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• Core Revenue Growth: 11.7%, reaching CHF224.8 million for 2024.

• EBITDA Margin: 19% for the core business.

• Gross Margin: 82.8% for the core business.

• Net Income: CHF11.4 million, with a net margin of 5.2%.

• Free Cash Flow: Margin of 6%, with cash flow increasing by CHF20 million.

• Cash on Balance Sheet: Almost CHF140 million at the end of the year.

• Regional Performance: EMEA was the key growth contributor; US showed strong growth; APAC affected by price cuts; Latin America underperformed.

• Acquisition: 51% stake in NeoOrtho, a Brazilian value player.

• Future Outlook: Organic growth of 13% to 15% in core sales and core EBITDA margin in the high teens range.

• Warning! GuruFocus has detected 4 Warning Signs with XSWX:MED.

Release Date: March 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Medartis Holding AG (XSWX:MED) reported a core revenue growth of 11.7%, reaching CHF224.8 million in sales for 2024.

• The company achieved a well-managed EBITDA margin of 19%, indicating strong profitability.

• The acquisition of 51% of NeoOrtho, a Brazilian value player, is expected to enhance Medartis' presence in the Latin American market.

• The company is focusing on innovation and digitalization, with plans to introduce patient-specific solutions and digital planning.

• Medartis is expanding its product portfolio with the launch of new systems like Hand 2 and the preparation for Keri TOUCH launch in the US, which is expected to drive future growth.

Negative Points

• Sales growth of 11.7% was slightly below expectations, indicating potential challenges in meeting market forecasts.

• The Latin American market, particularly Brazil, faced significant challenges due to changes in insurance companies, impacting premium segment sales.

• Price cuts in Australia have affected the APAC region's performance, with further impacts expected in the first half of 2025.

• The US market faced difficulties due to a lack of leadership for a year, although a new US President has been appointed to address this.

• The transition to exclusive distribution in the US is ongoing, with potential risks associated with changing 50% of distributors.

Q & A Highlights

Q: Could you provide more color on the sales guidance of 13% to 15%? What factors contribute to reaching the upper end of this range? A: The guidance is based on several factors, including the ongoing distributor changes in the US, which are currently 50% complete. The acceleration in the US market, particularly in upper extremities, and the expansion of KeriMedical in Europe are key contributors. The CEO, Matthias Schupp, emphasized a cautious approach, preferring to underpromise and overdeliver, with a clearer picture expected by the half-year results in August. (Matthias Schupp, CEO)