GVS S.p.A. (GVS) Earnings Call Transcript

Welcome, and thank you for joining the GVS 9 Months 2026 Results Conference Call. [Operator Instructions] Massimo Scagliarini, CEO of GVS. Please go ahead, sir.

Thank you very much. Good afternoon and good morning. Welcome, everybody, to the 9 months results presentation of GVS. So quick first 9 months with the sales nearly EUR 330 million, so plus 6.4% versus the previous year and very strong Q3 at EUR 150 million, nearly 13% over the previous year. As always, when our revenue grow, our EBITDA follow and so we are at EUR 85.8 million in terms of EBITDA, so plus 9% EBITDA margin. If we look at the Q3, EBITDA at EUR 30.4 million with 26.5% margin. [indiscernible] 37.5%. Adjusted net income, 11.4% margin plus 3.3% previous year climbing from the previous year at a leverage ratio of 2.2. Some more detail for the leave the speech to Guido. So nice to see all the 3 divisions growing with a nice organic role. And so we have health care and life science at the plus 5.3% and as mobility plus 5% and [indiscernible] 5%. As I was mentioning before, the adjusted EBITDA margin moved from 24.9% to 26% this year. And in revenue EBITDA and money is from 78% to 85%. And as we can see an declining of the net financial position from EUR 271 million [indiscernible] of last year to EUR 253 million this year. So with a cash generation of nearly EUR 40 million and bringing the leverage ratio from 2.5 to 2.2. With that to Guido.

And good morning to everyone. So let's you have a look at the various analysis of the sales for the 9 months of 2026. So we have still negative impact this is mostly, I mean to the U.S. depreciation versus euro in the first part of the year. In this quarter, we see this trend reversed, and we had a positive impact of EUR 1.7 million compared to the first half positive news is on the volume side that you see last EUR 12 million of positive volumes compared to the 9 months, and we have a strong acceleration of volumes in Q3, EUR 9.5 million of volume growth in Q3 of the year compared to 2025. Price continue to be [indiscernible] very positive with the -- in the first half of the year. So in total in 9 months, we have EUR 8.1 million net price effect. Moving now to the performance of the single division. As Massimo already mentioned, all the 3 divisions showed growth, organic growth. Let's start from Healthcare & Life Sciences, with 5.3 million lifestyles is growing 4%, but the best performance is from Tranfusion Medicine plus 14.4%, stepping back up from the result of the first half when the growth was 10.9%. And finally, also Medtech, acceleration from the flattish performance in the first half of the year is not growing for the 9 months or almost at 3% excluding FX. Moving to Safety. Also safety record that on end growth in the first half to 11.5% year-on-year, excluding FX in the 9 months. Finally, also in energy mobility, using effects last 5. Now I'll hand over to Marco to comment.

Thank you, Guido. Good morning and good afternoon, everybody. Okay. Adjusted EBITDA, as I said by Massimo, we are going from 24.9% last year to 26% after 9 months in 2026. In absolute terms, we go from around 79 to around 86. So we said negative FX went up by around 4% from 1.1 to 1.60. So negative effect is worth EUR 1.6 million. The margin pricing was 2.6% or [indiscernible] EUR 60 million. Trying to customize offsetting raw material cutting up. You see others were minus 5.4%, 50% of that is raw material every year which is about EUR 2.7 million. And then a negative impact coming from other income from namely a party contribution, which may parking to fund development projects for new products, for new processes, especially those that. Before we go to the next slide, I would like to make 2 more comments. I would like to draw your attention to 2 points. The first that Q3 is not an effect is we gave you last September '24. So no reason to change our guidance as for the EBITDA. The second point is about the second half because based on our forecast and our guidance, the second [indiscernible] million, which is higher than the first half. First half EBITDA -- adjusted EBITDA was at 55%. So that means that we're going from 55% in the first half to around 60%, 61% in the second half. Why am I highlighting that because over the past 3 years, so '23, '24, '25, the first half and the second half, well, equally in terms of adjusted EBITDA. I think it's nothing unexpected because on the 21st of September, we said that we expect a higher EBITDA in the second part of the year. Now we can move to the net income. You see on the left side of this line, we are going from EUR 20.7 million to EUR 41.8 million. So we are [indiscernible] in a income. But as usual, we give you also the advance income excluding feared to the U.S. dollar intercompany loans. And here, we see we are going for 36.3% to 37.5% [indiscernible]. Here, we are going up by 3%. You know why? Because DNA are up to the fact that last year, we complete 2 new plants, 1 in China and the other in the U.K. And now the third slide is about net financial position. Okay, let's come net financial position and leverage ratio. You see the ratio goes to the end of last year again, 2.2 target, our target and even so I believe we are -- we will do better than 1.99. So it's going to be lower than 1.9 million -- you see in the first 9 months, we start from working capital going up. You see EUR 35.6 million is the fourth from the left. We are -- okay, the 35.6%, let's say, was quite expected if you compare end of September we see that working rise up by EUR 10 million. So that means that in the fourth quarter, we are recovering around EUR 20 million of debt, reducing stock and receivables. And that's why we experienced of position in the last quarter and the end of evidence position of around EUR 25 million. Now I leave the floor to Massimo, again.

And very quick floor. In reality, we just confirmed the guidance. So we revenue, mid-single-digit organic versus the previous year, adjusted EBITDA, which as Marco mentioned, from 200 bps of margin expansion and leverage ratio in the region -- we didn't spend a lot of wording in this last slide because rejection of our next 3 years -- what I can confirm to you is that our visibility is very positive, and we are moving in the right direction. We have even accelerated a little bit earlier than what we expected. But we are inside our plan, and we are moving as the plan that we have presented. Thank you very much. I believe that we can now...

[Operator Instructions] The first question comes from Matteo Bonizzoni with Kepler Cheuvreux.

So you said, Massimo, that the visibility which you have and the feeling which you have for the next month is positive. So can you a little bit elaborate maybe on the various segments? Then on the EBITDA for the full year, you have already said, Marco, that you expect, if I'm not wrong, EUR 160 million more or less of EUR 55 million in the bar million over last quarter of the year. I was checking my model. So typically, Q4 tends to be higher than Q3. Q3 was EUR 150 million. So last year, for example, Q3 was EUR 100 million and Q4 was EUR 109 million. This year, we will have also a strong dollar. I mean, also today, the dollar is going further stronger. So this is ForEx is not an clearly. But is it fair to assume that you're going to generate in Q4 around about EUR 120 million of revenues? Is it, let's say, a reasonable assumption?

Okay. From what are the sales as we -- as I mentioned before, we are just following our plan. So each division is a way to grow. And so life science have contractor distribution contract, the validation in the pharmaceutical sector, we started pushing on the bioconside later on, on the next year. but these are the way the division is growing. Same thing for the Transfusion is gaining speed more and more that we move and we made all the certification and the validation, and we adjust all the sales network. So I would say that -- there is nothing different from what we have presented during our business plan presentation. Just the things are starting to get aligned and moving in the right direction. The second question also about Q4 sales. Sorry, it's too optimistic because we are telling you that we are confirming guidance.. We said that on the 25% in order to get the 5% even the current FX, EUR 113 million, EUR 114 million in Q4 is what we needed to achieve. Please when assessing our performance, do you look at a single model or a pipe. I first look at a 6-month period. That's why before in the second half of the year, we have a higher EBITDA MSCs compared to the first half. Just be and that with the poison. So just to complete I told you our forecast is -- or the Q4 is should be more , more or less Q3 -- that's our Okay. if I can say or we have gained in other years where we had a very weak quarter, we were obliged to push very hard in the fourth quarter. Now it's not needed because we have already reached our correct speed for the next quarters. And so we want to maintain this also to manage properly cash stock as on exactly.

The next question comes from Emanuele Gallazzi with Equita.

I have two questions. The first one is on pricing, a very strong contribution in the third quarter plus almost 4% and in the first 9 months, you are running at 2.6%. And I think you are head of the raw mat cost inflation. So I was wondering if, let's say, the current environment is helping you on the pricing power. And looking at 2026 -- 2027, sorry, if you think that your normal price increase of 1.5% would be considered sort of bottom for 2027. And thank you for the details on the Healthcare and Life Science. Also the Safety had a very strong performance I think, one of the best quarter. I just would like to understand a little bit better about the performance. Any additional color on the Safety will be useful.

I believe that we have already demonstrated and shown that we can increase -- we have a power of increasing the price on is needed. Of course, we try to play and suffer the transition period towards the new selling price. So say that there is no period that helps or not added. For sure, when you are in an inflection mode, and we are in an inflation more worldwide, it's more understandable price adjustment when you are in the range of 1%, 2%. So the answer is yes, but it's not something that was the price if needed also on the next year. Again, it's something that we can play. It's the tool that we have in our toolbox. And we use it on a necessary and 1 is the correct timing also versus our clients. Safety, nothing special. It's just the growth of the business. And the speed that we always have. Sometimes it's a little bit faster, sometimes it's a little bit slower. So no space. We were slow in the beginning of the year, if you recall, and now we have accelerated the bids. So the average roughly is the same.

The next question comes from Alessandro Tortora.

I have, let's say, four questions. Just the first one, let's say, relates to the to the Healthcare & Life Science. So first of all, if you can share with us also the -- we always discussed in the past on the Medtech, the part of the mobility and so on. So if you can give us an idea of the impact that you had so far in the 9 months on this line. The second question is on blood transfusion. You mentioned before that you are starting to have, let's say -- can I say, recover faster rate in terms of sales and deliveries. So the question is that if you can give us also an update on the -- any update in terms of tender in the coming quarter? The third question is on the recent agreement between [indiscernible]. Clearly, historically, you were a very close to a Monetic. So the question is if you can give me an idea of which kind of growth opportunity you see on this very important agreement they designed. And the last one, which is the fourth, is on the on the concentration side. Just a clarification on the previous question, let's call it not the recurring 1.5% price increase, but you are not assuming or you're not announcing to cut additional price increase related to cost inflation, input cost inflation.

We launched, I believe, 1.5 something like this. So it's something, let's say, is a phase-out if I can say that even if it's someone completely pace out is utilize on our total revenue slowly. And right now, in a control way, and we want to keep. And so we will -- it will not notice the declining of the next year because we will manage this in the way to do not affect in this way. But in the 9 months, we had -- yes, I believe in 1.5, something like that. Again, the market is open, is waiting for us. And right now, we are still in full rate. And we are not situation. And the red cross, we are negotiating with new customers. We gain contracts -- other contracts around the world. But apart from this organic growth and share market share gain that we might have in the future very really important point for this market are the certification of the existing products in new markets and the new product that we are going to launch. So there is -- besides any possible momentary churn that we might add with a big contract that we are working on, et cetera, the nice thing is that we have a very nice future path made of organic growth or taken expansion with a new certification and also with the new product that with a new product, we're going to launch that we are not covering right now. So I am absolutely very positive on the broad, I believe that -- we're just at the beginning of what the block can give us in terms of organic growth.

Then growth come from in a [indiscernible].

We are all this nice announcement of will be reflected in growing and also for us. Of course, it's not -- we're not talking about product like the 1 block you are selling at [indiscernible] or something like this because a component that inspire their plasma line. But anyway, it's absolutely -- will be absolutely a nice increase on our organic revenue.