Medios (Xetra:ILM1) Q2 2026 Earnings Call

0:00 Good day, and welcome to Medios AG analyst and investors call on our first half two thousand twenty six results. My name is Catherine Neufe, and I'm director investor relations at Medios. It is a pleasure to welcome you to today's call. Our CEO, Thomas Meyer, and our CFO, Stefan Bauerreis, will take you through the presentation today. They will provide an overview of our business performance in the first half two two thousand twenty six, including the key financial figures and important developments at Medios. Following the presentation, we'll have time for a q and a session, during which you will have the opportunity to ask questions. As a reminder, this conference will be recorded, and all participants will be in a listen mode only.

0:48 All relevant documents can be found on our website. And with that, I would like to hand over to Thomas Meyer. Thomas, please go ahead.

0:58 Good morning, everyone. We prepared 30 slides today. We wanna keep it short so that we have ample time for q and a and for the partial solar eclipse later over Europe. So the executive summary to start with. We achieved revenue of $1,075,000,000, and that's a plus of 8.4% and the first time that Medios achieved more than EUR 1,000,000,000 in the first half year. Our EBITDA pre is at EUR 44,000,000, that's minus 5.1%, and an EBITDA pre margin of 4.1%. Our focus is unchanged. We focus on profitability, cash conversion and operational efficiency.

1:46 For that, we started the project Avanti Medios that is helping us to cut costs and to help those operational excellence initiatives that are long term, but I think we see the first positive development in the second quarter. Yesterday, we announced a strategic milestone with the acquisition of CELO, a company that fits our compounding initiative and helps us to enter the German market. We're excited about this opportunity, and we will give you more detail in this slide deck. Looking at the numbers of the first half year, we see that our revenue grew. All segments helped with the revenue growth. And at the same time, EBITDA pre margin is lower than in the previous year.

2:36 That is due to lower profit margin and increased operational expenses. We see those effects continue in the second half of the year, and that's why we adjusted our guidance, as we told you last week. If you look at the different business areas, we see Pharmaceutical Supply within a revenue growth of 8.5% and at the same time, price pressure on specific marching high products. That resulted for that segment a 2.7% margin compared to 3.3% last year. That's where we had the biggest impact in the first half year. Patient specific therapies, on the other hand, we also see a strong revenue growth of 8.5%.

3:24 And what's very rewarding to see is that in Q2, our operational excellence measures helped to increase the EBITDA margin to 10.2%. We expect positive development for the second half of twenty twenty six in that business area. Our international business revenue growth is 6.9 and also a healthy EBITDA. And at the same time, we see some margin pressures going forward, and we took that in our adjusted guidance. Under regulatory radar, we see the drug price regulation, hilfstaxe, still under arbitration. So we don't really know what the outcome will be. We expect that to be closed disarbitration procedure in 2026.

4:13 And in our forecast, we have only a limited impact there knowing that, no, it is not yet known. For our pharmacy reform plan, we don't actually see a significant influence on Medios and the GKV contribution rate stabilization act is enforced since the July 30, and we got a negative there that the cannabis flowers are no longer reimbursed. That movement was a little bit faster than what we expected, and we took that negative impact into our adjusted guidance.

4:47 Health Security Act is still under planning. It is not yet in in the government bodies. We expect that to be happening in the fall window and see there a opportunity for Medios once the regulation is known. The EU directive is a rather long term project. There is nothing changed. We believe that the national law will integrate those adjustments in the second half of twenty twenty eight, and we see those development in Europe. We are also supportive of our business model. So much for the regulatory radar and now to what everybody is probably most interested in is the acquisition of CELO.

5:35 Here are the details. We have a we're going to buy a 74% stake in Caesar and Lawrence GmbH. That's a total consideration of 9,400,000. We pay 7,900,000 for the 74% of the shares. We have a 1,500,000 control premium, which later can be deducted when we will buy the remaining 26% of the shares. Included is an earn out provision that depends how the market develops of EUR 1,800,000. CELO is the market leader for compounding ingredients in Germany. So it accelerates our entry into German market. That's something we were looking for, and it has a complementary product portfolio to our PST business that is complementary and also serves the pharmacies.

6:31 So we see synergies there. We also see process synergies in combined sourcing, marketing, and sales mainly going forward. Signing up was yesterday, and now we are going to the antitrust process, and we hope that we can close the deal in a relatively short period of time. What's the company, Cesar Laureates? We have 240 employees working there. We are serving pharmacies, hospital, industrial clients, mainly in Germany. And overall, it is the compounding essential business. We sell OTC products to pharmacies, to hospitals, and also to the pharma industry.

7:22 Overall, they make 40,000,000 revenue is the expectation in 2026, and they expect a EBITDA of 1,600,000. Our target for the EBITDA is higher. We see that we can, a combined entity, we can increase this margin profile going forward. It it was founded a long time ago in 1886 and headquartered in Hilden and Bonn, and the managing director, Arcea Dogen, will remain in the director role, while Ulrich von der Linde will retire to be shareholder going forward.

8:06 How does that deal fit with our strategic objectives? It will strengthen our core market in Germany, that's very important. And it will add services for pharmacies as we do the dispensing for smaller quantities in those facilities that are GMP approved. CELO is the clear market lay leader with what you see up here in the right corner, a very, very well known brand in the pharmacies. You really see the CELO label in every pharmacy that does some compounding business. So we see a good opportunity to further strengthen that brand recognition and position it in the Medios network even more successful than in the past. It is also a next step for our European API platform extension.

8:57 We have Meta Pharmaceuticals in Spain and Marquis in Belgium, and we will combine that as one compounding essential GmbH under the leadership of Constantijn. And we see growth opportunities in Europe and have now a solid platform to further go after those opportunities. Where are the synergies? Certainly, in the supplier network, it's important that we have a professional sourcing organization for all three companies, and we see opportunity there to have a better procurement operations going forward. We also add capacities to our network where we believe we can further grow the business, and we'll do that in our integration office going forward.

9:52 With that, I pass it on to Stefan, who explains you more about the financial details of this transaction. Very much, Thomas, and also welcome from my side, and I will jump in directly in this slide regarding the financial assessment of the transaction and the acquisition of the 74% of of. So let me focus on three topics, synergies, the valuation, and also how we will finance the whole transaction once closing takes place. So on the synergy side, as Thomas already pointed out and mentioned, there is mainly opportunities around there in terms of the cooperation between all our API businesses that we that we have with now with Silo in Germany, but also in Spain and in and in Belgium and combining this kind of stuff. And we are also tried really much to to separate and to see what are the the opportunities in terms of synergies that we could get out for, and then you can see on the black bar, which are the synods you said we will see on cellular level itself and what are the ones that we believe that we will see on the on the level of the other two companies. So that will mean we will we will have, let's say, a good two years, two to three years to really come to the to the full extension of the synergies that we wanna we wanna get or that we believe that are realistic.

11:23 They are obviously mainly focused on the on the strengthening of the corporation of a very good purchasing network. And and therefore, really much, this has to be the focus of our synergies, the operational excellence, the cooperation between Maris Pharma, Meta, and and CELO, and this will start immediately after closing to place and all the the approvals are are there. So in total, we will see a 2,100,000 opportunities, which compared to the EBITDA number that the company currently has is a quite significant improvement that we that we believe that we could get. In addition, then coming to the to the valuation, all what you what you see here, the the EBITDA multiple based on the 2024, 2025, because the company has has a fiscal year, which is not the calendar year. That's why it's called like that.

12:20 It's an EBITDA multiple of 5.4. You have to know that all these numbers that were discussed with CLO as of now before closing are numbers of a company which are is doing all their accounting based on German GAAP. So all these reclass, what you normally see or you have to see based on IFRS 16 for leasing expenses is not yet included, and therefore, by by by technical issue itself will also increase increase margin and will optimize also here the multiples that we see. So what you see here in the numbers, it's all the EBITDA multiple based on the German GAAP numbers. And therefore, with the synergies, we really strongly believe that we will bring significant improvement of the qualities of earnings in there.

13:12 Talking shortly about the financing of the transaction. So we we made there an a bridge financing of one year, which is based on the following condition. This is euro short term rate is the basis, and we have there an interest margin of 0.85 that we have to pay. I think these are very, very good conditions in terms of getting the the the financing structure of the company. Why we decided to do a one year based bridge financing in the first instance? Because, you know, in our credit facility that we have with our core banks, there is also a kind of revolving credit facility involved where we have an increased option that we then can can take in 2027.

14:03 So the point is here, we will not refinance the bridge with a complete different transaction in terms of financing, but we with the the structure of the extension increase option of the RCF, we we are able to do that in a very easy level than in 2027 and, therefore, are here on a very safe side. In addition to that, you have to know that our leverage ratio is, as of now before the acquisition, with 1.32 on a very conservative and a very good and low level. And even with the acquisition also already here taking into obligate into in mind the leasing obligation that we then have to show as as financial debt, we will change that to increase from 1.32 to 1.42 due to the fact that we have to finance the purchase price. And on the other side, also having there a five year term loan, a five year rental agreement for both locations in Hilton and Bond, but with additional

15:12 extension option also for the future. So flexibility in that perspective is 100% on our side, and that is very healthy and very good. So this having said, I would like to to close my additional information on the financing side of of the transaction and give you a flavor what are the next steps. So, obviously, yesterday, as Thomas said, we have the signing of the of the contract. Now in the following days, on short term basis, we will make the notification to the competition authorities, the Bundescatl armed. With all what we what we know, all what we got as information from the lawyers, it's it's it's nothing that we should expect in terms of any issues.

15:58 So it's a formality that we have to do. But, nevertheless, it's an important one, and we take it serious. And then the attendant closing,

16:06 once again, it's always depending on when we get the the green lights from the Budnest Kartelland will then be will be there and, hopefully, is in and we believe that in q four, we will can manage that in having there the the closing of this transaction. This having said, going back to the financial overview of of Medios and coming back to the half year numbers and giving you a little bit more detailed flavor of where we where we are. Thomas already pointed out that we have a strong organic growth in revenues. But at the end of the day, when we're talking about the EBITDA pre margin, we reduced from 4.7 last year to 4.1 percentage point. We will come when I guide you through the different segments to the different to the different reasons why why we have that. An additional

17:05 information, I think, which is needed is even when it's not yet guided, it's the cash flow from operating activities. It reduced significantly from 23,400,000 in the first half of last year compared to the 11.2 this year. This is mainly due on the one side, obviously, due to the somehow a little bit lower level of the of the EBITDA that we that we have as a company. But on the other side, and that is what we have to know, it's mainly timing issue due to tax payments because significantly higher tax payments or lower tax refund took place in the first half of twenty twenty six compared to the to the to 2025 what we what we saw there. And this alone, on the tax side, these are impacts on around €6,000,000, which obviously negatively impacting the operating cash flow. Talking about everything, what is working capital, we are absolutely on track in in optimizing that. For sure, you see an increase

18:13 between the first half of twenty twenty five to 2026. But let's say the development in the first half last year and the development of the of the working capital was was quite positive, and we were able to optimize also here and to and to to improve slightly our our ratios that we that we have. So, therefore, working capital transaction and activities are on track, mainly impacted cash flow by additional tax payments, which took not not take place in the first half of the year 2025. So therefore, not that somebody believes that due to the operational business, we are not able to generate any cash flow anymore, so this is absolutely not the case.

19:03 We will come back and also our targets that we see with the straight operational cash flow steering and management will continue in that way for the second half of the year. Now as promised, getting back to the

19:19 growth and the overview of the different segments, pharmaceutical supply, patient specific therapies, international businesses. Here, you can see the quite significant good growth in mainly with 8.5% in pharmaceutical supplies, but also in the patient specific therapies. So there, we are very happy that we were able to to realize there in the first half of the year a very good a very good performance. You see on the EBITDA pre side

19:51 that in the pharmaceutical supply, we are below prior year. This is mainly due to pricing issue with some specific products that we were not able to get this higher margin in this this year on the pharmaceutical supply side. On the other side, when we go to the the patient specific therapies, it's always still on the half year,

20:16 a little bit below prior year, but the second quarter was already very promising. And last but not least, obviously, the international business also developing here good with an growth of 6.9% in sales and a slightly better EBITDA pre margin in that year. As I already mentioned, revenue went up in pharmaceutical supplies, but EBITDA pre decreased. So that is obviously not the structure we like to see, but this is due to continuous price decrease on selected individual products, which, unfortunately, also, we will see that this will maintain in the second half of the year. So there, we do not believe on a on a big recovery in the in that perspective.

21:02 Nevertheless, I think we are all nevertheless, you're on quite good track. And also compared with other wholesalers, we still have a good a good margin that we are able to to to to achieve. Medicinal cannabis business already started. You know that from the presentation of the first quarter. It was a little bit later, so it was a delay in the first quarter, but it developed quite positive in the second quarter of this year. So so we gained the momentum. Unfortunately, with the now new law in not getting any reimbursement anymore of the cannabis flowers that will make the develop further development very difficult or more difficult in the second half of the year. But that, as Thomas said, is already included in our new our new guidance in there. Also, have to know that, nevertheless, cannabis is not

21:58 the big revenue contributor still for Medios. Going to the bridge that we showed first time in the q one year over year. So you can see the major impacts are the 2,700,000 with the price drop of various products, individual products that we that we have here, then we see a good development in new businesses like the Novartis and also the the the cannabis one. And on the other side,

22:28 there are some some operational expenditures increasing, labor cost increase, which are normal. So apart from this price drop, we would say business are developing okay, but the price drop, unfortunately, in that business, we cannot compensate here.

22:46 Coming directly to the patient specific therapies, also here, the situation now and here, I would like to draw the attention mainly to the to the second quarter. So also, those who participated in the call of the q one noticed that with there, we were due to several reasons below expectations in the margin. Now the good message here is we are back on track regarding the growth of the business in terms of the revenue. So we increased from 54 in the q two to 59,000,000 revenues. It's a growth of 8.6%. So and that in a in in this market in Germany, I think it's a good development that we have. Second, also here, and that is also what we promised on q one, we the margin and the margin quality of

23:40 of these segments will come back, and here we are. Now we managed to get the 10.2 percentage point EBITDA. So Thomas already mentioned our Avantis Medios project. Also, here shows the first good positive impact. And, also, I just want to draw the attention on the effect that and what we announced that we closed the location of Schaffenburg and the site of Schaffenburg end of end of last month. So therefore, that will mean impact positive impact due to this,

24:18 let's say, change in the in the structure is not yet included in q one because this just will take place in q three, and that's why we are quite positive that the good development will continue in that segment. And we are absolutely delivering with our business here in Germany what we what we promised. And our guys with our colleagues with Christophe, they make here a really great job to optimize your margin in a German market.

24:49 In terms of our bridge, what does that mean? So we have here a quite positive volume impact, which is obviously helping us and which brings us the growth. The drug price regulation, that is this impact on the German hilfstaxi. That is the normal, let's say, price impact that we have to to to compensate, and we have to live from that perspective. On the other side then, there is also an increase in personnel costs and also some other costs still in the first half of

25:20 the year. We were working on that mainly on the other side to improve the situation and also the operational efficiency and excellence will help us going forward in the second half of the year. So I think well well done. Coming now briefly to the international businesses. Also here, revenue went up, so we are now at 44,000,000. When you have a look at the q two last year, it's a 42,000,000. It's it's also here quarter by quarter increase of 4.8% in terms of of revenues and and and sales. And and also the the EBITDA margin is with 17.5%, one of the best that we that we had. Obviously, it's not the best, but compared to the q two of last year, I think we were quite significantly improved. Also here, management and the people made there a good job. And also here, we know that on the terms of operational efficiency, we we have already identified

26:23 the activities to do, and we will work on that that also with the event in Medios project, which is a total group perspective program, also will then step by step show positive impact on the next month to come. We know that there are some higher material costs mainly with the eye syringes that we are delivering to our customers, and also these are topics where measures already are started to solve that issue and to to improve here the gross margin in that product segment. Coming also here as a summary to our EBITDA bridge, so positive volume effects of about 4,200,000. Then we had last year and this year both two different disinvestments, which we believe that for transparency reason, should show there a separate impact.

27:20 These were mainly sale of one pharmacy last year, and this year, it was the,

27:26 let's say, the the sale of of a building that was not used anymore in in Belgium where we had extraordinary earnings, if you wanna say it like that, of 800,000. So still, last year, more higher positive one timers than this year if we compare that. And then on the other side, we have the the known additional material costs, mainly talking about the I syringes products,

27:57 and then the topics like wage increases, which are the normal increases of wages that we have from one year to the other year. You see personal cost savings on the one side. That is that is correct, but it's unfortunately compensated via the OpEx on the other side. Why is that the case? Because currently, some internal plant people are not hired currently mainly on the pharmacy side and are used with external people, and these costs are shown in the other operational expenditures. And therefore, it's more, let's say, a change in the cost level or in the cost line where you can see that. Finally,

28:38 we were able to increase here the EBITDA pre. We were able to increase for the half year one, the total number. That is great. The second quarter was even a very good development of margin, and that makes Abitish to get to get more and to develop further this international area.

28:58 Last but not least, coming back to the Medios Group as a whole, you already know with the announcement that we made last week that we say on the sales or revenue side, we developed quite good. So also here, our now revised guidance is a little bit higher in terms of sales than what we when we had in the in the first guidance. So we now say it's 2.1 up to €2,160,000,000 as as our sales or revenue guidance. On the other side

29:28 and that is not our target, but due to the fact that we have these pricing issues mainly on the wholesaling activities in PS segment. And and on the other side, the the positive development of cannabis not coming in the second half of of the year.

29:48 This major impacts also, if you wanna say it like that, that we have to take down a little bit the EBITDA pre guidance margin from 94 to one nine two, now down to 88 to 92,000,000. You can see on the right side all the different reasons for that. I can assure that the management is working hard on on really focusing on the Avanti Medios and make all the operational excellence activities happen this year and also for the years to come. But I think also here, that is their realistic guidance.

30:26 So with that, I hand away, and I give back to Thomas for the focus activities and the takeaways. Thomas?

30:34 Thank you, Stefan. I'm gonna keep it really, really short. Nothing changed here with our focus activities. We have the one team Medios initiative. We wanna bring more transparency and collaboration in the entire group now also with CELO, and we are using processes to do so, but we also use use digital, and, we will introduce SAP s four HANA system at January 1 for Medios Pharma. Operational excellence is key in that business that we are running. So we are focusing on capital master plan, business integration, digital road map. We get those concepts out. We want to bring that on a group level and make sure that we can lift those synergies we see when we have more transparency and processes that span all geographies.

31:33 We continue to accelerate our organic growth. We have shown growth in all business areas, and we want to keep it that way. We are looking for additional business with existing customers or new customers. And as we have done with CELO, we are looking for selective M and A activities that are value accretive in add on acquisitions or collaborations. It's important here to mention that an M and A starts with the integration plan, and those plans are already in the making for the sale of integration. And I think we can set a nice piece there in showing that we really can gain together going forward. We will talk about all this and more at the second major Capital Markets Day on the September 29.

32:23 A good opportunity to see compounding hands on and personal and also to network with the top leadership team for that. We also have a dinner on the twenty eighth, and I hope all of you will join and use the opportunity to know ourselves, get closer together, and and also see what we do in our RADAR operation in The Netherlands. Key takes away takeaways I would like you to to go and see is the broad based growth we have in our business. So growth is there. We we are delivering a market that likes our services. So that's very positive. We see, first, small, but still, I think, sustainable progress on margin in the PST business.

33:10 More should be coming there. And we have now an acquisition of CEILOR, where we want to further strengthen our compounding business, where we bring additional services in Germany for the pharmacies. And we really have a broad product range that pharmacies will be able to buy from us. I think there's a lot of strategic sense to this acquisition, and I'm really looking forward to have a nice integration process starting as of today. With that, we come to question and answers, and I pass it on to the moderator. Thank you. We will now begin our question and answer now to enter the queue.

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34:45 And we have the first question from from Montego AG. The floor is yours. Can you hear me? Yes. We can hear you very well. Perfect. Perfect. Thank you. Couple of questions on the on the Xelo acquisition, if I may. The first would be, was that a structured sales process from the seller? Or how did that originate? Then the second question would be if you could comment on the total sales volume of the RT business in the whole group. So you mentioned that the EUR 40,000,000 of the Cielo, how much addition is that to the current business?

35:31 And maybe also on the margin profile compared to the RP business in the IB segment compared to Cello? And then can you confirm that I understand the slide correctly that you expect in total roughly €3,400,000 in synergies in the three year time frame? And then the last question on Cielo would be that the multiple slides you provided, thank you very much for that, implies a slight EBITDA decrease in the current fiscal year for CELO. Could you maybe comment on that also? And then I have a few other questions, but I'll start with that. Thank you.

36:17 Thank you, Tim. That's a bucket of questions. So I would say it was a half structured process. It was probably initiated by personal contacts at the very start. And the discussions were ongoing for quite some time, and we are really happy that we could ultimately close the deal in the way we we could now structure it. I think it was a good work of the team, of the m and a team, and and and everybody involved. So quite quite pleased with with what we what we could achieve in in terms of financial numbers and and also collaboration with with the sales team there. We don't break out the API business as a as a reporting here, but we I I can tell you that our margin expectations, as we mentioned in the call, is substantially higher for for that business than what is currently achieved in in Hilden and Bonn. So we get to work to to lift the margins there. That that's that's the key initiative I see from an operational standpoint.

37:28 And and for the synergies, maybe, Stefan, you have those numbers better in your head. I think they were correct, but I'm not absolutely certain. Yes. I can confirm the synergies you you mentioned are correct. So you made a good the right adding up of this both. So one part is will happen on our existing companies in Meta and Marcus. And the other one, the bigger one, obviously, will happen on on silo side, what we what we see here. And perhaps also to add to your last question as the multiple will increase based on the current forecast. Yes. It is correct that current the the overall EBITDA margin of this current fiscal year is expected to be slightly lower.

38:19 On the one side, and and I think that is the main issue, here is also is they are a little bit lower in terms of in terms of sales this year than than anticipated, but we strongly believe that this is only a temporary activities activity and and and an issue. And and and therefore, I'm really much convinced that we will gain track on that perspective very soon in terms of sales and also on the one side with the improved, let's say, synergies or that we that we believe that we will get on the one side. On the other side, I mentioned that shortly in during the presentation. All the numbers you see here are based on German GAAP, and the company uses in both location rented rented buildings.

39:12 So if you take a real IFRS 16 approach where you have to show that to compare Apple with apples because on on Medios side, it is an IFRS, let's say, accounting in place for sure and also here applying IFRS 16. So then you would you would add up somehow a little bit at the EBITDA by another 1,000,000 around to to reclass the the rental payments from EBITDA to EBIT to compare Apple with Apple. On the operational performance of the company, it's nothing to do. But if you compare multiples on an IFRS basis, you should do that to get on a clear structure. That is the one.

40:01 Second, we also and that is the last comment that we you see on that slide is that we that the the purchase price, it's really much covered by by net assets. So at the end of the day, we do not expect a significant goodwill to come in our balance. Okay. That's that's very helpful. Then maybe two follow-up or two additional topics. The the the PS margin, you mentioned that you don't expect big improvement. Can you clarify, does that mean that you see a further decline in margin or that we should expect sort of Q2 levels to sustain in the rest of the year? And then on tax and cash flow, can you maybe elaborate? You said this was a sort of a a one or timing effect on the on the tax effect, so that should even out over the year.

40:59 Maybe just clarify that. And then if you could give a rough free cash flow outlook for the full year, that would be very helpful. Thank you for the question. I'll take the first one on pharmacy supply side. The pharmacy supply side business has a certain level of volatility in there that we should expect at times to be maybe a little higher and at times a little lower. And to my understanding, right now, we are rather on the lower side. So I would hope that we can stabilize or even increase going forward over the next one or two years. But keep that in mind that specific initiatives sometimes come and sometimes they are not there. It's a little bit of a binary situation.

41:49 So that impacted our profitability in the first half year. And for the other questions, Stefan, you're probably the better person to answer them. Okay. Thank you. So coming to the tax perspective. So as I said, these are mainly I call that one timers that you cannot, let's say, put in exactly in a in a quarterly level to be comparable. So I I nevertheless try to give a little bit more flavor on that. So this very significant higher tax payment overall and and I and I when I'm talking about tax payment, I'm talking about net tax payment. So it's the net between tax payment on the one side and lower tax refund on the other side for for prior years. So in in Germany itself, the impact on these two bonds is 4,200,000 because in the first half of the year 2025, we got an tax refund of 3,000,000, which in the first half of twenty twenty six did not took place. On the other side, in 2026, we had to pay for former years additional taxes of 1,200,000.

43:04 So that will mean now 1,200,000 paid out and in the first half of the year for prior years. And last year, we received 2,900,000 also for prior years as a tax refund. So at the end, it's about 4,200,000 only in Germany, which obviously will not repeat in the second half of of the year. Netherlands, which is the other big country where we also have exactly the same situation, there it is 1,500,000 net tax higher tax payment, which is mainly due to the fact that also here, we had tax refunds in 2025 of around 700,000, which now we did not have in the second half in the first half of twenty twenty six. On the other side, you have to know that in in the q three, but that is what we already know because we received it in July, there is a tax refund in Netherland of about 1,000,000. So therefore, it will be a positive impact on that.

44:12 Will that be a complete wash offset between the quarters? No. It will not be because it's an impact on prior years, but it will definitely not be will not repeat anymore. And and therefore, part of that, like in Netherlands, will be compensate. Part of what we saw in Germany will not compensate this year, but will not repeat anymore because these are one timers. That is to the tax question. What does it mean in terms of cash flow? So, you know, we are not guiding the the the the current operating cash flow. So therefore, unfortunately, I have to disappoint you a little bit that I cannot give you a clear guidance now on the on the on the total number. But to be sure also on that side, we do everything when you take out this specific impact on on on the tax payments and to to maintain and to improve our performance and our cash generating capability in in future.

45:22 And therefore, also, will be able to generate good cash in 2026 for Medios Group. Okay. Thank you, gentlemen. Thank you very much. Looking forward to seeing you in Brita end of September. Perfect. Thank you. Looking forward to meet you. Thank you. And we have the next question from Simon Scholes from First Berlin. The floor is yours. Yes. Good afternoon. Can you hear me? Can hear you well, Simon. Yes. Okay. Very good. I've just got two questions. So on Page seven, the English version actually of the H1 report, you cite some figures for the pharmacy market in Germany in Q1 from IQVIA. And those seem to suggest that on average prices rose for the prescription segment of the market, which is about 90% of the market by 7%.

46:17 So I was just wondering why there's a deviation between the overall market and the price pressure you're seeing? And secondly, I was just wondering, are is substitution by biosimilars having a significant impact on price development at PS? That's it for me. Thank you, Simon. Yes. I think it's relatively straightforward. We are working on specific products, and we had a Hilf tax reduction in the fourth quarter of twenty twenty five that, is is subsidized, is shown in in this bridge that that was one specific product that had, lesser price going forward, and it's it's one of the products that that is a substantial part of of our business. And we could overcome this lower compensation we we gained there with with improved operational measures and and other products. So we we don't track the overall market in a perfect way. That's probably what I want to say. We we have to look at the specific products we are making.

47:32 For biosimilar exchange that is in the ophthalmology business, something we we were expecting. But right now, as we see it, the originator have have their contracts out there and and and are still in a very strong position. So probably a little less biosimilar exchange than what we have expected a couple of months back. But that's something that's outside of our control. It it might happen at a later point in time, I would expect. Okay. Thanks very much. That's very helpful. Perhaps adding your question regarding the half year report, you're referring about the 7% increase of of the cost for for medicines in in that perspective, if I understood you correct. Yes.

48:25 That's right. So this this 7% Pricing. Pricing. Because you've got volume. You've got you've got sales up percent up 6% and volume down 1.3%. So it looks if you've you've got a price increase of 6% or 7%. Yeah. So there is there is overall there is let's say, the the the total segment of those medicines, which where you can get a compensation increased by 6%, but the volume reduced. So therefore, it's a it's a positive pricing. I agree. So first of all, you have to know that this is, let's say, the full market, and there are also quite significant increases in terms of specific areas of where we are, mainly when we're talking about new products coming coming there, which are licensed products, which are also for very specific therapies where we we we still see, let's say, a quite significant increase on that perspective onto pricing.

49:26 But and that is what you have to take it clear. This pricing impact is absolutely not homogeneous in the in the whole market. So we cannot say if this calculation, the math that you've done, that you said, okay. There should be a price increase and why Medios does not see that. Because here, we're working on on a very specific niche. And and therefore, whenever you get completely new and specific other ones where we where we can see an an an an an increase in that in that perspective. So, therefore, it has to be very careful because also Medios is not a fully fledged, let's say, wholesaler on everything, what is what is the medicine there, but we are let's say, it's a nice, it's a good niche, but it's still a niche and a part of that. And that's why you cannot compare this this growth or not growth in that perspective in terms of the pricing. Unfortunately, this is not doable.

50:22 Okay. Thanks very much. Thank you. So if you would like to ask a question, please press star nine and the pound key on your telephone keypad, or you can also use the web dial in function in the web interface to click on the telephone handset button and then raise the hand icon. And we have one more question from Janik Ziering from Munciemeyer Petersen Capital Markets. Quite some questions have already been answered. Maybe another one on the guidance and especially on the guidance range. I mean, you now stand at €44,000,000 EBITDA pre after H1. Are you able to quantify the drivers of EBITDA in H2, so specifically between the run rate savings of the Avanti program, the PST Germany recovery and also the pricing issues in Pharma?

51:21 Is are there certain bids already contracted? And yes, maybe just some additional color would be very helpful. And the second part would be again on Pharmaceutical Supply pricing. Any color here if that's reversing at some point or if it's stabilizing at a new lower level would also be helpful. And also here, where you see it exiting in 2026 from the current levels of, yes, around 2.7% EBITDA pre? Thank you for the question. I mean it's clear that we made a bottom up calculation for our revised guidance, and that's what we are seeing right now. And I think this is a reasonable guidance that was done under the new leadership team.

52:13 And I expect that we can achieve what we now forecast in terms of EBITDA pre. All things need to come together. That's the saving targets we see for Avanti Medios. We have there a single middle single digit middle range number that that we try to achieve. And also, all segments need to continue to to have a good volume development and margin improvement in PST, especially. We cautioned that maybe in The Netherlands, we have a little bit of harder time to keep the margin where they are right now. And for PS, the pharmacy supply, we also think that what we are seeing right now and or a little bit more is what's going on going forward.

53:13 And I think I spoke to the volatility of that business that that's some kind of baked in, but I can also let you know that, of course, the people who are working in that business are looking for improvements every day. And I I give them a lot of respect and also trust that they will continue to to achieve the margin profile we see today or even a little bit better going forward. I think that that's all I can say, that's that's what I see. Perhaps to add of what Thomas said regarding your point of what is already contracted and what you see in terms of our contract with the customers. So that that is in in our area where we are working. It's different than in other areas of of businesses.

54:08 You do not have, let's say, low orders on hand. So it's it's it's very much you have to be very flexible. You have to be very fast and and and therefore react on whatever everything what is coming across on on the market. We we see, let's say, terms of revenues, a good stable development of our of our revenues in in the wholesaling activities. And and also, I'm sure that we we can we can improve year step by step revenues. We also will focus on the on the on the portfolio of our products. But here, it's these are always mid and long term smaller improvements that you can see because it's mainly dominated by the by the pricing and and and what you get there. On all the others, as Thomas said, Van Dimedios is running. We started the program just in in April.

55:08 So therefore, there will be positive impacts to come. I said also a Schaffenburg will contribute on that, that we were able without losing any customers to use the other locations in a very more efficient way to compensate and to get also improvements here. So PSC is on track, and all the rest will come will do the same over the next months to come. Great. Thanks a lot. Pleasure. Thank you. And we have one more question from Olof Price from Okay Consult. The floor is yours. Yes. Thank you very much for being allowed to ask questions as well. First one, regarding capital allocation.

55:55 I'm glad to see the structure of the takeover now. I think that is continuing the work which Gertner did well in terms of capital allocation, buying with debt when the stock is depressed and buying with equity when the stock is high. However, I mean, the point of trust in the market is important and the stock is close to an all time low. And what Gertner did last year, trying to rebuild trust rather successfully was the 1,077,000 tender at €12,500,000 From my rough ballpark figuring, that's about onesix of the cash on hand right now.

56:44 Are you considering to repeating that move? Yes, especially as for Thomas, I mean, you started Medios was like onesixteen of Bahrain and it was onesixteen when the stock was like in between 2016 and 2017 and now it's close to 122 or yes, Bachen is 22 times larger than Medios right now. And also your own purchases were at like 16. So would you consider using cash on hand or rather 1.6 of it to do a tender like Gartner did last year as well? So that would be the first question.

57:34 Yes. Thank you. We understand that the value of the stock is is depressed, and, we work every day to to change that. And, all all options are on the table. We we will have a discussion whether we do a share payback program. And once we have a conclusion on on that question, we we will let the market know. I mean, I think it's especially important as I mean, you know, in the market, trust is a very important thing to have. And of course, I mean, guidance is always difficult if they refer to the future, but it surely wasn't helpful that at the AGM, it was stated that the Gigafin reform wouldn't have a material impact. I mean, it was none of the two of you I know, but it was C level. And if then a profit warning like that comes pretty shortly after that, that's, of course, nothing pleasurable and nothing that creates trust. And also, if you look at the top picky folios, the 75% bearish sentiment, that maybe stems also at least from that.

58:50 I think discussing that with a positive outcome would clearly be a helpful step to rebuild that trust that has been lost by that statement and profit warning afterwards. I mean, if you press confirm and then afterwards you warn, that's really difficult. So, second topic would be cannabis. I understand until now that the exclusivity with Bedrokhan, which is a very clear loser, if not the clear loser of the KKV reform as the major asset of Bedrokhan was not the quality of its flower products, but the relationship to the payers. And as the payers are now completely out of the game, that advantage is completely lost. It didn't deteriorate.

59:47 It's gone. And as I understood, the contract binds only Bedrocan, while Medios is only bound by a Board resolution, which was by the old CEO and CFO to work exclusively with Pedro Canberra. That's internal, not in the contract. Is that Board resolution resolved by now? Or is it still existing? And if so, do you consider to work on that in the near future? Thank you for the question. It's correct that we were focused on the reimbursed market, because we did not target a much larger self payer market, in the past.

1:00:33 We are now, exploring our options we have, going forward. And, personally, I share your sentiment that PetroCon is is is impacted by by this change quite quite significantly. And, as Stefan mentioned in his, words, the the cannabis business is not, crucial to to the Medios Group, and and we will we will assess our options going forward and make sure that that we can limit the negative impact of a change that came somewhat faster than what we were expecting back at Assembly General. I mean, important point in that context is that extracts are still refunded by GKB. And of course, there will be a wave of patients who are not affluent who needed the reimbursement of flower to change to extracts, stronger than normal, first of all.

1:01:32 I understood that there have been talks on C level with the market leader with dronabinol. But as of now, as I hear from the other respective company, no material progress has been made. Do you consider kind of vitalizing that or changing anything in the process or the personal responsibility to not only not lose business with Pedro Cannes, but to have Medios. And I mean you have the clear asset of 1,000 pharmacies being able to provide and also give people advice on the product and basically tell them, yes, okay, you need it. You don't get reimbursement for product A, but you can get product B here, which is still reimbursed.

1:02:26 I mean, your pharmacies are existing and it doesn't cost you any money. And I think it's a chance, not a risk of losing less business with Bedrocan, but rather take an opportunity to do that. But I mean, it would have to be done before somebody else does it, I suppose. Well, torn up in all is part of our offering, and we we hope that we we can we can grow in that segment, but that's independent of the, Petrikan flower situation. And, Oh, you're doing that already. That's good to hear. Okay. Good. Thank you very much. Sure. I hope you have a lot of success in not only, yeah, earning money for the company, but convincing shareholders.

1:03:14 Yeah. We're working on it every day. I make good Good results results will help the most. That's what we All are laser focused right. I think it's top of the hour. Maybe one last question, if anybody is interested. If not, I'll thank you for your attention. Thank you. There are no further questions. So back to you or to Kathleen Nova. Yes. Thank you very much for joining today's conference. We look forward to meet you in The Netherlands end of September. If you have any further questions, please please drop me an email. So thank you very much, and have a good day. Bye bye.