Half Year 2026 Medartis Holding AG Earnings Call Transcript
Key Points
- Medartis Holding AG (XSWX:MED) delivered strong organic sales growth of 17% in H1 2026, with a significant acceleration in the US (27.4% growth) and robust performance in EMEA, including nearly 20% growth in Germany, UK, Spain, and Austria.
- The company raised its full-year 2026 guidance for core sales growth to 17%-19% and increased its US TOUCH procedure target from 1,200 to 1,800 cases, reflecting strong market acceptance and momentum.
- Core EBITDA margin improved to 18%, driven by a 140 basis point increase in gross margin on a constant currency basis, supported by favorable product mix, price, and operational efficiencies across plants.
- The TOUCH rollout is progressing well globally, with strong growth in Europe (40% in direct markets, 30% in distribution markets) and a successful launch in the US, contributing to upper extremity sales growth of 21%.
- The company received a CHF4.4 million refund for excessive US tariffs, which helped normalize the tax rate to 12.5%, and the project to shift US production locally is on track, with 70% of US sales expected to be produced in Warsaw by year-end.
- New product launches, including the Titan Nail with disposable instruments and the Proximal Humerus system, are well received, positioning the company for future growth and margin improvement.
- The NeoOrtho value line is progressing, with new production facilities in Curitiba and plans for international launches, while the Premium segment in Brazil grew 16%, showing strong momentum in Latin America.
- Medartis Holding AG (XSWX:MED) experienced a negative FX impact of CHF4 million on sales and 60-70 basis points on gross margin and EBITDA margin, primarily due to the appreciation of the Swiss franc against the US dollar and euro.
- The company incurred CHF800,000 in US tariff expenses in H1 2026, and while a refund was received, the tariff situation remains a potential headwind, though mitigated by local production plans.
- Free cash flow was negative CHF10 million in H1 2026 due to high CapEx investments (CHF18 million) in production expansion, and the company expects similar investment levels in H2, with significant improvement only expected in 2027-2028.
- The US base business, excluding TOUCH, is still recovering from the Florida distributor change, with the southern part of Florida expected to return to previous run rates only by the end of the year.
- APAC growth was only 5.5% due to a one-time positive impact in New Zealand in the prior year, and the region faces ongoing reorganization in Japan, with new leadership starting only in September.
- The company faces delays in hospital contracts for TOUCH (6-8 weeks), which slows surgeon adoption, and about half of trained surgeons are not yet performing procedures due to contract issues.
- Latin America growth was softer at 9.6% due to distributor changes in preparation for NeoOrtho launch, and the company is still in a transformation phase, with full benefits expected only in 2027.
Good morning, good evening, and welcome to this Medartis 2026 half-year results conference. We appreciate you taking the time this morning to dial in. Our reference document that you see also on the screen is the presentation slide deck, which was alongside the press release and also the half-year report published this morning at 6:45 on our website.
With me today on the left-hand side is Peter Hackel, the CFO; and in the middle, Matthias Schupp, the CEO. One brief note before we start, housekeeping question. Please refer to the disclaimer, which you see on the screen on slide 2 concerning forward-looking statements. We will take your questions at the end and welcome your active participation, as always.
With that, I'd like to hand over to Matthias for his opening remarks and the highlights of the first half on slide 3. Matthias, over to you.
Yeah, Fabian, thank you very much. And
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