Earnings call transcript: GVS Q2 2025 sees steady growth amid market challenges

GVS Group (market cap: €1.1 billion) reported its second-quarter earnings for 2025, showcasing modest revenue growth and a slight decline in its stock price. The company posted a 1.7% increase in revenue, excluding foreign exchange impacts, and a 4.1% rise in adjusted EBITDA. The stock price fell by 0.3% following the earnings release to €5.79, reflecting investor concerns over certain market segments and operational changes. According to InvestingPro data, the company maintains a "GOOD" overall financial health score of 2.9 out of 5, suggesting resilient fundamentals despite market pressures.

Key Takeaways

• Revenue increased by 1.7% excluding FX impacts.
• Adjusted EBITDA rose by 4.1% year-over-year.
• Stock price declined by 0.3% after earnings release.
• Strong performance in the medtech core business, growing by 3.5%.
• Operational changes include closing the Puerto Rico facility.

Company Performance

GVS Group’s overall performance in Q2 2025 demonstrated resilience amid various market challenges. The company reported a 1.7% increase in revenue, driven by strong performance in the medtech core business and the safety segment. The energy and mobility segment experienced an 8.5% decline, reflecting broader industry trends. With a robust gross profit margin of 55.6% and a healthy current ratio of 1.48, the company is maintaining its leadership in whole blood products while strategically reviewing non-core businesses.

Want deeper insights? InvestingPro subscribers have access to 6 additional exclusive ProTips and comprehensive financial metrics for GVS Group, along with detailed Pro Research Reports available for over 1,400 stocks.

Financial Highlights

• Revenue: increased by 1.7% excluding FX impacts.
• Adjusted EBITDA: €54.2 million, up 4.1% YoY.
• EBITDA margin: increased by 90 basis points to 25.1%.
• Adjusted net income: €26.2 million, up 16.2% YoY.
• Leverage ratio: 2.4.

Outlook & Guidance

GVS Group confirmed its expectation of mid-high single-digit growth for the coming quarters, with analysts projecting 5% revenue growth for FY2025. The company is targeting an EBITDA margin increase of 150 to 250 basis points and a leverage ratio around 2.2. Additionally, there is potential for a dividend distribution by the end of the year, and the Whole Blood segment is expected to generate €4 million in monthly sales. Based on InvestingPro’s Fair Value analysis, the stock appears slightly undervalued at current levels, with analyst targets suggesting potential upside of 21%.

Executive Commentary

CEO Massimo Scagliarini expressed optimism, stating, "We are very positive already in Q3." This sentiment was echoed by another executive, Guido, who highlighted the growth of the core high-margin medtech business. Scagliarini further emphasized the quality of their products, noting, "The products are confirmed as the best in class in this market."

Risks and Challenges

• The closure of the Puerto Rico facility and transfer of machinery could disrupt operations.
• The energy and mobility segment’s decline may impact overall growth.
• Tariff mitigation strategies and price increases may affect customer demand.
• Market saturation in certain segments could limit expansion opportunities.
• Macroeconomic pressures, including currency fluctuations, remain a concern.

GVS Group’s Q2 2025 earnings call highlighted its steady growth and strategic initiatives amid a challenging market environment. While the company faces certain operational and market-related challenges, its focus on core business growth and strategic reviews positions it for continued resilience. With a P/E ratio of 30.6x and a PEG ratio of 1.62, investors seeking detailed valuation metrics and comprehensive analysis can access the full Pro Research Report exclusively on InvestingPro, which transforms complex financial data into actionable intelligence for smarter investment decisions.

Full transcript - Gvs SpA (GVS) Q2 2025:

Conference Operator: Good afternoon. This is the conference operator. Welcome, and thank you for joining the GBS First Half twenty twenty five Results At this time, I would like to turn the conference over to Massimo Scagliarini, CEO. Please go ahead, sir.

Massimo Scagliarini, CEO, GBS Group: Thank you very much. Good afternoon and good morning to everybody, and welcome to the first half result presentation of the GBS Group. So a quick highlight on the number. The title for this slide is related to the second quarter of this year because we reached our record EBITDA since 2021. And I would like to remember that in 2021, we were still under the effect of the COVID pandemic.

So it’s a very nice sign of the track that we are following and a confirmation of the discipline that we have in improving our profitability. Healthcare life science, plus 2.2. We are a little bit disappointed by this result. Beside being positive draw, and and so this is really good. We are a little bit disappointed, and this is because we have been affected by a disruption in production by aeronautics that have stopped production for nearly one month.

And so this have impacted our sales in the second quarter. Plus, we have a legacy of two big customer of Medtronic in the modalities sector where we do some third party work. And besides this not being a very profitable business, is super volatile and is affecting our revenue, but not profit because, as I said, it’s not impacting this side. But, anyway, Guido will give you more details later on on these on these topics. Just to add another point, anyway, we are working on our strategic plan for the next three year, and we will address also this point in our strategic plan.

Safety safety, a nice plus 8.6. Positive, accelerating in the second quarter, and a nice view for the second for the second half. Adjusted EBITDA, 25.1, so 90 bps versus 20 ’24. And again, with a wonderful second quarter of 26.22 bps versus Q2 twenty four. So we are moving in the right direction in term of profitability.

Adjusted net income, plus 16.2% versus previous year, 26,200,000.0, increasing the margin from 12% to 12.1% versus 10.5% of the first half of the last year. Net financial position, $268,000,000 with a leverage ratio after management acquisition of 2.4%. Now some more detail in reality, I have already spent a lot of words in the first slide. Again, Healthcare Life Science plus 2.2. In reality and again, Widder will give you some more hint on this.

But if I extract just the old core business of medtech, we have a growth that is correct me, Widder is more than 5% on the

Guido, Executive, GBS Group: On MEDDEX.

Massimo Scagliarini, CEO, GBS Group: On MEDDEX just in this area. So this why I mentioned this because it’s a very nice signs that the market is finally moving in the right direction. So we’re very positive on this. Energy mobility, minus 8.5%. I will not spend comment on this.

Everybody knows the status of the market. And so I will move to the safety where we have the €8,600,000 that I mentioned before with an acceleration on the second quarter and a nice view for the second half. Adjusted EBITDA, plus 4.1% at 54,200,000.0 with a 25.1 margin for the first for the first half.

Guido, Executive, GBS Group: Net financial position, two sixty eight after with a leverage ratio of 2.4 after the M and A activity. Now I will give the speech to Widow for some Let’s other move now to Slide number four to comment the evolution of sales in the ’25. So compared to the 2024, the revenues are up 1.7% excluding the FX impact. So we had a negative FX impact of approximately 1.4% of €2,900,000 This has been more than compensated by growth both in volumes, euros 900,000.0 or 0.4%, and a 2.8 per €2,800,000 equal to 1.3% growth in price. If you go to slide the following slide, let’s see and let’s comment the various trend of different divisions, starting from health care and life science.

Health care health care and life science reported a 2.2% growth excluding FX. And as Massimo mentioned, he’s worth highlighting two different factors that impacted on the performance of the division in the first half of

Executive, GBS Group: the year. The first is transfusion medicine. Massimo already anticipated that we had one month block in humanetics plant production. And due to this stop, we lost approximately one month of revenues in the quarter. So approximately €4,000,000 of impact.

And this created a sizable order backlog that we plan to reabsorb in the second half of the year as our order portfolio remain very solid. And in addition of that, the completion of the transfer of the production machinery from the Emoneti Tijuana plant to our plant in Mexico that is expected to be completed by q three two thousand twenty five will help to stabilize this situation. Moving to medtech. We have

Guido, Executive, GBS Group: this negative 1.5% performance excluding effects. But as Massimo mentioned, this is affected by a sharp decline of our specific business. And this is a contract manufacturing of hemodialysis lines that we have in place with two large US customer. It’s a legacy from Hematronic acquisition. This business is low margin, is not strategic for us, and has been it has experienced a very high volatility in the last eighteen months.

In first half two thousand twenty five, the volumes are down approximately 30, 30%, compared to the 2024. So these translate into an impact of five negative impact of €5,000,000. So net of this impact, the med tech division is growing 3.5% in the first half. So there is a 5% difference from that is linked to this to this this dialysis business. That means that our core high margin medtech business, so the filters, the components, is growing nicely.

And it’s an important message we wanted to to highlight in this presentation. Please also note that in full year 02/2024, we had already a negative impact of this dialysis business. There was approximately €5,000,000 in the year, so 3% impact versus 02/2023. And it was, again, related to this business to to these two customers. This decline in revenue is not linked to a specific dynamics of the underlying sector because The US volumes, if you also look at the reporting of the listed player, are flattish basically.

But so this effect is rather a very client specific dynamic because both customer have internal production capacity, and our contract manufacturing only covers upon the quantity that they don’t produce in general. So we consider this business not core. We are now assessing in the context, as as Massimo said, in the context of the new strategic plan, how we want to handle this business going forward. So moving to safety now, I mean, a very strong performance in particular in the second quarter. So we had a strong acceleration in second quarter of sales.

Excluding the effects in second quarter, we reported a plus 13.8 growth in revenue from the 3.1 of the first quarter. And so, I mean, we expect this trend to continue in in the second part of the year, while the energy mobility basically had the same trend we recorded in the first half and is down on the first quarter and is down in the first half 8.5%. And now I leave the floor to Marco to comment the EBITDA.

Marco, CFO, GBS Group: Thank you, Guido. Hello, everybody. Three slides on the financials now. The first one is on the adjusted EBITDA. EBITDA in the ’24 was 52,000,000.

Now we are at 54.2. So we are improving by €2,200,000. The main reason being net price. So we increased we increased pricing by 1.3% year on year, and the the amount is €2,800,000. Then FX is a negative, slightly negative.

Half a million is driven by the trend of the dollar, which fell down by 1% year on year against the euro. And the slight negative impact is also generated by the Chinese currency going down by 2% against the the euro. As for the volumes volume mix, all in all, it’s around zero. Already we already told us a lot about that. And then you see on the right side of the slide, other is 0.1.

So negligible. It’s the the impact of the change, the tariffs is there. The impact has been $3.50 k euros in the first half. In the meantime, we have increased pricing to offset that. Starting from the July 1, we increased pricing in order to compensate and assume the tariff increase of 10%.

So in July, the impact of the tariff was zero. If we assume now from August onwards, 15% tariff, this would translate into the duration of our EBITDA of 400 ks in the second half, which means in the end, the same impact as in the first half. So anyway, the impact of the the tariffs is not so significant. Thanks to the pricing, further pricing we are implementing in the second part of the year. As for the EBITDA margin, already highlighted by Massimo, we are increasing by 90 points year over year.

Already set by Massimo the strongest quarter since the Q4 twenty twenty one. Let me say also that in Q1 twenty twenty five, so last quarter, the EBITDA margin was 24.1%. And in the second quarter of the current year, we are improving versus the first quarter, the EBITDA margin by two ten bps. Now I move to the next slide. You see on the right side of the slide, the adjusted net income, which is excluding the FX impact related to the intercompany loans in dollars, which funded the m and a over the past few years.

You see in absolute terms from twenty two point five last year to 26.2%. In the end, just to keep it short, the adjusted net income on net revenues is 12% roughly, which means that we convert into ordinary cash 12% of our revenues. And then my third slide is on the net financial position. You see last year, we closed with 2 19.8, let’s say, $220,000,000. We went to $2.75 at the end of Q1, and now we are improving versus Q1 by 7,000,000.

Now we are at EUR $268,000,000. You see that on the bottom part of the slide, there are two rectangle. The first is highlighting the extraordinary impact generated by M and A, the acquisition at mid January in 49.4% and the extraordinary CapEx, 5.6%, which are the extraordinary investments for the new plants in The UK and China. If we set aside the extraordinary effects that we have generated in the first half, it’s around €7,000,000 ordinary cash. This is less than we did last year because last year, over the first six months, we generated €15,000,000.

And why from 15, we went to 7? Because you see net working capital deterioration in the first six months, 17.5. Let me explain that. Around €4,000,000 is due to the fact that we have anticipated the payment of the variable pay from July to June. So it’s 4,000,000, and we are recovering all debt in the second half.

Then 8,000,000 is due to the stock not related to the acquisition, so it’s related to the old perimeter. It’s middle, and I bet that we are recovering that by October. And then 4,000,000, the remaining around 4,000,000 is due to receivables and our target is to recover around 50% of that in the second half of the year. So just to say that the negative impact of the working capital is temporary. So we are going to recover almost everything in the second half of the of the year, which translates into an ordinary cash generated in the second half of around €40,000,000.

The €40,000,000 we are going to generate in the second part of the year is not including the impact of the buyback, which is expected not higher than €20,000,000. So it’s gonna be between 10 and €20,000,000. And also the €40,000,000 I mentioned is not including extraordinary CapEx for the last portion of the investments for the move into the new plants in The UK and China. And CapEx also related to the acquisition we made at the beginning of the year. And and so we are confirming, excluding the buyback and leverage ratio around two at the end of the year.

Now I give the floor to Massimo for the conclusions.

Massimo Scagliarini, CEO, GBS Group: Thank you. Okay. Quick outlook to what will happen in the second half. So as we mentioned, 350,000 roughly what we paid on the first half for the tariff impact. In reality, we have already negotiated the price increase with all our customer.

So we are expecting to recover this on the second half. And, of course, this will help also the revenue because price increase will improve the first the first line. World blood, nice order portfolio. We need to be quick in transferring all the production from Aemonetics facility to our facility so that we will be in full control of the production, and we can accelerate and recovery what we have lost in the first half. We are seeing the transfer to be completed by q three in 2025.

On the guidance, nothing specific. We confirm the mid high single digit growth versus the previous year. And because we are expecting to recover a nice ramp up in the second half in the whole blood. Plus, we have the price increase in all the medtech that is impacted by the tariffs. We have the adjusted EBITDA still confirming at 150, two fifty bps, including tariffs.

And leverage ratio around 2.2, including the impact of the buyback that we activated one month ago. I believe that this is all. And so now we can move to the Q and A to give you more detail on any views that you may have on the first half. Thank you.

Conference Operator: Thank you. We will now begin the question and answer session. The first question is from Matteo Bonizzoni of Kepler Cheuvreux. Please go ahead.

Executive, GBS Group: Good afternoon. I have two simple questions, let’s say. One is, we know that you don’t disclose the Delta perimeter impact, but it’s fair to assume that in the first half it has been around €4,000,000 And it’s also fair to assume that in the full year it could be the net impact not including also the netting of the Infra Group sales maybe in the region of €20,000,000 This is useful for us just to calculate clearly the let’s say, let’s call it organic growth. And then I would like to have as a second question a sort of feeling on the trading condition which you are experiencing in Q3. Clearly, have done basically flat sales all in all in first half, including ForEx and everything you have done plus 0.4%.

Just to understand what kind of phasing we should expect for the acceleration in the second half? Are you already seeing including ForEx, including everything, including Delta perimeter, an acceleration in the third quarter? Do you expect to see or is more back end loaded in the fourth quarter? And then if I may also, we know that we should have a margin impact additional in the second half from the closing of the facility in Puerto Rico. We issued in the past guided to happen at some point midyear.

I would like to have maybe an update on this on how it’s progressing these item, let’s say. Thank you very much.

Massimo Scagliarini, CEO, GBS Group: Andrew, the first one here, Willem? Yes.

Conference Operator: The first quick question, I think your number are relatively accurate.

Guido, Executive, GBS Group: So I think we can have a couple of more million as total impact for the full year. But I think the you you you center the point. The second question, I don’t know if you want

Marco, CFO, GBS Group: Do you think condition about in q three? Do you

Massimo Scagliarini, CEO, GBS Group: Well, again, as I mentioned before, there are different different point that need to be evaluated. The first one is the conclusion of the transfer of all the machine and the starting of our production for what regards the blood division. This is going to happen in q three twenty five, so we are expecting to see an acceleration already in q three and then the full speed in q four. For what regards the legacy of the dialysis, again, this is very volatile. It’s difficult to predict how it’s going.

Medtech is running very nicely and and is growing very nicely. Life Science is confirming all their result. And safety is also going quite nicely in the vision that we have for the second half already in Q3 is very positive. I believe that endogen mobility would remain roughly where it is now in terms of revenue. So we are positive already in the Q3, but the blood, they might affect, let me say, the speed of the Q3.

It really depends on when we can close this. The closure of Puerto Rico is nearly done. We are still producing few small things, but the plant, it’s, I would say, completely empty. There are just two machine that are remaining in Puerto Rico. And by q three, that will be completely closed then so that we’ll bring more profit to the group because we will have less extra cost to managing this this plant.

Marco, CFO, GBS Group: If I may, I want to add one point. How we beat our guidance? We need just to be replicate in the second half the q two performance as for the old perimeter. Very simple. And as on top of of that, the whole blood needs to report €4,000,000 per month, which is what we have already done between February and May.

The only difference between the second half and the first half that we have lost January. In June. In June. January because we signed the contract at the fourteenth or January 15. And June because of okay.

We have already explained the the disruption. So the the guidance is not something external. It’s just the second gap in the second quarter. Yeah. Thank

Alessandro Torto, Analyst, Mediobanca: you.

Conference Operator: The next question is from Emmanuel Gallazia of Equita.

Emmanuel Gallazia, Analyst, Equita: Good afternoon, everybody. Thank you for the presentation. I have just two quick questions. The first one is back on your tariff topic. You were mentioning an additional price increase.

I think in the first quarter, you were guiding for something close to 1.5% price impact. Are you slightly ahead of this, so we should think about an additional price increase related to tariff? And the second one is, when I look at the second quarter results, do they include the full recovery of the Monterrey mold issue in the first quarter? And even for the safety, I think that in the first quarter, you were mentioning a shift in order. So the second quarter results include this big order that shifted from the first quarter to, I guess, the second quarter?

Guido, Executive, GBS Group: Okay. So if you can start from the last one on safety, yes. So we have recovered this, but on top, they would in general acceleration. The very good performance of safety in second quarter is not only linked to this recovery of order loss in the first, but is really also an acceleration of the business. And that’s why we are we see, as Marco said, that this performance can be potentially replicated in the second part of the year.

Marco, CFO, GBS Group: The first question was about the tariffs and pricing. Okay. Let me say, in the first half, pricing was 1.3%, close to very close to our budget. Then we have already implemented new pricing the around thirty, forty bps on top of the 1.3. And this has been implemented to completely offset the impact of the new tariffs expected equal to 10% for the good from The EU to The US.

So this is what we expected. Now, you know, we could assume 15%, so an extra 5%. Up to now, we have negotiated pricing to offset the 10%. So now our commitment is to to implement for the thirty, forty bps, but I cannot exclude on top further pricing. I hope I was clear.

Emmanuel Gallazia, Analyst, Equita: Yes. And maybe if I can follow-up on your guidance because in the first half, you reached a 90 bps margin expansion. And if I look at the low end of the guidance, it clearly implies a material improvement in profitability in the second half despite, let’s say, the top line acceleration should be driven by the M and A contribution, which has a dilutive effect on the profitability side. You clearly mentioned the Puerto Rico, but can you help us understanding a little bit better the moving parts here to have this improvement?

Massimo Scagliarini, CEO, GBS Group: On this two. May I spend a word? Yeah. What is interesting to to to to understand is that the first half, in term of margin dilution for the blood division was the more critical because we are paying Aemonetics for manufacturing the goods for us in in in during the transition from their plan to our plan. What will happen in the second half is that we will start production.

So we will not pay any more Ammonetics to produce for us. So that will bring a nice acceleration on the EBITDA margin. And further

Marco, CFO, GBS Group: info. Let’s say that last year in the second half, our EBITDA margin was around 24%. You probably remember that last year, the first half and the second half, we posted more or less the same EBITDA margin, something close to 24%. In q three and q four, now we are telling you we are going to replicate the second quarter. So it means that if I replicate the second quarter and the second half have a 26% adjusted EBITDA versus last year, which was around 24.

So it means that by simply replicating the the second quarter, in the second half, I have an increase in the EBITDA EBITDA of around 200 bps, not the 90 bps we posted in the first half. Then then on top of that, Puerto Rico. Puerto Rico closure is giving us further 50 bps. K? Because up to June the difference between July and June, just closing Puerto Rico, it means that we are going to save around 200 k euros every month.

And these are the main the main talks. Then, of course, don’t forget that it’s very important for us to increase volumes. So now we are saying we are assuming to have a volume to q three and q four aligned with q with q two as for the open meter, which means that the second half, we see we will see in the second half higher volumes than in the first half. And we are quite sensitive to higher volumes. You you remember that if we increase volumes by one percent, we improve our EBITDA margin by 30 bps.

But just to keep it very, very short, Monet, we need to confirm the second quarter performance in the second half.

Emmanuel Gallazia, Analyst, Equita: Very clear. Thank you. Thank you very much.

Conference Operator: I think there was a question regarding Monterrey. Yeah. The production disruption in Monterrey now

Massimo Scagliarini, CEO, GBS Group: It’s is okay. It’s Monterrey is running smoothly, and so no issue on this side.

Emmanuel Gallazia, Analyst, Equita: Thank you.

Conference Operator: The next question is from Christian Indorecker of Goldman Sachs.

Christian Indorecker, Analyst, Goldman Sachs: Good afternoon, everyone. Thanks for the presentation. I want to come back maybe just to start off with on the pricing comments. Appreciate that color in terms of the thirty, forty basis points that is, I guess, tariff related. Can I just clarify, is that in the context of the group?

And are you able to give a sense for what sort of price levels you’re putting through on the perimeter of sales that it affects? I’ll start there.

Massimo Scagliarini, CEO, GBS Group: The price increase related to the tariff or the price increase related to the I first

Christian Indorecker, Analyst, Goldman Sachs: think you’re saying that the price increase of 30 basis points is relative to combined group sales, if I can clarify correctly, rather than 30 basis points increase in each product you sell in The US.

Marco, CFO, GBS Group: And you are right. So it was 1.3% ordinary pricing for staff on top around 30 bps just to offset tariffs. You are right. And then the question is to

Guido, Executive, GBS Group: I think No. Will just clarify this point. If the 30 basis point is applied on the overall group revenues

Marco, CFO, GBS Group: No. It’s more related to the sales that are hit by the tax.

Christian Indorecker, Analyst, Goldman Sachs: Understood. Thank you. Maybe if I come back on the fourth quarter call last year, we talked a little bit about capital allocation. You’ve obviously had the extraordinary investment, so to say, in terms of the expansion of your U. K, China facilities.

How do we think about capital allocation going into H2 and beyond across CapEx, but also, I guess, the buyback and dividends? Thank you.

Marco, CFO, GBS Group: Okay. You mean you would have to have a forecast of the amounts?

Christian Indorecker, Analyst, Goldman Sachs: Yes. I suppose the point raised in Q4 specifically was around scope to reengage on the dividend. Since then, obviously, you’ve raised your leverage guide for the year and introduced the buyback as a sort of combined decision. Does that imply the dividend decision is maybe delayed? And then just how do we think about the CapEx plans for the business more broadly?

Marco, CFO, GBS Group: There are at least two questions. Let’s say, I will answer on the extraordinary CapEx and I will give the floor to Martin for the dividend. Yep. For the external decaps, in the second half, we you should expect €4,000,000 just to complete the move to the new plans in China and The UK. So €4,000,000 in the second half just for UK and China.

And then we are done with the external CapEx for the the new plans. On top of that, you can expect no more than 3,000,000 external CapEx for the acquisition because we are moving machinery from harmonic plant to our plant. So as from the CapEx, around 7,000,000 is a safe assumption for the second half, and that’s it. Then the question was also about back and dividend.

Massimo Scagliarini, CEO, GBS Group: Yeah. The intention is still to release dividend by the end of the year. Of course, we will see how and how much and how during the course of the second of the second half. But right now, we are still positive in distributing dividend by the end of the year.

Emmanuel Gallazia, Analyst, Equita: By the end

Christian Indorecker, Analyst, Goldman Sachs: you.

Conference Operator: The next question is from Alessandro Torto of Mediobanca.

Alessandro Torto, Analyst, Mediobanca: Yes. Hi. Good afternoon to everybody. I have four questions, okay, some cases are follow-up. So I will start with your whole blood business.

I understood that now you basically solved the disruption you had in the past month. Can you comment a little bit on the, let’s say, commercial opportunity you see here? Because clearly now you are, let’s say, now adjusting your production internally. So when you comment that you have a good portfolio, if we need, let’s say, to look a little bit ahead, how do you see this business evolving? You mentioned that in theory, if everything goes fine, you could basically raise 4,000,000 sales per month.

So okay, 4,000,000 sales times 12, let’s say, let’s maybe let’s take it out to a month, okay, for holidays. But the point is, can you give us an idea of commercially speaking, how how do you see this business? Are you approaching new clients? And what is the general feedback, okay, on Noteblad? That’s the first question.

Thanks.

Massimo Scagliarini, CEO, GBS Group: The the feeling is super positive. Consider that this year, we are still impacted by the huge stock that Aemonetics have produced Mhmm. To in all the customers. So our sales are really at the minimum at the minimum level. All the customer are very positive.

They’re very happy that we enter and we revitalize this business. The product are confirmed as the best in class in this in this market. So, no, the the the view is super positive. My expectation for ’26 are very nice. Then we are already negotiating some potential big deal.

But but, again, now I want to keep the focus in transferring everything. So and having the production under control that is the most critical point because we’ve cut cost and that will give us the possibility to speed up as we like in serving this in serving this this market.

Alessandro Torto, Analyst, Mediobanca: Okay. Thanks. And then the second question is, you mentioned during the presentation the fact that you have these contract manufacturing, okay, an heritage from a Medtronic deal. The question is, first of all, how big is it to this business today for you? Because you mentioned now a decline of 5,000,000 last year and again now another decline in this first half.

So can you give us an idea of the size of the business today?

Massimo Scagliarini, CEO, GBS Group: Yeah. Yeah.

Conference Operator: In in the 2025, it counted for €12,000,000. And it’s down, like, 30% from from the first quarter or 2024 when it was 17.

Massimo Scagliarini, CEO, GBS Group: Yeah. Yeah. The point is that this line are quite expensive each single line. And so the the fluctuation in in quantity is is affecting the the the revenue quite impacting the revenue in in quite big manner. But but in terms of marginality, they are more so not really important for us.

And this is why you might see this fluctuation in revenue, but you see that we are keep improving our profit quarter after quarter because this revenue are really not important in the sense of the profit and the margin of the company. That’s why we are working on it on our strategic plan to see what to do and how to manage this heritage, you know, this that we had from this acquisition.

Alessandro Torto, Analyst, Mediobanca: Okay. Okay. Thanks. And and just a follow-up question on this. I know your strategic action you have, let’s say, assessing for next year.

Are there any thoughts you can, let’s say, do us on the energy mobility business? I remember that in the past, we discussed about, let’s say, I don’t know, any possible option, okay, for this business for you?

Massimo Scagliarini, CEO, GBS Group: Yeah. We are working also on this. These are the two big, let’s say, point that we are analyzing in our strategic plan, and we are evaluating all the option and all the possibility. And we will let’s say, I believe we will have something public by next beginning of next year and where we will tell you what we want to do with this to

Alessandro Torto, Analyst, Mediobanca: Okay. Area. Okay. Okay. Thanks.

And then the last question is on the Health and Safety. So basically, hear that Widow mentioning that these are almost 14% in organic growth in Q2. When you say we expect to say kind of continuation of these trend in the second part, are you referring let’s say to the, can I say the high single digit first half trend or let’s say this low double digit and on top of let’s say this indication considering the acceleration you had, but also now your confidence in having a second half pretty strong? Can you give us an idea of the underlying trends? Is it still a is it, let’s say, only The US market?

Is it a matter of new products or maybe also other countries on top of, let’s say, US contributing to this trend? Thanks.

Massimo Scagliarini, CEO, GBS Group: Consider that we have launched the full face mask basically, at the beginning of the year. So it’s Mhmm. It’s a full speed in the second in the second half. Plus,

Emmanuel Gallazia, Analyst, Equita: we

Massimo Scagliarini, CEO, GBS Group: have one mask that have been designed to be wear on the Asian country. And so we are expecting to have a nice return from from this product. So there are apart from the market itself, there are nice new entry into the business that are keeping us excited. But I will anyway stay on the, mid high single digit growth as forecasted.

Alessandro Torto, Analyst, Mediobanca: Okay. Okay. Thanks. Thanks for the answer.

Conference Operator: Please click on the Q and A icon on the left side of your screen or press star and one on your telephone. Gentlemen, there are no more questions registered at this time.

Massimo Scagliarini, CEO, GBS Group: Excellent. Thank you very much to everybody for participating in our presentation. See you at the next quarter and have a nice summer to everybody.

Christian Indorecker, Analyst, Goldman Sachs: Thank you.

Conference Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your devices. Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.