Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the GVS 2026 to 2028 business plan web call. All participants are in listen only mode, and after the presentation, there will be an opportunity to ask questions through the Q&A session. At this time, I would like to turn the conference over to Mr. Massimo Scagliarini, CEO of GVS. Please go ahead, sir.
Thank you very much. Good afternoon and good morning to everybody, and welcome to the 2026 to 2028 business plan presentation. Before to enter into the business plan presentation, as we mentioned in the last call, I would like to share with you our guidance for 2026. Happy to say, as many of you were expecting, that we have revised upwards the guidance, specifically revenue, from low- single- digits upwards to mid-single- digit organic, versus 2025. EBITDA from 25 basis points to 50 basis points to 50 basis points to 100 basis points upwards, margin expansion versus 2025, and the leverage ratio confirmed up to, for the end of the year. The main driver of this growth, we have commented this on the last call. For sure, you remember on MedTech, we are collecting the commercial synergies on transfusion medicine.
Finally, we overcome all the reorganization into regulatory and the supply chain, and that is giving us speed and consequently market share, recovery. Life science, low- single- digit, is not representing the opportunity that we have in this area, but is just start showing you the job that we have done in the last year and a half. This is the result of the new distribution agreement and pharma validation. Safety, low teens. Keep moving in the right direction as always with new product, new geography, and a nice improvement in the order, as a result, a nice improvement in the order intake. [inaudible], mid-single- digit. We are seeing a nice reshoring of the traditional customer, but not only, we have also a new customer in this market. So, a nice rebound that give us the mid-single- digit by the end of 2026.
Now, the more interesting part, the business plan 2026 to 2028. Let's see some numbers. Organic target for the next two years and a half is mid-single- digits. We will see this later on in, again, division by division, in all the detail. But to be very synthetic, this organic growth is nothing else than the result of the job that we have done in the last three years. The reorganization of all the blood, the reorganization inside the MedTech in term of sales organization, new product that have been launched. A lot of activity that we've done in the last three years that finally now are coming back and bring us this nice mid-single- digit organic target for the next two years and a half. When we have organic target, automatically, we have a better saturation and that's bringing a better EBITDA.
This is, in our organization, an automatic consequence. What we expect is at least 100 basis points improvement in the EBITDA margin, and this due to the organic growth. Of course, not only we will have the pricing, we will have a gain, a constant improvement of all our organization. The fact that we are not foreseeing M&A activity, at least in the next year and a half to two years, it allow us to really focus on our business. We know that we are good at this. When we do these type of activity, normally we improve our margin, and we have a nice expansion. This, of course, margin expansion mean faster leverage. We are expecting by the end of 2028 to be at 1.0x. Definitely, a nice recovery on the leverage. Some comment division by division.
In reality, Guido will guide you more in detail and give you more flavor for every subdivision. MedTech. Again, MedTech, we are an organized sales network. We will have one part that will be more dedicated to filtering components. Another branch of the sales network will be dedicated more to bioprocessing and to pharmaceutical bags. There is a lot of activity, like science will be incorporated inside bioprocessing. At the end of the story, the point is that we will have a sales force that will be definitely more focused and dedicated to specific vertical, that we believe have a nice potential in terms of growth for the next two years now, and not only two years now. Because the job has been done until 2030, but we see today the consolidated numbers are 2026 to 2028. Consumer medicine.
The global platform has been built, as I mentioned before. We are now getting speed because we overcome the majority of all the regulatory and supply chain reorganization. Keeping speed on this area will allow us to regain market share, in particular in U.S., and gain new market share in the Middle East and in the Asian market. Again, from now on, we will start to collect all the job that we have been doing in the last two years, three years in reality. Safety. Again, we have been successful until today, and we keep working in the same direction. New products. Again, we want to be best in class in what we do. Until today, we have been succeeding on this, and we want to continue to do the same.
This will allow us to expand our market, will allow us to expand, consequently, all our sales network and geographic area. This will bring us a nice high- single-digit growth. Life science. Life science, again, will be incorporated into the new organization. What is important is, in the last year and a half, we have completely reorganized this subdivision. We have completely changed all the sales team. We have added hundreds of new SKU. We have completed a very nice filtration portfolio. As a result of all this activity, in the next year and a half, again, we are going to collect the result. We can see this already through distribution agreement and the pharma validating our products. Energy & Mobility. Energy & Mobility, of course, is a challenge. Also here, we have an reorganization in the sales area.
We will have one part of the sales network that will follow the traditional four base customer. Then we will have other two sales organization that will be dedicated more to the electronics with the human eye or everything is related to the future electronics. The other part will be dedicated to the hydrogen that is now ready to be launched in the market. I spoke a lot. Maybe I'll take part of your description, but Guido, please, your speech.
Thank you. Thank you, Massimo, and good afternoon and good morning to everyone. Let's start from MedTech. Our strategy in MedTech is based on two distinct growth engine. The first is what we call the core hospital business that includes features and component for medical liquid and medical air application. Here we expect to continue benefit from commercial synergies generated by our recent acquisitions. We now have a much broader product portfolio that creates opportunity for cross-selling and the launch of new product leveraging on an enlarged customer base. The second is the bioprocessing, the one that also Massimo mentioned, the bioprocessing related application. Here we are investing in a dedicated commercial structure that is focused on some of the fastest growing filtration application within healthcare and lifestyles.
This includes the pharmaceutical packaging, the membrane technology, and cartridge filtration system. Those product categories address an end market with growth rate that are significantly above those of traditional MedTech space. Therefore, we thought required dedicated commercial leadership and specialized resources to fully capture the potential. The result of this action, of this strategy, as a result, we expect MedTech to deliver a mid-single- digit target over the period, excluding the impact of our partial phase out of the hemodialysis business. Moving now to transfusion medicine. Transfusion medicine represents one of the most attractive growth opportunity with the group. As you know, over the past few years, we have built through a series of acquisition, a truly global platform with highly complementary product offering, and that would allow us to serve both developed and emerging markets with very high quality technologies.
The focus is now on scaling the platform. We estimate that our addressable market is approximately EUR 1 billion, and this market remain highly concentrated among a limited number of large players. Today, our market share is approximately 6.5%, and we believe this not fully reflect the quality and the breadth of our product offering. We have lot of room for growth. Our portfolio is positioned at the premium end of the market, so provide significant room for expansion. Our growth strategy start with the collection where we expect a significant market recovery, in particular in the U.S. market, where we know the large customer are increasingly interested in diversifying their supplier base, as well as in other markets like the Asian, Asia-Pacific market, where we see potential to penetrate in the collection space.
Collection is the entry point to customer relationship, because once collection products are adopted, we are able to pull through the broader product portfolio, including processing and transfusion products. In parallel, we are also developing OEM programs with leading player in the blood management space, and are continuing to invest into upgrade and innovation of our product range, to further strengthen the position of GVS brand in this global transfusion medicine market. Overall, we expect this initiative to increase our share of the global addressable market, this EUR 1 billion market, from 6.5% to 8% by 2028, and this will support high- single- digit stage target. Moving now to Safety. Safety has already delivered several year of strong and consistent growth, and our objective now is continue building on that momentum. The growth story is driven basically by two factors. One is product innovation.
An example is the launch of Elipse face mask. It's a very important milestone because it expand and complete our product portfolio, in particular in the U.S. market, where our market share in reusable respirator mask is well below the market share we have in the advanced respirator like the PAPR. Beyond the two phase, we are also continuously improving and upgrade our existing range of the other respirator, like the PAPR, and as well as new products that are designed to strengthen our value proposition. Second driver growth is geographical expansion, where we see opportunities both in our traditional core market, that for Safety are Europe and U.S., as well as accelerating our presence in regions such Asia-Pacific and South America, where our presence is still limited, but we see a lot of room for growth.
Combining this product development with the broader geographic reach, give us the confidence to continue deliver this high single digit growth also for the next few years. Moving now to Life Science. We see also here a significant room for growth. Our strategy is centered around four pillars. First is continue the expanding through our distribution network, through new partnership with large global distributor. That is something that we have already started in 2026, and we want to further increase in the years to come. The second is to broaden our filtration offering, to complete again, more the range of our portfolio, and then, using that to maintain a premium position. So filtration is critical, to preserve our differentiated value proposition in this market. The fourth, as mentioned also by Massimo, is the penetration of pharmaceutical customer.
We have multiple qualification and validation project underway, and of course, we plan to convert this into recurring commercial volumes. Together, all these initiatives should contribute to high- single- digit stage target during the period. Finally, next slide, Energy & Mobility. This vision here combines stabilizing the legacy business with several emerging growth opportunities. So on the traditional business side, after a year of decline associated with internal combustion engine, we are now seeing improved demand trends, and that is supported by reshoring initiatives from U.S. customers and also by the resilience of hybrid platforms. On top, at the same time, we are continuing developing applications in electronic ventilation, and that is benefiting from increasing electronic content in vehicles and the broader electrification trends. So looking further ahead, the hydrogen membrane is a tangible additional opportunity for growth. We have completed now our production line.
There are ongoing customer validation activities, so we expect that initial commercial sales will start in 2027. As a result, we expect this division to grow a low- single- digit overall in the next two years. Now I hand over to Marco.
Thanks, Guido. Good afternoon. Good morning, everybody. We can move on to the financials now, margins first, and then the ratio, net financial position. Today's call started with a review, with an update of the 2026 guidance. Massimo Scagliarini, said adjusted EBITDA is up year-over-year between 50 basis points and 100 basis points, which means in the current year, the expected adjusted EBITDA margin is equal to 26%. Then if you look at the right side of the slide, you see we are projecting, in 2028, an EBITDA equal to 27%, which means an increase of around 100 basis points in two years' time. Now let's go through the assumptions behind the calculation. There is one central assumption, which is the organic growth rate. We are replicating 2026 performance, which means, Massimo Scagliarini said, organic growth rate in 2026, mid-single- digits.
Mid-single- digits means between 4% and 6%. The midpoint is 5%. That's why I am projecting 5% growth rate. It's a story made of volume, just 1.5% is due to pricing. The assumption, you know that we have quite a good pricing power. Here we are assuming 1.5% pricing because we are assuming flat raw material pricing. If the raw material costs were to rise, we would pass on that increase to the customer. I believe we have demonstrated our ability to do so. Let's go through the other remaining assumptions. As for the revenues, we are assuming FX flat versus 2026. You know that 50% of our revenues are made into dollars. Here, I'm assuming an FX equal to $1.164, and then I'm assuming GBP 0.87 for the British pound, CNY 7.9 for the Chinese yuan. The main assumption is about the US dollar.
Today, the FX is $1.14. I saw that some analysts are now thinking of $1.13 in the short- term. Just to give you an idea, if the FX, instead of being equal to $1.164, should be equal to $1.13, we would increase our revenues by around EUR 7 million per year, which means around EUR 4 million EBITDA improvement year-over-year. Okay. Now let's move from the assumptions related to the revenues to the assumptions related to the cost. I said before that we are assuming flat raw materials, but what about for the remaining costs? The overall costs between the revenues and the adjusted EBITDA are around EUR 300 million, EUR 330 million per year. If we remove the raw material, which accounts for around EUR 110 million, there is a basket of EUR 220 million of costs different from raw material.
Here we are assuming an inflation rate of 2.5%, which means around EUR 5 million more each year. I am not taking into consideration any manufacturing efficiencies which could offset that negative impact. Just to recap, the main assumption is about the organic growth, and we are replicating just the average organic growth in 2026. We are not taking into consideration manufacturing efficiencies. We are taking into consideration instead 2.5% annual inflation on the cost. Now, we can go to the next slide, which is about net financial position. We said at the end of the current year, we expect leverage ratio of 2.0x. Which is the old guidance we gave you at the beginning of the year, plus the impact of the voluntary tender offer we made at the beginning of the year.
Then, we are showing you that we can improve by around 1.0x, the target leverage ratio in two years. So we are going from 2.0x to 1.0x at the end of 2028. Here, the improvement is generated by the EBITDA, so by the 27% I told you before. What about the remaining assumptions? The assumptions are consistent with the historical trends. For example, working capital is slightly up by around 5% each year. So it means that the net working capital is increasing proportionally to the increase of sales. Tax rate 26%, then you can use 25%, but the difference will be negligible. The difference between 25% or 26% is less than EUR 1 million each year. CapEx is 7% of sales. That is our historical trend.
Even though in 2026, the percentage is 8, but in the current year, we are making some, say, special investments to push our sales. Next year, we will go back to the 7%. Net financial cost, 3.5% is the current cost. We should close the year with a gross debt of EUR 280 million, of which EUR 260 million is at a fixed rate. So just to be clear, only EUR 20 million of financial debt are linked with the Euribor at variable cost. So for example, what if the Euribor goes up by 100 basis points? The impact for our P&L would be just EUR 200,000. Just to say, it is impossible to make a mistake on the focus of the financial cost. Leasing, these are the rents. Rents, it is about EUR 1 million per year.
The summary of my projection, both for EBITDA and for the leverage ratio, is that I made a very, let us say, simple exercise. It is all based on the revenue growth. We end up with 27% adjusted EBITDA with 1 .0x leverage ratio, which are a target that we feel confident we can achieve. Now, I am giving the floor to Massimo Scagliarini for the conclusions.
Thank you, Marco. We want to give you a slight flavor of the job that we have done looking at the future. Our road to 2030, so the next four years and a half. There are many growth engines. We have here a small resume. Bioprocessing, the human eye, the hydrogen membrane, safety, and the new product being transfusion medicine. If I had to give you a takeaway, is we have done this all in the last three years, and now is time to collect. We are entering into a number of verticals that have a very large expansion area. It's not something that is going to end in two years. We know that when we do our job in the correct way, we are able to develop very nice product, best- in- class, and we are super competitive.
This allow us to see a nice view up to 2030 and definitely completely different revenue compared with today. Said that, we have concluded our presentation, and I believe that we can move to the Q&A section.
Thank you. We will now begin the question- and- answer session. To enter the queue for questions, please click on the Q&A icon on the left side of your screen. When announced, please click on Continue on the pop-up window. If you are connected in audio only, please press star and one on your telephone. First question is from Christian Hinderaker, Goldman Sachs.
Good afternoon. Thanks for the opportunity. I wanted to ask on the hydrogen membrane side of the business. I guess, interested in update in terms of commercial receptiveness on that product. I think there was a footnote on one of the slides in terms of the midterm opportunity. Yeah, interested in the phasing for commercialization. I'll start maybe there, and then we can go one by one.
Okay. So far, we are basically testing the product with our customer and the feedback we receive from those customer is extremely positive. The level of the result, the level of efficiency of the membrane is even superior of the material they are currently using. Now it is really time to move to the industrial phase and we are confident about the development of this business. There is already an existing market that we estimate in the region of EUR 20 million to EUR 30 million that we can target right now. On top of that, there are all the new developments on hydrogen. We are all aware that those development, this pipeline, it is huge, need to be financed in the next couple of years to be effectively installed by 2030.
But even if only 50% of the current pipeline will be financed, we are talking about a market that in 2030 is 10x the current size of the market. This show what is the opportunity, geographically speaking is, in particular, the most active is Asian market so far and here also we are doing lots of job in that direction, but also we expect also Europe at a certain point to recover. But having said that, we have a good product in a market that shows a lot of potential.
Thank you, Guido. Maybe a little bit more philosophical, but as we think about whether it is hydrogen, I suppose, or the sort of humanoid opportunity or I guess, tangential or new markets, I am just interested in terms of the process of commercialization. I think you talked to the product development and confidence in the product capability, but how do we think about the ways you go after those new market areas in terms of, I suppose, process and timing and then convincing the customers ultimately?
Well, the first point is, the product development, at least if we are talking about the humanoid business, is basically null in the sense that we are already delivering products to related type of business and the humanoid, at least for what is the humanoid today, have exactly the same needs of the other market that we are covering. So it will be just an expansion of something that we are already doing, and we are doing very well. So if the customer wants a good product, I believe that we are in a good position to supply that. So it is just an expansion of an existing product range that we already have that is very promising. And for what regards the hydrogen, again, we are very prudent in the number that we give out.
But we are speaking with customers that are already using hydrogen, already using a membrane.
Not dream, not sensation, is something consistent. Of course, with a hydrogen membrane, there is a part that is still in validation with the customer. So again, there is all the path to be done and step by step, we believe that at least we can be on top of this process.
Thank you, Massimo. Maybe just third and finally, in terms of the growth ambitions, these are all then organic, I guess, any update or thoughts on acquisitions at all?
Not right now. Again, as I mentioned in my introduction, we want to focus in extract margin. We want to focus in excellence. We want to focus on our customer. We will mainly focus on market.
Very good. Thank you.
Next question is from Matteo Bonizzoni, Kepler Cheuvreux.
Thank you. Good afternoon. I have three questions. The first one relates to legacy hemodialysis revenues, how much is now and how much you are targeting to achieve in 2028? This is just to assess the approximate pruning which we should expect in the next couple of years on this hemodialysis business. The second question is on Energy & Mobility, which you have said is stabilizing and also thanks to reshoring, but also other drivers and should return to some slight growth over the next year. The question is, what is the current approximate breakdown of your revenues across combustion engine versus non-combustion engine? Maybe, if you have some targets of growth, you can disclose more precisely some target of growth on the non-combustion engine. Also, can you elaborate your actions to expand into non-combustion engine vehicles?
In part, you have already said, but I would like maybe to have, if you can, more color. The last one you have partly answered, I have to say. So you are going to generate EUR 55 million to EUR 60 million free cash flow, equity free cash flow per year in 2027/ 2028, if I have done the correct calculation, given a 7% CapEx on sales and given a one time 3x EBITDA in two years. So, have I understood correctly that you are not looking at all at M&A or-
The question was if you are looking something, or maybe not this year or next year, but in the midterm, can you share with us in which segments and geographies? Thanks.
Okay. Third question was the analysis. You wanted the number.
Yes. We already said in the past that the in reality business for us is, of course, around EUR 20-ish million. On that, there is a part of this business where we have renegotiated the higher prices. We are increasing the margin, and we want to keep this business going on because it has also saturation of some plants and this margin, I think it's a good cash generator engine. There are a part of this business that is approximately from 2026 to 2028, approximately EUR 7 million that we expect to phase out, because this is not interesting for us. We want to free up capacity, to be able to use this industrial capacity to other products with higher margin and higher growth opportunities. This is the numbers.
Yes. The second question was about the Energy & Mobility. If I have to give you a quick answer, I would say 80/20 today. But in reality, into this 80%, we have a certain number of applications that is not really directly related to the engine. My life is out. Yes, but it's definitely a much more longer period than not the next three years. This is the picture. I would say that the more critical revenue, it would be around from 50% to 60%, let me say. The more critical in the next three years.
Again, for what is the status today, and based on where are our customers geographically spread, I would say that I'm not expecting big surprise, at least in the next. Also because you remember, everything is plug in, it's still thermic driven, and so all the filters that were used before are still fully in use. Also this is part of the plan elaboration.
On top of that, there is also the exposure we have on agricultural vehicle.
Yeah.
This one, of course, by definition, less exposed to the electrification trend.
At least not in the short- term.
Not in the short- term.
Not in the short- term.
The last was on the free cash flow and the maintenance. Matteo, you said that you are forecasting, projecting a free cash flow of around EUR 55 million-EUR 60 million. Let me tell you that in order to achieve a leverage ratio equal to 1.0x, EUR 50 million per year free cash flow is not to achieve our target. Our projection is not including M&A, is not including dividends. You need to
Okay.
We will see about that.
Yes.
Okay.
Yes.
There is no impact of any possible extraordinary financial operations.
To complete the answer, as I mentioned before, the move right now is
No M&A.
No M&A, dedicated to the market, really excellence with our customer and with our products. So really focalize on this activity and expand the margin as we know we can do.
Okay. Very clear. Thanks.
Next question is from Emanuele Gallazzi, Equita.
Good afternoon, everybody. Hi, Massimo, Marco, and Guido. I have three questions. The first one is on the health and safety. Basically, you are guiding for a, let's say, confirmation of the high- single-digit growth. You mentioned also the contribution of new product and the geographical expansion. Could you give us a sense of the contribution you're expecting from the new product and the geographical expansion in 2027 and 2028? Maybe a comment on the strategy to enter in the new market. Should we expect, let's say, investment in the distribution and the sales force for the health and safety? The second one is on the margin bridge. I think, Marco, you mentioned the fact that you are not taking into account operating efficiency in the target of the 100 basis point margin expansion.
I was just wondering if here is a sort of prudent approach or after the work done in the previous years, basically, you see less room for operating efficiencies. The last one is on the capital allocation. Very clear on the M&A. You also mentioned the dividends. I think in the press release and the presentation, there is nothing about the dividends. Can you just elaborate a little bit more on views and your view on the return to shareholder remuneration? Thank you.
Okay. The first question-
contribution of new product and then market out of the total growth.
Okay. If I have to look at the contribution in terms of revenue, the new products, it is not the main driver of the revenue growth. What is the main driver here is the fact that we are keep innovating, that we are keep enlarging our product portfolio, and the market is paying for this. The market want us because we are introducing a Bluetooth device to communicate between two operators, because we are introducing a new light to help work in a dark environment. A certain number of small amount and enlarge the product portfolio and improve the quality of the product portfolio. This is improving the visibility of the brand and make that the distributors want us, and this allow us to gain new market share.
Then if I have to give you a number, it will not be more than 0.5% in relation to the growth of this division.
Okay.
Second was the margin bridge.
Was the margin. Yes, you said there's no impact of operating efficiencies on the margin bridge. You asked, is that prudent? Is that a prudent approach? Let me be clear on that. I said that 27% in 2028, the 27% adjusted EBITDA margin is a target I feel confident we can achieve. Then, especially when rents go up, it's even easier to extract manufacturing synergies. Let's say that, and we will try to use that to offset the inflation hitting the cost. So you're right that given that I want to give you a very favorable number, I'm not taking into consideration on purpose the operating efficiencies. When describing the margin bridge, I told you that as for the fact I've been prudent. But let me tell you even more about that.
I said that we are replicating in 2027 and in 2028 the average 2026 growth rate, which is around 5%. Let me stress one point. In the first half, the organic growth rate is 3.3%. The second half of the current year is between 6% and 7%. Then we decided to use the average growth rate because the first half, each quarter can be affected by seasonality. So we believe it's more solid to use the average. So, the question was, have we been prudent? Yes, we want to give you a solid number. The third question was about the capital allocation.
Shareholder remuneration and capital allocation.
Well, again, it's something that we will evaluate. For sure our interest is to do, and to find the best solution for the shareholder of the company.
Very clear. Thank you.
Next question is from Anna Frontani, Berenberg.
Hello. Hi, can you hear me?
Yep.
Yes.
Yeah. Hi, good afternoon. Thank you for the presentation, and congratulations on the publication of the business plan. I have a question on 2026 guidance. What are the assumptions behind the H2 acceleration that it implies? And maybe connected to that, what are you seeing in terms of current trading that gave you the confidence to raise the target? Then another question on the business plan, regarding the 100 basis points margin expansion to 2028. Is that expansion equally balanced across the next two years, or is there any phasing there?
The first question
Right
was about the 2026 guidance.
Yeah.
And-
I can spend a word and then
We touched the point because
But basically, Anna, the point is Q3 is normally our worst quarter, and Q4 is the best quarter. It is always like that. Now we have visibility on Q3, and we know quite well how will be the Q4, so that is why we are solid in giving you this upward guidance.
The second question was, sorry, I forgot.
Yeah, the margin expansion is the-
Ah, yes. If it is balanced or not. Yes, Anna. Given that we are projecting 5% growth in 2027 and in 2028, it is true. The growth of the EBITDA margin is, let us say, flat. When I mean flat, I mean that it is 50% expected in 2027, 50 more basis points in 2028.
Okay. Thank you very much.
Next question is from Alessandro Tortora, Mediobanca.
The fourth question, if I may. I would start with, let's say, a follow-up on your comment on the Safety business. I understood that you are gaining market share. You did not mention, let's say, to whom you are stealing this market share, that maybe is not innovating as you are doing. The question is it true that, I don't know, RPE products maybe are, let's say, outperforming in the sense you are innovating more on this product range? As a general comment, is it still a fair assumption to say that Safety has a profitability which is higher than the group average? This is the first question, just to understand the major trend behind this division. Thanks.
Well, RPE products are sold at $700 each when the half mask is sold at $20 each or EUR 200 and then EUR 20. For sure, the RPE product will impact definitely more in the growth of this specific division. Let me say that they are not anymore the product we bought in 2022, because we have done a lot of development. Personally, I call them the GVS Safety product for the sake of this remark. But yeah, they are definitely the best- in- class. Nevertheless, even the half mask, the Elipse, is the best- in- class. With the new launch that we have done in July this year of the XL size of the half mask, we are definitely accelerating also in this market.
But again, being a leader in the market of EUR 20 each per product versus being a leader in the market for EUR 700 per product, of course, makes a huge difference. But it's true that we are the best- in- class. Specifically, we are the best in class in blasting. That is a very specific niche. We are using this to develop all the other channels of this business. So it's not only growing in the blasting being the best, but it's also using this base to develop existing product to be applied in other area, and become the best in class also in the other area. The true thing is that there are no real innovation from the big guys in the market.
You may have innovation from small guy in the market, so in some specific region or area, but the big one, global, that is innovating, not today. We are not seeing this, and this is part of the leverage that we have in this market.
Mm-hmm. Okay. Understood. And sorry to complete also the question on this. When you said we are launching now the full face Elipse mask, is this a total new addition in your offer?
Yes. I didn't mention this, but we are launching also Well, we have launched again in June or March of this year, the full face mask. That is another super interesting market. Again, we believe we have developed an excellent product in term of visibility, in term of lightness, in term of breathability. Again, the market is now reacting very positively, and we have a nice spike on the growth of these products.
If I can add, Massimo. We announced this product already one year and a half ago, but this was just for the European market, because we took time in order to certificate the different filters of the full face mask for the U.S. market. This is also where you see the maximum potential. Now finally, in June, we got all the certification. The full face mask is getting to U.S. customer right now, and this, of course, is expected to be one of the growth lever for Safety for the next couple of years and more.
Yeah.
Okay.
It will take time as all the new product, but the product is good, and the reaction from the market are very positive. We are confident also of this. But we have other product that will be launched, and they will lead the market maybe in 2028. That might really impact the revenue of this division in the medium-t erm.
Okay. Thanks for the detailed answer. Moving on the MedTech. You mentioned before a dedicated salesforce for the bioprocessing application and so on. If you look today at, let's say, the MedTech division, this kind of application, the bioprocessing, I had a look, let's say, at the check to your offer. Intuitively, you have already this kind of a solution. But the starting point here is that you're going to have a commercial push into this, because probably today the portion of this application inside MedTech space are really marginal. Just understand, because probably the starting point is low, but as you mentioned before, the growth profile, let's say double-digit really is the reason why you are now doing this investment. Thanks.
Yeah. Well, it's not too small because if I am taking out from the MedTech, everything is related to bioprocessing. We are around EUR 30 million—
Yeah, EUR 30 million +.
EUR 30 + million. It's a good base to start to focus specifically in this area. Also, I believe it's important to clarify that MedTech and component is really one business dedicated to specific type of customer and you need a specific sales team to really extract all the synergy and the cross-synergy you can have in this area. Where when you go to sit with a pharmaceutical company or when you go to sit with food and beverage or electronics, it's another type of sales. It's another business. You know better than me what is a growing business desire, a lot of push, a lot of energy, because it needs to be recognized, adapted. So it's important to have a dedicated sales organization to maximize the return
Okay. Thanks. The third is on the transfusion medicine. The target here is also now considering the collection space to get the market share recovery. Is there already today another backlog which gives you some visibility on this forecasted market share gain? I recall in the past that you mentioned some commercial initiative where, for instance, GVS could get the kind of role of, let's call it, a backup supplier. Just understand, is it a business in the end that is going to be based on a longer- term of the backlog compared to the other division?
No. In term of backlog, I would not say that today. In the past, we had a backlog and this is my comment related to the platform that now is getting speed and overcoming all the regulatory and the supply chain reorganization.
Today, if I have to say that I am 100% happy on how we serve the market, no, I am still not 100% happy. We still have a lot of job to be done. What I can tell you is that what I see is every time that we improve, every time that we do something better, we gain more space and more share. The customer want the product. This is the conclusion. It is just on us, to reach the speed to really serve a larger share of the market and gaining the growth that we were mentioning.
Okay.
At the start of probably more than a backlog, we have a lot of visibility that there are customers that are willing to start working with us. They are willing to diversify their supply base. This is not something that happen from morning to evening. It takes times in terms of also for them to switch, to allow us to enter into customer relationship. They are quite long process, but the intention they expressed to us is clear.
Yeah.
That gives us a lot of confidence.
Okay. Thanks. The last question is on the cost assumption you made. Did I understood well that, behind the raw material cost, you are assuming a kind of flattish trend? In case it is correct, why so? Considering, let us say, the current environment of, let us say, high cost inflation. Thanks.
Okay. Because, if the raw material expenses were to increase, we would increase also our price to the customer, which is what, for example, we are doing now. In 2026, raw material pricing is going up, but we have passed on those pricing to our customer.
If I can resume, instead of trying to guessing
Yeah
what will happen in the next year, that is very difficult in this period, we have just preferred to give a more simple picture, knowing that when we have a material increase, we can immediately recompose our profit by increasing price.
Okay. Or let's say, another way to say, basically, you are telling me that the kind of pass-through that you are assuming in the assumption is very marginal considering this assumption of, let's say, zero, very minimal raw material cost inflation.
Yeah.
Okay. Thanks. I ended. Thanks for the answer.
Next question is from Peter Testa, One Investments.
Hello? Hi, Peter.
Peter Testa, your line is open. Peter Testa, your line is open. As a reminder, if you wish to ask a question, please click on the Q&A icon on the left side of your screen or press star one on your telephone. For any further questions, please click on the Q&A icon on the left side of your screen or star one on your telephone. Next question is a follow-up from Christopher Seidenfaden , Mediobanca.
Yeah. Can you hear me?
Yes.
Excellent. Thank you. Just to follow up, and forgive me if I've missed it, but I've had problems with the connection. I'm interested in a couple of pieces of information. If you have an estimate of what the whole blood market is going to be worth in 2028. You mentioned the 2026 number, which is about EUR 1 billion. I was interested to hear your view on the growth. Perhaps it won't grow, perhaps this will be stable. Specifically about the whole blood market. I remember in conversations, and in calls possibly, that you were targeting some contracts that could also sort of step up your position in the U.S. market specifically. I wonder if you could give us some color, if this influenced your calculations when you put forward these estimates for the three-year plan. Thank you.
The blood market itself is a stable market. It's really related to the number of people, the donors. Today is a stable market. We are so small in term of share of this market, that there are still a large space growth for us. We project this based on the share that we can regain and not on the market expansion. The other question again?
Yeah, there is a big contract, the partner in the U.S..
Yeah. We are working on this. We have been extremely prudent in our business plan. This is going on, it is moving, so it would be very fact related to the speed that the customers want to use with us in introducing our product in the supply chain. For this reason, we have been quite prudent in the number that we have inserted into our business plan.
Right. Can you hear me?
Yes.
You just described your estimate as being conservative. Would it be fair to say that there are opportunities to improve this market share by a few percentage points if you get some important contracts, or is this unlikely?
No, definitely yes. For example, again, I believe it is unlikely that the customer will give us first year the full volume. But in the case that this would happen, yes, definitely it will dramatically improve the number that we show in our business plan. But it is very unlikely because normally in the healthcare business, everybody is prudent and they introduce a new supplier. We are old as a product, but we are the new guy in the [Cordis] so they will introduce us gradually into their business.
Sure. Understood. Thank you very much.
You are welcome.
For any further questions, please click on the Q&A icon on the left side of your screen or star one on your telephone. Mr. Scagliarini, gentlemen, there are no more questions. Sorry, we have one follow-up, from Peter Testa, One Investments.
Peter? Definitely no audio.
I'm not sure he got it.
Yeah.
Peter, we cannot hear you. I don't know if you can hear us, but anyway, you can contact us any time. Okay? Even today, we can have a follow-up with you. I hope you can hear us.
We have no more questions registered at this time.
Okay. Thank you very much to everybody for the participation, and we will see you at the next call that will be on November. Thank you very much, everybody. Thank you. Bye-bye.
Bye.
Thank you.
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