Ladies and gentlemen, welcome to the Dermapharm Holding SE full- year 2025 results conference call. I'm Matilde, the operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Britta Hamberger. Please go ahead.
Thank you, Matilde, for the kind introduction. Ladies and gentlemen, welcome to Dermapharm's full- year result 2025 webcast. Thank you very much for joining us today. Our speaker is this afternoon our CFO, Christof Dreibholz. Christof will walk you through the presentation, followed by a Q&A session. Christof, the floor is yours.
Thank you, Britta. Good afternoon also from me. My name is Christof Dreibholz. Indeed, I will guide you through the presentation and, starting with slide three, the highlights of FY 2025. Let us begin with a summary of our results. With both our revenue and the adjusted EBITDA result of EUR 1.165 billion and EUR 324.8 million, we are well within our respective guidance. The board of directors and the supervisory board will suggest a dividend of EUR 0.88 to the general assembly this summer. Slide five, please. We are here on this slide looking at the standalone Q4 performance of the group with again an outstanding margin performance.
While revenue growth was 1.7% over Q4 2024, adjusted EBITDA increased by a remarkable approximately 18%, leading to an adjusted EBITDA margin of 30% of revenues, thereby continuing the trend we had already observed in Q3 2025, with a margin then of 29.9% of sales. Along with a strong performance in the branded product segment, here especially Allergopharma, and a notable reduction in low margin revenues in the parallel import business, we also saw very good results of our at-equity participations improving by approximately EUR 3 million over last year. The three months were further impacted by additional adjustments of approximately EUR 1.6 million for restructuring cost, especially in this quarter at Arkopharma, and the first time recognition under IFRS 16 of a warehouse in Spain, as well as new machinery accounting for approximately EUR 700,000.
At earnings after tax level, the higher EBITDA results were accompanied by lower interest and tax expenses. Interest expenses were positively impacted by a step down in the margin following our continuous deleveraging, while tax expenses were mainly reduced by deferred taxes, both IFRS and PPA related. The impact is calculated on the basis of expected tax rate at the time of the reversal, hence the lower corporation tax as of 2028 decided by the government last summer reduces the deferred taxes. Slide six, please. Sorry. Slide six. There we are. Full- year 2025 was characterized by slightly declining revenues.
The strong organic growth of the branded product segment driven by Allergopharma and the international business could not entirely offset contribution margin-oriented delisting of certain products by the parallel import business, the restructuring of the Arkopharma business model and lower revenues from the Pandemic Preparedness program, with an EBITDA reduction of EUR 7.3 million in 2025. As a reminder, 2024 contained 18 months of revenues as the Pandemic Preparedness contract was agreed in Q1 2024, retroactively starting July 2023. Adjusted EBITDA increased by approximately 3% to roughly EUR 325 million or 28% of sales. The elimination of low contribution margin revenues in the parallel import business improves the margin by approximately 1 percentage point alone.
Earnings after tax improved by nearly EUR 20 million, driven as in Q4 2025 by the operational result as well as lower interest and tax expenses, as can be seen in a bit more detail on the next slide seven. Here we bridge key elements of FY 2025 performance leading to a growth of EUR 20 million at earnings after tax level. As mentioned earlier, FY 2025 BioNTech related revenues and results were at a sustainable level in 2025. The lower amount compared to 2024 is exclusively attributable to the aforementioned retroactive recognition of revenues in 2024. The contract will expire mid of 2027. The decline of adjusted EBITDA of Arkopharma was of EUR 5 million. Normalized restructuring expenses amount to EUR 3.4 million.
Let me add a few sentences at this point to Arkopharma performance, as we see it currently beginning of 2026, in relation to the change in the business model towards a B2B2C business model. What we see is that sales and EBITDA are currently above budget in the first two months of 2026. The first sellout related results of challenges and training prove success of the measures. As an example, for certain products like Forcapil, Arkorelax, Collagen, and the GLP-1 product, we see an increase in sellout with trade marketing through displays and training of pharmacists of 11%.
If we look at the same products, again, Forcapil, Aquarelax, Collagen, and GLP-1, where we on top of the two measures mentioned before also introduce challenges, we see a further increase to 27% in sellout, proving the effectiveness of the measures which we've introduced at Arkopharma. We also see a flattening market share decline despite a strongly declining market in February. Parapharmacies sellout increased by more than 1% versus market, which is actually declining. Sellout evolution also improves in Spain with a very good sell-in of 15% and 28% compared to prior year and budget. We see excellent product innovations with the already mentioned GLP-1, where the sell-in is currently, i.e., after two months, above the full- year budget.
Additional projects that the Arkopharma team is working on is increasing the utilization of the plant. We have in terms of our FTEs closed execution gaps, i.e., by employing a regional sales manager, and we've filled the entire field team. We are also progressing in terms of additional on top cost reductions. Coming back to the bridge and to axicorp, we see that reported axicorp EBITDA declined by approximately EUR 4 million compared to prior year. Adjustments due to FTE reductions were EUR 1.2 million. Full- year results will only be visible in the current financial year. Also, some additional remarks regarding the axicorp performance following the restructuring started in April 2025. We see in 2025 a quantity declining by approximately 60% to currently circa 63,000 products per month.
The corresponding sales declined by 20%, always comparing February 2026 and in this case March 2025 as the last month of 2025 before the optimization was started. In the same time, we saw a contribution profit per piece that doubled from EUR 13 in March 2025 to now nearly EUR 27 per product. We also see that there is still room to improve contribution profit, absolute contribution profit, with a relative contribution margin remaining currently at also at the level of March 2025 with approximately 11%. Coming back to the next bridge item, the remaining businesses increased by EUR 28 million over 2024. Largest positive contributors were Allergopharma, Candoro Ethics, and the international business. Euromed suffered from the USD-euro devaluation, and mibeTec was negatively impacted by the weather.
In this case, as the last summer had a significantly lower incidence of mosquitoes. The interest hedging, which expired at the end of 2025 and syndicated loan interest costs contributed EUR 2.5 million each to the growth of the earnings after tax result. Syndicated loan interest costs are based on a margin grid that is tied to the leverage ratio. The improvement of the leverage ratio reduced the margin in 2025 with a corresponding impact to a favorable impact on our result. Lower tax expenses are mainly driven by the deferred taxes I mentioned before. Depreciation charges as the last bridge item are largely unchanged. Coming to slide eight, please. This slide summarizes our normalization adjustments, which mainly comprise restructuring expenses relating to headcount reductions in Germany, and so mainly here, axicorp. France, i.e.
Arkopharma and also to significantly lower with a significantly lower impact in Spain. The next slide nine , please. This slide shows our net debt and the equity ratio development. Net debt has been continuously reduced over the last quarters following the amortization payments regarding syndicated loan Tranche B with EUR 25 million per semester and the scheduled repayment of the promissory note loan. Net debt declined as of December 2025, was mainly driven by a favorable net cash flow trend of EUR +85 million, with a corresponding increase in cash on balance sheet. The leverage ratio is comfortably below 3 x at currently 2.7 x and with that slightly below Q3, which was at 2.8 x. The interest cover ratio, that is interest expenses compared to EBITDA, has again improved to 8.2 x from 7.7 in Q3.
Equity ratio steadily increases due to positive results. The dip as of June 2024 and 2025 is driven by the reclassification of the dividend to liabilities settled beginning of July each year. Slide 10, please. Our net assets and liabilities increased slightly to EUR 2.187 billion over 2024, driven by increased current assets, mainly higher cash, as explained before, as well as a down payment receivable from the Mucos Group acquisition. The equity number increased from retained earnings despite the dividend of EUR 48 million in July 2025 for financial year 2024. Maybe at this point also because I just mentioned it, a few words regarding the Mucos acquisition. We signed the contract end of 2025 with closing beginning of January 26th.
The preliminary purchase price, as can be seen from the down payment, was EUR 33 million paid end of December 2025. The purchase price mechanism is closing accounts, i.e. there will be an adjustment of the purchase price depending on actual figures. We expect a single-digit million EUR amount to result from this exercise. We have acquired a plant in Berlin and the sales organization in the Czech Republic that also caters other Eastern European countries and is a very good addition to our growing international business. The Wobenzym product itself is an excellent addition to our pain and inflammation therapeutic area. We have made an initial delivery both to international markets as well as to German wholesalers. We are planning revenues between EUR 25 million and EUR 30 million in the current financial year. Slide 11.
Slide 11 summarizes working capital and the underlying days. Net working capital is at the level seen as of December 2024, a reflection of the underlying seasonality in the business. Same was the case as of September 2025. The increase in trade receivables is largely offset by lower inventories. The respective days mirror the trend in the absolute numbers, i.e. the underlying drivers, including growth in revenues, inflationary production cost increases, both in terms of labor cost and cost of materials, and the necessity to hold certain buffer stock remain unchanged. DPO increased by nine days to 72 days. As of September, we saw 70 days, with a favorable impact on the underlying cash cycle. Slide 12, please.
The increase of our cash flow from operating activities seen already in year-to-date September 2025 continues in Q4 2025, with a slight reduction of the broad working capital by approximately EUR 5 million compared to December 2024, partly also a result from the portfolio optimization at axicorp with a lower buildup of trade receivables and inventory in Friedrichsdorf. Recurring CapEx was EUR 41 million in 2025. The remaining amount comes from M&A related CapEx for Mucos, that I mentioned before, the acquisition of Trenka, in Austria, and a participation in a U.S. business called Solaris. The resulting free cash flow is EUR 131 million or EUR 193 million, excluding M&A CapEx. The cash conversion rate is 71% and up 6.7 percentage points. Details of the improved operating cash flow are shown on the next slide 13.
Whilst cash EBITDA improves in line with the earnings before tax result, the favorable trend of operating cash flow is mainly impacted by the reduction of working capital, as discussed before, partially netted by higher tax payments that are related to historical fiscal years 2022 and 2023. The last slide 15, the outlook for the current financial year. We plan further growth resulting in revenue and EBITDA ranges of between EUR 1.182 billion and EUR 1.218 billion and EUR 331 million and EUR 341 million respectively. Main drivers in Branded Products is M&A, with the integration of Mucos and sales among other in Germany, Czechia and Slovakia based on the reestablished product availability. The German core business is second largest contributor through growth of focused products, i.e.
The products that are marketed by our physical sales force and new product introductions. Allergopharma will continue to grow, especially in Germany and China, more than compensating for the loss of the Acaroid product. The international business will especially grow in Poland, Austria and Italy, whilst we expect slightly negative FX impacts, especially in the Ukraine and Switzerland. Growth in Other Healthcare will be distributed across all entities. Candoro will grow with Dronabinol following the cancellation of the Dronabinol liquid solution in the market, the introduction of cannabis flowers and a concentrate. Positive growth in Arkopharma from the introduction of the B2B2C business model, as we already saw before. Euromed will mainly grow in the, in Europe, overcompensating for loss, for losses among other FX driven in the US.
Anton Hübner will grow in Germany, in drugstores and in the export business. The revenue in PI is expected to slightly decline based on 12-month contribution margin optimized business model. EBITDA is expected to slightly increase due to gross margin improvements and lower personnel expenses. Maybe one last word to the current share buyback program. We, as we have communicated, slightly more than 4.8 million shares have been tendered, resulting in a proration ratio of approximately 0.89. We will hence ultimately acquire 4,299,180 shares or slightly below 8% of our share capital. The aim was to increase shareholder value in light of the undervaluation of the share price. The latter has increased by approximately 10% to currently slightly above EUR 42.
The shares will be redeemed and will reduce the equity of DSE. Thank you.
Now we can kick off the Q&A. Thank you, Christof.
We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Stefan Wolf from ODDO BHF. Please go ahead. Mr. Wolf, your line is now open. You may go ahead with your question. The next question comes from the line of Fabian Piasta from Jefferies. Please go ahead.
Hi, good afternoon. Can you hear me all right?
Yes.
Yes.
Very good.
Awesome. Two questions from my side. I mean, you were already commenting on the positive development of at Arkopharma. Would you maybe give us some granularity you were talking about above budget kind of developments. Do you think that this would basically, if we continue on this trajectory, that we are looking at more than 5% top-line growth for the group? Is that like a fair assumption for overall moving the needle, obviously keeping all other assumptions the same? The second question would be on Mucos. So if I understand correctly, that's EUR 25 million-EUR 30 million in sales for this year. Could you give some information on the adjusted EBITDA margin? How is it as of now, and where do you think it could move in the medium term?
The last one on PI, I understand that the reduction of staff is only going to unfold in 2026. Can you give some granularity on when we can expect break-even levels, whether this is too early in the stage right now? Thank you.
Thank you for the question. Arkopharma is indeed above budget, but I wouldn't deduce from that, now after two months, that we will be significantly ahead of budget with an impact, a further positive impact at group level. Currently, what we see and where we are very happy about is that the individual measures that I also try to give some granularity about that they seem to work, and that we will or that we currently see based on the first results, no indication that we are away from what we planned for.
Maybe within the next month, it will definitely become clearer, and we can then see whether the development is so positive that this can also lead to a higher plan at group level. This is not what we currently see. We are currently very happy with the entire team that what they worked for seems to indeed pay out. Regarding Mucos, revenue is EUR 25 million-EUR 30 million approximately that we've planned for, and we've planned for a balanced result. Mucos had difficulties in the past. It was a small subsidiary in the huge Nestlé world, we see a lot of potential there to improve Mucos. There is work to do also in order to achieve this balanced result.
There is obviously, based on the product, compared to our products in house in the same therapeutic area, there is indeed room to improve the margin, notably. It is part of branded products where we generate a margin of north of 40% of revenues. It is definitely our aim within a mid-term period to significantly increase the margin. Whether it's possible to increase this or align this with the average branded product margin is currently too early to say. In the last point in PI, indeed there is approximately roundabout EUR 3 million cost improvements from personnel expense reduction, where we will only see the full-year effect in this year.
This will simply unfold. There are no measures in order to achieve that have been taken. This will unfold in 2024, the current financial year. The work that we are all currently working on is to, in parallel, improve the contribution margin further. We have delisted the low-performing products, but we still need to work also on the margin. We see if we look at the contribution margin per piece, we see a remarkable improvement, as I said, it's double the amount we had before. But there is also still a way to go.
As a reminder, if you wish to register for a question, please press Star and One on your telephone. We now have a question from the line of Gerhard Orgonas from Berenberg. Please go ahead.
Hi, good afternoon. I'd like to ask about the budget for Arkopharma. What are you planning here in terms of revenues and profits compared to last year? Second question is the expected contributions from F. Trenka and segment earnings. The third question would just be on the share buyback program. By when do you expect to close this and cancel the shares?
We are normally not disclosing information for individual entities. Arkopharma is approximately in terms of revenues at the level we've seen in the year before. A change in mix but not an increase in terms of revenue. EBITDA result is. I must say even from the top of my head, I can't say the amount in 2025. We due to the changes we have also there assumed a low single-digit amount improvement in EBITDA in Arkopharma. The second question was? Sorry.
F. Trenka contribution.
Thank you. Trenka is approximately EUR 10 million in revenues and an EBITDA margin of roundabout between 10% and 20%.
Once again, to ask a question, please press star and one on your telephone. Ladies and gentlemen, that was our last question. I would now like to turn the conference back over to Britta Hamberger for any closing remarks.
Thank you very much for joining our call this afternoon. Should there be any questions left open or arise afterwards, please feel free to give me a call. Thank you.