DiaSorin S.p.A. Stock

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the DiaSorin Half Year 2026 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Carlo Rosa, CEO of DiaSorin. Please go ahead, sir.

Thank you, operator. Good morning, good afternoon, and welcome to the second quarter conference call. As usual, I'm going to comment on results at constant exchange rate. And then our CFO, Mr. Donati is going to take you through the numbers. So quarter 2 to 2026 recorded a growth of 4%. And if actually, we exclude 2 outliers, China and molecular growth would have been 5% molecular respiratory.

And this is confirming the expected quarterly progression provided during the full year '25 results in March. If we look at three technologies of the soy in the segment. Immunodiagnostics grew 4% in Q2, 5% at China fundamentally return to growth is supported by double-digit performance in the U.S. as we have discussed during the Q1 results, quarter 1 was actually affected by destocking on QuantiFERON plus weather conditions in the U.S.

So the growth of 4% globally is driven by U.S. and it also recording a normalization in Europe and the impact of VBP in China. And we're going to talk about it later. And clearly, in Q2, there are no one-off effects that has happened in quarter 1.

If you look at molecular diagnostics, plus 1% in quarter 2, respiratory that as we have discussed many times, has affected the results of a lot of companies in H1 so without respiratory would be 4%. And as we're going to comment later, we have strong growth in our strategic declines.

And then finally, LPG, plus 7% in quarter 2, and we see initial signs of recovery especially life science. But as we have discussed, each 1 was a tough comp compared to last year because of the ordering pattern. So this result is expected that has been discussed already in the quarter 1 call.

So now let's deep dive in technologies and let's first cover the immunodiagnostic. As we said in Q2, plus 4% which is actually normalizing H1 growth to plus 2%. If we look at the different geographies, and we start from the U.S. the U.S. performance is back to historical growth with a hospital strategy that continue to -- on track that continues to deliver new hospitals. And we confirm our expectation of reaching 600 hospitals by the end of 2026.

As said before, weather impact and destocking that we experienced in Q1 is behind us. And so we have experienced double-digit growth in TV as well in the U.S. By the same token, especially specialty tests continue to show strong momentum in the U.S. And it's noteworthy that hypertension, which, as we have discussed, is a key product line for DiaSorin we are experiencing an acceleration of our petition portfolio following the recent guideline changes I remind everybody recommended to screen all patients respect of hypertension right away with aldosterone and [indiscernible] which are 2 products that we carry both in Europe and the U.S.

As far as [ TB ] again, is concerned, we see double growth in U.S., and we see double-digit growth in Europe as well. And so the destocking is behind us. And for those of you who are interested, we have clearly not seen any activity by Roche so far. They presented SA, but we don't see them yet on the market in Europe, withstanding the fact that the product got approved in Q2.

Ex U.S. and Europe, if we look at all the other direct business ex China, which means Australia, India, Brazil and Mexico, strong performance in Q2, 12% growth versus last year. If we look at our export business, it actually declined 7% where we have been seeing Middle East, clearly impacted due to the current situation, especially in Iran where we had a very nice business and comparing to Q2 last year, where we had over EUR 1.5 million of revenues this year.

We registered no revenue. So we have this delta that we expect to continue to see throughout 2026. In China, the business continues to decline roughly 25%, in line with previous quarters. We see no end to the effect of EDP and competition by local suppliers.

And honestly, at this stage, we don't expect H2 to show different results. Discussed many times, China for DiaSorin is becoming a very small market, although, again, it continues to decline double digit. The only good news on China is that we expect to receive by the end of the summer approval of the TBSA. So starting from Q4 we will start to commercialize the LIAISON TV in China as well.

Now let's talk about molecular. I'm going to talk about the different technologies here. If we look at Q2, overall, the business has been slightly growing 1%, plus 1%, notwithstanding again, the effect of a very soft through season.

If we go through the different franchises, and we start from LIAISON MDX, which is represent approximately EUR 100 million of annualized revenues. We look at this business in actually 3 subsegments, we have targeted specialty, which is roughly EUR 45 million of business annually.

And this is growing very well for DiaSorin Q2 is up 25% versus last year. And clearly, this is fueled by the launch of all the specialty assets, as we have discussed in previous calls.

We are still in this technology, a small respiratory business, which represents roughly EUR 10 million of annualized revenues, and this continues to decline minus 20% in Q2 and minus 35% in H1. Finally, roughly EUR 40 million of ASR. ASR those reagents that we use for -- that customers used to develop LTDs in the U.S. And this business is very -- it really depends on the ordering pattern in Q2 was relatively flat. We expect it to be flat or low mid-digit -- single-digit growth -- sorry, single-digit growth by year end.

Again, order impact here is really determining how this business is performing on a quarterly basis. Now let's move to multiplexing Q2 plus 7%. This clearly multiplexing for us means the VERIGENE I legacy product and the LIAISON PLEX. The growth of the business so far is heavily reliant on respiratory panel, as you can imagine, because we have -- we got approval of the blood panel recently, and we just launched them, and we really got approval of the GI panel in the last few weeks.

So the plus 7% takes into account clearly a very negative impact on the flu season, although the rest of the pro line is growing nicely and compensating the decline of -- we have roughly 150 customers when it comes to Plex the Plex adoption continues to be very well received from the market with the vast majority of our clients choosing Plex.

So just to give you an indication, only 1/3 of our placements today are with the fixed whereas the rest is primarily reflect. By customer type, 90% hospitals and 10% commercial labs. So we have initiated to develop the business around have a lapse and then we migrate it better obviously into the hospital systems in the U.S. that took longer to close, but we expect to represent the bulk of placements moving forward.

So we're very happy about the way that this product line the flex is received on the market, and we expect by way to launch this product with now the full panel in Europe starting from Q1 of '27. When it comes to the LIAISON NES, we literally just started the commercialization of this product line through our distributors.

So I'm not going to provide numbers because those would not be any significance. It is noteworthy that we have received also a [indiscernible] care approval for our second assay, the group a strep so now we have the full panel, and we are going to give a better resolution in the Q3 and in Q4 calls.

And also, we are going to have a better understanding of the seasonal impact of flu in 2026. Last but not least, the LTG, the LTG, as we discussed many times, in 2025 was heavily skewed towards H1. And then we had a light H2 and again, it has to do with other pattern. Q2 was surprisingly very good better than we expected.

We grew 7%. Fundamentally, we see a recovery in life science and biopharma business. And so we are confident that we're going to deliver by year-end mid possibly to higher single-digit growth in this business.

At this point, I'm going to leave the microphone to our CFO, who's going to take you through the numbers .

Thank you, Carlo, and good morning and good afternoon, everybody. And thank you again for joining the on H1 2026 earnings calls, and thank you also for the continuous interest that you're contention our company. .

In the next few minutes, I'm going to walk you through the financial performance of the first half of the year. Specifically, with particular focus on the second quarter, and we'll then turn the line to the operator for the usual Q&A session.

As we navigate through the results, you will see that each one confirms the improvements we anticipated. Revenues came in at net at a constant exchange rate for the first half, while Q2 specifically delivered the return to growth at 4% constant exchange rate, demonstrating the normalization, the progressive normalization of some of the extraordinary factors that impacted in Q1.

As a result, we remain confident in achieving the full year guidance for 2026. Now starting from revenues. H1 came in at EUR 602 million, which was again flat at constant exchange rate compared to H1 2025 will at current exchange rates, revenue declined 3%, reflecting a total ForEx headwind of EUR 20 million for the first 6 months of the year. The picture over is improving as the year progresses because in Q2 2026, revenue grew 4% at constant exchange rate and 3% at current exchange rates with a much smaller ForEx headwind of just EUR 3 million in the quarter is a significant step up from Q1 when the ForEx drag alone was around EUR 17 million.

This revenue improvement in Q2 reflects both the feeling of the extraordinary items that Q1 Carlos mentioned them before the exceptional weather events in North America, the destocking of certain large private customers in North America as well and a more favorable base for currency translation.

Moving to profitability. H1 adjusted gross profit came in at EUR 390 million, which was minus 1% at constant exchange rate compared to a EUR 225 million and minus 4% at current exchange rates with a ForEx headwind of EUR 12 million. . The adjusted gross margin remained broadly stable at 65%, both constant and current exchange rate, slightly down from 66% of 2025.

And this gross margin resilience reflects disciplined cost management, which was partially offset by, on one side, the tariff impact, approximately EUR 3 million in both Q1 and Q2 of 2026.

And the VBP pricing in China, where the continued average selling price erosion is flowing directly to the gross margin line. The Q2 2026 adjusted gross profit was confirmed as 65% of revenues and this is aligned with the same quarter of the previous year, notwithstanding the impact of the tariffs, which were only marginally impacted Q2 2025, while at around 100 basis points impact in our Q2 2026 margin.

Moving to the adjusted operating expenses for each one they amounted to EUR 241 million at constant exchange rates, representing 40% of revenues.

Now if we exclude the commercial investment related to the next launch in North America, OpEx grew versus prior year of its growth versus a year fundamentally in target attributable to the inflationary impacts, including the not salary increases, and this is again a reflection of the disciplined cost management across the organization.

Each one 20266 adjusted EBIT came in at EUR 149 million 10% reduction at constant exchange rate, a 12% reduction at current exchange rate with a ForEx headwind of around EUR 4 million.

The EBIT margin was 25% at current exchange rate and 24% at constant rates. The net financial expenses, again, adjusted were approximately EUR 7 million in H1 compared to EUR 1 million in the prior year period.

Now this increase was mainly driven by lower interest income was a reflection of both lower market interest rates and lower average cash balances as well as higher financing costs related to the credit facilities of the group. And this increase in borrowing and the reduction in the cash balances were primarily attributable to the ongoing share buyback program.

Moving to the IDA. H1 2026 EBITDA closed at EUR 194 million, down 7% at constant exchange rate and 10% at current exchange rate, reflecting negative foreign impact of around EUR 5 million. EBITDA margin was 32% at both constant and current exchange rates.

As confirmed by our guidance as well. And the year-on-year decline primarily reflects the impact of the VBP in China and the planned commercial investment to support the next launch, LIAISON launch in North America. Notably, the EBITDA margin improved from 31% in Q1 to 33% in Q2, benefiting from stronger revenue performance and so also demonstrating the operating leverage potential of the business.

And as I was mentioning before, this trend is fully consistent with our expectations for the year and supports our confidence in achieving the full year EBITDA margin guidance of 32% to 33%. Turning to our balance sheet and as well as the cash flow performance, we delivered a solid result despite the challenging revenue environment that affected us in Q1.

Our net financial position showed the net debt of EUR 844 million at the end of Q2 compared to EUR 58 million in December 2025. This EUR 265 million movement that reflects on 1 side, the good operating cash generation. The free cash flow in H1 was EUR 58 million compared to EUR 83 million in H1 '25, primarily due to the planned buildup of inventory to support the LIAISON launch and this was more than offset on the other side by EUR 233 million in share buyback as to the program that the Board.

The shareholders meeting approved back in January and the payment of dividends for EUR 65 million. Looking ahead, we expect for each to cash generation to improve again in the second half of the year, supported by the stronger earnings performance and a grade normalization of inventory levels as the next full-out progresses.

Now going back for a second to the share buyback. As of today, the company has purchased around 3.6 million shares, representing approximate 6.5% of the share capital for a total of EUR 236 million, and this is around 95% of the total program.

Now in light of the H1 results that I just mentioned and that came in line with our expectation. We are confirming our full year guidance at constant exchange rates with a revenue growth of 5% to 6% and adjusted EBITDA margin, 32% to 33%. I'll now hand over to the operator for the Q&A session.

[Operator Instructions] First question is from Aisyah Noor Morgan Stanley.

Carlo, and Alberto, my first one is on your molecular guidance for the full year, which I can see you have reiterated at low double-digit growth for the full year. This after the first half results of including a weak flu season will still imply that you need to deliver something like 27% organic growth in the second half.

And I imagine you are going to fully load that for the flu season and NES in the fourth quarter. So I would love to know what you're seeing in the market today with respect to the adoption of this? And what gives you still the confidence to deliver this very strong number in the fourth quarter? And then my second question is maybe for Alberto on the tariff number for the quarter. Did you book any tariff refunds that could have helped the EBITDA in this quarter done? Or is there more to come?

I would take the first one. Yes, you're right. Mathematically, its 20 some-percent. You need to take in consideration a couple of elements. The first one is that we are thinking about -- we're taking into account a normalized flu season, right? And we know the last year full season was particularly weak.

So there is an effect of normalization in volume that will work on our current installed base. But the second and more important element is that we are developing a base of LIAISON Plex, which we didn't have last year and clearly are not contributing too much to the revenue right now because we are of season.

So the volumes are very low. And the same reason is last year, we had known as whatsoever. We started commercialization. We expect to place a certain number of systems don't have the mini, but a number of systems that will generate revenues in Q3 and especially Q4, where we expect the season to start that clearly we did end of last year.

So don't be fooled necessarily by the percentage and I think it makes more sense to look at the dollar amount that is necessary, which is, I believe, you do the calculation within last year very reasonable okay?

Absolutely. I'll take the one on tariffs. So as you correctly recalled, we did initiate refund actions through the CDP established refund mechanism for the EPA tariffs. And we did receive as of the refunds that we submitted in the order of magnitude of around $2.5 million. And you can appreciate that in the decrease of other operating expenses net of nonrecurring items.

So if you look at our income statement, this is answering to your question, where you can see the impact of the partial refund that we got so far.

Next question is from David Westenberg of Piper Sandler.

So I want to stick with the Q2 guide and the acceleration there. Q2 was obviously much better than Q1. Are you seeing strength in Q3 so far? And as we look how confident are you on the easier flu comps than the normal flu season? I guess you kind of just already got into that.

But let to get that in a little bit more product launch. How are you thinking about overall in the business as business momentum as you exited the second half? And then just to continue with that, the guide also includes operating leverage. Do you feel like if you got those revenue hit that you would get that operating leverage? And then I just have one more.

Okay. So let me try to answer. Clearly, I need to -- I cannot provide you a specific answer. But if you look at the 3 components of the business, right, and you look at Q2 and expectations for Q4 I believe that we have discussed molecular already.

When it comes to the assumptions we make on respiratory testing volume, which is normalized versus last year, which was a weak season. So I'm not going to comment on that. The second element is immunodiagnostics. Immunodiagnostic, the problem we had was factor Q1, which I believe surprised everybody, I have to say, including ourselves. And that was an outlier.

In the U.S., our immuno business traditionally has been growing double digit. The destocking on TB was very heavy. So the underlying business was still very strong, but if we had that effect plus I have to say a weather effect. Don't forget, we have a significant business with some of the big commercial labs, and that is particularly subject to these events.

Q2 there is, we are going back to normal. The QuantiFERON volume continued to increase in the U.S., primarily driven by the fact that there is more adoption of TB, especially in association with certain drugs and certainly some work that QIAGEN is doing on converting blood test to blood testing the skin testing.

We expect that in Q3 and Q4, elements will continue. So we expect that we continue to see growth of our overall franchise for immuno as we have seen in Q2. There is clearly a question mark which affected immuno Q2, which has been the Middle East, where, so far, as I said, we have seen just in the quarter, an effect of EUR 1.5 million just with run.

We did not project any revenues moving forward, but clearly, normalization of the Middle East would add more to what we have seen in the quarter.

Last but not least, is LPG, again, tough comparison as we have said from the beginning because H1 last year was very high. And we actually expect the H1 in 2026 to be below last year.

But surprisingly, as a combination not only of order patterns, but certain projects that some of the partners developed Q2 was very strong. And we see a recovery in Life Science, and we see to the quarter of last year, more instruments now being moved down the channel, which was a good surprise.

So when it comes to H2, the LPG is going to be good contributor to the growth of the company. We expect to be -- the LPG to grow in the mid-double digits. So it's -- this explains why clearly we see -- we are positive on the year-end guidance.

You asked how does Q3 look like in 4 weeks, you can not on much. I remind you that Q3 started 4 weeks ago.

No, you answered like probably 4 of my next question. So I apologize. The next one is not going to [indiscernible] So what are you seeing in terms of mix between, say, centric panels in single test in the U.S. and trends for like next year and the year out, what direction you see that.

Are you seeing any changes in reimbursement difficulties on syndromic panels. I ask that because you obviously have that slack option that is beneficial. And that was great color on the last question.

David, listen, for the sake of time, I really cannot take this question because we need to focus on Q2 and year-end, and this will take hours to discuss what is going to happen next year. So here to be a little bit more patient, and we're going to give color to this in our Q4.

Next question is from Ankar Verma JPMorgan.

The first one is actually just a follow-up on [indiscernible] question. Could you share how much of the tariff refunds will be left for H2? And how to mix that you expect all of that to come to Q3? Or will this potent in Q4?

And also, could you share your FX guidance for the full year for '26 and then the second question is just on if we can get a bit more color around your placement.

I appreciate you might not be able to give us the exact number, but just directionally how the placements have been going?

Michel, this is Carlos. [indiscernible] By first. Let me start from the next question. I'm not going to give you numbers. It's too early. And I think that some of you have been -- I saw that some of the analysts have been talking to our distributors and customers, and I believe there were some very good reports came about the system and the technology. But the due is out too early.

Whatever number I give you should not be exciting to you because I believe it's just if we need to normalize it over the next 2 to 3 months. Typically, placements in this business happened right before the season. So I believe that can need to be patient.

Clearly, I'm fully biased about the technology. I believe this system is a beautiful system. As you can imagine, I believe that compared to what is out there is very handy when it comes to this physician office labs that are not at all ready to hand difficult technologies.

But again, be a little bit more patient, and we'll talk about it in Q3, Q4. to kind of take the other 2. So regarding the tariff refund, let's start from what was the impact and what we paid in total, which was around $9 million in full. Now, regarding the refunds, 2.5 as mentioned, is what we received so far, but fortunately, we do not have visibility of the timing of the remaining part of the refund.

So we don't have expectation in terms of when we're going to receive any of the remaining parts. It could be in H2. It could be in 2027. Unfortunately, when some meeting, we don't have confirmation of the approval nor the timing for the refund.

Going to the second question related to the full year ForEx guidance. So on one side, we're not going to take a position in terms of forecasting the ForEx is not our job. But what I can tell you is that if the exchange rate should remain at around EUR 115, EUR 116 with euro to U.S. dollar, our impact, full year impact should be in the range of around EUR 25 million. As a reminder, we had around EUR 20 million so far.

Last year second part of the year, the average was very similar. So should the exchange rate remain similar to the level of the last few weeks, we will have a minimal impact in the second half of the year.

Next question is from Anna Ractliffe Bank of America.

I wanted to follow up on QuantiFERON, which was obviously really strong in Q2. Would any of that catch up from the slowdown in Q1 at all? Or it's all underlying momentum? And could there be upside to the mid-single-digit guidance if that continues?

And then I also wanted to quickly clarify on LTG. I see in the slide deck you guys have low single-digit growth as the guide for the full year, but all of the commentary seems to be pointing to the possibility of mid- to high single digits. So maybe just wanted to confirm what the LCC guidances for this year.

I'll take the question. Yes, we believe that LPG can give us a positive surprise. Again, we were not expecting Q2 to be so strong and actually it was. Again, as I said, we see that the funnel of instrument placements is going back to where it was prior to the last year, the funding and all the consequences that had, especially in the U.S. .

So yes, I believe that it could really help us out in the second half, better than expectation, but let's keep in mind is the B2B business. So we reflect what our distributors, distributors being the very large life science companies. I'm going to tell us in Q3, Q4. So I honestly recommend that you listen to what they say in order to understand the performance of this business.

When it comes to QuantiFERON, no was not a catch up, as said, very specifically, the event that we incurred in Q1 was destocking by a couple of very large private labs, which are the ones that typically provide QuantiFERON testing for Visa. And since they saw that demand for coterm testing was declining starting from Q4, they destocked so they didn't buy for one quarter, and that affected our revenues just for the quarter, now they start again with the [indiscernible]

And again, QuantiFERON. Keep in mind, if you are trying to read our number, our revenues and try to correlate to the casing revenues, I'm warning you, is not possible because we only deal with clear so the [indiscernible] which does represent a portion of the total revenues of QIAGEN because they have a lot oilier revenues, which are not in the U.S. and not in Europe that follow a completely different dynamic. Again, so don't take our commentary on QuantiFERON to try to read the QuantiFERON numbers.

Next question is from Charles Pitman-King Barclays.

Charles Pitman-King from Barclays. Two, if I may. Firstly, I was wondering if you could just provide us from your insights into the pricing strategy for Net versus others on the market? And just given the placements are likely to be strong given the innovation advantage and these are given away that aren't paid for upfront but paid for reagents.

And just thinking about -- at what point in the ramp-up of the respite season, you'll have set insight into the your pricing strategy suit for delivering the expected economics and how we'll think about the earnings impact and then just secondly, in terms of the results in 1H, you delivered quite a good beat on sales and marketing expenses versus consensus.

I'm just wondering, is there any phasing within that related to market expectations around the net costs that they're actually going to be delivered in the second half? Or is there any one-off that we need to take into account?

I'm going to follow the first question. Look, it's unreasonable to ask us about our pricing policy because that's a competitive information, and so I'm not going to comment on that. I have to tell you the one thing that today, the reimbursement in the U.S. when it comes to the targeted which means 4 assays.

And I'm not actually commenting on the multiplexing, but on the 4 targeted or respiratory the reimbursement falls at around $140 and the denial rate is very small. So this allows companies actually to price in this space.

The respiratory panel in the proper way. So the only comment I can make is that I see no pricing pressure so far in for the NES in this segment. On the second question, at absolutely.

And just allow me to make sure that I get your question correctly. You are looking at the H1 results, your question is related to the fact that they were better than your expectation and you want to know if there is any one-off or phasing effect? And what's the expectation in the second half? Did I understand correctly?

First is consensus, yes, sales in a seems to come in, came in lower than expected. Just wondering if there's any one-offs we need to take into account of the this is phasing or you guys are just performing better on the sales cost -- so I think that there are 3 elements.

So I'll refer to the EBITDA margin in Q2, closing at 33% as a function of 3 effects. One is the good operating leverage that we have compared to Q1. The second one is also favorable mix, as Carlo was mentioning before, the FTG had a growth of which is supporting our gross margin and eventually also.

And as a third element, also the tariffs offset because in one side, our gross margin suffered one point because of of tariff impact in the quarter. On the other side, we had around EUR 2 million of refunds that supported us to partially offset that impact. In terms of phasing for the second half, we already explained during the guidance that there are several elements, the operating leverage, the mix of, for example, the FTG growing double Digi as well as the normalization of all the costs that will be absorbed after the launch of the products.

So this is absolutely aligned with the comments that we made in the previous call related to the guidance for the full year.

Next question is from Odysseas Manesiotis BNP Paribas.

Firstly, could you remind us of your reason plex sales portion of U.S. outpatient versus inpatient. And if we should expect an impact from the MolDX expansion from the potential mortgage expansion to all Medicare contractors. Secondly, on the QuantiFERON China opportunity, I mean, considering the TV burden is quite substantial from a share of cases. Should we view this source of acceleration for you into next year for that franchise? Or would penetration move slower than what we've seen in the West. And the very quick third one, on the [indiscernible] Q2 is the new solar quarter for syndromic testing, but can I confirm that you had no or low placements for on Flex given the number is the same as Q1?

Let me start on the last. We didn't comment on placements for Q2. So I don't know if you came up with the fact that we had no placements.

Just the customer number, which is the same apologies.

I'm sorry. I'm sorry if I got you guys to our own number. We have placements clearly in Q2 and not only replacement but also with activation of blood into existing respiratory accounts. If I move to the QuantiFERON for China, the problem of China is that there is a ton of local competition.

And that has -- yes, there are 26 million local LIAISON suppliers, and I believe one came in [indiscernible] assay, which is similar to what we have at least on paper so that has really been driving the price to a very low level.

So China today is fundamentally becoming a very key market. So yes, we are going to have revenues in China, but don't expect China to really move the needle significantly compared to what actually we have been doing in Europe and in the U.S. I believe that together with QIAGEN, there are other secondary markets today that are served with LIAISON that we decided that we will not start to go after this market within zone now, especially with the new kit, which is providing higher throughput.

So that is the next wave of expansion that we see of QuantiFERON. Remind me the first question?

Is plex patients in patients.

Okay. Here is a very interesting discussion here because I think, as we said a few times, our initial placements were in private labs. Right? And by definition in private labs is all our patients. In the hospital market, where we operate right now, I would like to say that it really varies quite a lot, depending on whether these hospitals are actually also have a business with serve physicians and requests, so they are coming from the outside.

But in general, we have seen more prevalence of inpatient -- so I would say 60%, 70% in patients versus the outpatient. But it's very difficult because today, hospital systems few hospital systems are also developing a business model. We have a start to offer services competing locally with the travel mate.

So the business in the U.S., since also the U.S. money is running out. I believe that you see now hospitals developing a very nice laboratory business.

Carlo. Just to clarify the second part of the first question. I also wanted to get a feeling of whether the expansion of MolDX is going to be a issue for your outpatient sales for LIAISON Plex, given that was a bit of a burden 6, 7 years back?

What is -- sorry, what is exactly MolDX. What are you referring to? .

My understanding is stricter reimbursement requirements for outage for using molecular testing on the outpatient front, but it has not yet been expanded yet, but I understand if that's not [indiscernible]

No. But look, don't forget that our overall strategy is [indiscernible] So we really believe that highly complex multiplexing panels are not going to be reimbursed any longer, unless for some very specific for some very specific patients.

Today, I believe that every customer we talk to, they say that when it comes to reimbursement, they count on $142, which is what is paid with a very minimum denial rate for these small panels and this is why we believe that the concept of mini panels not only makes sense clinically, but is also following the fact that the vestment system is starting to become way more careful with the abuse of the highly complex multiplexing panel.

So that this has been -- if you remember, our theory in the beginning anything that now is proving right to the coin that competition now is moving to fixed mini-panels. Roche is doing that and you saw over is using actually the spot fire with smaller panels.

And what's unique about the sorting is that we don't impose mini panels, we give them the base to design any many panels they want to and as you have seen in our presentation of the LTP for the GI is a wonderful example where you can have 8 mini panels that really covers all the different applications, whereas if you take a page, for example, it's just offering 1 of 11 targets.

Next question is from Jan Koch, Deutsche Bank.

My first one is on LTG. In the press release, you mentioned that growth was driven by a different timing of orders and the partial recovery in the Life Science segment. Could you try to separate these 2 effects and quantify them? And then secondly, on Flex, how is the launch of the GI panel progressing?

And have you already benefited from the current outbreak in the U.S. And one clarification, if I may. On the 150 Plex customers you mentioned during the call again, you provide the same number on the Q4 call actually, are you going to provide an updated number going forward?

So I'll cover the first 2 and then Alberto going to cover the last. I cannot give you any split simply because in providing information of all my partners when it comes to the LPG. The only comment I can make, I said is that what we did not expect is to see a fast recovery on the instruments.

But again, to read this business, I strongly recommend you to listen to what our partners are saying because eventually, it's a B2B. But it's actually a recovery in my opinion faster certain than what we expected. Again, keep in mind that last year, our H2 was very weak because of other in patterns.

So on top of the recovery, we believe that there is a favorable comparison in H2 to H2 last year. When it comes to GI, just launched, again, I believe GI is a wonderful application for mini panels, 8 different mini panels I'm aware of -- if I look at the funnel of opportunities really expanded by a significant number, the funnel that we have access to but in terms of customers, I believe that so far, we validated 2 accounts. So in the numbers that you see in Q2, there is no effect of GI yet has been very much recently approved.

I'll try to explain a little bit doing just a few weeks ago during the last call, Carlo did mention that we had approximately 150 customers. We are all now over 150. And what we are now Carlos also referring to the several installations and activations of the customers, where in the last quarter, the focus was also on add-on modules instruments into existing customers.

For the launch of the new panels, namely the blood and now just recently also the GI. So we are increasing not just the number of customers, but most importantly, also the number of installations and adding on the panels to the customer base.

Next question is from Natalia Webster RBC.

My first 2 are on Plex. Just a follow-up there with the blood and TI contribution going forward. What sort of mix between respiratory versus nonrespiratory do you see as reasonable going forward? And then my second question also on Plex is around the implementation time lines. You've previously talked to longer time lines of 6 to 12 months.

Is that still the case? Or are there things you can do to help accelerate these? And then just finally, if I could follow up on margins. You previously talked to 2026 guidance, excluding additional inflation pressures. Are you able to comment at all on what you're baking in there, particularly with that sort of EUR 8 million to EUR 10 million you were guiding towards at the CMD?

Thank you, Natalia. So I'll try to answer to the question, starting from plex versus respiratory versus nonrespiratory and related needs. Please keep in mind while the respiratory is the first not only the first panel that we launched, but it's also the most prevalent in the overall [indiscernible] market in the U.S.

So naturally, the respiratory panels will be prevalent and the most relevant in our revenues going forward at least for 2026. GI was just recently launched. We saw a very positive pickup of quotes, a very active funnel. But as of today, we're not providing a split of our forecast between respiratory and respiratory.

As I said, just please keep in mind that resist is over 70% of the overall name market in the U.S. So although we have a very strong GI strategy with the mini panels. We still believe that respiratory constitutes more than and majority of our revenues at least -- going into the second question related to the activation I can confirm that the time to activate customers has not changed dramatically compared to when Carlos first discussed it.

This is a function of several factors. One is the fact that customers need to do validation as it reference not only molecular diagnostics, but also in immunodiagnostics and any other platform but the difficulty here is the fact that we are offering a product with the Plex and our mini panels that is in a way very unique, and that requires longer time for the IT departments of our hospitals to adapt and to integrate our mini panels into their system.

So on one side, number of customers that are activating and picking up the flex is increasing. On the other side, there is the still complexities in the validation and activation that are behind the 6, 12 months activation time line that Carlo mentioned, and we can confirm.

Last but not least, you asked about the inflation effect, if I recall correctly related to the conflict in the Middle East and understanding, am I recalling correctly, Natalia?

Yes, that's right. I think previously, you mentioned a EUR 8 million to EUR 10 million impact just to what you're seeing at the moment and what you're expecting within the guidance?

So we took out the disclaimer and from the guidance simply because as of this year, and we are already at the end of July, we believe that we have had so far minimal impact, inflationary impact as we've been able to absorb we expect for the second half also that we can be able to absorb the impact, the EUR 8 million to EUR 10 million is an annualized overall impact coming from both not only the cost of the fuel, the jet fuel, for example, so that's linked to distribution, but also the cost of raw materials linked to plastics.

This is confirmed as an overall assessment but since we will not have a material impact to date, we've not reiterated that as an impact for 2026. We will see how the conflict progresses and what the impact could be

Next question is from Kavya Deshpande UBS.

I've actually just got 2 on the new high throughput version of quantify on that. What is the gross margin like on that product compared to your regular throughput lease on the QuantiFERON test? And also what proportion of your customer base can eventually be converted to the high throughput version [indiscernible]

Kavya, the conversion is going to be 100%. We actually started already. And I believe we converted anything between 30% to 35% of the base. So the idea is that by year-end, we're going to have it pretty much done across technologies. The margin structure is exactly the same as the previous one.

We have no more questions raised at this time

Thank you, operator. Bye-bye.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the DiaSorin First Quarter 2026 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Carlo Rosa, CEO of DiaSorin. Please go ahead, sir.

Thank you, operator. Ladies and gentlemen, good afternoon, and welcome to the Q1 conference call. As usual, I will give some color to the financial results, and then I will let our CFO, Alberto Donati, to take you through the numbers. I'm going to make my comments at constant exchange rate.

In quarter 1, 2026, as anticipated during our full year results call, the quarter registered a slightly negative performance, minus 3% and mainly as a result of the following factors. First one, as reported by all our competitors, the softness of the flu season with declining volume by roughly 25%.

And this clearly has affected the performance of our molecular diagnostic platforms since a good chunk of business today, especially in multiplexing is related to products in the respiratory area. As far as LTG, if we did comment before a tough comparison with the same period of last year. But in this case, we expect that by -- in the second half of the year, the trend will revert.

And then last but not least, the QuantiFERON-TB performance that in the U.S. has been driven by the reduction of immigration-related testing which specifically for us resulted into a one-off event of destocking of some of the large commercial labs in the U.S. that where typically this testing happens.

Now I will now deep dive into the 3 business lines. The Immuno grew 1% compared to last year. Molecular Diagnostic declined 12% and LTG declined 7%. So now let's go one by one. When it comes to Immuno, as said, it grew 1% over last year. If we exclude China, the growth was 2%. North America was growing 1% and the rest of the world, including Europe, 2%.

China declined -- continues to decline 22% as the effect of VBP broadens and now also is hitting the performance of the company in Shanghai and Beijing that until last quarter were not actually affected by VBP.

When it comes to QuantiFERON, the performance on QuantiFERON globally was weaker than the previous quarters. The QuantiFERON franchise grew globally 6% and this is due to a one-off destocking event of the QuantiFERON product in some large commercial labs.

And this has been driven by decline in demand for TB testing, which is required for immigration for the Visa issuance. We expect this to recover already starting from quarter 2 because as I said, this is related to the fact that some of the large labs have canceled orders in Q1 because there -- to bring their inventory level back to where it's needed.

We continue to see stable double-digit growth in U.S. and in Europe outside the commercial labs. And this has been driven by the launch of the new high throughput version of the LIAISON QuantiFERON-TB Gold Plus II test, which has been recently FDA cleared.

As QIAGEN reported, we see no changes in pricing or competition. So QuantiFERON continues to grow double digit in the hospital market, continues to grow double digit in Europe. And we saw, again, this slowdown in the commercial lab in the U.S. Net of this impact, sorry, let me just add a couple of things.

We also experienced in January and February, but with a recovery in March of general softness of U.S. testing volume as reported by some of the commercial labs due to the severe weather conditions in the U.S., as said, which affected some testing volume in certain states, and we saw recovery of this started from March and in April.

The third element when it comes to immunodiagnostic is that we continue to see the normalization of testing volume in Europe as we have been anticipated in previous calls. Net of these impacts, our immuno-based business continues to grow steadily and perform strongly as discussed before.

The U.S. hospital strategy continues to be on track, and we are now approaching close to 550 hospitals by midyear. And by year-end, we should get to the mark of the 600 hospitals, which actually was part of our '23, '27 plan, and we are 1 year ahead of expectations. So the strategy, again, is working very well. And the second element of this is that our specialty testing, which clearly goes into this installed base of systems in hospitals in the U.S. continues to grow. And there's a strong momentum in areas like gastroenterology and other and some of the infectious disease specialty areas.

If we look outside U.S. and Europe, as said before, the only geography where we are experiencing a slowdown is China. China continues to decline, again, in the quarter, 22%. And what we saw is that on top of the VBP that is hitting the industry. Now we see that some of the provinces and cities that [ supposingly ] were not supposed to be hit by VBP now as a combination of price policies driven by competition and/or the fact that hospitals do apply the VBP policy anyway.

We see that the price erosion continues to be very strong in China. Again, as I believe, has been reported by everybody that operates in this sector. When it comes to our direct business, ex U.S. and ex China, so we are talking about Australia, India, Mexico and Brazil, we continue to see mid- to high single-digit growth.

These markets continue to perform very well for the company. Last but not least, our export business is displaying results in line with expectation with clearly the exception of the Middle East region that has been impacted by the current war. And we estimate that the effect in the quarter is close to EUR 1 million. Now let's move to the molecular diagnostic. The molecular diagnostics total franchise declined 12%. And as said before, this is fundamentally driven by the very weak respiratory season.

As we have discussed previously, I will comment the different segments, different platforms, the LIAISON MDX franchise, and then I will talk about our multiplexing franchise and make a few comments about the LIAISON NES. So let's talk about the LIAISON MDX franchise, which annually represents roughly EUR 100 million of revenues.

The franchise declined 7%. But as we have discussed, there are different trends in this product line. We have the respiratory, which is declining 40%. Again, it's all volume driven. We have the targeted specialty, which is growing 41%, and this has to do with the fact that we continue to benefit on the uniqueness of our product offering.

Today, the targeted specialty represents roughly EUR 45 million, so it's almost half of this franchise. And then we have the ASR. ASR is for us, a relevant business, represents 40% of this basket. It's -- these are reagents that we provide to hospitals and commercial labs to develop their LDT. It is highly affected by ordering patterns and because clearly, hospitals do buy these reagents in bulk. And in Q1, we -- the business declined 10% versus last year, but we expect that this will normalize and get annualized to a small growth starting from Q2 this year.

Then let's move to molecular multiplexing franchise, which is approximately, again, EUR 100 million of annualized revenues in Q1 is flat, and it is flat, notwithstanding the fact that there is a good portion of this business, which is a respiratory, which clearly is very negative, but it's counterbalanced by the fact that we are growing the PLEX customer base.

And so we have additional business and additional respiratory business, although it's -- again, from a volume perspective, is not where it's supposed to be due to the weak season. And then we have launched the blood and the new panels, which clearly are not seasonal, and they contribute to the net growth. So if we look at the performance of this segment, which, again, strategic is PLEX-based, is flat, but it's also the matter, there is a strong growth, which is compensating the decline of the respiratory component of this business.

When it comes to customer split, which is an information, I believe we have been starting to provide to the market. By now, 90% of the customer type are hospitals and 10% are commercial labs. Clearly, we expect this to shift even more toward hospitals, which is the fundamental market for this technology. When it comes to the contribution though to the total revenues, 30% of the contribution comes from commercial labs and 70% comes from hospital labs.

And this has to do with the fact that as we have press released, we have signed up and now installed our LIAISON PLEX in some of the major large commercial labs in the U.S. We expect the GI panel clearance within days. So I hope that we will be able to provide some good updates, good news during our Analyst Day, which is going to happen on the 20th.

Now I'm going to give some qualitative comments about the LIAISON NES because it has been just launched on April 1. We have both distributors, Thermo Fisher and McKesson now operating in the U.S. with the LIAISON NES. Because of the way this business works, there is in the next few months, we expect to install systems. And then these systems clearly are going to generate reagent revenues during the flu season.

So starting from late Q3 and beginning of Q4. We're going to give way more color during the meeting on the 20th, but I am happy to report that the launch has been so far very successful. Now last remark on LTG. As you all know, the LTG business for DiaSorin is a B2B business. It's always related to bulk orders that are coming from our diagnostic clients as well as the life science clients because of the way of the ordering pattern in 2025 versus 2026, we expect that H1 is going to be lighter than last year, and we expect H2 to show strong growth compared to last year.

And overall, we confirm our expectation that LTG will deliver low to mid-single-digit growth in 2026. One element that I would like to comment on is that we see an improvement of the life science sector, I think, as reported by some of our clients in their comments of Q1, whereas the Diagnostic business has always been traditionally very strong and clearly more predictable. I'm now comment on the Investor Day.

So everybody is invited to attend to our Investor Day, which is going to happen on May 20. We're going to host our Capital Market Day at our innovation hub in Milan, where we're going to unveil our 2027, 2030 strategic plan.

This event clearly will offer a unique opportunity to experience our innovation present, including live demonstration of all our platforms, which will be led by either R&D or our marketing team. And then the session will then continue with a comprehensive presentation of the new plan.

And I warmly invite everybody to join us either in person or connected through the web. Now I'm turning the microphone to Alberto, who is going to take you through the numbers. Thank you, Alberto.

Thank you, Carlos. Good morning and good afternoon, everybody, and thank you again for joining the DiaSorin Q1 2026 Earnings Call and also for the continuous interest that you're all showing in our company.

In the next few minutes, I'm going to walk you through the financial performance of the first quarter of the year, and then I will turn the line to the operator for the usual Q&A session. As we navigate through these results, you'll see that while we faced some expected headwinds this quarter, we also remain confident that we're going to be achieving our full year guidance.

So let me start from the revenues. Q1 2026 total revenues came in at EUR 287 million, which is down 3% at constant exchange rates compared to Q1 2025, which is in line with the trend and guidance we shared in the previous conference call and as Carlo just outlined.

At current exchange rates, revenue declined 8%, reflecting a significant ForEx headwind of around EUR 17 million. As a reminder, Q1 2025 benefited from an extraordinarily strong U.S. dollar with an average of around 1.05 compared to an approximately 1.17 in Q1 2026, which is a difference of more than $0.10.

So overall, Q1 2026 was particularly impacted by the exchange rates, so given a very tough year-on-year comparison. Moving to profitability. Q1 2026 adjusted gross profit came in at EUR 186 million, down 5% at constant exchange rates compared to Q1 2025.

At current exchange rates, the decline was 9% with a headwind of EUR 10 million due to the ForEx -- to the exchange rate. The adjusted gross margin remained, however, quite stable at around 65% at both constant and current exchange rates, slightly down from the 66% of 2025, and this is primarily due to the negative impact of the tariffs in Q1 2026, which, as you all know, were not yet present in Q1 2025.

And this is also despite the unfavorable leverage of fixed cost, which is also demonstrating the continuous capability of the company to deliver a diligent and rigorous cost management measures in order to maintain profitability. The Q1 2026 adjusted operating expenses were EUR 119 million that are substantially flat compared to 2025 with a ratio of revenues of 41% vis-a-vis 39% of last year.

This increase at constant exchange rate is around 4% as a result of a normal increase of expenses and most notably the commercial investments for the launch of the LIAISON NES platform, which were -- which we commented during the last call and accounts for north of $10 million for the full year.

Q1 2026 adjusted EBIT came at EUR 67 million, which is down 17% at constant exchange rate, while at current exchange rate, the decline was 20% because of a ForEx headwind of EUR 3 million. The margin -- the EBIT margin was 24% at current exchange rates and 23% at constant exchange rates. The adjusted interest expenses at EUR 2 million are compared to an income of EUR 1 million in 2025, and this is a difference of EUR 3 million, mainly because of the lower yield on our cash balance, which is coming from not only the reduction of the interest rates, but most importantly to the lower cash balance due to the share buyback.

Year-to-date adjusted net result came in at EUR 49 million, which is 17% of revenues and decreased by EUR 16 million or 25% compared to the previous year. Now let me move to the EBITDA. Q1 2026 adjusted EBITDA totaled EUR 90 million which is around 31% at both constant and current exchange rates.

And this decrease compared to last year reflects some of the headwinds that were previously mentioned, namely the VBP tariffs as well as the decision of investing for the success of the NES commercial launch, but most importantly and significantly, the unfavorable operating leverage due to the lower revenues in the quarter.

Turning to the balance sheet and the cash flow performance. We delivered a solid result despite the challenging revenue and macro environment. Our net financial position showed net debt of EUR 711 million at the end of Q1 compared to EUR 580 million at the end of 2025. This is a variance of EUR 131 million that primarily reflects, on one side, the good operating cash generation. The free cash flow came in for Q1 at EUR 32 million. But on the other hand, this was more than offset by EUR 154 million for the cash outflow to support our share buyback program that is, as you know, aimed at the shareholder remuneration.

And as a reminder, we think the authorization approved by the shareholder meeting on January 27, and the Board of Directors approved the launch of a share buyback program for shareholder remuneration for a total cash outflow not exceeding EUR 250 million. As of today, the company purchased over 3 million shares, completing roughly slightly above 80% of the total program.

Now in light of the Q1 results, we are confirming our full year 2026 guidance at constant exchange rates for 2025. We continue to expect revenues to grow between approximately 5% and 6% with adjusted EBITDA margin in the range of 32% to 33%.

Please note that as we mentioned already last -- during the last call, this guidance does not account for further potential negative impacts from the prolonged military conflict in the Middle East, which could further impact the group. Specifically, it excludes the possible indirect effect of extended logistical and distribution difficulties and most importantly, the potential future inflationary effect on material cost on one side and supply chain on the other, which were not significant in Q1.

Now before turning to the operator, allow me a quick update on tariffs because as you all know, the U.S. government adopted an exceptional tariff framework in 2025, while in 2026, in early 2026, the legal landscape shifted significantly.

On one side, the U.S. court ruled the termination of the [ APA ] duties and also a nationwide order for customs to refund eligible amounts, while at the same time, the administration introduced also, as you all know, a temporary 10% global tariffs under the Section 122.

As a result, DiaSorin initiated a refund actions through the newly established mechanism. So we are now closely monitoring the situation, and we expect to have updates from customs within the next 90 days at the latest. I will now hand it over to the operator for the Q&A session.

[Operator Instructions] The first question comes from Aisyah Noor with Morgan Stanley.

My first one is on QuantiFERON, which you mentioned on the call was growing 6% globally. So my understanding is QIAGEN last week reported a 5% decline in their QuantiFERON franchise.

So what is explaining this difference? And could you quantify the impact of the destocking effect for QuantiFERON in the quarter for you? My second question is on the diagnostics market outlook. So we heard from [ BioMeria ] a few weeks ago that the instrument sales development in the market has been weaker than expected due to cost pressures in IBD. Just wondering if you are seeing a similar dynamic? And if you could remind us what the kind of split in sales or what was the development of instrument sales versus consumables for you?

I'll take the call. I'll take the question. On the QuantiFERON, unfortunately, what you cannot really compare our revenues to the QIAGEN revenues for 2 reasons.

First one is that they have -- they report CLIA and they report ELISA. And so when they see it, so the overall franchise. And so when they show a decline, and I think they've been talking about the effect of tenders in the Middle East, they clearly refer more to the ELISA technology.

And therefore -- and this has been really impacting the overall franchise, whereas we only see the pure CLIA effect, and so we don't suffer from that. Typically, if you remember, our QuantiFERON franchise was growing 15%. And so now this slowdown, as we discussed, is primarily driven by commercial lab segment in the U.S. and destocking.

North America has been soft in that sense. So it has been declining. QuantiFERON, minus 3% as a combination of that effect. So I cannot give you the destocking value, but I give you enough data that you can do the math yourself.

My observation is that starting from the beginning of Q2, which is what we experienced so far, we see that there is a normalization in QuantiFERON volume. So this has been, again, some of the large labs that are actually doing all this visa testing that had a lot of inventory that they decided to consume.

So they stop ordering for almost a quarter. And now they started again. When it comes to the instrument sale comment of [indiscernible] , and again, I believe -- I don't know -- I believe you are referring to the spot fire, correct?

No, I think the comment was on broader instrument appetite for instrument CapEx in the diagnostics market overall. So this would also be relevant for the immunodiagnostics business.

Look, I would say that the vast majority of our business today is on reagent rental, both in -- certainly across all the European countries. In the U.S., there was -- after COVID, I believe we went back to the normal course of business.

And so I would say that 80% of our placements today are all reagent rental. So the sales really make a small portion of our revenue. So on the LIAISON NES, granted, we -- I have 4 weeks under my belt, and so not enough experience.

But we actually had surveyed the market pretty well the POL market, which is where this system goes. And what it was very clear to us is that if during COVID and I would say, until 2023, 2024, there was availability -- cash availability by these customers to buy the systems. Today is 90% reagent rental because for a very simple reason, the customers cannot predict the revenues that they're going to be generating because it's seasonal.

So think about this season, right? For these customers, POLs testing for respiratory is actually a revenue line for them. And they don't feel comfortable about projecting the revenue line because they are dependent as we are on the season. And they, I think, revert back to what was the typical model in this space pre-COVID, which has always been reagent rental.

The next question comes from Odysseas Manesiotis with BNP Paribas.

Firstly, on the cost lines, I mean, considering sales seem to have come a touch below but EBITDA seems a bit above. Could you give us a bit of color on how the different cost lines move and why you stopped disclosing them?

And secondly, on the -- sorry, second, yes. On the net interest so far, Carlo, I understand you don't have a long weeks under your belt to get a good feel of the interest so far. But from the few clients that you might have gotten a feeling, what are the points of differentiation of the platform that have been appreciated the most so far?

I will take the second question, and I will leave to Alberto for the first one. I think then he is just one clarifying question to you to be able to answer. So second -- so you're asking about NES and why we think NES is different.

I hope you're going to be in Milan next week, but I will -- actually in 2 weeks. But I will show you why NES is different. NES is a very simple platform. It's really like a Lavazza coffee machine to be sure. And you just put inside the cartridge, you push a button and get the result.

If you look at the Spotify, for example, there is hands-on, it's been a very successful platform, by the way. But there is hands-on time, hands-on that I mean customers have to do it. The fuel space, again, 4 weeks under my belt, but it's a very unsophisticated space.

And I believe that the advantage that we have today compared to some of the legacy systems, Abbott is a good example or even more recent systems is that we are really hands-free.

Let me remind you that this system was designed originally for Walgreens. When we started this, it was a Walgreens system for pharmacies. And I believe that today, what customers experience is 2 things versus a pretty much it takes 17 minutes versus 40, 38 versus the other competition that provide the results in similar time frame, it's simplicity, okay?

But I hope you're going to be in Milan next week, and I'll show it to you.

Alberto?

Allow me just to clarify whether you were asking for the split of the cost line, so the OpEx split or did I misunderstand your question?

Yes. I was looking for a feeling of how the cost lines moved in the quarter. And just a feeling of whether there were substantial decreases in any of them to justify the stronger margin than our expectations.

Okay. So let me start from the cost line. As I mentioned before, the growth in our operating expenses was 4% compared to previous year.

Now this is the combination of fundamentally 2 things. On one side, the salary increase, as we discussed and commented in the past, and it is done in July every year. So in Q1, we had an impact of roughly 1/3 of the increase of the overall increase is simply given the salary increase, the carryover effect of the salary increase that we had in Q3 of the previous year.

The second element, as I mentioned before, in terms of OpEx is the investment for NES launch, which, again, $10 million -- north of $10 million for the full year. And we started very early with investments since the beginning of the year.

We hired the team -- almost the full team since the beginning. So that contributed around 1/3 of the increase. And then 1/3 is purely driven by the normal increase of expenses, infraction increase of expenses that we usually have.

From a gross margin standpoint, as I said, we have a gross margin that is substantially flat and similar to previous year. We closed 2025 adjusted gross profit at 66%, while we closed Q1 this year at 65%. The 1% difference is fundamentally driven by the tariffs, while at the same time, we were able with strong cost management to offset the negative operating leverage.

So from a gross margin standpoint in Q1, we were substantially in line with our expectation.

And are you going to continue not disclosing the lines going forward? And could you give a feeling of whether anything changed on the R&D side.

So in terms of disclosure of data, we're going to be consistent with what we have disclosed so far. So you're going to receive the same level of information and data that we've been providing. From an R&D standpoint?

On an R&D standpoint, let me just make a comment. We have been investing a lot in our platforms in the last 3 years.

There has been a surge in R&D spending, which has been very significant and clinical spending because we've been taking to the market 3 platforms. So what you had to expect, and I think what you will start to see from second half is that there is going to be a normalization of R&D expenses, which doesn't mean that we are not going to be developing products because you will see during our Investor Day next week, what we commit to in terms of new product development, but certainly not to the intensity and level which was necessary to develop 3 platforms in the last 3 years.

So again, normalization starting from H2.

The next question comes from Kavya Deshpande with UBS.

My first one is just around the reiteration of guidance. So it implies slightly faster revenue growth than previously over the rest of the year. But if I'm not wrong, it still looks like it's implying flat margins over the next 3 quarters versus last year.

And Alberto, you were very clear on the pressures you faced on margins in Q1. But I guess something underlying feels like it was better, whether it was cost control or the benefit of the German factory closure.

I was wondering whether you could just elaborate on those tailwinds and whether you expect them to continue over the rest of the year? And then, Carlo, just on your expectations for China, given everything that's going on there. On the last call, I think you said you were expecting a EUR 5 million decline there. Is that also -- is that expectation also reiterated as part of your guidance?

Let me take China first, Kavya, and then I'll let Alberto discuss about the rest. Look, I am -- you need to concede that we have been very clear about China a while ago when everybody else was a little bit ginger about it.

And I'm telling you the situation is not improving. And it's not improving as a combination of a couple of things. A, we all thought and hope that the VBP would be -- would actually stay within certain provinces, and we all thought that we would be sheltered in some very large markets in China. I'm telling you it's not happening.

And it's not happening as a consequence of 2 things: A, some of these hospital administrators do implement VBP anyway. Second, you know and I know when you have companies very large companies leaving on the table hundreds of millions of dollars in price as some of the very large players have reported, the market become nasty.

And nasty means that in order to preserve the business that everybody has, then we kill ourselves with pricing that, in my opinion, doesn't make sense. So I believe we are very fortunate with the fact that if it's not $5 million, it's going to be $7 million, okay? But it's a relatively small damage.

I believe that when it comes to the whole industry, there is going to be another level of pain that will surface in this market moving forward. It's a combination of 3 things: the market becoming, again, very aggressive, VBP being extended. And last but not least, I believe I'm starting to see Chinese players that now are moving not only out of clinical chemistry, hematology and immunoassay, but they're also getting a more specialty segment.

Thank you, Carlo. So going back to your first question related to gross margin and what is our expectation. So allow me to start from the end, and then I'll walk you through some of the elements. Fundamentally, yes, we do expect our gross margin to be stable and then the EBITDA to improve so that we go back within the guidance range of 32% to 33% as the effect of the operating leverage.

So let me now further clarify. We do have positive and negative elements affecting our gross margin. On the side of the negative elements, of course, we have -- we're going to have and we're going to foresee a negative an unfavorable mix coming from the growth of the molecular franchise that, as we know and we discussed in the past, is dilutive in terms of margin for our group.

So the growth of the revenues in that franchise is going to be slightly dilutive for our gross margin as well as, as Carlo already mentioned, a further deterioration on China. Now we plan to offset those, thanks to -- you mentioned it as well, Germany, the closure of the Germany, so the optimization of our industrial footprint, the fact also that in the second half, we're going to have a lower impact on tariffs compared to what we had in the second half of last year and simply the positive effect of the operating leverage.

And if I could just clarify on the German factory closure, I think [indiscernible] had previously said you expected a EUR 6 million to EUR 8 million benefit. Is that still the expectation?

Yes, indeed.

The next question comes from Jan Koch with Deutsche Bank.

You mentioned in your press release that you expect several headwinds to ease from Q2 onwards. What gives you confidence that this actually happens? And then secondly, on QuantiFERON, and sorry if I missed that, but how much of your QuantiFERON revenue is exposed to immigration testing in the U.S. and in the Middle East region?

And then finally, on the phasing of your sales growth this year, do you think that you can already be in line with the full year guidance range in Q2?

So I'll start from the guidance. We are -- so when we disclosed the guidance last month, we already showed the progression. And so we showed the progression quarter-on-quarter.

And you can see that while we were expecting for Q1 to be slightly negative, we also expect Q2 to be slightly positive. We're going to be within guidance by the end of the year, thanks to the contribution of the second half. So by the time we close H1, we're not going to be yet within the 5% to 6% growth.

I think the question is different. Look, I understand what -- so you're saying -- so you're asking what are the headwinds that you're not going to have? I think primarily 2. One is an assumption that I think everybody is making that we're going to have a normal flu season in Q4, right?

Second element has to do with the LTG. As explained last year, if I remember correctly, LTG grew 15% in H1. It declined 14% in H2 and eventually, the growth was around 1%.

We expect that overall, by year-end, the business will grow low single digit to mid-single digit. It really depends how Life Science will perform, so -- but growth anyway. Q1, we -- I think we closed with minus 7%, again, which has all to do with the ordering pattern.

So this is going really to carry an effect on the H2 performance versus H1. Let me also remind you that the LTG -- the fact that LTG carries more weight in H2 is really contributing also to the growth of the margins because it's a very profitable business for us.

So it will contribute to an improvement of the mix. Next -- sorry, did you have another question?

Yes, on QuantiFERON and exposure to immigration testing.

Look, as you know -- as you very well know, QuantiFERON is a QIAGEN business. And so I cannot really comment too much on QuantiFERON.

I know that Thierry had a QuantiFERON Day yesterday. And unfortunately, I didn't have time to listen to it. And so I don't know what he discussed about the immigration, whether he quantified it, but I really invite you to actually refer to what QIAGEN discussed yesterday.

Got it. And then one follow-up, if I may, on the commercial investments for the NES launch. How much of the planned $10 million investments were already booked in Q1?

Less than 2.

The next question comes from Anna Ractliffe with Bank of America.

I wanted to ask about the reiterated guidance in the context of the slightly softer quarter. Do you still see a pathway to the high end? Or should we be thinking more about the low end for this year? And then also, I appreciate you aren't including the Middle East impact in your guidance, but if you could help us directionally with the exposures.

I think last quarter, you said every month, the price of oil is above $100. That's a $5 million impact. Is that still the right way to think about it? And do you have any levers to offset that impact?

Look, believe me, I'm not in a position now to say high end, low end. I'm saying that we feel as comfortable that we're going to hit the range. And I believe that let's see what happens in Q2, and then we may comment differently about which side of the range we're going to be.

Related to your second question about the effect of oil, I think Alberto is going to shed some light.

Thank you, Carlo. Yes, indeed. So as we mentioned before and during the last -- during the last call, Carlo already mentioned that there are -- we have estimated at least EUR 5 million of potential increase between the supply chain cost and also a further potential increase on materials that we have not quantified coming from the increase in material costs due to the plastic -- the increase in plastics.

Now this is not included in our million annualized. Absolutely. This is not included in our guidance because it was not material, not significant in Q1, and we cannot make an estimation of what it could be the impact within 2026 yet.

But one -- just one clarification. There was no impact in Q1, correct?

Yes.

The next question comes from Natalia Webster with RBC.

I have 3, please. The first is on the Immuno business. Just following up on Immuno U.S. growth. I appreciate the numbers around QuantiFERON, but are you able to provide the level of impact that you saw from the adverse weather in Q1 and then what the underlying U.S. growth look like, excluding both of these effects?

And interested to hear on what you're expecting for both QuantiFERON growth and underlying U.S. growth for the remainder of the year. And my second question is on Immuno growth in Europe. You previously talked to normalization in volumes and specifically, you mentioned that German testing volumes fell to around 1% in 2025. Has this stabilized in Q1? Or do you see further downside risk here? And then thirdly, just following up on that last question on the Middle East impact. I appreciate you say that the impacts weren't material in Q1, but are there certain mitigation measures that won't necessarily continue going forward? And are you able to just help us a bit around the potential exposure if you're not able to offset these in the longer term?

Let me start from the last. We know for sure that our business in Iran most likely is going to suffer from this situation, right? Roughly, Iran did represent for us EUR 3 million to EUR 4 million.

And so far, clearly, we are not able to ship anything to the country nor we know what is going to happen at the end of this because we had a distributor there. And honestly, we don't know what the distributor is these days. So that is an element.

The rest of the region, we assume that the problem today is more to do with the logistics. Actually, we know it's logistics because Dubai was our port of entry for many of these countries and we had slowdowns. Distributors have been working with inventory that they had.

So depending on how long this will continue, clearly, it's going to get to a point where they're going to run out of inventory, and then that is going to be a problem. So today, I don't know it can be temporary or kind of an effect moving forward.

When it comes to the volume, look, today, what we see -- when we said normalization in Europe, it means that we continue to experience quarter-to-quarter growth, which sits as low as 0.5%, as high as 2%. Clearly, again, you need to be difficult on a monthly basis. And this is why I'm saying we are saying it's around 1%, 1.5% compared -- but really compares to last year where you were around 6%, right, in certain quarters.

So this is why I'm saying, we believe that we fundamentally reading these numbers, we are back to pre-COVID time where the European market was growing to these levels. And I don't know didn't pay attention, I don't know if any of our competitors gave any indication about volume. U.S. growth, let me make it simple for you.

If you strip out these 2 effects, which is the destocking plus the weather effect and the weather effect, again, did hit some of the states because others were no problem. But unfortunately, in some of the states like the East Coast, we have very large customers.

I would say that if I look at March, March pretty much normalized. And therefore, if you strip out QuantiFERON and you strip out the weather effect, the rest of the business has been delivering in line with what we have seen in the previous quarters.

And just on the QuantiFERON growth going forward, are you expecting this to improve into Q2 and H2?

Listen, I said before, I believe you should be talking to and listening to QIAGEN and just following the indication about what they expect QuantiFERON to be.

Again, the only thing you need to be cautious is that they have an ELISA component to it, which clearly is solid in a certain environment, whereas we only have CLIA. And our business is fundamentally U.S. and Europe, whereas their business is global because in many geographies, they sell ELISA. So when you talk to them, you -- I think you need to ask from them more color on the geographies in case you're interested.

The last question comes from Philip Omnou with JPMorgan.

Just one more technical one. The D&A charge in Q1 a bit lower at least versus what we expected. And I know you guys have spoke to higher D&A given the launch of NES.

So can you give us a bit more color on what we should expect as a run rate going forward from here? And then second question, just on QuantiFERON again. And I know you guys don't want to talk too much given the QIAGEN business, but you would help us understand if there's anything baked into the full year guidance for sort of incoming competition in the latent TB testing area?

I'll take the second one. We honestly -- we are eagerly waiting to see what Roche is going to say. I think, in their diagnostic Day. But to be honest with you, I don't expect any material competition in 2026. So our guidance does not take into effect any effect from the launch of [indiscernible].

[Operator Instructions].

First question.

I'll do it. Thank you, Carlo. So from a D&A perspective, we can confirm the expectation of growth in the second half. Just please, you mentioned 2 components, the launch of the new products, which for us is in 2 components, the NES and the PLEX.

Why do I mention both? Because on one side, NES was officially launched on the 1st of April. So you don't see the full impact and the full effect in the first quarter. And second, because we do have also the expectation for the GI panel to be registered and launched in a matter of weeks and days. And so we will also start the depreciation and amortization of those panels. This is from an intangible standpoint. And then from a tangible standpoint, again, given the fact that the NES has just been launched, the installation of instruments is going to happen in the coming weeks and months.

And so we do expect that with the success of the platform, you're going to see also an increase of depreciation and amortization related to the instruments that we will be placing in reagent rental.

Mr. Rosa, gentlemen, there are no more questions registered at this time.

Thank you, operator. Take care.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the DiaSorin Full Year 2025 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Carlo Rosa, CEO of DiaSorin. Please go ahead, sir.

Thank you, operator. Ladies and gentlemen, good afternoon, and welcome to the DiaSorin full year results.

Today, we have a busy agenda. I'm going to make some business remarks. Then our current CFO, Mr. Pedron is going to take us through the 2025 financials, our future CFO, Mr. Alberto is going to discuss about guidance 2026, and then collectively, we're going to take questions.

So let me start from 2025 business comments. 2025, I think, marked a year of good achievement for our company with success for our strategy in the different technologies with Immuno delivering 7% growth, Molecular Diagnostics year-on-year flat and we'll see later primarily related to the fact that the flu season this year is -- has been very weak. And then LTG delivering to expectation flattish compared to previous year. And again, we will discuss later, primarily due to the fact that on the Life Science segment, as I think is very well known by everybody, 2025 has not been an exciting year.

Let me now turn to the specific technologies. Let's from Immuno. It's very clear that Immuno, we always talk about the success of our hospital strategy. In the U.S., we have delivered the number of hospitals that was targeted. And actually, if I go back and think about the 2023 plan, LTP, what was when we deliver our targets for the hospital strategy, our -- what the company was looking for is to get to 600 hospitals by 2027. And actually, I believe we're going to get to 600 hospitals by the end of 2026. So this strategy has been extremely successful.

By the same token, we continue to launch specialty assays, hepatitis delta together with Gilead, we are the first and only company to have an FDA-approved hepatitis delta assay, which is a great opportunity in light of the expected approval of the new hepatitis delta drug. And the TRAP, which is an autoimmune assay, very specialistic. So we continue to fuel our -- globally our Immuno franchise with specialty products.

When it comes to Molecular Diagnostics, I will be more specific later, but we continue with increasing the launch of the different panels in -- on the PLEX platform. Today, we have 4 approved and GI is submitted and expected to be approved in the next 60 to 90 days. We are -- as you know, I remind everybody, as far -- as of today, we are focusing our effort just in the U.S. market. So when I will talk about PLEX, just remember, it's only the U.S. and we continue to deliver the customizable mini-panel strategy.

When it comes to NES, which is the small platform. As discussed already, we have the -- we got approval of our respiratory panel. We have submitted our GAS panel on NES, and we expect approval within H1 of 2026.

We built a dedicated sales force in the U.S. of around 30 people with an investment with annualized is estimated to be around $10 million, that will allow us to launch efficiently and effectively NES in the non-acute and acute space in the U.S.

In parallel, we have signed up 2 major distributors, Fisher Scientific that will work with our direct sales force in the acute hospital segment, and McKesson. I think the press release went out yesterday that is taking the exclusive distribution of our LIAISON NES in the non-acute in the U.S. together with, again, the dedicated 30 people that we have hired to support the business. Commercial launch is expected to be April 1.

Moving forward with the business from a footprint organization, we have pretty much completed the phase out of our industrial plant in Germany. Again, to streamline our manufacturing footprint, all product manufacturing has been moved to Italy. And we are practically at the end of the process, and I would like to thank all our German employees that have been extremely collaborative and professionals in allowing the company to close the plant in good order and not to provide any disruption of supply to the customers.

When it comes to Chicago and Cypress, which are the 2 sites where we manufacture PLEX and NES, we have completed all the investments, which have been in the order of $30 million. And now we have the capacity in place to sustain the launch of the 2 platforms.

When it comes to China, we have -- we believe that we continue to see that the macro environment in China is actually not improving, to say the least. VBP policy now is adopted in all the provinces, but what we are seeing is that even in Shanghai and Beijing that supposedly were not touched by VBP, now clearly, VBP is also the factor applied into these very large markets. And so the effect of VBP will hit China in its entirety. Because of that and because of the fact that we honestly don't see for DiaSorin a space as a supplier of commodity non-specialty assays.

In China, we decided to close our manufacturing site in Shanghai and discontinue the local manufacturing project. Unfortunately, we funny enough, Murphy's Law, we are making the decision when we just got approval of all the products. But I think that, again, our view on the Chinese market continues to be very negative and the ability to compete in that market with the 2 products, I don't think is there.

And although as I think we have discussed, we are now resorting to a different strategy, which is the specialty strategy in 2 areas. One is TB, where we are successful globally together with QIAGEN and the other one is on the GI immune strategy. We expect the TB product to be approved by the summer. So we will start our TB campaign in the summer and the Calprotectin assay to be approved within 2026, beginning of 2027.

So again, China, we are redirecting the effort. We are taking away all costs associated with being a nonspecialist player and investing to become a specialty player in that market, which we honestly believe is the only way for a company like DiaSorin to continue to survive and make good business in the Chinese market.

When it comes to 2025, again, we have been experiencing, I think, overall headwinds and tailwinds. Let me remind everybody what happened last year. Tariffs clearly have been impacting the P&L last year, although we believe that those tariffs, which is in the range of $9 million, again, I'm talking about the cash component, will -- we will be able to get them back sometime in 2026. But last year, they did impact our P&L.

The NIH funding cuts did impact the business of our partners in life science. And in fact, and this is the reason why we have a flat overall LTG business, which, as we have discussed a few times, is a combination of high single-digit growth of the diagnostic component, but high single-digit decline of the life science.

We have been experiencing volume normalization in Europe, testing volume. And I'm using Germany as an example. Germany used to grow on an annualized rate around 6%, 7% from volume testing perspective at the end of '24, beginning of '25. And we actually saw that by the end of 2025, that is more around 1%. And I'm using Germany because it's a very large market, but I believe that this problem is actually replicating around Europe. And again, it's normalization clearly after the COVID effect, in my opinion.

And then last but not least, the flu season, no need to comment, but the flu season has been very poor in 2025 and also Q1 of '26, we continue to see the same effect. And because of the fact that a good chunk of our business for molecular is flu, clearly, we are tactically suffering from lack of revenues in this segment.

From a tailwind perspective, clearly, PAMA implementation has been delayed post 2026, and this has lowered the level of pressure on our customers. And so I believe that from a pricing perspective, we do not foresee an impact coming from PAMA.

Now let's dip a little bit more into the numbers and let's look into Immuno. Our Immuno franchise, we like to look at total and then take out what we believe are the one-off effect. But if you look at the Immuno franchise, full year growth 7%. If we take away 2 effects, which are China, the China decline, which was almost 18% and the outbreak effect that we commented a few times, then the growth of the franchise would have been 9%, which -- so it means that solid, healthy growth of our Immuno business.

North America continues to be one of the leading markets for DiaSorin. We had full year growth of 15%. But if you look at quarter-to-quarter, quarter 3, 14%. Quarter 4, 14%. So the performance of North America is clearly extremely solid there.

Europe, we saw that by year-end, it's mid-single digits, which I think is okay when it comes to the European market, which does have dynamics, as we know, of growth expectations, which are very different from the rest of the world.

China has been very negative. And overall, during the year, we lost EUR 8 million in China in revenues, which is minus 19% versus prior year. Clearly, we saw these effects softening in Q4, but what we are seeing moving forward, though, is that this VBP effect, I think, will continue now into provinces that so far were not really touched by this. And so my view when it comes to 2026, certainly is not positive about this.

If we look at Molecular, as you know, our Molecular business is fundamentally flat but -- year-on-year, but with different components. Looking at the 3 different legs of the business, as you know, let me remind you, we look at the business as the -- what we call targeted, which is our Molecular franchise that came in original from the DiaSorin and Focus, we have the franchise, which is the multiplexing franchise, and then we will have the NES.

If we now talk about the targeted franchise, we see that -- which, I mean, overall is close to $100 million. There are 3 different segments into this. We have what we call specialty. The specialty targeted, which closed at around EUR 40 million annualized with growth rate full year '25 of over 35%. And by the way, fairly constant quarter-to-quarter. So this continued to drive the growth of this franchise.

But by the same token, we have a respiratory component, which is 40% down compared to last year. The good news is that now it's becoming very small, is between EUR 10 million to EUR 15 million. But the seasonal effect was -- has been so far very heavy because of the respiratory season.

And finally, we have what we call ASR, which is again roughly EUR 40 million, very profitable business, which are reagents that we sell to laboratory in the U.S., roughly 200 customers to do LTD (sic) [ LDT ] assays in the U.S., which is flat and not expected clearly to be a significant growth driver, but it's a very significant profit, very profitable business for the DiaSorin, and on top of that, it's allowing us typically to launch as LDTs, some of the specialty assays and then meanwhile, file with run clinicals and get the FDA approval that then will allow us to move to the full kit.

So this franchise, I believe, is solid, and will continue to deliver the growth, transforming this -- the business from very dependent on respiratory to fundamentally to be very dependent from the growth of specialties.

The first -- the second segment is the multiplexing. The multiplexing for us is the combination of VERIGENE I plus the LIAISON PLEX. Full year growth of this business, all-in, has been around 9%. Clearly, there has been an effect here, which has to do a lot again with flu and flu season in 2 ways.

The business that we had with VERIGENE I had a flu component. But more than anything else, all the LIAISON PLEX business that we actually are building, it's all respiratory for a very simple reason that we just got blood in mid of 2025. So it's very clear that we have a double whammy situation in this case.

So if we look at LIAISON PLEX per se, we had an objective to close 150 customers in the U.S. and in fact, we closed 147, which -- so we are at target. We have placed roughly 1,000 systems with these customers in the U.S. Again, this is U.S. only because we did not make this platform available outside the U.S. 40% of the contracts that we close are fixed and 60% are flex, which means now that -- and the weight of the flex business is increasing clearly because all the new placements we are making are fundamentally based on flexibility on building the mini-panels.

If you look at customer split, 90% are hospitals and 10% are commercial labs. Clearly, if we look at the revenue contribution so far, commercial labs represents a little bit over 50% of the business, and this is because of the fact that we closed some very large contracts. In commercial, and namely the one that was made public was the Quest agreement where Quest now has transitioned to the LIAISON PLEX platform for all the respiratory business.

GI panel clearance, as said, expected in the next 60 to 90 days. And this clearly will accelerate penetration in the U.S. -- in the U.S. hospitals, also because the GI panel is the one that allows to the full extent the use of the mini-panel -- customized mini-panel concept.

When it comes to the nonautomated business, which is the legacy business, left -- clearly is left unattended is declining minus 6% full year and is supposed to continue to decline simply because this is a business that we're not invested in, is a cash cow and still very profitable with like all the cash cow businesses.

LTG, we spoke about the LTG before. It's a very -- so it's a 50-50 business. As you know, the split is 50% diagnostics, 50% life science. When it comes to the diagnostic business, it grew 9% last year. And -- but when it comes to the life science business, it actually declined 9%, and this is why it made the LTG business fundamentally flat. We'll talk about the expectations for this business in 2026. But I believe that in 2026, we are expecting moderate growth, primarily driven by the fact that there are initial signals that the life science business is going to do better than last year.

Also because in full honesty, last year was for everybody in the business, a very terrible year, right? And so a recovery of that business is mathematically expected.

At this point, I believe that I will let P.G. take care of the comments on the financials and then I'll make some further remarks. P.G.?

Thank you, Carlo, and welcome, everyone, as Carlo said, to our 2025 Fourth Quarter Earnings Conference Call. As usual, during the next few minutes, I will provide an overview of our financial performance for the full year, after which, as Carlo just reminded us, he and Alberto will cover 2026 guidance. And we will then proceed to the usual Q&A session.

So 2025, full year revenues were just short of EUR 1.2 billion, reflecting a 1% or EUR 10 million increase compared to the same period last year. This performance was achieved notwithstanding a EUR 13 million reduction in COVID-related sales, once again as expected, and the EUR 34 million negative impact from foreign exchange rate, primarily due to the depreciation of the U.S. dollar against the euro as we have discussed many times during our last earnings calls.

Excluding COVID and at constant exchange rate, our core business has achieved a 5% full year growth, therefore, in line with the guidance. Carlo previously outlined the factors contributing to this performance, the robust results from the new franchise despite the challenges in China and the outbreaks in Europe in 2024, normalization within the LTG franchise following a favorable phasing in the first half of 2025 and a stable trajectory for the overall Molecular business, which has been negatively impacted by a very mild start of the flu season. And as you might remember, the discontinuation of the ARIES platform.

2025 adjusted gross profit at EUR 778 million accounted for 65% of our revenues. This represents a decrease of EUR 4 million or 1% compared to 2024, mainly driven by tariff impact which at the P&L level in the year accounted for EUR 4 million, a different product mix and the negative FX impact. With constant exchange rate, adjusted gross profit would have increased by almost EUR 20 million or 2%.

Adjusted operating expenses for the full year were EUR 474 million, marking a 1% decrease from the previous period, whereas at constant exchange rate, the expenses increased by 1%.

As a percentage of revenues, OpEx declined to 39%, down from 40% in 2024. The small rise in absolute value at constant exchange rate was mainly due to the higher labor costs from the annual salary review and increased depreciation tied to the recent product and platform launches, including LIAISON PLEX, which had been previously in development. This minimal increase reflects our disciplined approach to cost management.

I'd also like to address the reported statutory operating expenses, which in Q4 has been impacted by the initiation of the divestiture plan of our manufacturing site in China that Carlo just talked about. This project will be completed by the end of 2026. These initiatives, which was prompted by a material change in the Chinese market as we heard, is consistent with DiaSorin ongoing strategy to optimize our global manufacturing footprint like previous actions, such as the divestiture of our Irish and South African facilities and the commissioning of our manufacturing site in Germany. These steps demonstrate our continued effort to adapt to the evolving macroeconomic conditions and enhance our long-term competitiveness.

We anticipate that the one-off charge related to the full scope of this initiative will not exceed EUR 22 million, EUR 20 million of which has been booked in Q4 '25 with the vast majority being noncash costs, primarily intangible and fixed asset write-off. The monetary total impact will be less than EUR 3 million. We estimate that this initiative will bring an annualized saving was completed of about EUR 6 million.

As a result of these dynamics, 2025 adjusted EBIT reached EUR 304 million, representing 25% of revenues, confirming the profitability we had in 2024. This reflects an increase at constant exchange rate of EUR 13 million or 4% compared to the same period last year, whereas the resulted current FX is in line with 2024.

Adjusted interest expenses for the full year were slightly above EUR 1 million compared to an income of EUR 4 million in 2024. The primary factor behind this variance was a reduction in our cash balances and investment yields, reflecting the decline in interest rates.

As discussed in previous earnings calls, the normalized tax rate is adjusted to 25% following the conclusion of the Patent Box regime for our Italian legal entity. For the full year 2025, the tax rate is about 29%. And this is due to a couple of one-off events that occurred in the fourth quarter, the more significant impact resulting from the resulting tax and dividends from the U.S. subsidiary and the impact of not accrued taxes deduction of the impairment cost related to the divestiture of the Chinese manufacturing site in light of the limited visibility on future taxable profits in our Chinese legal entity. These items are not expected to occur again in 2026. So we will go back to a normalized tax rate of 25% in 2026.

2025 adjusted net result at EUR 223 million or 19% of revenues is lower than '24 by EUR 13 million or 6% as a combination of the negative FX impact accounting for EUR 12 million and higher interest and tax rate expenses.

The adjusted EBITDA for the full year 2025 is EUR 394 million, accounting for 33% of total revenues, therefore, in line both in absolute -- with the absolute figure in the revenue ratio recorded in 2024. At constant FX, adjusted EBITDA reported an increase over 2024 by EUR 15 million or 4%. The margin is slightly exceeding 33%, in line with the annual guidance.

Q4 '25 profitability at constant exchange rate, just short of 32%, is about 140 basis points lower than the corresponding period in 2024, mainly due to the variations in product mix and the impact of the tariffs, which accounted for EUR 2 million or thereabouts in the quarter.

Before turning to the net financial position, let me share a brief comment on the tariff situation in the U.S. On March 5, the U.S. Court of International Trade, so-called CIT, issued a nationwide order requiring U.S. Customs and Border Protection to refund IEEPA-based tariffs following the U.S. Supreme Court's February 20 ruling that the IEEPA does not authorize tariff actions. The order applies to all importers, thereof to DiaSorin as well. The Court of International Trade has given Customs and Border Protection 45 days to prepare the system for this activity. We will keep on monitoring the evolution of this very complicated situation and update investors consequently.

As of today, the potential P&L upside related to 2025 tariffs is about EUR 4 million, as we said, plus EUR 1 million, EUR 2 million for the first 2 months of 2026. From March on, IEEPA tariffs have been replaced by the new tariff scheme imposed under Section 122, which is included in our 2026 guidance.

Turning to our net financial position. We closed 2025 with a net debt amounting to EUR 580 million with an improvement of EUR 38 million compared to the same -- to the end of 2024. This reflects a solid free cash flow of just short of EUR 210 million, compensated by cash outflows, including EUR 97 million in payments to shareholders exercising with global rights after the recent implementation of the announced voting rights mechanism as well as EUR 63 million distributed as dividends to our shareholders.

Before Carlo and Alberto present the 2026 guidance, I'd like to share a few personal remarks. As you might know, this is going to be my last earnings call in DiaSorin since in April, I will be moving to a different professional chapter of my life. As I wrap up my time here, I just want to say a big thank you to all my DiaSorin colleagues, my super amazing team, Carlo, obviously, and the old Board. The last 15 years has been an incredible ride, full of teamwork, growth, achievements that I will always remember.

DiaSorin has been like a second home to me throughout these years and I have every confidence that it will continue to excel and accomplish even greater things in the future. I'm also certain that Alberto, who has been an integral part of my team since I joined DiaSorin, will be an outstanding CFO. And to all the analysts and investors I had gotten to know over the years, it's been a real pleasure interacting with you. Thank you for your insights and open and constructive dialog. I wish you guys the best going forward.

Thank you, P.G. Clearly, this is a very emotional moment for everybody here. P.G. reminded me today that when he joined DiaSorin 15 years ago, our revenues were less than our OpEx today, which clearly shows that the company grew significantly and P.G. was very instrumental to work with us during this very interesting times.

By the same token, I would like to welcome Alberto Donati, who is stepping in effectively today as the CFO of this organization. And as all the CFOs, it's going to be the duty and honor now to help us out to understand the guidance for 2026. Alberto?

Thank you, Carlo, and thank you, P.G. Good morning and good afternoon, everyone. I will now walk you through our guidance for 2026, which, as usual, will be expressed at a constant exchange rate using 2025 as a reference year.

Now before getting into the numbers, allow me to briefly frame the macroeconomic environment we are operating in as 2026 will be characterized by some headwinds in the first part of the year. Specifically, we do expect a slower start of the year in the United States, and this is because they are partly impacted by the critical weather conditions in the first quarter as well as a much weaker flu season as has already been reported by many of our peers, which is weighing on our respiratory testing in the early part of the year. We also see a continued normalization of the volume in Europe, which is consistent with the trend that already observed in the second half of 2025.

With all of this being said, for the full year of 2026, we expect the group revenues to grow between 5% and 6% at a constant exchange rate. As a reminder, this includes COVID sales, which were included in the 4% growth of 2025. So 5% for 2025 was excluding COVID. We are now giving the guidance, including COVID. But we do expect COVID sales to continue to deteriorate.

From a quarterly standpoint, 2026 will be back-end loaded. So in the -- we expect a softer first half primarily explained by 2 factors. First, the LTG business was significantly front-loaded in 2025 as mentioned during last year conference calls and as reminded by Carlo, resulted in a tough comparison in the early part of 2026. Secondly, the flu season has been especially weak in the first quarter of 2026, which while we have embedded in our numbers a normal season for the second half of 2026.

Additionally, considering the NES -- LIAISON NES with the launch of the ABCR panel and the LIAISON PLEX having the complete panel available in the second half with GI, those will primarily contribute in the second half of the year, which is naturally shifting a meaningful portion of the Molecular Diagnostics growth towards the back end of the year.

From a profitability standpoint, we expect the group to deliver an adjusted EBITDA margin between 32% and 33% in 2026. And again, as usual, this is at constant exchange rate. This reflects the combination of a softer first half, driven by business facing and the product timing, and the commercial investments we made to ensure the successful launch of the NES platform, again, as mentioned by Carlo earlier, north of $10 million. We do expect progressive improvement in the second half of the year, supported by the volume recovery, the operating leverage and the contribution from the new product launches.

Please consider that 2026 guidance does not take into account any potential negative impact related to the ongoing military conflict in the Middle East, which could affect the group sales in the region. It also excludes any possible indirect effect of the conflict, including the increasing logistical and distribution complexities potentially extending to the Asia Pacific region as well as inflationary pressures on cost.

And before concluding, let me just reiterate that DiaSorin remains highly exposed to the USD, with approximately 50% of the group revenues, which are denominated in USD. And as a reminder, a rule of thumb is that every $0.01 movement of the USD versus euro has an impact of approximately EUR 6 million to EUR 7 million on an annualized revenue, and EUR 2 million, EUR 3 million on our adjusted EBITDA.

I will now turn it to the operator for the Q&A.

[Operator Instructions] The first question is from Aisyah Noor, Morgan Stanley.

My first one is on the Immunodiagnostics guidance of mid-single-digit growth for 2026, which is a slowdown from 2025 of 7%. Can you explain why this is a slowdown if the China VBP impact is smaller year-over-year?

And then my second question is on the McKesson partnership that you signed yesterday. What do you think will incentivize McKesson to push your products more strongly versus the competitor SPOTFIRE. Are you pricing it competitively? Is there higher fees to this partner? Basically, how do you ensure the success of this partnership? And then I'll have a follow-up after.

Thank you, Aisyah. Let me take the 2 questions. The immunoassay projection in 2026 foresees a normalization of testing volumes. As I said, we saw it progressively softening during 2025, and I'm talking about Europe. And therefore, we expect that this will have an effect in 2026, meaning that this is going to be the normal volume effect that we will expect in immunoassay. Please consider that in Europe it is 50% of the immunoassay revenues. So it does have an impact.

Second question on McKesson. Look, these distributor platforms, they carry instruments from different companies. That is true. Although I believe that when we look at the POL market, there is what we -- and we map all the POLs in the U.S. by size. We believe today that there is a great opportunity provided by the fact that in the low, mid-volume POLs, there is no platform today, and I'm talking about modern platform that can serve that segment.

And so we are talking about customers that are consuming between 100 -- sorry, 500 to 1,500 tests -- total flu tests per year. And we also saw in the market that the positioning of the SPOTFIRE actually is on a higher segment of the market, including where you find Cepheid, where you find also Abbott ID NOW, whereas in the lower smaller side of this business, you find ID NOW. And you know that today, ID NOW is the platform everybody is going after because it's a very, very old technology and really is not serving the purpose of this market.

To be honest with you, when we went to McKesson, so we are learning this space. This is not a traditional space for DiaSorin. And we actually understood that the way we look at the market, so positioning of the product in a certain segment is exactly the reason why McKesson was looking at getting our platform exclusively for distribution. We have an exclusive relationship with them, clearly, with a minimum commitment that they need to guarantee for retaining the exclusivity. You asked for about McKesson right, not Fisher. So that's the answer for McKesson.

Yes, I did. And just a follow-up, maybe a question for Alberto. Could you give us some guidance on the FX impact on sales and EBITDA margin for the 2026 fiscal year?

Yes. So from an EBITDA perspective, just as a reminder, we did give the guidance at a constant exchange rate. What do we expect? We expect -- I mean as you know, as I reminded before, the impact for us is EUR 2 million to EUR 3 million every $0.01 movement that we have.

Now in 2025, the impact on our top line was EUR 35 million, and at the bottom line was around EUR 15 million in 2025, allows us some flexibility in 2026 as we don't know where the dollar is going to be given the uncertainties of the market. So at the moment, the guidance is at constant exchange rate, knowing that for every $0.01 movement, we have a EUR 2 million to EUR 3 million impact on our adjusted EBITDA.

Aisyah, if I can step in. If you look at the latest Bloomberg consensus for the FX rate for 2026. And again, a lot of things are happening. But what you find today is 1.18, right? So since the average exchange rate for 2025 was 1.13, applying the rule that Roberto told you about, you would expect a negative FX impact on the top line of EUR 35 million, right, which is the difference from 1.18 to 1.13 times 7, which is the EUR 6 million, EUR 7 million that I was talking about on the top line.

And I believe this is important for you guys to understand and master. Otherwise, it's going to get some complications when you will be working on your model and defining our consensus. Whereas if you go to the EBITDA level, again, it's EUR 2 million, EUR 3 million times this 5 we were talking about. So you get to top EUR 15 million. So at the end of the day, if you believe Bloomberg forecast for 2025 -- 2026, I'm sorry, eventually the FX impact on 2026 vis-a-vis 2025 is going to be similar to what we experienced in 2025 vis-a-vis 2024.

The next question is from Odysseas Manesiotis, BNP Paribas Exane.

Firstly, I wanted to get a bit of a feeling of what was the main driver for your growth expectations to be lower than what they were in Q3? I remember you were saying high single-digit growth was possible in '26 in Q3. I want to get a feeling of the key drivers of your expectations there? Was it -- I'm thinking, is there a bit of a small delay on the [ Calpro 3 ] launch, lower expectations on the NES or further presence in China, Germany and Europe? Sort of what are the main drivers here? And then I have a follow-up.

Listen, if I understood correctly, you were talking about the comment on high single-digit total business growth 2026 expectations, correct?

Yes.

Okay. I made a comment before. Two things. We are starting Q1 with a very, very low respiratory season, which is not what were clearly built in the expectation in Q3 last year when we were commenting 2026 numbers. You saw that some -- you saw it from comments and commentaries, which have been made by some of our competitors that the flu season is 25% to 50% lower than last year. So very significant which was not built in clearly in our expectations.

The second one is the fact that in the European volume, we saw it decreasing also in Q4. As I told you, I gave you a number. Now we are at average 1% growth. We were sitting midyear with annualized around 3.5%, right? So there is a normalization, so called, of volumes that now we have seen and we expect to see moving forward.

Last but not least, and again, I'm referring to commentaries, which have been made by some of the large U.S. operators, namely Quest and Labcorp. Q1 volumes, testing volume in the U.S. have been particularly low, and this is because of a very severe weather situation.

Please go and listen to what Quest and Labcorp mentioned about quarter 1 that are still affected today. Those volumes is still affecting some of the U.S. business these days. This is why we believe that high single digit is not achievable and 5% and 6% are more realistic. We don't do respect though, guys, I think that Alberto made a good point.

We are where we are, as we sit in Q1 in -- after 20 days of war. And so making a projection of what is going to happen at this point on -- from a costing point of view is mission impossible, okay?

So from what we understand today, we believe that the business is going to grow 5% to 6%. And we believe as Alberto clearly explained, it is backloaded as a combination of mathematics on LTG, so tough comp, H1 versus H1 and the fact that H1 will completely miss the flu numbers.

That's very clear, Carlo. And on energy and logistics, I mean, I understand, as you said, it's a mission impossible to give specific guidance, including these. But just to get a sense of how bad this may get for you? I mean your consumables, are these largely made of oil-based plastics and historically, in times of higher energy prices, were you able to pass through costs comfortably to the customers. I remember that may have not been the case. Is that correct?

Okay. Listen, I was going to give you a rule of thumb. If the cost of energy stays where it is today, right? So with oil being over $100, to us, the impact on energy and logistics is around $5 million. okay? But my problem, to be honest with you, is not necessarily with energy and logistics because the logistic issue, if it doesn't solve, I think that we have a whole set of different problems, right?

Today, the logistics issue is that we cannot ship through Dubai and we were shipping pretty much not only Middle East, but we were shipping Asia through Dubai, but that will be solved. To me, the real problem is the inflation on the raw material as we all know. And that is a completely different order of magnitude because it has to do with all the plastic and all the oil derivatives that everybody in this industry is using, right? And to make projection there is really mission impossible. But again, energy and logistics is around $5 million.

P.G., it was great working with you. I wish you all the best with the new role.

Thank you, Odysseas, likewise. Great working with you.

The next question is from Jan Koch, Deutsche Bank.

Thanks for providing the comments on the sales phasing in 2026. But what about profitability? Margins have been usually higher in H1 than in H2. Is this still the case in 2026?

And then secondly, you have provided the growth rates of your automated multiplexing business in recent quarters. Could you provide that comment for Q4 as well?

And finally, one housekeeping question. Could you help us with the expected D&A ratio in 2026 in view of the upcoming PLEX and NES placements?

Sorry, can you repeat the last question?

D&A ratio in 2026, I guess. Depreciation and amortization, I guess, D&A.

Absolutely.

Okay. First 2 questions.

First one was profitability phasing. I guess, Alberto can take it, right?

So as mentioned before, within the 32% to 33%, we have to take into consideration a few effects. First is that we do have a full year effect on the tariffs. We do also have a mix effect since we know that the molecular growth growing low double digit brings lower marginality, which is dilutive to the gross margin.

And the net investment, Carlo mentioned it before, north of EUR 10 million, which brings us a natural under-absorption in the year of the launch, plus the further deterioration of the -- of China due to the VBP and the continuous pressure from locals and on pricing is posing us pressure on the EBITDA margin overall, but especially considering the tough comparison of the LTG in the first half, we do expect to see the EBITDA to be softer in the first half as a function of fundamentally, the lower sales on LTG and the operating leverage, and we then expect the EBITDA to recover in the second half as improvement supported by the volume that is recovering. Again, as I mentioned, the operating leverage and the contribution of the new product launches.

I guess the second question was automated in Q4, the automated multiplex, right? Jan?

Yes, absolutely the growth rates.

The growth rate in Q4, as said, was, I believe, slightly negative, minus 5%, but it's all flu volume. It's all related because placements, I give you a number of placements, but you can assume that the placement developed regularly. But from a revenue perspective, minus 3%.

Minus 2%. It's minus 2%, Carlo, the right number. It's in presentation.

Minus 2%, but fundamentally it's respiratory driven and volume effect.

Yes. The last question related to the depreciation/amortization, I understand correctly. So you know that we've been launching 2 platforms in -- between 2025 and 2026. So we do see an increase of the depreciation amortization linked to the start of the depreciation of all the tangible and intangibles that are linked to the launch of the NES platform.

All the best, P.G.

Thank you, Jan.

The next question is from Kavya Deshpande UBS.

My first one is just on the revenue guidance. You've been very clear about the headwinds that get you to the 5% scenario. I was just wondering at the top end is that the 6% growth scenario. Does that -- is that including what in your view is sort of the full contribution of all the potential product tailwinds you've got from the PLEX panels from, I guess, to a lesser extent, NES because it's early and QuantiFERON Gold Plus, et cetera.

And then, Carlo, actually, one for you on China. I mean you've made a big step in terms of changing your strategy here. But I suppose what are you seeing on the ground that's making you think this is kind of still an attractive market for DiaSorin to stay in. And also, would it be possible to specify the exact China headwind you expect for 2026? I understand if not, but I thought I'd try.

Specifying the exact headwind. Look, as I said, in 2025 was around EUR 8 million, right? And caveat, I believe in 2026, it could be in the order of magnitude of EUR 5 million. But again, it's a toss of a coin, because the truth of the matter is that we were expecting VBP to be done and over with fundamentally and now what's happening is that VBP de facto is also rating Shanghai and Beijing. Shanghai and Beijing are clearly, as you can imagine a big business opportunity for us.

But if you are asking and then if you're asking me, is there an opportunity for the DiaSorin in China? I believe is very practical short term. I see a market that is becoming extremely competitive, but competitive, meaning, as you know, that when you have the market leader that is leaving on the ground, CHF 500 million in revenues in 1 year, which is 20% down, I think, of that total revenues, the market is becoming a terrible market, where everybody is chasing all the opportunities with the aspiration on price, so the VBP concept, its fundamental has been driving all companies to go after all the business with a very low price.

And this is why I'm saying we came to the conclusion that what we were thinking in 2019 when all this started and nothing of this was there and there was a very large significant profitable opportunity with mainstream products, evaporated.

And now since the only opportunity for us is to become a specialty company and nd there are a couple of areas where the specialty is significant, you are left now with the fact that now manufacturing a specialty in China is dangerous because, as you know, nobody is guaranteeing you know-how. But by the same token, it's not needed because at that point, specialty being a specialty, if there's no VBP, there is no very high local competition. So the added value of being a local manufacturer is not there, it would be only increased risk of losing control of your technology. So this is China.

On the revenue guidance, Kavya, you said on the 6%, I believe that we have a high -- 2026 is a very important year for DiaSorin because we have the launch of NES, okay? And we will discuss in May about expectations, strategic expectation on NES for DiaSorin, as you can imagine, as you saw from bioMerieux as well. The expectation is very relevant for us because the market opportunity is very relevant because the window, I believe, is the right window because an opportunity within the next 3 years to get to the market also with [ SDI ] and tap into that business as well.

And so certainly, the 6% includes the fact that there is an additional technology and product line that will help us drive revenues next year. As said by the same token, it does foresee that the volume effect that we experience in different geographies is fundamentally. It went back to where it used to be pre-COVID.

The next question is from Charles Pitman King, Barclays.

I have 2, please. Maybe just firstly, I'm just wondering around how you're thinking in your guidance around the outlook for your LTP revenues given Roche is expected to launch the space soon. I believe it is expected to bring in some pricing pressures. So if you could just quantify again what revenue you're currently generating from TB and how you expect to kind of continue to grow through this over 2026?

And then just secondly, coming back to your LTG revenues. You kind of highlighted that we've seen improving commentary from life science peers, but obviously, '25 was a bit of a balance of life science down, diagnostics up. Just wondering how you expect diagnostics to also be improving in whether or not you think that will be whether both end markets will improve to drive asset growth for LTG this year.

Okay. Listen, clearly, we are not going to disclose what are the revenue of LTP -- sorry, of tuberculosis. That's confidential information, especially in light of the fact that Roche supposedly relaunching the product. How do I -- so the question is what is your expectation about Roche in the market? I don't know because I don't know when they're launching, if they're launching and what they're launching.

So hold your thoughts until May 13 because May 12, Roche is going to have their Analyst Day and they're going to talk about the good, bad and ugly about diagnostics? And then we are going to, a week later on the 20th, we're going to talk about LTP. And there, you're going to hear about what we assume about the Roche effect.

Just one comment. Remember that the only thing that Roche said is that they're not going to lower price. Keep that in mind when we will see what happens when they hit the market. okay? But if you go to their Market Day, ask them, if it is true that they are waiting to lower the price.

LTG. LTG, our diagnostic business is very healthy and somehow de-correlated from what you have seen in diagnostics because we are serving a couple of players that dominate their space.

One Lambda, which is one of our customers today in diagnostic multiplexing, they have 80% market share in transplant. And business is a solid business that is growing single digits simply because the transplant number is growing. So this is why I'm saying I'm not expecting that to see a negative effect on the diagnostics side.

By the same token, the life science business, as you very well know, was so poor in 2025, right? And we see that all that -- and fundamentally was driven by the U.S. market and fundamentally, it was driven by this NIH mumbo jumbo at least that NIH situation has been clarified.

We know that funding has been guaranteed. We know that customers are applying for funding, and what we know is that investments -- if you look at 2025, we were hit most on equipment, right? And this is simply because with the uncertainty on fund labs and academia was not buying systems, what we are seeing is that the funnel on instruments is actually coming back, okay, from a very poor situation. So this is why I'm saying my LTG expectation from -- in 2026 is that we're going to have a moderate growth. But please listen to what the Thermo, the Millipore, the Bio-Techne and all these guys are saying because they are all DiaSorin Luminex customers.

All the best, P.G.

Thank you.

The next question is from Natalia Webster, RBC.

I have 3, please. The first is a follow-up on margins, Appreciating the various effects like tariffs in China to consider in 2026. But what else has changed from your previous expectations to reach the 36% to 37% level by 2027? And do you still expect margin expansion beyond 2026, with the continued dilution from the molecular growth.

My second question is on Immuno guidance at the mid-single digits. Again, looking beyond this, once the European volumes have normalized, do you see potential for this to pick up back to the high single-digit levels that you've seen previously? And do you see that double-digit growth in North America specifically as sustainable going forward considering there's a couple of delays on a couple of the key specialty tests that you called out previously.

And then finally, on your PLEX platform, are you able to talk a bit more about what you're seeing in the competitive landscape here. You've talked about the GI panel being important for more adoption in patient settings. Is this the main barrier there? Have you seen any pushback on other areas like the longer time to resolve versus competitors?

Okay. I'll take the last one, okay, right, on PLEX. If I understood correctly, you want to understand the competitive landscape. In my very humble opinion, the competitive landscape did not change and also meaning that you have a bioMerieux dominating this space with -- and now we are talking about the acute space or the hospital market because PLEX goes on the acute space.

So from a competitive space, we are where we are. We honestly don't see in the U.S. QIAGEN today as a competitor. Also because QIAGEN so far has been very active and successful outside the U.S. and they are building, I believe, their presence in the U.S. market.

And so the competitor, you need to go after in this place is always bioMerieux. On the time to result in this space, 1 hour or 2 hours doesn't make any difference to be honest with you, because you're talking about hospitalized patients or you are talking about commercial labs, right? And a commercial lab is a send-out sample and so it doesn't. So they collect, they get the result and then ship back within 1 shift. So 1 hour, 2 hours doesn't make a bit of a difference.

Clearly, I'm not referring now to the SPOTFIRE, which is 30 minutes assay, that goes into a different segment, and that is where we compete with LIAISON NES that does have same or better time to first result.

On the GI, I'm saying that, as I think I always commented that when it comes to the adoption of mini-panels, so the ability actually not to run all the 20-some-analytes, but build mini-panels GI is where you have most variability of parents. Because of the use of these different panels, which can be associated with dietary, which can be associated to infections, which can be associated with travel, bugs which you get into any countries during travel.

So we estimate that in that sense, you have 7, 8 different panels that you really need to build in order to segment the different clinical situation that a doctor would have to face when it comes to the infections.

When -- volume. I believe your question is, do you see volume going up? And my answer is no, I don't. I believe that we're going to go back to where volume was prior to COVID and whatever happened after COVID and primarily, in my opinion, driven by a combination of things. One is that is an economic situation. Volume typically reflects because there is a portion of this diagnostic procedure that is paid directly by patients out of pocket everywhere in the world.

I have in mind Italy where if the health care budget is EUR 140 billion, the government pays for EUR 110 million and people chip in for $30 billion. So the availability of patients to pay off pocket really is very well correlated to how economies are doing, and I don't see that moving forward.

From what we see today, economies are going to do great, right? So I don't see that incentive more off pocket, it will drive up volume. And again, we are going back to where we were in -- prior to COVID where it was expected that in the developed market on average volume would grow around 1% to 2%, which is where fundamentally we are today.

On margins, Alberto, can you please comment.

Thank you, Carlo. Natalia, Alberto speaking. So on your question on EBITDA and the comparison with the 2023 plan of getting to 36% in 2027. Please consider that we are fundamentally living in a different world and I'm specifically referring to the macroeconomic and industry events, some of which are outside of DiaSorin control.

Specifically, let me start with the China VBP. Carlo mentioned the impact that we had, which is around 1% of our top line, and this is primarily due to price reductions, which go directly to the bottom line.

The second one is the NIH funding, which is affecting the growth of the LTG not only on instruments at the beginning, but there is a consequence also on the other product lines of the franchise being the consumables and the royalty for a franchise that has a high marginality and tariffs.

And additionally, also, the company has decided to increase the spending and the investment of NES in order to ensure the success of the launch. So taking all of the above into consideration, the base business is, at the moment, delivering the marginality that we are expecting. But for 2027 onwards, please wait for the Capital Market Day when we are going to give our view until 2030.

And just on the North American Immuno business growing double digits. Do you see this as sustainable going forward particularly with the specialty tests that you talked about previously?

Can you please wait for May because we're going to go through all the drivers of growth. Overall, I believe that North America -- again, growth in North America, if you think about it, has been driven by hospital strategy plus high penetration in the big labs, right, which is today our business. TB certainly has been a growth driver for the company.

And TB growth went high double digit today to whatever number QIAGEN is saying because I keep saying, it's a QIAGEN business. So I would recommend that as far as TB, you wait for QIAGEN to comment. And what they say clearly is applicable to DiaSorin. As far as the hospital strategy, we will continue to deliver the hospital strategy.

As said, as far as the big laboratory business, I recommend that you listen to what they say, generally speaking, about the volumes because, again, their volume is our testing volume in that segment. In order to get a more strategic qualified by product line and expectations, I believe you need to wait for the May discussion.

Understood. And all the best, P.G.

Thank you.

Gentlemen, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.

Thank you, operator. I think we are done. Thanks.

Ladies and gentlemen, thank you for joining. The conference is now over and you may disconnect your telephones.

Good evening. This is the Chorus Call conference operator. Welcome, and thank you for joining the DiaSorin 9 Months 2025 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Carlo Rosa, CEO of DiaSorin. Please go ahead, sir.

Thank you, operator. Ladies and gentlemen, good afternoon. and welcome to the Quarter 3 DiaSorin Conference Call. As usual, I will make some qualitative and quantitative comments on the quarter, and then I will turn to our CFO, Mr. Pedron, for the financial -- comments on the financial results.

Let me start with some general notes and on the 2 main businesses that we have Immunodiagnostics and Molecular Diagnostics. With immunodiagnostics, the strategy continues also in Q3, as we have been discussing now for a few quarters, and I would say, in the last 2 years. So we have a development strategy in the U.S., as we know, enlarging our footprint in hospitals and as it happened last year, we foresee from the result that we have seen in the first 9 months, including Q3 that we will hit our target of roughly 90 new hospitals, and we confirm our ambition to reach 600 new hospitals by 2027.

Meanwhile, we continue to develop content on the LIAISON platform. we have developed a new version of the QuantiFERON assay for TB is called high throughput that we are ready to launch in Europe, and we have submitted to the FDA for approval, and this is to continue to offer better and improved solution to high-volume accounts around the globe, again, together with our partner Qiagen. We have launched a new assay, specialty assay, which is the TSH receptor assay. And this is in continuation with our strategy of continuing to enrich the catalog of the LIAISON XL with new and specialty products.

MeMed, there has been new evidence, which has been presented at the ACEP meeting in 2025. And so we continue to -- MeMed continues to deliver on its promise to fund clinical study that proved the clinical use of their algorithm for differential diagnosis between bacterial and viral infection. And so we continue to believe in this program, and we continue to support MeMed deployment in the U.S. and key markets using the LIAISON XL and also the key system of MeMed that we have in distribution in the key markets.

From cost point of view, we have announced that we're going to consolidate our manufacturing in Europe, closing our German plant and consolidating all our volumes into the Italian and U.K. plant and the project is ongoing as expected and will be concluded as expected.

If we now turn into Molecular Diagnostics, where we have 3 platforms, and I will comment more on the sales results of the 3 platform, although when it comes to menu activities and major and major achievement for the LIAISON MDX, as you have seen in the press release, we got finally approval of our Flu A/B & RSV and COVID assay, which we were missing from our arsenal and this should give us the opportunity to stabilize our MDX respiratory franchise that has been suffering, and we will see later, both from increased competition with 4-PLEX, but also clearly the decrease in volume due to the very late start of the respiratory season.

On the LIAISON MDX, we continue to develop strategically new assays and Candida auris, which has been very successfully launched in the U.S., now has also been made available in Europe through CE Marking.

If you move to the LIAISON PLEX, we have launched the blood panel, gram-positive, gram-negative, and yeast. We have been completed the clinical study for GI that we plan to submit by the end of this month, assuming that the FDA will open up because today, the FDA is working on current applications, but not on new filings. So as soon as they reopen, we are ready to file the gastroenteric and we expect clearance by H1 next year, and this will complete the fundamental stream of products needed to be competitive on PLEX. On the LIAISON PLEX, as we have press released, we signed a major agreement with Quest. Quest is a very trustworthy partner of DiaSorin and we have initiated deployment of PLEX for the RSP panel in all the Quest labs. This is going to be completed and validated by year-end. And we will start to generate revenue starting from Q1 of next year.

We have launched a fully customized base panels as part of our flexing strategy in the U.S. and I will comment later on the success of PLEX, but we see adoption of the Flex algorithm in half of the installations that we achieved in the U.S.

Now when we come to LIAISON NES, which is our third strategic platform, we submitted in July for the -- for PLEX respiratory panel. The interaction with the agency is continuing without hiccup or anything unexpected, and we expect to get clearance by year-end of for early 2026.

Now let me just now move to discussing the quarter 3 revenue as usual, at constant exchange rate. So in quarter 3, our business ex COVID grew by 3%, driven primarily by Europe, which delivered a 6% growth with molecular diagnostics where the overall molecular diagnostics franchise declined by 1% and LTG declined by 6%. I'm going to comment later on each of these elements. This means that 9 months into the year, ex COVID, DiaSorin grew 6% with Immuno leading at 7% and Molecular at 3% and LTG at 4%.

To fully understand the quarter 3 results, we will provide more data and deeper segmentation across the 3 business lines. So I'm going to talk about Immuno, Molecular and LTG. So let's start from Immuno. In immuno, let me remind you that in H1 '25, so in the first 6 months, the franchise grew 8%. If you look at this growth, taking out for 1 second, China and the outbreaks event, which we did comment before, growth has been 11% in H1, with the North America growing 16%, the rest of the world, including Europe, ex China, growing by 9% and China declining by almost 20%.

What happened in quarter 3? In quarter 3, total immuno grew by 6%. If you look at the total immuno without China, the outbreak effect in quarter 3 has been very minimal is there. So the base business without China grew 9%. So strong growth.

If we now look at the major geographies, U.S. continues to grow very strongly at 14% in the quarter. The rest of the world, including Europe, mid-single-digit growth, 6%, and there is a very specific element that did impact Europe, and I'm going to comment later. In China, because of the implementation of the BB2 that now is covering all the oncology products took a hit very significant in the quarter minus 30%.

Now let's look at what happened in the main geographies. Let's not discuss North America because North America continued to deliver hospitals are in line with expectation and growth in the quarter has been 14%. So let's take that off the table. When it comes to Europe, we see immunodiagnostic testing volumes decelerated in quarter 3 versus H1. And this is specifically has been reported in 2 main markets for DiaSorin, one is Germany and one is Italy. So again, we saw a deceleration of testing volumes in these 2 markets. In Germany, this is explainable by the fact that there has been a new reform that has been implemented, and now we feel it's taking effect in Germany where the denial rate in commercial labs as a result of the recent health care reform is increasing. What does it mean?

It means that the government is controlling diagnostic volume growth in 2 ways: one, which is historical providing to general doctors, general practitioners of budget for diagnostics. But now assigning also to the hospital and the laboratory, the responsibility over the budget, which fundamentally means that over a certain budget, private labs and hospital are denied by the government, by the different states of the reimbursement. And this is, again, to control a volume growth that has been explosive in Germany in the post-COVID time.

Italy is not subject to any specific reform, but we saw the Italian volume becoming seasonal again, what does it mean? Historically, pre-COVID, we always have experienced that volumes were growing in H1 and seasonally declining in H2. That didn't happen in the last 5 years, and this has to do with the fact that there was a continued testing volume increase has been interpreted like post-COVID catch-up. We saw that 2025 is going back to historical seasonality, which in my opinion, means that in Italy, we are going back. There has been a complete catch-up in testing, and we're going back to what it used to be. So you expect to be more front-loaded in H1 than in the second part of the year.

China, we did comment. So it's minus 25% in the quarter, but is due to the effect of VBP2. We expect that starting from next quarter, this effect in China will start to smooth out.

Now let's talk about Molecular. And I'm going to comment on molecular looking at the 3 different platforms that today DiaSorin is serving to the market. The MDX, the multiplex franchise, and then I'm going to make some specific comments on the NES. When it comes to the MDX franchise, let me remind everybody that the MDX is the platform that we sell to hospitals and we provide -- it does have a limited multiplexing capability up to 4, then it is the DiaSorin platform for specialty products. The revenue, total annualized revenue of the MDX franchise is roughly EUR 100 million. And it is split in 3 segments. We have 15% of the revenues or roughly EUR 15 million, which are respiratory. So it's extremely seasonal. And it is actually a market that DiaSorin has not been able to hold post-COVID because of the fact that we were lacking as a combination of 2 things. The market was actually shifted by [ say ] to a 4-PLEX, and we didn't have the 4-PLEX. We had a 3-PLEX, the 4-PLEX was just approved last week.

The second thing is that this platform was never intended to be a platform for respiratory has always been, again, intended even at the beginning as a platform for specialty. So now we have the respiratory, which is, again, as I said, roughly 15% of total revenue for the MDX that have been declining severely in the last quarter and in the current quarter.

Second cluster of products is the targeted. And this is where this platform becomes strategic for DiaSorin is roughly 40% of total MDX franchise, so roughly EUR 40 million. And on this franchise, we've been experiencing in Q1, Q2 and Q3 growth of 35% to 40% per quarter. This is driven by all the specialty, the congenital CMV, the C. auris and the HSV testing for meningitis, which continue to be very successful and drive placement in the U.S. market of this platform. So this is the future of the franchise. And this is actually the reason why DiaSorin has developed also the follow-up platform, which is going to be the MDX plus that will actually continue to give life to the strategy.

And then we have the third bucket, which again is roughly EUR 40 million that runs on the MDX and is the ASR. The ASR business is a very profitable business. The DiaSorin is inherited by -- with the Focus acquisition from Quest. It's clearly a business that does not provide a strong growth because it has to do with the fact that hospital -- certain hospitals in the U.S. market are developing LTDs on this platform for certain applications, let me say, the more difficult application, those that companies don't take through the FDA.

And typically, you would expect from this franchise to provide low single-digit growth, which in fact, this has been doing every quarter in the last few years. Again, this is not a strategic portion of our portfolio, but a very profitable portfolio and is one that we continue to keep a nurture with the development of LTD. And this also is giving us the opportunity sometimes to launch certain products, the uptake and then decide to move them from an LDT to a fully validated 510(k) product as it happened with C. auris. So the total franchise for MDX in H1 grew 9%, in quarter 3, grew 4%, primarily driven by the seasonality effect of influenza and in the 9 months, it grew by 7%.

Now let's now move to the multiplexing franchise. Our multiplexing franchise, we look at this business in 2 buckets. What we call the nonautomated multiplexing which is an old technology that fits very well certain market actually is adopted more in Europe than in the U.S. It is a franchise that continues to decline clearly because labs have been moving to more automated solution. It is still relevant for DiaSorin around EUR 35 million annually and extremely profitable. So we continue to keep it. We use it opportunistically in Europe in certain markets, but certainly is not -- and it cannot be a strategic franchise for the company.

Although it does represent roughly 35% of the total multiplexing franchise. So the total multiplexing franchise, it's around EUR 110 million for the company. Of this, as said, around 35 million would be nonautomated. The rest is a combination of VERIGENE I and LIAISON PLEX.

I'm going to comment specifically of the -- on the VERIGENE 1 and LIAISON PLEX. So it's very clear that the VERIGENE 1 represents a very interesting installed base sitting roughly on 200, 300 customers in the U.S. of different size between commercial labs and hospitals. It does have part of this business VERIGENE 1 is still respiratory, although a good chunk of this business actually is more blood in sepsis because this is how this technology was launched by Luminex at the time. It does offer for DiaSorin also clearly an opportunity strategically to replace this Luminex with the LIAISON PLEX, we have not announced and we don't have any intention to announce in the near future that we are going to stop making the VERIGENE 1. But certainly, we make an effort to transition some of these accounts to the LIAISON PLEX. You will see later that every time we transition these accounts from 1 technology to the other, that drives a price increase in the range of 20% to 25%.

Let's talk now on the LIAISON PLEX. First, let me remind everybody that we launched the LIAISON PLEX just in the U.S. Second, we have today closed approximately 100 customers in the U.S. split by -- if you look at this 100 users, 80% of these customers are hospitals and 20% are commercial labs. Although if we look at the RSP revenue contribution, and again, I will not comment on blood because blood has been just launched, so it's 'not relevant when it comes to the quarter results. So if we look at the revenue contribution of this base of PLEX, 65% of revenues are coming from commercial labs and roughly 35% are coming from hospital labs.

What does it mean? It means by definition that the majority of the respiratory revenue that we get on the PLEX are outpatients by definition and not inpatient. And this is exposing our PLEX business more than other competitors to seasonality, right? So because we don't have the inpatient component that it gives more stability across season to this business. And again, this explains why since the season is late, we are particularly hit on our multiplexing revenues, again because of this dependency.

If now we look at the usage of these accounts between flex and fixed. So between offering the total panel versus using mini panels or credits, 60% of the customers adopted flex as a combination of mini panels and/or credits. And 40% adopted the fixed, right?

So it's almost 50-50, although if we look at hospitals versus commercial labs, we clearly see more adoption of flex into hospitals than the commercial labs. If now so the top -- what does it mean? It means that these 100 customers, if we look at the contracted yearly business, so annualized business, clearly, on an average season, right, because there's a lot of respiratory is above $30 million. With half is brand-new business, half is conversion from VERIGENE 1 to PLEX with an average price increase of, as I said before, 20% to 25%. So if I look at the overall PLEX launch, I believe it has been very successful. I believe that more than what we discussed before and by some of the competitors, the market is veering towards flexing as a combination of mini panel adoption where, again, the difference between our positioning and competitive position of mini panel is that we allow the customer to fully customize their mini panels, whereas competitors offer fixed mini panels. And we believe that there is a competitive advantage in offering full flexibility versus fixed mini panels.

Now let me just conclude with the LIAISON NES. As said before, we submitted, clearly LIAISON NES is intended to serve hospitals and POL. So at launch, we will offer this platform in hospitals and POLs in the U.S. Submission is gone as expected. And as said, we expect clearance by year-end or beginning of 2026. As far as commercial readiness is concerned, we are hiring as we speak, a dedicated commercial team that will be in place by Q1 2026, assuring readiness for a successful U.S. launch. And we are also working on the selection of a distributor or a couple of distributors, which will complement our direct sales force, and we expect this distribution network to be in place by H1 2026.

Let me now comment briefly on our LTG. If you remember, in H1, LTG provided growth, which was double digit, we clearly explained that we cannot expect due to the situation with the life science market, we could not expect that growth certainly to continue year-end. And we were driving the market to low single-digit year-end growth. And in fact, in quarter 3, and this is because of the seasonality of this business, we actually supply customer -- our end user customers are actually the major life science companies and then package our agent and instruments into their own offering.

So if you look at quarter 3 results, minus 6% is very much expected in order to drive year-end results again at around low single-digit growth. Although if you remember, this business is actually a business that is by half of it roughly is directed toward companies that use the technology to develop diagnostic test. And half of it is actually we are supplying companies that develop products for research, academia and biopharma. And it's very interesting that if now we look at how this business is performed, right? And again, we need to look at the seasonalization here is driven not necessarily by an in-user seasonalization, but again, by how their supply chain is scheduling, ordering and inventory.

We continue to see even in quarter 3 that the diagnostic business continued to grow low single digits. Although Life Science, we continue to see a steep decline. So minus 15% of the Life Science business in the quarter, indicating that this life science market stabilization is not in sight yet. If we look inside this decline or this instability of life science, what we really see is that the instrument component of this is almost completely frozen, whereas the reagent side continues a modest growth or a single digit -- low single-digit decline, indicating that the issue today in this segment of the market is that academia researchers clearly do not have CapEx availability to buy instrument, but they continue to buy reagents to feed the current installed base of systems that they have.

So before turning to the CFO to comment one on PAMA and the result. We continue to get questions from analysts and investors about PAMA and how this will affect the business. And just summarizing where we are, the Congress now is pushing the adoption for PAMA, but the timing is very uncertain. And today, the government is trying to understand through a better survey than the one that was originally done in 2015, better understand what is today the differential in reimbursement or price reimbursement actually between what private payers reimburse for certain tests versus what the Medicare does.

And the reason as a result of a discussion between the different stakeholders, the results has been issued, and now the CMS is collecting new data to really understand to define this differential between private payers and Medicare. So long story short, there is an effort ongoing, we believe that PAMA will eventually is going to hit the sector diagnostic players is very difficult for anybody to predict when and to which extent, right? So this is what at best. This is what we can tell. But certainly, it's not a 2025, and we are not sure if it's going to be a 2026 event, but I would be -- I believe all the players are going to keep the investors updated on what's happening.

Last comment I want to make is on tariffs. Mr. Pedron is going to comment on tariff better. But from a business perspective, the -- I believe the majority of the industry has decided that in the U.S. for the time being, tariffs are not going to be pushed through the channel to the customers. And so everybody has been keeping tariffs in their balance sheet for a series of different reasons. And same thing has happened for DiaSorin. So today, we anticipate when it comes to 2025, roughly EUR 5 million negative contribution on tariff that on a full year basis will impact our profitability by roughly EUR 11 million. So nothing astronomical, but to the contrary of what we were thinking before, we don't believe that in 2025 or 2026, we will be able to push this to the to our customers.

So now Mr. Pedron is going to drive you through the numbers. P.G.

Yes, Carlo. Good day, everyone. Thank you for attending the DiaSorin Q3 2025 earnings call. During the next few minutes, I will provide an overview of the solid financial performance for the first 9 months of the year. Following my remarks, as usual, we will proceed with the Q&A session.

So year-to-date revenues for 2025 reached EUR 900 million, reflecting a 3% increase of EUR 23 million growth compared to the same period last year. This performance was achieved notwithstanding an EUR 11 million reduction in corporate sales and EUR 19 million negative impact from foreign exchange primarily due to the depreciation of the U.S. dollar against the euro, as previously discussed during our last earnings call. To this note, let me please remind you that on a full year basis, each $0.01 movement in the U.S. euro-dollar exchange rate usually affects DiaSorin revenues by about EUR 6 million to EUR 8 million and adjusted EBITDA by EUR 2 million to EUR 3 million. Considering the average U.S. euro exchange rate in Q4 of last year was around $1.07. We anticipate continued foreign exchange headwinds into the latter part of 2025.

Excluding COVID impact and the constant exchange rate, our core business has achieved a 6% year-to-date growth. Carlo has already covered all the different elements. In the third quarter, revenues at current exchange rate declined by 2%, representing a reduction of EUR 7 million compared to 2024. In contrast, the performance excluding COVID, FX and the constant exchange rate, as we just show was plus 3% with a negative effect in the quarter of EUR 12 million.

So out of the EUR 19 million, EUR 20 million, I was discussing about for the full 9 months of the year, EUR 12 million were in Q3. Gross profit for the first 9 months of 2025 totaled EUR 587 million, accounting for 65% of revenues, broadly consistent with the 2024. This represents an increase of EUR 9 million or 2% compared to the same period in the previous year, notwithstanding a tariff impact of about EUR 2 million, as we just discussed.

For the third quarter, the gross profit margin remained stable at 65% of revenues, aligning with Q3 2024 and continuing the trend we saw over the past previous quarters despite the negative tariff effect that we have just mentioned. Year-to-date adjusted operating expenses at EUR 346 million represented a 1% increase compared to the prior year or about a 3% constant exchange rate. Adjusted OpEx as a percentage of revenues declined to 38% down from 39% in 2024. The increase in absolute value and operating expenses relative to 2024 was mainly driven by higher labor costs from the annual salary review cycle as well as an increased depreciation related to the recent product and platform launches previously in development phase, such as LIAISON PLEX.

Excluding the impact of this increased depreciation, I think it's interesting to notice that adjusted operating expenses at constant exchange rate would have risen by only 1%, indicating a very disciplined management of our cost base. Adjusted other operating expenses for the first 9 months of 2025 were negative by EUR 8 million, EUR 1 million better than the same period in 2024. As a result of the dynamics we just described, September year-to-date adjusted EBIT reached EUR 233 million, representing 26% of revenues, confirming the profitability we had in 2024.

Adjusted interest expenses for the first 3 quarters were just under EUR 1 million compared to an income of EUR 3 million in the same period of 2024. The primary factor behind this variance was a reduction in our cash balance and investment build, reflecting the reduction of our debt and the decline in interest rates. The adjusted tax rate increased from 23% to 25%, mainly due to the termination of the patent box regime for our Italian legal entity as we discussed in H1. Year-to-date adjusted net income amounted to EUR 174 million, accounting for 19% of revenues.

In the first 9 months of the year, adjusted EBITDA reached EUR 302 million, marking an increase of EUR 10 million or 3% over the same period the last year at current exchange rate and 7% at constant exchange rate. The EBITDA margin was 34%, both at current and constant exchange rate, an improvement from the 33% we had in 2024. At constant exchange rate, Q3 EBITDA margin stood at 32%, remaining broadly consistent with the same period in 2024.

Turning now to our net financial position. We closed Q3 2025 with a net debt amounting to EUR 617 million, in line with the position at the end of 2024. This reflects a solid free cash flow of EUR 461 million, compensated by cash outflows, including EUR 97 million in payments to shareholders exercising withdrawal rights after the recent implementation of the announced voting rights mechanism as well as EUR 63 million distributed as dividends to our shareholders.

Let me now close with our revised outlook for the full year 2025. Taking into account the factors mentioned by Carlo that are affecting our overall top line, our guidance has been revised as follows: revenue ex-COVID to grow by about 5% with COVID-related revenues projected at around EUR 10 million, adjusted EBITDA margin at about 33%. As always, these figures are at constant exchange rate, assuming USD-euro rate of $1.08, which was 2024 as a reference. I would like to emphasize that despite the headwinds affecting our revenue impact of tariffs, we have managed to review the adjusted EBITDA margin by only 100 basis points.

I believe this outcome reflects, as I was saying before, the very disciplined approach we have applied to managing our cost base.

With that, I will now turn the line over to the operator to begin the Q&A session. Thank you.

[Operator Instructions] First question is from Anchal Verma, JPMorgan.

I have 2 questions, please. The first one, can you provide us an update with the divisional guidance for FY '25 and given the revised guidance for the group? Are you still comfortable with 8% for Immuno. And on the Molecular side, above 8% seems quite challenging. So what would be a realistic guide. And essentially, just want to understand how you see the recovery in the top line. And while it's still early, are you able to provide any comments around the trajectory into FY '26?

And then the second question is just looking at the last couple of years of performance and today's revised guidance, the path to midterm targets, how confident are you in those in the high single-digit to low double-digit CAGR for the top line and 36% to 37% EBITDA margins by 2027. Could you potentially hold a Capital Markets Day next year and revisit the midterm targets?

Anchal, this is P.G. speaking. I will try to take all of your questions. So we are not providing guidance for 2026 yet, right? But I'd like to underline that a few, I would say, most of the things that Carlo discussed about that affected the last quarter of -- that will be affecting the last quarter of 2025, and we saw already in Q3 of 2023. So a lot of those headwinds will not be there in 2026. And so we do still feel comfortable with the 2027 guidance we put out there at the end of 2023, which was calling, as you just rightly said, for a growth of the top line of high single, low double.

Obviously, considering what has happened we believe that the high single digit growth for the top line is, I would say, more likely. And yes, we will be reviewing in a dedicated event in 2026, I believe, towards the end of Q2, we would be renewing and doing our plan because the previous plan was coming due in 2027. So we felt like it was the right time to go in front of investors and the market, Q2 next year to tell the market how we see the business developing from 2027 onwards.

Let me please remind you that when we put in front of the market a guidance for -- long-term guidance for 2027. It was back in December '23, and we had not launched yet the LIAISON PLEX and the LIAISON NES platforms, which by the next Capital Market Day, will -- have been brought to go to the market. So it will be also, let me say, we'll have more real life data to project the future.

For 2026, as I was saying, the guidance for 2026 is going to be released when we would be discussing about year-end results for 2025. But building again on what Carlos was saying, I would say that it wouldn't be unreasonable to think about a number, which in 2026 vis-a-vis 2025, will show a top line increase of high single digit. Again, the precise number will be given March 2026, but this high single digit, I believe, is a very reasonable number.

That's helpful. Just kind of follow up on the divisional guide for '25, please?

When you say divisional guidance, exactly what you mean because we have not issued for 2025 division guidance. So we have issued a guidance for the overall top line of DiaSorin. And then if you are referring to the documents we put in front of investors back in 2025, where we told investors how we saw the progression of the 3 main technologies we have, Immuno, Molecular and LTG, that is not the guidance that we gave in 2024, not in 2025, right?

But the main trajectory is a standard, meaning that the immuno franchise should expect to see a growth of, let me say, mid- to high single digit. And the molecular franchise is going to show growth of, let me say, mid- to high teens, let me put it in that way, coming from once again, the full aspect of LIAISON PLEX. Now you're going to see the gastrointestinal panel being available on the market plus all the, let me say, the full effect of the 100 customers Carlo was mentioning, we're discussing about the plus once again the NES, for which I believe Carlo shared a few details in terms of sales organization and contract with distributors. But again, in 2025, we did not issue specific guidance as such for the 3 different franchises.

Sorry, I just wanted to make...

Sorry, go ahead, Carlo.

Okay. I just would like to make a comment on the need of a view of a new view. If you think about it in the last 12 months, 12 to 18 months, the world changed dramatically, right, with consequences to the business. Think about all the discussion about life science, where is it going, and the funding and the fact that certain projects will be funded. Others were not going to be funded, the effect on vaccines funding, which by the way, does impact our business. And by the same token, the Chinese situation is very much new, right? So if you really look at the business that was the business model and all the assumptions that we developed in 2023, projecting 2027 and forward, all these assumptions, I believe, are changed one way or another, some are positives, some are negatives.

For example, in our plan, there was a small component of LIAISON NES. Today, the LIAISON NES is almost a product and crossing fingers, is going to be a product approved in the U.S. very soon. We have done -- we have developed a 5-year view for the LIAISON NES, so we now have an understanding of the potential of that market with this segmentation.

And so we really feel the need that -- to go back to first ourselves, investors and I put myself as an investor to the Board and to the other stakeholders and explaining this new environment, how the company see growth and the opportunity. And this is why P.G. is saying we're going to anticipate our revived LTP into 2026 rather than waiting for the full year '26 and then do it in 2027.

Thanks, Carlo. That's very helpful. Thanks, P.G., that was very helpful as well. The new division guide I was referring to the soft comments you have made around Immuno being around the 8% initial guide and Molecular being above that. But I'm happy to jump back in the queue, that was really helpful.

Next question is from Odysseas Manesiotis, BNP Paribas.

Carlo, thanks a lot for your color there that has been very helpful as we get our heads around the current dynamics. I had one other point you made about PAMA. So could you give us some color on your exposure on the routine testing targets for your immunoassay franchise, just for us to get a sense of how this risk may be quantified for you?

Look, it's very, very difficult for me. But let me make a couple of comments. Back then 2016, 2015, when all this really initiated, we had a very significant exposure to this primarily with vitamin D because back then vitamin D was a big, big portion of this -- of the U.S. revenues, and we actually knew that clearly, vitamin D, the Reimbursement that Medicare versus private was different magnitude. I mean in today's environment, our U.S. business completely shifted away from that more into specialty, right? And therefore, it's typically in a laboratory and I think Quest and LabCorp did comment on that. Medicare does represent 30% of their revenue, give or take.

Today, our revenues, our portfolio, I think that is way less than that when it comes to the Medicare contribution versus others. For example, if you take TB, which is certainly relevant for DiaSorin in the U.S. primarily, the business is driven by routine testing of health care workers, which has nothing to do with Medicare, right. So didn't do a very specific analysis and happy to give more flavor when we are going to do the LTP. But let me say, compared to what we were back then at PAMA, I believe that PAMA today will have a much not necessarily a big effect on our revenue. And I keep saying that at the end of the story, even if I look at the vitamin D story, which is changing dramatically, the environment is competition more than government cutting reimbursement, right? And again, if you look at vitamin D, the availability of more than 1 player drove the price from $8 to $0.80, which is the reality -- the reality of today. But said that. So take it with a grain of salt, but I honestly believe that -- a grain of salt, but I honestly believe that our exposure is not going to be dramatic.

That's very helpful. And a follow-up maybe on your -- the comments you made around the new reforms in Germany. Am I right to understand that this may be one of the factors, let's say that also becomes a pressure into next year. And could you help us quantify your exposure into the country? And how about can you get to simply just to get heads around how much of a pressure that can be?

No, don't read too much into it. This has nothing to do with the exposure in the country. Actually funny enough, most of the progress manufacturing in Germany were directed towards the Chinese market, right? Because where in Germany, we were making me-too products for oncology and thyroid that we don't sell much -- of which we don't sell much in Europe. It's more for export market and in China, right. As far as the exposure, our exposure in Germany, if you don't mind, can comment on it because this is really -- it would be good for competitors to know. But just for information is the second largest market for us after Italy.

Got it. Sorry to clarify, I meant on the reforms that had an impact on testing volumes there in Q3 that you mentioned, whether we should expect the other pressure that may accelerate or become more 2026, sorry if it wasn't clear.

To me, just to give you order or magnitude, if in 2023, testing volume in Germany was overall was growing high single digit, right? And that was the effect of the post-COVID catch-up. What we are seeing today later in H2 -- sorry, in quarter 3, so the second part of the year, is going more close to low single digit, so 2%, 2.5%. So there's a magnitude of the effect. So we don't see a decline in volume. We see much less growth. This is important to understand that volume is declining, it's not growing as much as it used to grow.

Next question is from Dylan van Haaften, Stifel.

So just a couple of clarifications from my side. So maybe, firstly, just on the Molecular business. If we kind of look into next year, can we just kind of reflect on what will happen with the composition of the low PLEX respiratory. We also kind of think about what can happen with ASR and also how the flex side will look once the GI panel is there. And let's say, if we do the same exercise you guys did on the slides. If you kind of look into next year, how would that look? So for instance, I understand that with flex in the hospital side, the lack of the gastrointestinal panel kind of hurts you guys right now that might look different next year. Also, Roche will be in the market than with the GI panel. Maybe just a mental exercise that we could do that.

My second question would just be on NES. And if you guys have decided on a distributor or if there is also going to be a direct component to the marketing?

And then thirdly, is there any update on the line detect assay? And if you've seen any change in the interaction with the FDA.

Okay. Let me -- one because there are 3 different questions, So when it comes to NES, as I said before, we are hiring as we speak, our own sales force, around 20, 25 people that are going to be dedicated to serve some of the direct customers in the segment. So the larger PRLs, whereas by the same token driving the distributor and again, this is nothing new is what typically you do in this sector with a sales regional rep that is more business development and a sales rep, right, because utilizing different channels. No, the answer is no, we've not selected the distributor yet. We are working to -- we're talking to the distributors to understand which one makes sense for DiaSorin in light of the fact that one of them is already fully engaged with a competitor. And so we are looking at other possibilities, right? And as I said, our objective is to have in place the distribution network by H1 of next year.

Now when it talks to -- about line detect, we are reflecting, as I said, with Qiagen and talking to a major lab to understand if we can introduce this product to the market as an LDT and meanwhile, we are understanding how to get a clear path for clearance with the FDA. Now when it comes to 2026, look, I'm going to leave it to P.G., but please take into consideration that we don't have a budget for 2026 discussed or approved with the Board, so it's very difficult for us to make any specific comment on 2026. But P.G.?

Yes, I would try -- Dylan, I will like to take it from a qualitative perspective, right? And all the trends, I believe, are very similar to what Carlo described in his initial remarks. So for the respiratory, I believe it's fair to say that you shouldn't expect a negative, let me say, a headwind as we did in this year. Obviously, it all depends on the flu season, but the remainder business that we have is smaller, as Carlo said, now we have -- we just press released the fact that we have the 4-PLEX, which will allow us to fortify and to better defend the remaining business we have, which is not a strategic business.

But I would say it's fair to say from a qualitative perspective, directional perspective that you should not expect a headwind the strongest the one we saw this year. The molecular targeted assays on the contrary, should be -- keep growing at a very nice clip. We have a few assays for which we are the only game in town, as Candida Auris as you know, is the only assay which is FDA approved. We have continued to have CMV, we have HSV with cerebrospinal application, cerebrospinal fluid application. So we have a very nice position in there. So I would say, again, directionally expecting a double-digit growth next year is fair.

ASR, again, Carlos spoke about ASRs. A few minutes ago, we said you should expect in his remarks said low to mid-single-digit growth on the ASR business. That's what this business usually provides to us. You are not going to have, obviously, the negative headwind from ARIES. ARIES in the first 9 months of the year was minus EUR 5 million. And that is going to go away simply because it's a different perimeter of consolidation. For the nonautomated multiplex said that is not a strategic business. It's a business which is more material in Europe than in the U.S., but there, you should expect single-digit, low mid-single-digit decline. Again, directionally, this is not a budget. Eventually discussing about multiplex automated, so as on PLEX in the VERIGENE 1. I go back to what I said previously to Anchal, right? So this is one of the engine of our growth.

Obviously, we said that we closed business for EUR 30 million, and we still have months to go before the end of the year, you will see the full effect of that business next year plus the contribution of GI and the blood panel the 3 blood panels. So all combined, obviously, this brings you to a double-digit growth for this franchise. And this is as much as I can say now since, as Carlo just reminded everybody, we still need to go through our Board approval for the budget. But directionally, I believe you have a good indication of where the business should go.

Next question is from Aisyah Noor, Morgan Stanley.

My first one is on Molecular. So I would love to unpack a little bit Carlo. The numbers you've disclosed today on the LIAISON PLEX business. Apologies for the naivity of this question. But of the 100 customers you talked about, does Quest count as 1 customer or 8 labs or 24 systems? And of those, I would just like to understand whether or not you think you are taking market share in the quarter.

My second question is on Immuno. So between China, Germany and Italy, which is I think the 3 regions you called out as the weaker regions, which did you at least expect to impact you in the third quarter from a growth perspective? Because I think our thinking this whole year, Carlo, was that China was VBP minus 5 million or so. And so this seems like it's gotten worse than you perhaps anticipated. So I just would like to know, a, the ranking of the headwinds and b, maybe how long you expect of these 3 regions, how long these headwinds are expected to persist.

First, obviously, and sorry for naivety of my answer. But Quest is one, not 24, Otherwise, I would not -- will be fair. Quest is 1 account, right? Then as you've seen from the press release, we are placing different systems in different labs because they are decentralized testing within the facilities. Now talking now about the different regions. Look, China, the problem is that the full year effect of China is going to be EUR 7 million, EUR 8 million, whatever it is, but EUR 3 million were just Q4 -- sorry, Q3, right? So Q3 fundamentally was in -- we got it in 1 quarter the same way we got it in H1, right? This is why it is more skewed toward Q3. Q4, is it going to be stabilized? Not yet, but I think the -- most of the damage actually has been done in the first 9 months.

And my expectation is that moving into 2026, we're not going to see 30% decline in China any longer. Are we going to see a flat China, which would be a great result. I don't know, but probably we're going to see a more reasonable low single-digit decline, which again in these days in China, it means stabilization, right? As said and as we will discuss moving forward, the problem for us in China is that we had a business with 75% was me too. And as a me too assay, we were hit by competition VBP full blown.

Moving forward, the residual business is still partially me too, but now the full hit has been taken, but then we have the specialty component, which now is more relevant. And again, I think, as we discussed already, specialty for us in the future has to do with 2 products, TB, which is not registered yet in China.

And we expect -- we filed the clinicals to around the discussion, and we expect to get it approved next year. So TB will be available in China. And the second product is more calprotectin and inflammatory where we are starting a registration clinicals and it is going to be at 2027.

But that will move fundamentally our business away from me too, VBP kind of business.

Now Germany and Italy, I think it's very different. Certainly, Italy has doubled the size of Germany. So any effect in Italy bigger than Germany. But by the same token, if I look at Italy, the overall performance, right? So the full year performance. It's not that far from what we expected in the budget. The problem is that we had a tremendous H1 because the volumes -- volume growth was very significant. And now we see that on, what I call seasonalization, I see now that H2 is going to be lighter. We still provide for Italy, low single-digit growth, okay? So it's not a declining market. It's simply you don't have that effect of volume growth that was pushing that market from a low single-digit to a high single digit. Germany is a completely different story, and I believe is more difficult to predict. Again, in Germany, you don't have a declining volume, you have a volume that is volume growth that is stabilizing back to what it used to be prior to the COVID time and all this turmoil that really happened over the last 5 years.

For your reference, if you look at the EDMA data and you look at the markets, so total market growth in Immunoassay Europe, major markets is 2%, right? So if I do have in Germany a volume that is growing around low single digit. We are going back to pre-COVID times. This is what I'm saying. So the true damage, if you call it as a damage, is that H1 was skewed by the fact that all this effect are going to hit H2 more than H1. That's it. And was it foreseeable, not really. This is the problem. And I think we have been commenting several times about the fact that in Europe, for now several quarters, our industry have been enjoying an extra volume push, which was difficult to quantify and was very difficult actually to forecast how long this has lasted. And I keenly, I didn't follow actually reporting by other companies. And I really want to understand in Q3 and Q4 how other companies that are very much dependent on me too and in these markets, how they're going to comment the performance of Europe.

Okay. And just a follow-up on the comment you made earlier on the molecular market. You mentioned a market shift to 4-PLEX testing against 3-PLEX testing. I'm just curious how you know that this have happened if you didn't sell the 4-PLEX test before, is it because you actively had customers requesting the 4-PLEX? Or did you actually see customers deactivate the 3-PLEX usage with you? Just some color there on this comment.

Listen, I'm simply reading the press release of Danaher and Cepheid. If you remember the story, Cepheid was the first 1 actually to launch on the platform, the 4-PLEX. And actually, the force during COVID times -- at the end of the COVID times, right? They force all their customers to move away from the COVID only to the 4 PLEX, right? So they launch it, and they force that market to move. And it has been a very smart and winning move because it moved the market away from COVID or COVID flu into the 4-PLEX, which was -- and they were the only company to really supply. This business for DiaSorin has always been -- forget the COVID component, which was huge, obviously. But the flu COVID has been a good franchise for DiaSorin has been declining over time because we lost some of it, again, because of COVID per se.

Now we are backing to the regular use of 4-PLEX in the market, which is the new reality. In fact, if you look at LIAISON NES. The LIAISON NES is a 4-PLEX assay. And if you go back to what we were discussing about why we delayed the LIAISON NES, it was because we had developing ready to go to clinical with flu A, flu B and COVID. And we realize very rapidly that the market actually moved away from that into the 4-PLEX. So we actually the clinicals with a new product and now we are launching the right product. This -- but its history and is driven by what Cepheid has been very acutely able to do in this market.

Next question is from Kavya Deshpande, UBS.

P.G., I think you said that earlier, most of the headwinds impacting Q4 this year won't continue into 2026. Would you be able to break down in a bit more detail, which ones continue and which ones don't. And then for the ones that do continue, so what is the quantum. Are they -- are they kind of unwinding or are they accelerating?

And then just another quick question on the sort of outlook for the multi-taxing franchise as a whole color. I think previously, you talked about EUR 300 million as a target for sales by 2028. I mean in terms of the PLEX respiratory revenue exposure, perhaps making it lean more towards outpatient and making those revenues a bit more sensitive to flu fluctuations. Had you baked that into the EUR 200 million revenue sort of outlook? And does that still hold?

Kavya, I would try to take the first one and I guess also the second one and maybe Carlo can chime in if I'm not -- if I would be missing anything. So it's not yet, I understand why you guys want to have an understanding of 2026, but you need to be patient because we need to go to the Board approval and then 2026 guidance is going to be early next year. But I will try once again from a qualitative perspective to help you out to kind of understand the main moving pieces. I believe Carlo said a few seconds ago, we are not expecting headwinds from China or a very limited headwind from China in 2026.

So that is not going to be there. ARIES' EUR 5 million, EUR 6 million headwind is not going to be there in 2026 and onwards, obviously. This headwind, we experienced on the MDX platform, it's not going to be there for 2 reasons: One, the business now is very limited in size, and so it's not material; and second, because of the availability of the new product, we think we will be able to better defend the remaining business, which is, once again, not material. The outbreak, we've not discussed a ton about the outbreak by the end of the day, by the end of the year, the outbreak impact that we had in 2024 is going to be EUR 6 million, which is not going to be there.

And if you just take China and the outbreak together, you have a 1 percentage point of our total sales, which are not going to be there. If we move to LTG, you guys have not made a ton of questions about LTG, but LTG as Carlo said during his remarks, is playing against us because of -- it's a B2B business, we see a very nice growth on the diagnostic part of the business, but on the life science part with our customers, and it's the big names of life science, telling us is that they're struggling as well to sell instruments. Instruments represent 1/3 give or take of our Life Science franchise in the LTG business and we had a material headwind, which we think is not going to go away in Q4. What's going to happen next year, very difficult to tell you. It depends on -- it's a business we don't control, it's a business-to-business, depends on NIH, it depends on funding, and we will see there what our customers will tell us. Going to the molecular part of the business, I believe I've already covered it, discussing Dylan, and those are the, let me say, drivers that you should expect in 2026 and onwards.

Then discussing about the PLEX. The fact that most of the PLEX business now is in reference lab, so it's outpatient, it's because of -- it's driven by the fact that we have up until a few weeks ago, 1 panel available, which is the respiratory panel. And so debt limitation is going to go away completely when we will have the GI -- the, let me say, a very strategic part of our offering and strategies to go to hospitals. That is where we want to play. And we also see possibilities of cross-selling to our immuno customers molecular product the short answer to your question is, yes, in the number that we gave for 2028, we already included the federal part of that number is going to be a respiratory sales. But the majority of that number, we believe, is going to come from the gas stove from the blood as it is for the VERIGENE 1 offering as we speak.

Next question is from Jan Koch, Deutsche Bank.

Two quick questions. The first one is on your new guidance. Does your new guidance assume any meaningful impact from the government shutdown in the U.S. in Q4.

And then secondly, on your supply chain, do you face any negative impact from the supply chain issues that one of your key suppliers has currently.

I'll take the second question because I'm not sure I understood the first. When it comes to the second question, the answer is no. So whatever Stratec issued as for magnets, I don't know what you're talking about, but certainly it has not to do with anything that has to do with the supply of the LIAISON XL, right? First question.

I'm not sure I got it. If you can please clarify your question, Jan, on the one on the guide, I think.

Yes. On your guidance essentially for LTG, do you expect any kind of incremental negative impact in Q4 on the back of the government shutdown in the U.S.?

No, I don't think the government shutdown per se is creating an issue with -- you get an issue with the instrument. The issue, again, has been the lack of funding or redirection of funding or the freeze of funding to academia that has frozen completely the instrument market in -- so far. I mean what is going to happen in quarter 4. And again, I really -- in order to understand how we will do in this business, please listen to what ThermoFisher and the other players are saying about the space. Because whatever they say about that space is going to be reflected on the way our Life Science business will perform because Thermo, Millipore, bio technique, I mean these are the companies that are buying system and distributing systems for us in that segment right? So I didn't -- I did not really follow their latest report. Please refer to that and you will have a better understanding of what that business will be.

If I can add a comment here on the LTG just again, but it's just reasoning it out with available data, right? If you look at the 9 months data we provided for you. Obviously, what Carlo said about the life science part of the LTG business stands. But if you look at the diagnostics part of the business in the first 9 months of the year, you see a plus 20%, right, which is unusual, right, because it means that our customers, diagnostics customers would have been growing their business by 20%.

So there, remember, as we always said, there are -- there is a phasing of these big orders bulk orders that we got from diagnostic customers, meaning that you should expect a Q4 for the diagnostic part of the our LTG business, which eventually will deliver full year for diagnostic growth, which is usually, let me say, mid- to high single digit. But this is just what we always said. So it's just looking into the numbers and the information that we've already disclosed.

Next question is from Natalia Webster, RBC.

First, a confirmatory question on PLEX. You mentioned that you now have 100 users in the U.S. Do you still see your previous target of 150 active users by the year-end as achievable?

And then secondly, in terms of that mix, you mentioned that the GI panel could help you increase your mix of inpatients. I was just wondering if you're expecting that GI panel introduction to also increase the number of customers that are using the flex versus the fixed option?

And then thirdly, a question on NES. You mentioned that you're looking for clearing towards year-end or early '26 in an agreement for distribution by H1, so is it reasonable to assume revenue contribution from Q3, Q4 2026? And also just trying to understand how you plan to differentiate yourself here given the market has become increasingly competitive.

Okay. Let me -- let me start from the last. So yes, we expect to see contribution from H2 from NES, okay? But if you don't mind, we are going to give more color on NES. Certainly, when we talk about 2026 budget, but very much so during the Capital Market Day that we're going to do by the next 2026 summer.

Okay. When it comes to flex, my -- I believe that what P.G. said is as follows. The more we complete the menu, the more the market with development to the hospital because commercial labs have both enough volume to justify multiple placement subsystems with one parameter. But when you need to penetrate the hospital market, clearly, you need more than one even if quite often this hospitals and multiple platform, right? You need to be able at least to take away one, which typically runs on 1 or 2 panels. So my take is that moving forward with flex, blood with respiratory blood and GI, we are going to penetrate the hospital market also because by the way, GI is a hospital market panel.

And more than that a comment I would like to make is that as we discussed this previously, GI is almost a perfect example for the mini panel because at that point, the combination of mini panel that the hospital can make is very large. You can go seasonal, you can do depending on where the patient is coming from. You can go by outbreak. You can go in many different ways. And so I expect that, as I said, today, 50% or 60% of our customers are using already flex with respiratory. And with GI the number will increase significantly, again, because of the nature of the disease. When it comes to the first question, you said 150 accounts. We are at 100 today. I believe we're going to get close to 150. I see the funnel. I see the number of accounts we have in the funnel. But I believe that, again, counting Quest as one, we are going to get close to that number.

Mr. Rosa, there are no more questions registered at this time.

Thank you, operator. Good night.