Galderma Group AG (GALDY) Q3 2026 Earnings Call Transcript

Welcome to Goderma's third quarter 2026 trading update call. The press release was published today at 7 a.m. Central European time and can be consulted on our corporate website at any time. Today's presentation slides, as well as a recording of the webcast, will be made available on our website after the call. Please be advised that today's presentation contains forward-looking statements which should be treated with the appropriate level of caution as detailed on the slide. Let me now introduce today's webcast. Dr. Fleming Onskov, CEO of GoDerma, and Luigi LaCorte, CFO, will provide performance updates for the first nine months of the year and discuss the outlook for the full year. After the presentation, Fleming and Luigi will be available to answer questions from financial analysts before Fleming provides his final remarks to close the webcast. With this, I would like to invite Fleming to start with GoDerma's highlights for the third quarter of 2026. Fleming, go to you.

Thank you, Emil. Neil, good morning, good afternoon, and welcome to Galderma's third quarter 2026 trading update webcast. It's a true pleasure to be here today to discuss Galderma's continued momentum across the business and the strength of our proven integrated dermatology strategy. As usual, none of this would be possible without the dedication of our teams around the world. With execution against our three strategic pillars, we are driving growth across the core portfolio, complemented by innovation and further increasing penetration in fast-growing markets. We also continue to take steps to expand our portfolio and further strengthen our dermatology platform. First, organically, with progress of our innovative pipeline, we're starting new indications for nemolezumab, progressing our biostimulator clinical assets, and developing new innovation for Cetaphil and for Elastin, just to name a few examples. Second, we continue to explore external innovation that would benefit from the globally scaled integrated dermatology platform that we have built. Our recently announced agreement to acquire Zio Skin Health is a prime example. It represents a highly strategic and financially attractive addition to Calderma's business. As a leading science-based physician-endorsed skincare brand, Zio Skin Health is a very strong strategic fit. Its portfolio and global presence, complementary to elastins would enable us to expand our dermatological skin care offering in the attractive, fast-growing physician-to-spend skin care segment. CO's daily regimen and targeted prevent and correct portfolio complements elastin's offering more focused on period procedure skin care. CO's broad commercial footprint also complements elastin's. CEO covers a high breadth of accounts, extending Gilderma's existing reach for both elastin and injectable esthetic. CEO also brings a strong leadership position in the U.S. and in international markets, including Canada, Japan, the U.K., and the Nordics. Gilderma is strategically positioned to unlock value with CEO. Our integrated dermatology platform provides complementary synergies and scale. We can leverage our proven TAC record of supporting innovative, science-led brands with research and development, skin care education, commercial capabilities, and geographic expansion. It also represents an attractive financial profile. With appropriate growth investments, we aim to return Zio to a growth trajectory as of the second year. We intend to follow the successful blueprint of our Elastin acquisition, protecting CEO's fundamentals while integrating it into our global dermatology platform. This represents a strong proof of our value creation capabilities. Luigi will provide more details later. For the first nine months of the year, Gilderma delivered record net sales of 4.765 billion U.S. dollars. Performance was particularly strong in therapeutic dermatology across both Nemluvio and the Mature portfolio, as well as in dermatological skin care and in neuromodulators. Net sales year-on-year growth was 25.1% at constant currency, with broad-based double-digit growth across the portfolio. We continue to outperform the market in each product category supported by resilient market conditions that were ahead of expectations. We continue to benefit from sustained consumer demand and preference, particularly through our premium positions in injectable aesthetics and in dermatological skin care. We're raising full year guidance on net sales up to 22.5 to 23.5 growth year on year at constant currency. We are also confirming our core EBITDA margin guidance for the full year of approximately 26% at constant currency. Let's now look at performance highlights for the third quarter by product category. In injectable aesthetics, we continue to build on our strong trajectory, driving expansion across the portfolio while reinforcing our leadership in science, in education, and in commercial execution. On the portfolio expansion front, we continue to strengthen our leading positions in neuromodulators with Ralfides. In the first launch market, the majority of patients continue to be either new to the category or switching from competitors. We're also further broadening our geographic footprint with regulatory filings ongoing in additional territories. In the U.S., following the FDA's complete response letter in June and a recent Type-A meeting with them, we are now targeting a resubmission in the first quarter of 2027, subject to further regulatory feedback. We're strengthening our chin augmentation offering with the launch of Restylane Shape in Europe, together with new proprietary injection techniques. At the same time, we continued the geographic expansion of Sculptra with additional launches in Southeast Asia. Alongside this expansion, we continue to execute with a strong focus on our leadership in both science and education. Positive phase three data for Restylane Volume in Tempo hollowing support our plans to expand in China while further strengthening the clinical evidence behind the Restylane portfolio. This year also marks 30 years of Restylane, providing an opportunity to reinforce its longstanding track record and its proven safety profile. And we continue to expand the evidence supporting our portfolio in skin quality. Aligned with World Menopause Day on October the 18th, we highlighted interim investigator-initiated trial results showing progressive improvements in hydration, skin barrier function, and skin quality with Restylane Skin Booster and Sculptra in menopausal women. In dermatological skin care, we significantly outperformed the market, driven by strong execution across our facetive brands. For Cetaphil, we maintain our focus on international markets and disciplined executions against three fundamentals. Strong core brand equity, anchored in superior science for sensitive skin and dermatologist reclamation. Prioritizing the core portfolio and driving locally relevant activation. The strength of our established portfolio remains a key driver of performance. While we continue to support innovation, more than 60% of Cedarfield's global growth in the first nine months came from the core portfolio. This was supported by locally tailored campaigns with particularly strong activation in fast-growing international markets. With Elastin, we remain focused on the attractive period procedure opportunity. Where we are sold, the brand remains the number one preferred option among physicians to spend skincare brands overall and for procedure pairing. In addition, brand familiarity among healthcare professionals grew 25% compared to last year. We also continue to innovate with the U.S. laws of restorative eye complex with Trihex Plus technology. In therapeutic dermatology, Nemluvio is approaching leadership in periculo-notularis in the U.S. and continuing to ramp up in atopic dermatitis. In the U.S., Nemluvia shows healthy and growing underlying demand supported by increasing prescriber confidence and disciplined commercial execution. The majority of patients continue to be new to advanced therapies across both indications. In Perigolo Nolaris, our rolling six-week market share is trending at approximately 45% of paid new patient starts and 37% of total paid prescriptions. In atopic dermatitis, we're trending at approximately 9% and 5% respectively. We also continue to broaden Nemluvia's global footprint with approvals across both indications in more than 40 countries and further reviews are ongoing. Alongside this strong commercial momentum, we continue to invest in Nemluvia's future growth drivers. New three-year Arcadia long-term extension data reinforced its durable efficacy and favorable tolerability profile in atopic dermatitis. Lemluvio is the first therapy to demonstrate freedom, yes, freedom of itch, further reinforcing its recognized differentiation in itch relief. The data also supports positioning of a strong skin clearance profile with sustained improvement through three years. Recently published patient-reported outcomes from a Phase II study of nemolizumab in children aged 2 to 11 with moderate to severe atopic dermatitis showed meaningful reductions in its severity, showed better sleep, and showed improved quality of life maintained for a Over the next month, we are planning to file a U.S. submission in pediatric dermatitis in the U.S., following clinically meaningful late-breaking data that we presented in the first quarter. In addition, we continue to explore opportunities across additional potential indications. With that, I'm pleased to hand over to Luigi to provide more details on our performance.

Thank you, Fleming, and good morning, good afternoon, everyone. Truly a pleasure to have the opportunity to comment, and I should say celebrate, what was a very strong set of results in the third quarter, and also a number of important milestones that the group achieved. Among these, of course, the inclusion in the Swiss SMI index and the upgrade of our credit rating by Standard & Poor's to Triple P Plus with a stable outlook, which they've reiterated recently, and which clearly recognizes our ever stronger financial profile. With regards to our trading performance, momentum clearly remained very strong for the first nine months. Revenue growth of 25.1% at cost of currency was continued to be predominantly driven by volume, complemented by a favorable mix. But nice to continue to see also net year-on-year price being positive, excluding, of course, the expected growth to net erosion on Nemluvio, which continues, however, to be below expectations. Growth was broad-based with double-digit growth across all product categories and in most of our top 10 markets. international as you see from the slides grew 18 percent a custom currency with double-digit growth in all areas us up 34.7 percent clearly driven by the continued strong ramp up of Nemluvio but with positive sales growth across all categories in about 10% also excluding Nemluvio Q3 year-on-year in that sales growth of 26% was supported by continued outperformance of our portfolio across all categories and resilient market conditions that were ahead of expectations. Looking at each of the categories in a bit more detail, starting with injectable aesthetics, net sales were up 13.2%. We continue to outpace the market across geographies in both neuromodulators and fillers and bus stimulators. As we anticipated already at Q2, revenue growth for neuromodulators was particularly strong in the third quarter, benefiting also from the unwind of phasing effects from Q2 and offsetting a somewhat lower growth in the quarter for fillers and bus stimulators, which reflects for this category a high base in the second half of 2025. Overall, in the first nine months of the year, neuromodulators delivered sales growth of 16.9%, with this for continuing to grow double digits across all key markets, including those where we've launched Welfare S, which continues to ramp up very nicely and is now approved across 37 markets. Photos and biostimulators achieved growth in the first nine months of 8.5%, despite continuing to see some softness in some geographies. Scalprap, meanwhile, continued to grow double digits, both in U.S. and international, despite a growing comparable base in the second half of 2025. Dermatological skincare, sales were up 16.2% constant currency. We continue to maintain a strong growth momentum, a tank driven by our flagship brands, and continue to outpace the market. In both the U.S. and international, consumer demand remains supportive, with interest in the dermatological skin care really providing resilience to the category, which remains underpenetrated relative to other parts of the broader skin care market in most key geographies. E-commerce remains the fastest growing channel globally and represents the large majority of our revenue in Asia, supporting very strong growth of Cetaphil in that region and across the international markets. Alastin delivered double-digit growth in both geographies with continued penetration in the U.S. and continued geographic expansion, and we really see the product continuing to benefit from strong growth of the physician dispense market. And finally, on therapeutic dermatology, sales were up 64.4% at cost and currency, obviously reflecting the very, very strong growth of Nemo, Nemo Luvio. So the moving sales were $735 million in the first nine months and just over $300 million in Q3, with a quarter-on-quarter increase of 22%, and with atopic dermatitis contributing more than prurigo nodularis. We continue to make progress in penetrating both the commercial and Medicare parts of the market, while maintaining a disciplined execution in our ongoing negotiations with payers in the medicare plans and of course while the u.s continues to represent the majority of the sales for nemovio it does continue to ramp up ahead of expectations also in our international markets and we are preparing for the launch of the product in brazil mature therapeutic dermatology portfolio was up 9.2 percent and did continue to show positive growth in the third quarter with lower than expected impact from generic entries and also showing good growth of differing globally, and especially in the U.S., which was driven by the strong launch performance of the product post the OTC switch earlier this year. So overall, very strong momentum across all of the categories. And thanks to that stronger-than-anticipated trajectory, when we look at the full-year outlook, and thanks to that strong momentum, particularly on therapeutic dermatology, dermatological skincare and neuromodulators, we now expect year-in-year net still growth of Fleming Asset of 22.5% to 23.5% of cost and currency for full year 2026, up from 19% to 21% previously. Growth rate in the fourth quarter clearly is expected to reflect a significant step up in the move or run rate in the fourth quarter of 2025, as well as transition to structurally lower channel inventory levels in brazil our third largest market driven by the expected implementation of tax reform in the country as of january 2027 in injectable aesthetics we continue to expect full year growth of 2012 to 13 percent a custom currency likely in the upper half of that range assuming a continued supportive market environment and within this category, fillers and biostimulators growth for the full year, is expected to be broadly in line with year-to-date rates, potentially slightly below, again, depending on market conditions. In dermatological skincare, momentum remains strong and performance continues to be ahead of expectations. Although it's already set out at the start of the year, we expect some moderation in the fourth quarter against a high comparative base. Therapeutic dermatology in Nemluvio is clearly is well on track to break into blockbuster territory in terms of global net sales for the full year. Well, we expect the mature portfolio to show mid-single-digit growth at constant currency, thanks to the slower erosion that we've seen in the first part of the year, particularly in international markets. On profitability, we clearly confirm our core in vital margin guidance of approximately 26% of constant currency as we continue to invest behind the very significant growth opportunities that we see ahead. And clearly, you know, our guidance excludes any potential contribution from the acquisition of Zero Skin Health, which is expected to close in the fourth quarter 26 or early 27, subject to regulatory clearance. And of course, as usual, you will find are highlights in terms of foreign exchange exposure impact on revenue in the appendix. A few words from me on the Zedowski in health acquisition. Clearly, as Fleming has said, from a strategic and financial point of view, a great opportunity for Golderma. We expect, as I said, for this to close in Q4 of this year early next. The transaction will be financed through existing cash reserves of approximately $700 million and bank financing of $800 million. In terms of financial profile, as you know, the business reported net sales of approximately $330 million US dollars in the last 12 months as of June 26. We do plan to increase commercial investment to strengthen the foundation for renewed growth as of 2028. Whilst on profitability, we expect the acquisition to be slightly dilutive to core EBITDA margin in 2027, sorry, and achieve broadly margins comparable with the group average already as of 2028 onwards, and is expected to be core EPS neutral in 2027. We estimate approximately 50 to 60 million U.S. dollars of one-off and integration costs over the first two years of the acquisition, but most importantly, beyond the terms of the transaction, what we're really excited about is that acquiring a great asset like Zedoskin Health, you know, creates an additional long-term growth fiber for Galderma whilst maintaining financial discipline. And on that, we thought important, you know, following this acquisition to confirm that our capital allocation priorities remain unchanged with disciplined investment in growth at the core. Our first priority continues to be investing behind organic growth, including our commercial capabilities, R&D and manufacturing capacity to support the significant growth opportunities we see across the portfolio. We will, alongside this, continue to explore selective licensing and business development opportunities across all three product categories, looking for opportunities that can broaden our portfolio and further strengthen our long-term growth profile. And we will, together with this, continue to further drive shareholder returns through progressive dividends, on which our policy remains unchanged. and where appropriate will also consider share repurchases we will do this all this with discipline in our investment decisions and maintain a strong balance sheet and maintain and reiterate our commitment to maintaining a solid investment credit rating finally before closing we remain confident in our ability to continue to drive broad-based growth and outpace the market across all product categories. This underpins our midterm ambition with extended midterm guidance to be communicated early next year, as already mentioned, at the time of our 2026 full-year financial results call.

Thank you Luigi, thank you Fleming for the introductory remarks. This concludes the first section of our webcast. Before final remarks by Fleming I would like to hand back to the operator today Sara to open the call for analyst questions. As usual in the interest of time, we would appreciate if everybody can keep it up to one question per turn so that we can fit as many of you as possible. With that, Sarah, over to you, if you could please open the line.

Thank you. If you would like to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. And to withdraw your question, please press star one and one again. Please stand by while we compile the Q&A queue. Thank you. We will now start with our first question. This is from James Gordon from Barclays. Please go ahead.

Hello, James Gordon from Barclays. Thanks for taking the question. I'll limit it to one which is about Nemluvio. So Nemluvio Q3 performance was a bit stronger than I might have expected or the market might have expected if we just looked at the IQVIA data, which looks quite flat and it looks like there's some share last to the least endless if you look like the new-to-brand prescriptions. But the sales are up about 20% sequentially. So what if we not really get right? Was it just that the channels are poorly capturing with IQVIA where you're actually growing more quickly, and that's what we missed? Or is there some net price benefit? It looks like maybe there would even have to be a sequential team's price benefit. And could there be anything to do with 340B changes, which I know have hit a number of other derma products for other companies this quarter? Or is it XUS starting to ramp? So is the progression from Q2 to Q3, a clean number we could extrapolate to Q4 as well, and you could still do like a billion dollars just in the U.S. this year.

Well, thanks a lot, James. Yeah, IQVIA is a great source of data, but not perfect. It does not cover all the channels, and there are pockets of channels where we are very strong that they don't seem to cover. There's also facts about that our prescription are paid prescriptions. There are also various programs that, for instance, EPCLIS has that record non-paid prescriptions. So there are a number of things to take into account. I think the numbers we're giving you are the real numbers, and we continue to perform strongly. But it is true that EPCLIS is particularly putting a lot of resources into DCC. They're performing well. But I think if I look both at our commercial plan performance and I look at our Medicare performance, even though we have less coverage than many others, we continue to perform very well. And I think being a sixth or seventh entrant, I think we've broken many records and we'll see whether we hit a billion in the U.S. We certainly will hit a billion globally.

Thank you. We will now move to our next question. This is from Matthew Weston from UBS. Please go ahead.

Thank you very much. My question is about the Zoskin acquisition. So if I think back to when you acquired Elastin, I think you've doubled revenue in either three or four years with that franchise. I realize the Zoskin franchise is significantly bigger in terms of total revenue at the beginning, but I was interested whether or not you felt it was also possible to drive a similar amount of growth over a similar time frame with that brand, and that's how we should think about modeling the deal in a midterm.

Yeah, I will let Luigi also add, but I was intimately involved in the Alastin acquisition and the integration. It does take, unfortunately, a bit of time. We will, first of all, have the deal to growth. Secondly, we will need to align the two field forces. We will look at accounts. We'll look at the portfolio. It is quite clear that it's super complementary. We have refocused Alastin, where we have both more or less rebranded it. We have reformulated it with a tri-x plus, and we position it to a strong preference in period procedural care. And I think we have grown to, I think, number four in that category in the U.S. with phenomenal growth. I think we've more than doubled. I almost would say triple the business, but don't set your expectation that we will be able to do the same with 330 million in a very short period of time. It will take some time. The brand could need some more investment. There are other things we want to change. So once the deal is closed, we'll sit down with the team. We'll figure out where it is, what we can do, what the opportunities are. We wouldn't have bought it if we were not confident that it would be a growth contributor to us, but it may take some time. And I think realistically, 2027 will be a bit of a year of a reset. And hopefully in 2028, we can start seeing some of those benefits. But Luigi, anything you want to add?

No, I'll just add, you know, we really are excited. And also because of the complementary of the portfolio. The only thing I would add is that, you know, this is very complementary and synergistic with elastin in terms of both channel and geography so you know we expect that and the reason we're excited about this acquisition is that not only we will expect to grow the business but we expect this acquisition to potentially help us continue to sustain you know elastin growth in the future as well thanks to that complementarity can i just have a quick follow-up if I can.

So if I think of the outperformance of Nemo into 27, that would probably, some of that would be falling through to the bottom line. You obviously now commented around an investment year behind Zoskin. Should we think of that as being a drag on 27 margins versus consensus, or we should think of the outperformance of base Galderma funding the reinvestment in Zoskin?

Well, I think in terms of, you know, margin for next year, of course, will provide guidance in early 2027. We remain committed to that sort of midterm target that we had set out. That implied a level of margin accretion for next year. I think we've said, and of course, yes, the business is growing at a very healthy rate and that momentum will continue. We do have to also bear in mind, as we said, one, a little bit of dilutive effect from the acquisition, subject, obviously, to any close, as we do intend to invest behind it. And two, there are new tariffs coming in, right? Since September, Section 232 tariffs are now relevant for Nemruvio. I mean, we do have inventory cover to middle of next year. There will be a little bit of headwind from that. It's manageable. We're working through the guidance, which has been provided most recently. Again, we will provide specific comments. we will deliver the, we are still aiming to deliver on that margin accretion target that we set out. But those are the pluses and minuses, Matthew. Perfect. Many thanks indeed.

Thank you. We will now take our next question. And this is from Benjamin Jackson from Jefferies. Please go ahead.

Great. Thank you for the question. Fleming, I just wanted to ask on the level of confidence heading into that Relford S re-submission post this meeting with the FCA. I appreciate you've not had the written comments back yet, but are you coming away feeling better about, you know, around the analytical methods, which perhaps was the stickier part of the conversation? And I guess this time last year, you were very much talking about one big issue that had to be fixed that you still needed to work on. Where are you relative to that? Is this somewhere where you're much more confident heading into this cycle? Thank you.

Yeah, of course, as a Scandinavian, I love to spend time in Scandinavia. So also with Luigi, we've had trips to Uppsala, which is particularly beautiful in summer. I would say we'll now see how beautiful it is in winter because it probably will warrant a few more trips. Yeah, we're very busy. I'm incredibly proud of the team. First of all, they keep adding countries where they have been approved for Ralph Fidesz. So they really know how to manufacture and we've had no stockouts or anything. So I'm really proud of the team. The U.S. has set a very high bar. I think that we have really worked very hard on the CMC issue. So it's down to, I would say, one or two. We are still waiting for the written comments by the FDA, but I think the team has provided good solutions. Of course, they will be subject to review. and then on the getting Uppsala up to the level that the FDA's inspection so that we can sustain another pre-licensed inspection, which is probably more likely. I think the team also with external support, also people that knows what the FDA is looking for, is doing a really good job. I wish I could guarantee there is no guarantees. I think we have a very serious competitor that also seems to have some of the similar questions. I can only say the team has done a phenomenal job. They have reduced the number of open topics. We have a very productive type A meeting with the FDA. We're waiting for written feedback. And I think I've seen that firsthand, the significant upgrading, including some new buildings that is going up in Uppsala so we can meet the highest standards. So I feel optimistic. But, of course, there's no guarantees. We're working really hard. We've said it will probably be in the first quarter of next year. We know every week, every month counts. But we're very busy. As you know, we also are trying to file the pediatric data for nebulovio before year-end, and we have a few other highlights that we need to get done. So I feel confident also that the regulatory team will meet that guideline.

Thank you.

Thank you. We will now take our next question. This is from Shyam Kortadia from Goldman Sachs. Please go ahead.

Thank you. My question is on the Ibsen arbitration that you called out in the press release. So I just wanted to get some clarity on that. So is this all to do with the commercial rights for IPN 10200 or are there other elements you're seeking arbitration on as well? And what does this therefore mean in terms of a potential partnership for the toxin in the event you are successful? Are the commercial partnership terms set in stone in the contract or is this something you would need to negotiate with Ibsen following the outcome? and how long do you anticipate this could take? Thank you.

Yeah, first of all, I imagine I couldn't recall the number you were saying, but it's commonly known as the LAND, the long-acting neurotoxin. But I just wanted to say that this is just pertaining to the commercial part of this because we have, and it does not pertain to any of our other products, Ralph Fidesz, Disport, and others. We have exclusive rights to commercialization in quite a number of countries around the world for the aesthetic indications for those. And that's what we continue to reinforce. It may feel a little bit strange from the outside. But the issue is that the way these many agreements were written, if the two parties have issues of discussion, they have to go to arbitration. It also means you have to have a lot of patients. I think the average time is two, maybe two plus years. So I think we have a team that will take care of it. We'll see what the outcome is, but it does not affect our commercialization of any of the existing marketing product. This is about the long-acting neurotoxin.

Maybe I'll just ask, you know, at the same time, we continue to drive the full portfolio. I think I've mentioned already in my remarks that we're very excited that the modular portfolio is growing strongly. We continue to see double-digit growth of Diceport in all territories, also where Ralph Fidesz is launched. And, of course, very happy with the continued ramp-up of Ralph Fidesz as well.

Thank you. We will now take our next question. This is from Victor Flock from BNP Paribas. Please go ahead.

Thank you very much for taking my question. Maybe one on the Amruvio and on the market share in AD, which has been relatively flat lately, even though the performance of the product has been extremely strong. But just to get a sense of whether you can talk a bit about what you can do to drive further market share gains from here and what you think could make the biggest difference going forward, whether it is DTC or just basically just increasing the coverage in the government channels. And if I could just squeeze a quick one on capital allocation, now that you've completed the ZOS Kenya acquisition, what are your main priorities going forward, and should we see focus shifting towards industrial aesthetics in the future? Thank you very much.

So I think we have to look a little bit at the fixation. So we just reported nine months results of 4.8 billion. We have now been speaking about adding another billion by a product, maybe even by year end. So I think we need to put things in perspective. We're incredibly proud of the performance we as a six or seven interest have achieved with Nemluvia in the U.S. And unfortunately, it is not so that the IQ data will provide you with a perfect image of the progress we're making. If I look at our actual market share in Medicare, very strong. If I look at our commercial penetration, very strong. But it's also very important for me that we keep a perspective here. We are a relatively small company up against some really big companies. And I think it's about driving profitable growth. That's the most important, in my opinion, for a company like Galderma. It just turned profitable. And I think for us, we invest, we invest appropriately, we'll continue to progress, but we still are expecting the team that they drive both market share gains, but also profitable growth. We are now, if we look forward, we are approaching potential leadership in Periglian Nodularis. If I look at the September, October, new to prescription page, it's 45%. If I look to atopic dermatitis, it's 9%. So I think the team has had a really strong performance. Do we have competition? The most important for me is we progress really well. And we're just talking about the U.S. If I look at the performance outside the U.S., one country after the other is at par with or even some outperforming on a relative scale, the U.S. So I feel very, very good about where we are.

And you had a question, I think, also on capital allocation. Look, you never know when the next deal is going to be, right? We're looking in all three areas. We see opportunities in all three areas. And we won't call out. You never give too much details about that. You never know until you sign a deal, whether you have a deal. And when you sign, you announce. So we'll see. We're looking at each one of those areas. We're excited to have brought this one to the finish line. Of course, we still have to wait for the regulatory clearance of it, but we'll see. But again, I will reemphasize that priority number one, as I said, is continuing to invest behind organic growth opportunities because we're very excited about the opportunities. We have to continue to gain shares in markets which continue to show strong momentum. So we'll continue to focus on that, complement that would be the NM&A, and then, of course, enhance that, as I said, with returns of cash to shareholders.

Great. Thank you very much.

Thank you. We'll now take the next question. This is from Joffrey Balicimella from Bank of America Securities. Please go ahead.

Yes. Good afternoon, Fleming. Good afternoon, Luigi. Thank you very much for taking my question. This one is also on Zio Skin Health and the acquisition there. I was wondering during the due diligence process if you could give us a bit of details on what overlap you are seeing between Zio's 16,500 physicians that you mentioned in the press release last week with either Allistin or the injectable aesthetics portfolio.

And so, therefore, how should we think about the cross-selling opportunity here? is that effectively beneficial or incremental to growth for for injectable aesthetics particularly thank you very much good question so what we saw in diligence and what we saw when we look from the outside because they're of course also competitors to us so we know them very well we have built a very strong position with a core dermatologist and plastic surgeons they are much stronger, for instance, than MedSpas and others. Their portfolio is more a procedure as a kind of a package where you get multiple products. We are more procedure related. So they're more general skincare. We are more procedure related. Of course, it's not a perfect separations on both sides. But what it will do for us is we will both increase the total number of accounts that we're calling on. We will supplement our strength with dermatitis and plastic surgeons, with med spars and other accounts we're not in today. We'll have a portfolio that don't only cover period procedural intervention, but also now will be more general skincare in the context of physician dispensed skincare. So, of course, we have some further refinement to do. We will look at the portfolio. We'll make sure that that separation stays clear. And what we like the most is what we like the most about Elastin. It's science first, okay? Dr. Obachi, 2007, started this company as an impeccable scientific reputation. The products are high quality. They're scientifically differentiated. There are certain areas where we're not that strong, where they're very strong. and it's exactly what we liked about the last of the commercial execution we know how to do the field forward execution we know to do they were also not really strong or had not invested i can't say they were not strong in e-commerce an area we are very strong in so there's multiple things we can do but as luigi also said it will require a little bit of investment next year and we will then set it up for success very good thank you very much thank you we'll now take the next question this is from harry septon from rbc please go ahead brilliant thank you very much

for taking my question it's just on the guidance so another strong sales beat but i'm reiterating on the margin and we saw a similar strategy last year and you've talked about the profitable growth for nemluvio which should be a significant driver of operating leverage over the midterm but maybe can you walk through the areas that you are reinvesting in opex and also how some of that OPEX reinvestment that we saw through last year as Nemluvia outperformed and how that's helped with the sales outperformance that we've seen this year. Thank you.

No, so I'll take the first part in Alaska, Luigi, to complement. It is quite clear that the atopic dermatitis markers and even the perigelonotivitis markers shows incredible growth. and you saw the percent of our patients that are actually new to therapy or new to biologics therapy. So we see a lot of opportunities. So part of the additional investment has gone into some of the areas of strengths we see that is related to Nemluvio. Okay, the competitive intensity is also going up. So we also have to continue to stay attuned to that. We haven't had time so far on the call today, but if I look at the phenomenal growth rate we have in dermatological skincare, if I looked at Asia, if I look at China, if I look at India, if I look even at Europe, if I look at the U.S., we have lots of opportunities to invest. In some areas, like probably in the U.S., we were probably investing a little bit less than maybe we should have, but we continue to look for opportunities. We don't just invest, just to invest. People, of course, have clear targets that they have to deliver, but when you deliver 13%, 16%, and 64% growth in the three categories, it's quite clear it's going to require some investment. And the good news is we're flexible. We allocate the resources to where we see. If we invest a little bit more here, a little bit more in e-commerce, a little bit more in physician training, a little bit more here, we drive very strong growth. It does not mean that we're also not driving additional growth in injectable aesthetics, but we just highlighted those two as potential areas of further investment.

Yeah. And the only thing I'd add is if the question behind the question is, you know, you're increasing sales guidance, why not margin as well? Well, you know, we took the view that, you know, achieving a roughly 26 percent EBITDA margin, you know, would deliver close to 300 basis points accretion in margin in one year. And we think that's already a very strong increase and there are opportunities for growth. It's competitive markets. We want to become the undisputed leader. And now is the time to invest and go on in, as Fleming has said, a number of these. So, you know, we do want to be balanced with the pace at which we grow margins to make sure that we really maximize the opportunities that we have. As I said, on many occasions, you only get one chance to maximize a product, particularly when it's still in the early phases. So, you know, we're very happy with that balance that we're striking this year.

Understood.

Thank you.

Thank you. We will now take the next question. This is from Sophia Grace-Burn-Nielsen from JP Morgan. Please go ahead.

Good afternoon. Thanks for taking my question. Just one on sculpture. So in terms of market share development, how have we seen that evolve over the course of the year in the biostimulated category? Are we seeing more of an impact of growth from market expansion in terms of interest in collagen simulation or are there also substantial market share gains? what's your expectation of how this outlook could look in China as we continue to see more competitor entrants?

Yeah so overall we're extremely pleased with Sculptra as you saw from from our results fillers and biostimulators they achieved you know 914 million dollars up 8.5% we think that particularly the Sculptra part performs really well I think what we have seen is in certain markets are just astonishing, phenomenal launch. I think sculpture, we made the decision in China that it was going to be positioned as a significant premium product. We feel we have the science. I think we have the safety and other track records. We did enormous amount of training. It continues to do extremely well. Is there a lot of competition? Yeah, I think there were six when we started and 23 now, but I still see that very strong performance. All our portfolio, whether it's in China and Korea or in many other markets, we're one of many. We're used to that. The key thing is we're not one of many when it comes to premium, science-backed, high-quality, predictable outcomes. So that's what is the really opportunity that is important. We also look at reorder rates in China, very, very sound reorder rates. So I feel very good about it, but we can't stay too optimistic without every single day being a little bit paranoid about all the competition. And I'm really looking at reorder rates. I'm looking at the growth rate. And if I look at that and I look at this team that is not only able to deliver phenomenal Cedarfield performance, but also on Sculptra has really shown the way for all of us, how strong, but they've also shown what the potential of this product. Yes, it's probably going to get even more competitive. But if you're premium, high signs, clearly differentiated, has the best product, I'm sure we'll do fine.

Thank you. We will now take our next question. This is from Thibaut Bouturin from Morgan Stanley. Please go ahead.

Thank you. Just a question on the overall fillers and buy stimulator outlook. The annual growth for this combined franchise was around 7% to 9% range over 2024, 2025, and 2026 should also be in that range based on your indication. But if we look at the composition of sales within that bucket, it has changed a lot over the period. Fields have been a bit softer. Skiltra has had a very, very strong performance. And now, I think it's approaching close to half of revenues.

So should we expect to see an acceleration of this category as Skiltra is representing a larger share of of revenues and having more of the growth so basically when you think about the overall bucket should we see a growth acceleration in coming years well we reported combined and we also look at it combined because we are seeing that consumer preference has changed for some fillers there's less demand or there's more price competition and for sculptor we continue to see very strong demand. And consumers are shifting a bit more to skin quality, natural, to the fact of stimulating your own collagen. So Skolta has a lot of the features that it has. I'm not going to predict what the filler part of this is going to do. Some people say it's stabilized. Some say we've seen the the the nanny of that what we see is it seems to be more stable but the most important which is also what we're doing is you need to continue to innovate we're coming out with restylane shape we're coming out in china my restylane volume we're celebrating the 30 years of the restylane range we continue basically to differentiate but i don't think that it's going to be accelerating thank you thank you Fleming I think this was the the last question and before we wrap up the call I would actually perfect you so that you can wrap up the webcast yeah first of all thank them for your time and your questions today one clarifying thing I saw today that is very important for you to understand. When you're a high growth company, you don't give people their full budget from the beginning of the year. People come and compete for the last 20% or 10% of their budget so we can direct growth and investment to where we see most growth opportunities. Yes, there's always part of the business, whether it's the fillers in certain countries or other products in other countries, but I think whether you look at our mature prescription portfolio, whether you look at our overall performance in fillers and buyers tumors, we continue to do really well. And the good news is you can always shift resources around and having a broad-based, actually the broadest-based portfolio gives you a lot of leeway to continue to drive growth and allocate resource in an appropriate manner. So there's many, many people behind and many reasons behind that we delivered record net sales for the first nine months of the year. But we have a team that is totally execution focused that also can deal with adverse geopolitical terrorists and other things and find ways to still show very strong growth. How do we see that? It's a very broad-based growth. I think most of our top 10 countries showed double-digit growth. We had also double-digit growth across our product categories and across the geographies. U.S. was a little bit stronger this time than international, but both of them very impressive results. We like innovation. We We like signs. We like tokens. So the CEO's skin health fits very well, strategically. We found it was financially attractive. And I think it speaks to our wheelhouse and we will increase our customer base, our product offering. And we think that's very important. We are very confident in our growth trajectory. We will continue to invest behind the growth opportunities we have. And we will continue to see that we are very optimistic about the outlook, also why we increased the guidance for the remainder of 2026 to 22.5 to 23.5%. I think both the first nine months and the third quarter showed very strong results. And with that, I first of all would thank you for your patience, but once again, thank the amazing team we have at Gilderma that drives these results.