Cantourage Group SE (HIGH) Earnings Call Transcript & Summary

Hello, and a warm welcome to the H1 Earnings Call 2026 of Cantourage Group SE. I would like to welcome the company's CEO, Philip Schetter; and CFO, Monique Jaqqam, who will guide us through the figures in a moment, followed by a Q&A session via audio line and chat. And with that, I hand over to you, Mr. Schetter.

Thank you, and good morning, everyone, and thanks for joining Cantourage's Q2 2026 Results Call. In a nutshell, Q2 was an important step for us. And today, we want to show you why. Why we believe that our business has improved, especially in profitability, and in how we are positioned internationally. So here's how we'll walk you through it. First, the strategic developments in our core European markets. Then we'll get into financials, into more detail. And finally, our priorities for 2026 and beyond. Let's start with the key message of the quarter. Our shift towards higher-margin business is delivering. Revenue came in at EUR 21.8 million. That's below prior year quarter, but that's by design, not by accident. In Germany, we deliberately pulled back on our lower-margin business and put more focus on higher-margin premium products. And you can already see that effect clearly in our profitability. Our EBITDA margin rose to 13.1%, almost double where we were a year ago. So we're generating significantly more EBITDA from a lower revenue base. That's really important for us because it shows our focus on earnings quality is actually working. At the same time, we're continuing to strengthen our differentiation through our own proprietary products and brands. But first, let's look at how our revenue mix has changed. One of the biggest developments in Q2 is just how much more diversified our business has become. We are by now a pan-European player. International markets made up about 54% of group revenue in the quarter. A year ago, that number was only around 16%. So our Q2 mix now looks like this: roughly 46% in Germany, 44% in the U.K. and 10% in Poland. That's a fundamental change in the makeup of this company. As mentioned before, we are now a pan-European player. Germany is our home market and very important for us, but our dependence on a single market is dropping significantly. Again, we are a pan-European player. Today, we operate mainly across 5 European countries, but we still see real opportunity ahead in markets like France, Italy and Spain. This diversification gives us several growth platforms and makes this whole business more resilient. So let's look at our 3 most important markets in detail, kicking it off with Germany. Germany, as of today, is still Europe's largest medical cannabis market, and it's still at the core of everything we do. The market really accelerated after regulatory change in April 2024. Medical cannabis is no longer classified as a narcotic, and in general, any doctor can prescribe it. That has made access for patients much easier and has driven strong market growth. At the same time, competition has intensified a lot. There's now a large and increasingly diverse offering out there across all product categories. For us, that means we need to differentiate. We don't believe in creating sustainable value by chasing volume. Our focus is on attractive products, pharmaceutical quality, innovation and margins that hold up. And the structural opportunity here is still substantial. Germany has a population of around 84 million people, and an estimated potential patient pool of roughly 70 million patients. That's factoring those large indications where cannabis can actually be prescribed to. And right now, we're seeing roughly maybe 0.5 million to 1 million medical cannabis patients. So all in all, the penetration of the potential patient pool is still less than 3%. Which means, despite the strong growth we've already seen, we think there's still a lot of room for this market to develop. And there's an important discussion happening right now around statutory health insurance reimbursement. So here's the key point on the proposed reform of the GKV. It mainly changes reimbursement pathways, but not patient access. And for us, that distinction really matters. More than 90% of Cantourage flower sales in Germany are self-pay prescriptions as far as we can estimate, so we expect the direct financial impact on our existing business to be very limited. And importantly, all those changes recently were also further clarified. Existing patients on cannabis extracts or other product formats, like dronabinol, can continue their therapy without switching to approved medicine, a finished medicine first. That gives patients and physicians more legal certainty and continuity of care. Under those proposed changes, cannabis flowers will generally no longer be reimbursed, but they can still be prescribed. And where approved finished medicines exist, they're expected to be preferred over compound products. But right now, there are only a few approved finished medicines, and they cover very narrow indications. For a lot of indications, there simply isn't an alternative to dronabinol or other product formats. Hence, we expect compounded cannabis therapies to remain an important treatment option. And there could actually be an opportunity for us here, too, if some patients currently on reimbursed therapies need to move in the self-pay market, and we like our chances that they will switch to a Cantourage product. So our position in the German market lines up very well with this, and we like the decision we've taken in the past, a very patient-oriented but also self-pay market-oriented product portfolio. And that brings us also to GRAMZ. GRAMZ. is our medical cannabis brand, and it's an important milestone for us. It builds on the core strength of our platform, our global sourcing network, our pharmaceutical expertise and the distribution capabilities we've already built. And it leverages our insights and data we created, operating as distributors and offering telemedicine platforms in multiple markets. Our ambition is simple: premium medical quality at attractive price points by combining curated genetics with a scalable international supply network. But strategically, GRAMZ. is about something bigger than that. It moves us further along the value chain from distributor towards brand owner. That strengthens our differentiation, and it gives us the chance to capture more value and improve our margin potential long term. And the initial response was really encouraging. The first batches sold out quickly, and GRAMZ. generated more than EUR 0.5 million in revenue shortly after launch. And we see that as a blueprint. The infrastructure, the market insights we're building here, can support future brands and further product innovations down the line. So Germany remains a key pillar of our strategy, but it's increasingly complemented by strong international growth. And the best example for that is the United Kingdom. The U.K. has become our second major revenue pillar. In Q2, U.K. revenue grew from EUR 3.9 million to EUR 9.6 million. That's year-on-year growth of about roughly 150%. So the U.K. business is now almost at the same revenue level as Germany, and very profitable. And we still see substantial structural potential there. The U.K. is Europe's largest private medical cannabis market. Nearly all patients are treated through private clinics. NHS prescriptions are still limited to very, very, very few exceptional cases. And that market structure actually fits very well with our experience and capabilities. We are seeing digital cannabis clinics and pharmacies expand and more high-quality EU GMP products becoming available. Both are supporting further market development. At the same time, penetration, similar to Germany, is still low. U.K. population of roughly 70 million people, more than 5 million potential patients and currently roughly 100,000 medical cannabis patients. So penetration still very, very low. Addressable market is still significant. Our third major market is Poland. Similar story. However, Poland is [ similar to ] Germany and the U.K. in absolute terms, but it's developing very dynamically. Also, our revenue grew there from EUR 0.6 million to EUR 2.1 million last quarter. That's about 250% growth year-on-year. What makes Poland particularly attractive is that the medical cannabis market in Poland is entirely import dependent. And at the same time, patient and prescription numbers have grown significantly since legalization in 2017, driven by a high unmet medical need and growing acceptance, both among doctors and patients. The market did see some temporary pressure due to stricter telemedicine restrictions, but the market bounced back and is on a growth path. So all in all, similar story to Germany and the U.K. Lots of potential in Poland, and we like our chances being at the forefront of that movement. In total, looking at the Cantourage opportunity, just looking at the different markets we've just talked about, huge potential in the future. We are active in the 3 largest and most dynamic cannabis markets in Europe. And as outlined, looking at the sheer numbers, lots of growth potential just for Cantourage. And that's, by the way, also supported looking at the, let's say, wider world, we firmly believe cannabis can be used to treat several different indications. Here shown, larger ones like sleep disorder, anxiety disorder, chronic pain. Currently, lots of indications where people are not thinking about using cannabis as a remedy, but that's the future. People looking to treat their indications, their illnesses with alternative therapies and cannabis can be the one helping lots of people around the globe, or, in particular, in our 3 target markets: Germany, U.K. and Poland. Lots and lots of potential, and for Cantourage that creates a significant long-term opportunity. We already built the sourcing, the distribution and the market infrastructure. And we believe that puts us in a strong position to capture growth as these markets continue to develop. And with that strategic context set, we believe we're firmly positioned to further drive profitable growth in the foreseeable future. And let's talk financials now. I'm happy to hand over to Monique, our CFO.

Thank you, Philip. The financial results on this slide clearly demonstrate the impact of the strategic decisions you've just heard about. Let me start with revenue. Revenue amounted to EUR 21.8 million compared with EUR 27.8 million in the second quarter of 2025. That is a decline of approximately 22%. But this decline needs to be seen in the context of our deliberate decision to reduce lower-margin business in Germany. The more important development is, therefore, what happened to profitability. Our gross margin increased from 28.5% to 36.4%. That is an improvement of 7.9 percentage points year-on-year. And despite the lower revenue base, EBITDA increased from EUR 2 million to EUR 2.9 million. EBITDA margin increased from 7% to 13.1%. So the financial equation is very clear: lower revenue, but substantially higher margins and higher EBITDA. For us, this is strong evidence that the premium strategy is delivering the intended results. We are prioritizing the quality of revenue and sustainable profitability rather than pursuing top line growth at any cost. And this improvement in operating profitability is supported by a very solid financial position. Manuel, shall we move on? Thank you. Our balance sheet provides us with significant flexibility to continue executing our strategy. As of June 30, 2026, our equity ratio stood at 71.3%, and our net cash position increased to EUR 9.3 million. This compares with EUR 1.9 million in the prior year period. The strong capital base is important for 2 reasons. First, it provides stability and resilience as we operate in markets that are developing rapidly. And second, it gives us the financial flexibility to invest in our future growth. That includes the development of proprietary brands, new product formats, further international expansion and further development of our digital healthcare capabilities. So if we summarize Q2 from a financial perspective, we see 3 important achievements: we significantly expanded our margins, we increased EBITDA despite lower revenue and we maintained a very strong financial position. This gives us a solid foundation for the next stage of our development. And with that, I hand back to Philip for our strategic priorities for 2026 and beyond.

We cannot hear you, Mr. Schetter.

Now I'm back on. Sorry for that. So what's in store for 2026 and beyond? So our utmost objective is profitable growth and further diversify our product service -- our products and our service portfolio. We quickly talked about GRAMZ., our flower brand in Germany. We're currently working on introducing a few additional brands with, let's say, the similar underlying rationale, expands our sourcing opportunities. We can put our cash to use in order to boost our profitability and our margins. So that's something we're currently working on hard. And we'll also leverage our Cantourage brands in introducing additional form factors. Form factors here, we're talking about edibles, vapes, hash, resin, rosin, all types of different form factors that we're currently about to introduce in our European target markets, especially in the U.K. and in Germany. In addition to that, we're working on improving our telemedicine offering in Germany to further expand pathways for patients in order to start a cannabis therapy. Stay tuned. We'll have some news, I believe, in Q4 on that. And all in all, and those innovations, be it brands, be it form factors, but also our service offerings, are boosted or underlined by our data analytics. And by now, we've been doing it for quite some time. Active in different European markets, being an importer, manufacturer, distributor. But also our telemedicine offerings, we've compiled lots and lots of data, which we'll systematically analyze in order to also inform our strategy and decision-making in the future. So any innovation that'll come out in the next couple of weeks and months, but also the years to come is actually spurred by our data analytics, which we're currently building out. That's it from us.

[Operator Instructions] And we already have 2 risen hands. Ellis Acklin.

Can you hear me now?

Yes, we can hear you now.

Apologies for that. I have 2 topics to kick things off here. The first one, I'll go one at a time. In the revenue reset, it's quite clear. This was a deliberate chance to reset your product mix. Maybe you could talk a little bit also about German demand, if anything specifically has changed there at all, that we should be aware of? Or is it really just the [ profit ] mix? And then, finally, on that topic, if Q2 revenue level can be seen as a new base for Germany going forward?

So the demand -- the German market is there. I also say that it still sustained momentum. However, also mainly the market segments that are growing are, and we call it value segment, where there are currently very limited to no margins. So hence, we made the decision to change our portfolio mix, rather playing in the market segments where we can actually make some profits and earn some cash. So that's by design. Currently, working also in changing our operating model, also changing our underlying financial model to potentially reenter that segment, but that's ongoing. For the time being, we feel very comfortable in the position we're in, making very healthy margins with, let's say, a decent top line in Germany. The top line we saw in Q1 and also Q2, if you read also, let's say, our -- or were in our Q1 earnings call, so revenue stabilized. Currently, at that level, we're seeing -- we foresee potentially an uptick in the upcoming quarters, as we've, let's say, reconsidered or reconfigured our portfolio and also now are ordering more biomass in order to get into that premium segment. That usually takes some time to re-ramp up production or cultivation, but we foresee that we have an opportunity to grow our top line also with their premium strategy in Germany. And also, for example, our brands like GRAMZ. will come into play. So the first couple of drops happen in Q2. Also seeing the question from [ Johannes Wilde ]. We're currently also ramping up the supply chain to bring more GRAMZ. products to the markets in Q3 and Q4. I hope that answers your question.

Okay. Yes. And then my second question, it's a margin bridge question pertaining to the gross margin. I mean, that was a great uptick there. If you can maybe just give a little bit more color, if that's traced, how much is traced to the mix pruning, maybe supplier terms, geographic mix, introduction of GRAMZ.? Just maybe connect a few dots there would be helpful.

Yes. Maybe then, Monique -- Monique, you want to take that question? Yes, go ahead, please.

Yes. I would say that the majority of that uptake is related to the segmentation of the products, but there's also a portion that relates to supplier renegotiations of terms. But the majority is really product mix driven.

There is another risen hand from Ingo Schmidt.

Congratulations on the strong results and impressive margin expansion in this quarter. I have 2 quick questions. First, on U.K. Revenue soared by 146%, almost matching Germany. That's great. Do you expect this growth momentum to continue at a similar pace in H2? Or are you running into supply and capacity bottlenecks? And second, on M&A and your net cash position. Given last recent takeover news in the cannabis market, how do you view your position? Are you actively looking at M&A to buy smaller competitors? Or given your high profitability, do you now see Cantourage itself as an attractive takeover target?

So with regards to the U.K., we like our chances, let's say, to further build on that momentum. The latest news, also the Home Office, so the regulator in the U.K. tightened regulation around product supply that plays into Cantourage's cards. We have a very robust, highly compliant supply chain, whereas others are cutting corners to a certain degree. So we do like our chances to further build our position in the U.K., and that could potentially also show in the U.K. performance in Q3 and Q4. We like our chances to continuing that trend, also by introducing new product formats fairly soon. So stay tuned. M&A, as of now, we feel very comfortable with our infrastructure and the projects we're going to be running to further build our license stack. We have very preliminary talks to potentially do a forward integration to increase our wholesale or distribution capabilities in, let's say, new or additional European markets. Yes. So we're coming at least from our position, from a position of strength. So rather, an active player, being acquired, it's not something we're currently discussing.

We have another risen hand from Tobias Koesters.

Can you hear me?

We can hear you.

Congratulations for the results. What I am missing, you had indicated guidance for '26 would come in August. And so far, my question, is it still coming, and when? Second question, when will we see new product on the Telecan platform? When will they go live? And third question, since the beginning of the year, you speak about France and other countries, but which countries are next? And what is the time line, please?

So with regards to guidance, so August is still young, not even the middle of the month, and we're in the process of, let's say, readjusting or redoing our forecast, which will inform also potentially making a guidance soon. So let's wait and see, so to speak. Second question was around our telemedicine offerings, in particular in Germany, and expansion of our product portfolio. So we're planning to do a step-by-step approach, as mentioned, we call it Telecan 3.0 internally. Should go live in Q4, which will center around cannabis initially, but will have, at least our expectation, an improved patient experience, and, by the way, also an improved doctor and pharmacy experience. And building on that, we're planning to expand or extend our product portfolio in 2027, then basically using that building block and improved cannabis ecosystem and then extending that to additional medicines in 2027. And that's also a time line for additional markets. So Spain, Italy and France. France are now still finalizing the regulatory framework and an underlying reimbursement scheme. This is pretty much delayed. Similar to Spain, it's a tricky market. The framework was delayed again. By now, there is a first product that might enter the market, but the market is not that attractive as of now. So we have rather hopes for entering Italy, where we've started an initiative to register products, but this is rather something for 2027 or 2028. So those markets will take time to develop, but also will take time from us in order to get into those markets. So our focus is on Germany, U.K. and Poland for 2026 and 2027. But as mentioned, I mean, lots of potential there. We like our chances to do quite some damage in those markets. I hope that answered your question.

There is another risen hand from Ellis Acklin again.

Can you hear me now?

We can hear you.

Excellent. So I maybe have some questions for Monique here at best. Can you maybe talk a little bit about the working capital development during the first 6 months of the year, especially with regards to how you've been hinting to the market that you're going to take on a bit more inventories? And then maybe as a second topic, if you could, update us on the reporting, housekeeping items that have been discussed throughout the year, where those stand?

Okay. Yes. Let's start with the working capital. So if you look at the end of last year, you can actually see that our equity ratios slightly decreased. The reason being that our balance sheet has expanded basically on both sides: outstanding trade receivables, specifically relating to the increase in revenue in the U.K. And also on the liability side, the reason there being that as we are -- we do continue to also look at serving the value segment, and we are doing more spot deals. So where we try to find deals or products at a fixed but very low price, and that normally comes with the fact that we're going to have to prepay a certain amount or the whole raw material, where in the past, we had a lot more products, where we were sharing the risk with the grower through revenue share model. So that's basically the reason for that. And we've also come to agreements with our contract manufacturers that lowered rates in exchange for being paid a bit earlier. So that's on the working capital side. With regards to reporting, in hindsight, the assessment in June was a bit too ambitious as to the 2025 consolidated financial statements. The audit review is taking longer and is more time consuming than I expected. There are no new risks that have appeared. It's just we need to go through the motions, and we are currently expecting completion in early September.