Fagron delivers strong topline growth of 18.8% and an increase in REBITDA of 13.1% for the first half of 2022

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Nazareth (Belgium)/Rotterdam (The Netherlands), 4 August 2022 – 7.00 AM CET

Fagron delivers strong topline growth of 18.8% and an increase in REBITDA of 13.1% for the first half of 2022

Fagron, the leading global player in pharmaceutical compounding today publishes its half year results for the period ending 30 June 2022.

Key Highlights

  • Organic revenue growth of 6.9% at CER with total revenue growth of 10.9% at CER (18.8% reported) to €328.6 million
  • Revenue development in EMEA stabilizing; steady revenue growth in Latin America and very strong performance in North America
  • REBITDA increased by 13.1% to €63.3 million with a margin of 19.3%
  • Free cashflow increased by 44.3% to €31.9 million
  • Earnings per share increased by 29.7% to €0.48
  • Four acquisitions completed in the period followed by the 503B facility in Boston in July
  • Leverage ratio of 2.2x provides sufficient headroom to capture future opportunities
  • Solid progress on our sustainability agenda with 21.5% reduction of greenhouse gas intensity compared to 2019
  • Excluding the impact of the Boston acquisition, the FY 2022 revenue expectation increased to between €670 and €690 million with higher REBITDA margin in H2 compared to H1

Rafael Padilla, CEO of Fagron commented

“Our strong focus on execution continued to deliver excellent results in the first half of 2022, despite the challenging macroeconomic environment, with turnover increasing 10.9% at constant exchange rates and growth across all regions, specifically in the US. The sustained commercial momentum and broad-based growth in each region reflects continued strong customer demand across the attractive growth markets we serve. REBITDA increased 13.1%, and as a percentage of turnover decreased 90bps to 19.3%, mainly due to delays in the passing on of cost increases in certain countries in EMEA and increased competition in Latin America, both resulting from inflationary and supply chain pressures.

We remain committed to ensuring quality across all our operations, especially in light of the communication from the FDA regarding the St. Paul facility in June 2022. We have submitted the remedial action plan and are working closely with the FDA to ensure a satisfactory conclusion of the audit.

We have also progressed our buy & build acquisition strategy with the addition of Letco (US), Pharma-pack (Belgium), Curaphar (NL) and Hiperscan (Germany) in the first half of the year, followed by the recently announced purchase of a 503B facility in Boston. This acquisition provides us with an exceptional platform to further grow our business on the East Coast. We remain committed to disciplined execution of our M&A strategy as we seek to grow our footprint and capabilities globally.

Another area of key focus for us is driving operational excellence, and to this end I am delighted to welcome Vera Bakker as Fagron’s Chief Operating Officer and member of the Executive Leadership Team. Vera joined us from Unilever and stepped down as non-executive director from our Board with immediate effect. As Vera’s replacement, the Board is delighted to co-opt Els Vandecandelaere as independent non-executive director, who will strengthen our HR expertise in the Board.

For the second half of the year, we expect continued strong revenue growth and our profitability to improve compared to the first half of the year excluding the temporary dilutive impact of the Boston acquisition. We remain confident in our ability to meet our mid-term guidance as the secular trends and underlying fundamentals in our industry are strong and we are progressing with the implementation of our strategic priorities.

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Fagron delivers strong topline growth of 18.8% and an increase in REBITDA of 13.1% for the first half of 2022