Fagron realizes turnover of € 134.8 million

Financial results | 4 min read

Regulated information
Nazareth (Belgium)/Rotterdam (The Netherlands), 13 April 2021 – 7.00 am CET

Fagron realizes turnover of € 134.8 million

Strong operational performance in Latin and North America

Highlights of Q1-2021

  • Reported turnover decreased 4.8% on sharply weaker BRL, USD and MXN versus EUR
  • Turnover growth of 4.9% at constant exchange rates
  • Strong operational performance in North and Latin America despite fewer doctor’s visits and postponement of elective care
  • Strong COVID-19 related decrease of prescriptions impacted performance in EMEA
  • Wichita compounding facility on track; successful product launches offset lower demand due to COVID-19
  • Transition to new repackaging facility in Poland to start in second half of April

Rafael Padilla, CEO of Fagron: “As expected, the entire first quarter of 2021 was affected by far-reaching lockdowns in most of the regions where we are active, whilst the comparable year-earlier quarter was still virtually unaffected by COVID-19. In addition, currency effects had a downward impact on the reported turnover of our activities in North America and Latin America, while these regions showed a strong underlying operational performance. On balance Fagron as a whole realized slight organic turnover growth of 2.6% at constant exchange rates.

In almost all the countries where we are active elective care was scaled back and doctor’s visits were postponed, resulting in a decline in prescriptions across the market. This was clearly visible in EMEA in particular, where the number of prescriptions in the first quarter was lower not only compared to last year’s level but also compared to the fourth quarter of 2020. This mainly affected Compounding Services and Essentials. In the earlier stages of the pandemic, this effect was offset by an increase in demand for COVID-19-related products, however this was not the case during the quarter under review because the health sector is now better equipped to deal with the situation.

The development outlined above resulted in a decline in turnover of more than 7% in EMEA. Thanks to our strong product portfolio and positioning, Fagron EMEA will be able to benefit once measures are eased and the number of prescriptions starts to increase. Moreover, we have taken more steps in EMEA to further increase the organization’s efficiency. The transition of activities to the new GMP facility in Poland will commence in April with the facility representing an important step in the process to centralize the repackaging activities for EMEA.

Fagron Latin America realized strong organic growth of 21% at constant exchange rates. Although the countries where Fagron is active in this region were badly affected by COVID-19, pharmacies generally stayed open. Thanks to its scale and global network, Fagron is well equipped to cope with the challenging market conditions, as a result of which the company was able to improve its competitive position in these countries.

Fagron North America realized organic growth of more than 9% at constant exchange rates. Measures to contain COVID-19 vary strongly by region. During the first quarter of 2021, a number of states still had stringent restrictions in place, including important areas like California and the North East region, while other states started to reopen again. Although not yet back to pre-COVID-19 levels, we see elective care gradually returning once the measures are eased. During the quarter Fagron Sterile Services in Wichita once again successfully launched a number of new products, in response to COVID-19-related needs as well as general trends. Together with newly concluded contracts this gives us confidence that we will be able to further accelerate our growth in 2021.

All around the world vaccination programs will enable further relaxation of the restrictive measures, but the pace at which this is happening varies widely from region to region. This means that visibility continues to be limited by COVID-19. Our strong focus area’s – prevention, lifestyle and outsourcing of sterile compounding activities by hospitals – have become even more relevant as a result of the pandemic. Together with a more focused organization and further expansion of the product portfolio this means that we are in an excellent position to benefit once the health sector returns to normal levels. We reiterate our expectation for growth in both turnover and profitability for the full year 2021.”

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Fagron realizes turnover of € 134.8 million