Richards Group (RIC) investor relations material

Executive summary

• Revenue increased 5.2% year-over-year to $221.6M for the first half of 2026, driven by 27.2% healthcare growth and recent acquisitions, while packaging revenue declined 14.4%.

• Net income rose to $19.8M from $8.6M year-over-year, aided by $3.1M in IEEPA tariff refunds and absence of prior year non-recurring costs.

• Gross margins improved due to tariff refunds, operational efficiencies, and acquisitions, with gross profit up 18% to $98.6M and margin rising to 44.5%.

• Adjusted EBITDAAL grew 10% to $29.4M, with healthcare up 30.4% and packaging down 10.2%.

• Completed significant share buybacks, including 770,000 shares at CAD 28.50 and 450,926 shares under NCIB, impacting capital allocation and leverage.

Financial highlights

• Healthcare segment revenue up 27.2% for the first half, with aesthetics up 50% year-to-date, pharma up 8%, and other healthcare up 38%.

• Packaging segment revenue declined 14.4% for the first half, with cosmetic and food & beverage sub-segments both declining double digits.

• Gross profit increased 18% year-over-year to $98.6M, with gross margin rising to 44.5% from 40.4%.

• Free cash flow conversion at 67% for the quarter and 65% year-to-date, improved from last year, aided by tariff refunds.

• Leverage ratio increased to 1.5x, gross debt at CAD 95 million, net debt at CAD 85 million, due to acquisitions and share buybacks.

Outlook and guidance

• Management expects continued healthcare growth, both organic and through acquisitions, while packaging remains challenged by macroeconomic factors.

• Anticipate stabilization or modest growth in packaging in the second half, with June showing the strongest month in the quarter.

• Ongoing integration of recent acquisitions (DermapenWorld, PharmaSystems) expected to drive future efficiencies and margin improvement.

• Targeting 15% adjusted EBITDA margin as integration and operational initiatives mature.

• Financial performance is expected to support ongoing working capital, capital expenditures, and dividends through 2026.