Avantor (AVTR) Q4 2021 earnings summary

Executive summary

• FY21 net sales rose 15.5% to $7.386B; organic growth was 11.3%, led by core business demand and supported modestly by COVID-19-related sales.

• Strong growth across all end markets, especially biopharma; execution and proprietary-product mix supported gross and Adjusted EBITDA margin expansion.

Financial highlights

• Net income increased to $572.6M from $116.6M; operating income rose to $972.2M from $706.8M.

• Adjusted EBITDA increased to $1,458.6M from $1,141.6M; net sales were $7,386.1M versus $6,393.6M.

• Operating cash flow was $953.6M; free cash flow was $920.3M, up $52.1M YoY, including $77.8M of acquisition-related costs paid.

• FY21 net sales growth included 2.0% favorable FX and 2.2% M&A impact; organic net sales growth was 11.3%.

Outlook and guidance

• 2022 supply-chain capacity and footprint expansions were planned; management cited confidence in the 2022 outlook and long-term growth.

• Single-use platform was ~45% of bioproduction revenue versus 20% in 2017 and was expected to grow >20% annually; more than $8B of M&A capacity was anticipated through 2025.

• Target leverage range remained 2–4x Adjusted EBITDA while pursuing acquisitions in bioproduction, research workflows and clinical services.