Avantor (AVTR) Q4 2022 earnings summary

Executive summary

• FY22 revenue was $7.512B; core organic revenue growth was 6.0%, while Adjusted EBITDA margin expanded ~110 bps to 20.9%.

• Growth came from biopharma and advanced technologies & applied materials, proprietary products and prior-year acquisitions; FX and COVID-19-related declines offset gains.

Financial highlights

• Revenue rose to $7,512.4M from $7,386.1M; reported growth was 1.7%, organic growth 2.4%, and organic growth excluding COVID-19 impacts 6.0%.

• Net income increased to $686.5M from $572.6M; operating income rose to $1,130.2M from $972.2M.

• Adjusted EBITDA increased to $1,570.7M from $1,458.6M; 2022 included $99.5M of M&A impact and a $60.5M unfavorable FX impact.

• Free cash flow was $710.2M, down $210.1M YoY, primarily reflecting lower operating cash flow and higher growth-related capital spending.

Outlook and guidance

• End markets were described as robust; priorities include deeper integration into customer workflows, new product development, geographic expansion, digital enhancement and efficiency-led margin growth.

• Capacity projects underway across North America, Europe and Asia include a cGMP distribution center in Ireland, a cGMP manufacturing center in Singapore and U.S. facility expansions.

• Management expects cash from operations and credit-facility availability to fund capital needs; future liquidity depends partly on financial performance and external factors.