Avantor (AVTR) Q4 2024 earnings summary

Executive summary

• Achieved a return to organic growth in Q4 2024, with bioprocessing delivering high single-digit organic growth and Laboratory Solutions remaining stable.

• Adjusted EBITDA margin expanded to 18.2% in Q4, the highest in over a year, with sequential and year-over-year improvements in adjusted EPS and free cash flow.

• Adjusted EPS grew to $0.27 in Q4 and $0.99 for the full year, meeting guidance midpoint.

• Free cash flow was $222M in Q4 and $768M for the year, with conversion above 110%, supporting significant debt reduction.

• Paid down over $1.3B in debt in 2024, reducing net leverage to 3.2x adjusted EBITDA.

Financial highlights

• Q4 reported revenue: $1.69B, with 1% organic growth; full-year revenue: $6.78B, down 3% reported and 2% organic.

• Adjusted gross profit: $564M in Q4 (33.4% margin); full-year adjusted gross profit: $2.29B (33.8% margin).

• Adjusted EBITDA: $308M in Q4 (18.2% margin); $1.2B for 2024 (17.7% margin).

• Adjusted operating income: $279M in Q4 (16.6% margin); $1.09B for 2024 (16.1% margin).

• Q4 diluted GAAP EPS was $0.73; adjusted EPS was $0.27; full-year diluted GAAP EPS was $1.04; adjusted EPS was $0.99.

Outlook and guidance

• 2025 guidance: organic revenue growth of 1%-3%; reported revenue decline of -3% to -1% due to divestiture and FX headwinds.

• Adjusted EBITDA margin expected at 18%-19%, with a target of 20% by end of 2025 (19.6% adjusted for divestiture impact).

• Adjusted EPS guidance: $1.02-$1.10, representing 10% growth at the midpoint.

• Free cash flow expected at $650M-$700M, about 95% conversion of adjusted net income.

• Q1 2025: organic revenue expected to be flat; Lab Solutions flat, Bioscience Production modestly up, bioprocessing mid to high single-digit growth.