Azelis Group (AZE) Q1 2025 TU earnings summary

Executive summary

• Q1 2025 revenue reached EUR 1.1bn, up 4.5% year-over-year, with 2.5% organic growth and 2.2% from acquisitions.

• Organic revenue growth momentum continued for the third consecutive quarter, though growth trends varied by region and end market.

• Margin pressure resulted from cost inflation, higher operating costs, and slower-than-expected growth, prompting EUR 20m in annualized cost-saving measures.

• Volatility and uncertainty increased sharply in March, especially in the U.S., due to new tariff announcements and global trade disruptions.

• Management remains confident in navigating challenges and supporting customers amid ongoing volatility.

Financial highlights

• Gross profit: EUR 263.8m, up 1.2% year-on-year; gross margin contracted by 77 bps to 24.0%.

• Adjusted EBITA/EBITDA: EUR 119.7m/120m, down 3.8% year-on-year; margin contracted by 93 bps to 10.9%.

• Free cash flow increased to EUR 120.3m, with cash flow conversion at 99.7%.

• Net working capital to sales: 14.7% at end of March 2025.

• Leverage ratio stable at 2.9x since December, up from 2.7x in Q1 2024.

Outlook and guidance

• Near-term outlook remains highly uncertain due to macro volatility, tariffs, and shifting demand.

• Order patterns have become more frequent but lower in value, reflecting customer caution.

• Positive organic growth expected to continue, but at a slower pace than anticipated.

• EUR 20m in annualized cost savings to be realized, with first effects expected from May/June.

• The market for specialty chemical and food ingredient distribution remains highly attractive.