Blau Farmacêutica (BLAU3) Q2 2024 earnings summary

Executive summary

• Achieved record net revenue of BRL 465 million in 2Q24, up 28% year-over-year, driven by strong performance in both Hospital and Retail + Aesthetics + Plasma segments.

• Hospital segment revenue grew 23% year-over-year, while Retail + Aesthetics + Plasma surged 62% year-over-year.

• Gross margin improved to 36.5%, up 320bps sequentially, with recurring EBITDA reaching BRL 91 million, up 41% quarter-over-quarter and margin at 19.6%.

• Recurring net income was BRL 52 million, up 23% sequentially, with margin of 11.2%, but down 26% year-over-year due to higher provisions and financial expenses.

• Cash conversion cycle reduced to 246 days, with inventories at 179 days after five consecutive quarterly reductions.

Financial highlights

• Net revenue reached BRL 465 million in 2Q24, a 28% increase year-over-year, with organic growth (excluding Bergamo) of 16%.

• Gross profit was BRL 170 million (+12% YoY, +42% QoQ), with margin expansion driven by lower replacement costs and higher volumes.

• Recurring EBITDA was BRL 91 million (+41% QoQ, +86% YoY), margin at 19.6%.

• Recurring net income was BRL 52 million (+23% QoQ, +100% YoY), adjusted net margin 11.2%.

• CAPEX was BRL 69 million in 2Q24, mainly for intangibles and equipment for new product lines.

Outlook and guidance

• Management expects continued growth from new product launches, international expansion, and further efficiency gains.

• Ongoing investments in R&D, capacity expansion, and international diversification to support future growth.

• Pipeline for 2024 includes launches with a total addressable market of BRL 714 million, and BRL 1.4 billion for 2025.