Fagron (FAGR) H1 2024 earnings summary

Executive summary

• Achieved 15.5% reported revenue growth and 12.8% organic growth at CER for H1 2024, led by North America and Compounding Services, with successful acquisitions contributing.

• EBITDA/REBITDA margin increased by 30 basis points to 19.7%, reflecting acquisition synergies and operational excellence.

• Net profit grew 22.1% to €40.7 million; earnings per share rose 22.2% to €0.55.

• Upgraded full-year 2024 revenue guidance to €850–€870 million, with expected year-on-year profitability improvement.

• Strong free cash flow generation with 53.6%–54% conversion (adjusted for factoring and one-off capex); net debt to EBITDA ratio at 1.5x.

Financial highlights

• H1 2024 revenue reached €429.3 million, up 15.5% year-over-year; organic growth at CER was 12.8%.

• REBITDA increased 17.2% to €84.6 million, with margin expanding 30bps to 19.7%.

• Gross margin improved by up to 90bps, mainly from product mix benefits in North America and Brazil.

• Operating cash flow (excluding factoring) rose 34.7% to €58.3 million.

• Free cash flow decreased 4.2% to €21.4 million, mainly due to phasing out of factoring and one-off capex.

Outlook and guidance

• Upgraded 2024 revenue guidance to €850–€870 million, with margin and profitability improvement expected year-on-year.

• Maintenance capex guided at 3.0–3.5% of revenue, excluding announced projects.

• Long-term working capital guidance of 12.5%–13.5% expected to be met by year-end.