Genomma Lab Internacional (LABB) Q3 2024 earnings summary

Executive summary

• Net sales rose 15.9% year-over-year to MXN 5.093 billion, with strong growth in Mexico, Brazil, Argentina, the US, and Central America, and sales recovery in Argentina.

• EPS increased 81.6% to MXN 0.66, and EBITDA margin expanded to 23.7%, up 245 basis points, driven by productivity initiatives and manufacturing efficiencies.

• Free cash flow reached a record MXN 2,404 million for the trailing twelve months, up 68% year-on-year.

• 73% of sales maintained or gained market share, and 92% of sales outpaced inflation.

• All key metrics surpassed last year, previous periods, and internal targets.

Financial highlights

• Gross profit increased 19.3% year-over-year to MXN 3,272 million, with a margin of 64.3%.

• Net sales reached MXN 5.093 billion, up 16% year-on-year.

• EBITDA margin expanded by 245 basis points to 23.7%.

• Net income surged 78.1% year-on-year to MXN 660.1 million; EPS grew 81.6%.

• Free cash flow for the last twelve months increased 68% year-on-year to MXN 2,404 million.

Outlook and guidance

• EBITDA margin expected to average 24% through 2025, with Q4 2024 guidance between 23% and 24%.

• Margin improvements above 24% will be reinvested to drive top-line growth.

• CapEx will focus on maintenance and innovation only, with further margin and cash flow improvements expected in 2025.

• Guidance does not depend on recent GMP approvals, but upside is possible.

• Focus remains on strengthening core brands and achieving MXN 1.8 billion in annual cost savings by 2027.