NEUCA (NEU) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 5% YoY to PLN 11.81bn; EBITDA increased 11% to PLN 379.7m and net profit rose 7% to PLN 159.5m. Adjusted net profit, excluding one-time items, fell 9% to PLN 149.0m.

• H2 returned to YoY profit growth; Q4 EBITDA rose 45% to PLN 85.2m and net profit increased 117% to PLN 32.8m.

• Core wholesale remained the largest business, while pharmaceutical manufacturing and patient-focused businesses expanded; clinical-trial sales more than doubled.

Financial highlights

• Gross profit on sales increased 16% to PLN 1,307.4m; gross sales margin expanded 1.1 pp to 11.1%.

• Operating profit rose 9% to PLN 265.1m; reported net profit was PLN 159.5m versus PLN 149.4m in 2022.

• Financial expenses increased 71% to PLN 97.0m, mainly reflecting a PLN 33.6m increase in interest expense; sales and overhead expenses rose 14% and 25%, respectively.

• Adjusted EBIT increased 1% to PLN 249.7m and adjusted EBITDA rose 5% to PLN 364.3m; adjusted net profit was PLN 149.0m, down 9% YoY.

Outlook and guidance

• The Polish pharmacy wholesale market is expected to grow 5–6% in 2024; inflation is expected to remain an elevated contributor to market growth.

• 2024 investment spending is expected to be lower than in 2023, focused mainly on replacement projects; funding is expected from internal resources, with possible bank financing.

• 2024 priorities include expanding pharmacy partner programmes, pharmaceutical care, Synoptis Pharma’s drug portfolio, patient services and clinical-trial capabilities.

• Synoptis Pharma plans launches across pain, allergy, chronic-disease and seasonal-infection categories; development of medical-marijuana products is also planned.