Puig Brands (PUIG) H2 2024 earnings summary

Executive summary

• Achieved record net revenue of €4.8 billion in 2024, up 11.3% reported and 10.9% like-for-like, outpacing the premium beauty market and IPO guidance.

• Adjusted EBITDA reached €969 million (20.2% margin), up 12.3% year-over-year and slightly above guidance; adjusted net profit was €551 million (11.5% of sales), up 15.5% year-over-year.

• Reported net profit hit €531 million, up 41.1% from 2023, with exceptional free cash flow generation and leverage reduced to 1.1x net debt/adjusted EBITDA.

• Free cash flow conversion improved to 65% of adjusted EBITDA, supported by inventory optimization and IPO proceeds.

• Major strategic moves included a €2.7 billion IPO, full buyout of Byredo, increased Charlotte Tilbury stake to 78.5%, and acquisition of 65% of Dr. Barbara Sturm.

Financial highlights

• Net revenue grew 11.3% year-over-year to €4.8 billion, with 1.2% growth from the Dr. Barbara Sturm acquisition and a -0.8% FX impact.

• Gross margin at 74.9%, up 20bps year-over-year, among the highest in the industry.

• Adjusted EBITDA margin improved to 20.2%, up 20bps from 2023.

• Adjusted net profit margin rose to 11.5%; reported net profit up 41.1% to €531 million.

• Free cash flow from operations was €634 million, with a 65% conversion over adjusted EBITDA.

Outlook and guidance

• Maintains medium-term guidance of high single-digit like-for-like revenue growth.

• 2025 net revenue like-for-like growth expected in the 6%-8% range, with upside in fragrances and risks in makeup due to dupes and market moderation.

• Adjusted EBITDA margin improvement targeted in line with 2024; A&P investment to remain at 31%-32.5% of net revenue.

• Dividend payout ratio to remain at ~40%, with €212 million proposed for 2024.

• Selective M&A to continue, with a robust innovation pipeline for 2025 focused on the second half.