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Fagron realized turnover growth of 14.5%; REBITDA increased to € 99.1 million
Nazareth (Belgium)/Rotterdam (the Netherlands), 7 February 2019
Organic turnover growth accelerated in the second half of the year
Highlights - Financial
- Turnover amounted to € 471.7 million in 2018, an increase of 14.5% CER
- Organic turnover growth accelerated to 10.1% CER in the second half of the year
- REBITDA increased to € 99.1 million (+8.8% CER)
- Strong operational cash flow of € 73.3 million
- Net financial debt/REBITDA ratio of 2.63 at the end of 2018
- Dividend proposal of € 0.12 per share
- Further growth of turnover and profitability expected in 2019
Strategic - Operational
- Strategic focus on innovation and quality provides competitive advantage in view of strict quality requirements
- Fagron Sterile Compounding Facility in the Netherlands received GMP-certification
- Launch of Fagron Genomics - start-up of NGS laboratory in Barcelona
- Focus on Brands led to an organic turnover growth of 23.4% CER, supported by all regions
- All activities in the US showed very strong growth
Rafael Padilla, CEO of Fagron: "Fagron has shown a strong performance in 2018, both in terms of turnover growth and results development. Turnover increased to € 471.7 million, while REBITDA increased to € 99.1 million. At constant exchange rates, turnover increased by 14.5% in 2018 and REBITDA by 8.8%. Organic turnover growth showed a clear acceleration in the second half of the year, which all our activities contributed to.
We are particularly pleased with the developments in the segments in which Fagron is active. In North America, the organic turnover increased by 25.1% at constant exchange rates in 2018. The 28.0% organic turnover growth at constant exchange rates in the second half of the year represents a clear acceleration compared to the first half. The activities focused on Brands and Essentials realised a growth of 13.9% in the second half of the year, while Compounding Services realised a growth of 32.6%. The REBITDA margin amounted to 13.1% in 2018 and here again, with an REBITDA margin of 14.8% in the second half of the year, we see a clear improvement compared to the first half of the year.
In South America, we have been able to further strengthen our leading market position in 2018. The organic turnover growth at constant exchange rates in 2018 amounted to 12.7%. This increase was mainly driven by the strong growth of the compounding market in Brazil, good product availability and the focus on the development and introduction of innovative and distinctive Brands. Almost 36% of the turnover in South America in 2018 resulted from Brands.
In Europe we also see a clear growth acceleration in the second half of the year. Organic sales at constant exchange rates increased by 3.5% in the second half of the year and by 2.7% in the full year 2018. The decision to temporarily reduce the capacity at one of the sterile compounding facilities in the Netherlands has had a negative effect on both turnover growth and profitability. The negative impact on turnover in 2018 was € 4.0 million.
In 2018 we have invested significantly in our facilities, qualified people and organisation. With these investments we anticipate effectively to the ever-stricter quality requirements inspections set to the repackaging of raw materials (under GMP-conditions) and the preparation of personalized medicine; a development that increasingly forms a barrier to entry for many players in the market, but also for hospitals. These investments in qualified people and facilities provide Fagron an increasing advantage over our competitors. This enables us to even better serve our customers and patients and achieve further growth for Fagron.
Fagron Genomics started in the last quarter of 2018. Fagron Genomics specialises in the development, production and marketing of innovative genetic tests. The genetic analysis, with algorithm-based software developed by Fagron, takes place in the state-of-the-art Next Generation Sequencing laboratory of Fagron Genomics in Barcelona (Spain). Fagron Genomics' genetic tests allow the prescriber to prescribe the most suitable personalised therapy to his patients. In 2019, Fagron Genomics will, amongst other, introduce a genetic test that will allow anaesthetists to administer the most suitable medication to the patients.
The coming years, we will continue to expand our leading market positions in Europe, North America and South America through organic growth and strategic acquisitions. Given the positive developments and opportunities in the market for personalised medicine, we are convinced that our strategic focus provides us a strong position to create significant value in 2019.
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