Full year ‘21 results Fagron in line with expectations
Regulated information
Nazareth (Belgium)/Rotterdam (The Netherlands), 10 February 2022– 7.00 am CET
Full year ‘21 results Fagron in line with expectations
Fagron strengthens position in Belgian market
Highlights
- Turnover increased 3.2% to €573.8 million (5.9% CER)
- REBITDA decreased 4.5% to €118.3 million (-1.5% CER)
- Net profit increased 2.2% to €61.4 million
- Operating cash flow of €78.4 million
- Net financial debt/REBITDA ratio of 2.11 at year end 2021
- Dividend proposal of €0.20 per share
- Operational working capital improved versus H1 2021 to 10.3% of turnover
- Greenhouse gas intensity reduction of 20% compared to 2019 (2021 target: 10% reduction)
- Fagron strengthens position in Belgian market with acquisition of Pharma-Pack and minority stake in HeW Pharma
- Board of Directors intends to submit the appointment of Ann Desender as independent and non-executive director
Rafael Padilla, CEO of Fagron: “With pride I look back on how all of us operated as one Fagron in a very dynamic year. Despite the challenges once again presented by the Covid pandemic in 2021 we were able to increase our turnover to €574 million. We achieved this by launching a good number of new products and innovations, attracting new customers, and further strengthening our position, in particular in the Brands and Essentials segment globally and Fagron Sterile Services (FSS) in the United States.
During 2021 we saw demand for COVID-19 related products fade globally. At the same time, elective care showed recovery in North America, particularly in the second half of the year, while only a limited recovery was visible in EMEA. Specifically in Northern Europe, elective care remained scaled down. In addition, pressure on the global supply chain continued to be high in the second half of the year with continuing high prices for transport, packaging material and some raw materials. We are now able to pass on most of these cost increases or expect to be able to do so with some delay. However, this had a temporary negative impact on our margin and REBITDA, as a result of which REBITDA – in line with our expectations – came in at the lower end of our estimated range.
These developments translated into a 4.6% decline in turnover in EMEA, although we did see improvement in the fourth quarter. We expect this trend to continue in 2022, so that EMEA is expected to return to sales growth in 2022. In Latin America, where Fagron is mainly active in Brands and Essentials, we realized good turnover growth of 9.3%, despite demand for COVID-19 related products fading in 2021. In North America, our strong position in Brands and Essentials and our investments in Compounding Services translated into robust turnover growth of 11.3%. In December 2021, FSS had a run rate (turnover; annualized) of over US$80 million, putting us on track to achieve our turnover target for year-end 2022.
With the recent acquisition of Letco and the divestment of our contract manufacturing division in the United States we are taking important steps towards realizing our ambition to be the market leader in Brand and Essentials. Furthermore, we strengthen our position in the attractive Belgian market with the acquisition of Pharma-Pack and a minority stake in HeW Pharma. We continue to actively look at acquisition opportunities, in EMEA and North America in particular.
Corporate social responsibility is of key importance to Fagron: by personalizing medicine, it becomes accessible to even more people. In 2021 we took a number of important steps in realizing the ESG objectives we have set for ourselves. In the beginning of the year, we published our 2022 revised objectives to contribute to a better world.
All this shows that Fagron is strongly positioned to contribute to the future of personalized medicine, realize continued growth and create shareholder value. For 2022 we expect to realize growth of both turnover and profitability. During our Capital Markets Day on 15 March 2022, we will provide a strategy update and present medium-term targets both for our three regions and for Fagron as a whole. We look forward to welcoming our investors then, be it in person or virtually.”
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