Report
Biogroup : Best-in-class margins but regulatory uncertainty weighs on our sentiment
We consider that Biogroup has well resisted to the steep tariff cuts in France and in Belgium in 2024. We forecast that Biogroup’s EBITDA will drop by only -3% to € 421m in 2025 (vs. € 433m in 2023) thanks to the consolidation of Analiza in Spain since July 2024 as well as a good execution of the transformation plan (€ 41m of savings in 2024 and € 55m expected for FY2025). We thus forecast a slight deterioration of the net leverage from 6.3x in 2023 to 6.6x in 2024-25, before a reduction to 6.0x in 2026. The improvement next year will be supported by the tariff freeze in France until the expiry of the 2024-26 agreement with the CNAM and incremental savings. Although Biogroup is navigating well in the current environment, we believe that the mid-term risks can’t be ignored (reimbursement regime in France after 2026, anti-trust probe). We prefer to maintain a cautious stance on BIOGRP bonds despite their attractive yields (6.2% for the 2028 secured notes and 9.3% for the 2029 unsecured notes).
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Oddo BHF
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
Pierre François Merveille
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