Azelis Maintains Strong Margins Through the Cycle
Q1 2024 Highlights
-
Revenue of
EUR 1.1bn , representing year-on-year decrease of 3.8% (decrease of 1.2% on a constant currency basis), with volume recovery offset by ongoing price discovery in some of our end markets. -
Gross profit of
EUR 260.6m reflects a 47 bp gross margin expansion to 24.8%, supported by positive mix effects across our business. -
Adjusted EBITA was
EUR 124.3m , implying adjusted EBITA margin of 11.8%, and conversion margin of 47.7%, reflecting the Group's continuous focus on maintaining margin levels achieved in recent years. -
Azelis generated free cash flow ofEUR 114.5m , representing a cash conversion ratio of 91%. -
Leverage ratio was 2.7x at the end of
March 2024 , compared to 2.3x in the prior year, and 2.5x at the end ofDecember 2023 . -
Three acquisitions completed during the quarter, reflecting the Group's commitment to its expansion strategy. Together with the two additional transactions announced year to date, the combined annual revenues of these five companies were over
EUR 50m in the prior year. - The management remains positive that the Group will return to organic growth during 2024, although the timing of the recovery remains uncertain.
-
Kåre Schultz andMelanie Maas-Brunner appointed as independent, non-executive directors to the Azelis Board. Kåre and Melanie succeedAntonio Trius andAlexandra Brand , respectively.
(in millions of €) |
Q1 2024 |
Q1 2023 |
Reported Change |
Constant Currency |
Life Sciences |
668.8 |
669.0 |
0.0% |
2.5% |
Industrial Chemicals |
382.3 |
423.8 |
-9.8% |
-7.0% |
Revenue |
1,051.0 |
1,092.8 |
-3.8% |
-1.2% |
Gross Profit |
260.6 |
265.8 |
-2.0% |
0.7% |
Gross Profit Margin |
24.8% |
24.3% |
47 bp |
48 bp |
Adjusted EBITDA1 |
134.3 |
141.7 |
-5.2% |
-1.6% |
Adjusted EBITDA Margin |
12.8% |
13.0% |
-19 bp |
-6 bp |
Adjusted EBITA 1 |
124.3 |
134.0 |
-7.2% |
-3.6% |
Adjusted EBITA Margin |
11.8% |
12.3% |
-43 bp |
-31 bp |
Conversion Margin1 |
47.7% |
50.4% |
-270 bp |
-222 bp |
Free Cash Flow1 |
114.5 |
136.1 |
-15.9% |
|
FCF Conversion ratio1 |
91.0% |
100.7% |
-976 bp |
|
|
13.9% |
14.7% |
-83 bp |
|
Leverage |
2.7 |
2.3 |
+ 0.4x |
|
1 Refer to the definitions of Alternative Performance Measures in the 2023 Integrated Report
Comment from
We will continue to control our costs while the markets remain volatile. We are executing on various commercial programs and our overall strategy to ensure that
I would like to take this opportunity to welcome
RESULTS PRESENTATION BY MANAGEMENT
The management of
OPERATIONAL REVIEW
Headline results
(in millions of €) |
Q1 2024 |
Q1 2023 |
F/X Translation |
M&A Growth Contribution |
Organic Growth |
Total Growth |
EMEA |
460.1 |
501.0 |
-4.3% |
4.8% |
-8.6% |
-8.2% |
|
371.3 |
358.4 |
0.9% |
11.4% |
-8.6% |
3.6% |
|
219.6 |
233.5 |
-4.5% |
4.7% |
-6.2% |
-6.0% |
Group Revenue |
1,051.0 |
1,092.8 |
-2.7% |
6.9% |
-8.1% |
-3.8% |
|
|
|
|
|
|
|
EMEA |
121.1 |
129.7 |
-4.1% |
6.3% |
-8.8% |
-6.6% |
|
92.3 |
90.9 |
0.0% |
11.7% |
-10.2% |
1.5% |
|
47.2 |
45.1 |
-4.1% |
5.8% |
2.9% |
4.6% |
Group Gross Profit |
260.6 |
265.8 |
-2.7% |
8.1% |
-7.3% |
-2.0% |
|
|
|
|
|
|
|
EMEA |
65.8 |
72.5 |
-4.6% |
4.7% |
-9.4% |
-9.3% |
|
45.2 |
48.8 |
-0.4% |
10.7% |
-17.6% |
-7.4% |
|
22.2 |
21.5 |
-3.9% |
4.9% |
2.2% |
3.3% |
Adjusted EBITA 1 |
124.3 |
134.0 |
-3.6% |
7.2% |
-10.8% |
-7.2% |
1 Total Adjusted EBITA includes Holding companies
EMEA
(in millions of €) |
Q1 2024 |
Q1 2023 |
Reported Change |
Constant Currency |
Revenue |
460.1 |
501.0 |
-8.2% |
-3.8% |
Gross Profit |
121.1 |
129.7 |
-6.6% |
-2.5% |
Gross Profit Margin |
26.3% |
25.9% |
43 bp |
37 bp |
Adjusted EBITDA |
69.7 |
75.8 |
-8.0% |
-3.3% |
Adjusted EBITDA Margin |
15.1% |
15.1% |
2 bp |
8 bp |
Adjusted EBITA |
65.8 |
72.5 |
-9.3% |
-4.7% |
Adjusted EBITA Margin |
14.3% |
14.5% |
-17 bp |
-14 bp |
Conversion Margin |
54.3% |
55.9% |
-157 bp |
-132 bp |
EMEA revenue was
In March, we completed the acquisition of Oktrade, strengthening our lateral value chain to become a leader in the attractive personal care market in
Gross profit for the period was
(in millions of €) |
Q1 2024 |
Q1 2023 |
Reported Change |
Constant Currency |
Revenue |
371.3 |
358.4 |
3.6% |
2.8% |
Gross Profit |
92.3 |
90.9 |
1.5% |
1.4% |
Gross Profit Margin |
24.9% |
25.4% |
-53 bp |
-32 bp |
Adjusted EBITDA |
49.1 |
51.3 |
-4.3% |
-4.0% |
Adjusted EBITDA Margin |
13.2% |
14.3% |
-110 bp |
-93 bp |
Adjusted EBITA |
45.2 |
48.8 |
-7.4% |
-6.9% |
Adjusted EBITA Margin |
12.2% |
13.6% |
-145 bp |
-127 bp |
Conversion Margin |
49.0% |
53.7% |
-468 bp |
-443 bp |
Revenue in the
In February,
Gross profit in the region was
(in millions of €) |
Q1 2024 |
Q1 2023 |
Reported Change |
Constant Currency |
Revenue |
219.6 |
233.5 |
-6.0% |
-1.5% |
Gross Profit |
47.2 |
45.1 |
4.6% |
8.7% |
Gross Profit Margin |
21.5% |
19.3% |
216 bp |
209 bp |
Adjusted EBITDA |
24.2 |
23.2 |
4.0% |
8.0% |
Adjusted EBITDA Margin |
11.0% |
9.9% |
106 bp |
100 bp |
Adjusted EBITA |
22.2 |
21.5 |
3.3% |
7.2% |
Adjusted EBITA Margin |
10.1% |
9.2% |
90 bp |
85 bp |
Conversion Margin |
47.0% |
47.6% |
-58 bp |
-70 bp |
Revenue in APAC was
At the end of January, we completed the acquisition of Agspec, a leading distributor of crop nutrition, crop protection and specialty agricultural products in
Gross profit increased 4.6% to
Holding companies
|
Q1 2024 |
Q1 2023 |
Reported Change |
Constant Currency |
Adjusted EBITA (in millions of €) |
-8.8 |
-8.8 |
0.6% |
0.6% |
As % of Group Revenues |
-0.8% |
-0.8% |
-4 bp |
-1 bp |
Operating costs at the Group’s holding companies, which relate to the Group’s non-operating entities as well as the head office in
OUTLOOK
Whilst global political and economic uncertainty persists, we remain committed to controlling costs, generating cash and driving growth.
The Group has expanded its operational and geographic footprint over the last three years, strengthening its commercial and technical network and developing new competencies within the specialty chemical & food ingredients distribution. Following investments in our future growth drivers, the management will provide an update on our strategy at our annual investor laboratory event in September.
FINANCIAL REVIEW
(in millions of €) |
Q1 2024 |
Q1 2023 |
Reported Change |
Constant Currency |
Life Sciences |
668.8 |
669.0 |
0.0% |
2.5% |
Industrial Chemicals |
382.3 |
423.8 |
-9.8% |
-7.0% |
Revenue |
1,051.0 |
1,092.8 |
-3.8% |
-1.2% |
Gross Profit |
260.6 |
265.8 |
-2.0% |
0.7% |
Gross Profit Margin |
24.8% |
24.3% |
47 bp |
48 bp |
Adjusted EBITDA1 |
134.3 |
141.7 |
-5.2% |
-1.6% |
Adjusted EBITDA Margin |
12.8% |
13.0% |
-19 bp |
-6 bp |
Adjusted EBITA 1 |
124.3 |
134.0 |
-7.2% |
-3.6% |
Adjusted EBITA Margin |
11.8% |
12.3% |
-43 bp |
-31 bp |
Conversion Margin1 |
47.7% |
50.4% |
-270 bp |
-222 bp |
Free Cash Flow1 |
114.5 |
136.1 |
-15.9% |
|
FCF Conversion ratio1 |
91.0% |
100.7% |
-976 bp |
|
|
13.9% |
14.7% |
-83 bp |
|
Leverage |
2.7 |
2.3 |
+ 0.4x |
|
1 Refer to the definitions of Alternative Performance Measures in the 2023 Integrated Report
Revenue
Revenue declined by 3.8% to
Revenue in Life Sciences was flat compared to the prior year at
Profitability
Gross profit declined by 2.0% to
Cash flow and financing
Net working capital to sales was 13.9% at the end of
Free cash flow was
At the end of
FINANCIAL CALENDAR
Date |
Event |
|
Annual General Meeting 2024 |
|
Ex-dividend date |
|
Dividend record date |
|
Dividend payment date |
|
Half year 2024 results |
|
Q3 2024 trading update |
ALTERNATIVE PERFORMANCE MEASURES
Throughout its financial communication (Annual and Interim reports, website, press releases, presentations, etc.),
Notes to the editor
About
Across our extensive network of more than 70 application laboratories, our award-winning staff help develop formulations and provide technical guidance throughout the customers’ product development process. We combine a global market reach with a local footprint to offer a reliable, integrated and unique digital service to local customers and attractive business opportunities to principals. Top industry-rated by Sustainalytics,
Impact through ideas. Innovation through formulation.
Important disclaimer:
This announcement may contain statement relevant to
The forward-looking statements and estimates contained herein represent the judgement of and are based on the information available to the Company’s management as of the date of this announcement. They involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward looking statements.
These forward-looking statements should not be considered as guarantees for future performance of the
The foregoing list of important factors is not exhaustive. When considering forward-looking statements, careful consideration should be given to the foregoing factors and other uncertainties and events, as well as factors described in any other document published by the Company with the
View source version on businesswire.com: https://www.businesswire.com/news/home/20240424502419/en/
CONTACT INFORMATION
Azelis Investor Relations
T: +32 3 613 01 27
E: investor-relations@azelis.com
Source: