ANTWERP, Belgium--(BUSINESS WIRE)--Jul. 31, 2025-- Regulatory News:

Azelis (Brussels:AZE):

Highlights H1 2025

• Revenue of EUR 2.2bn in H1 2025, representing year-on-year increase of 0.6% (+3.3% on a constant currency basis), with 1.2% organic revenue growth and 2.2% revenue growth contribution from acquisitions offsetting the negative F/X impact during the period.
• Gross profit of EUR 515m resulting in gross profit margin of 23.9%. The 68 bp gross margin contraction reflects the mix effect from higher growth contribution from Industrial Chemicals and the Group's less mature businesses.
• Adjusted EBITA of EUR 234m results in adjusted EBITA margin of 10.9%, and conversion margin of 45.5%. The EBITA and conversion margins in H1 2025 do not yet reflect the full benefit of cost-saving measures announced at the beginning of Q2.
• Net profit of EUR 85m represents a decline of 14.6% over the prior year, driven by the lower operating profit.
• Free cash flow increased by 10.8% over the prior year to EUR 151m despite the lower EBITDA. Cash conversion expanded by more than 10 percentage points to 63.8% underscoring the resilient, cash-generative nature of the business model.
• Leverage ratio was 3.1x at the end of June 2025, versus 2.9x at the end of December 2024, and 2.7x at the end of June 2024. The step-up in the leverage ratio reflects the slower EBITDA evolution and the impact of deferred payments made in H1 2025.
• Two acquisitions were completed in H1 2025, and a third was announced shortly after the close of the period. The three companies had combined annual revenue of over EUR 100m in 2024.
• The Group is focused on managing its costs whilst uncertainty persists in the near-term, whilst continuing to execute on its medium-term strategy to capture the benefits of an attractive industry.

Comment from Anna Bertona, Group CEO: "Our results in H1 2025 reflect the resilience of our business model and the dedication of our teams, allowing us to navigate short-term volatility whilst continuing to position Azelis as the industry reference in our focus end markets.

Despite the impact of the growing trade and geopolitical uncertainty around the world, we remain confident that we have the right strategy to ensure that we capture the opportunities created by the volatility in the industry and emerge stronger than before.

We are making good progress on aligning our resources with end-market demand. We remain focused on delivering further on our cost savings programme as we move through the remainder of the year. Furthermore, our asset-light, flexible business model allows us to continue focusing on profit and cash generation alongside our growth ambitions through the cycle."

Conference call

The management of Azelis invites you to a conference call and live webcast at 09:00 CET to discuss our H1 2025 results and current operating trends. Please click here to view the webcast.

OPERATIONAL REVIEW

Headline results

Azelis delivered revenue of EUR 2.2bn in H1 2025, representing year-on-year growth of 0.6%. Revenue during the period was driven by a 1.2% organic revenue growth and a 2.2% growth contribution from acquisitions, offset by a 2.7% negative impact from F/X translation. In Q2, revenue declined by 3.1% versus the prior year, as the 5.1% F/X headwind offset stable organic revenue growth and a 2.1% revenue growth contribution from acquisitions.

In H1 2025, revenue in Life Sciences was EUR 1.3bn, in line with the prior year (+2.6% in constant currency), and revenue in Industrial Chemicals increased by 1.5% to EUR 809m (+4.6% in constant currency). During the period, we completed the acquisition of Solchem, strengthening our presence in the Spanish nutraceuticals market, and S Amit Group, reinforcing our footprint in India.

EMEA

EMEA revenue increased by 6.7% year-on-year (+9.0% in constant currency) to EUR 979.1m in H1 2025, driven by organic revenue growth of 4.8% and revenue growth contribution from acquisitions of 4.2%, partially offset by a 2.2% negative impact from F/X translation. In Q2, revenue increased by 5.7% year-on-year, as organic growth accelerated to 5.1%, driven by continued growth in volumes and constructive pricing across most end markets in both Life Sciences and Industrial Chemicals.

Gross profit increased by 3.4% year-on-year (+5.2% in constant currency) to EUR 248.8m, translating to a gross margin of 25.4% for the period. The 82 bp gross margin contraction reflects negative product mix effects primarily within Industrial Chemicals, as well as dilution from recent acquisitions. Adjusted EBITA decreased by 3.9% to EUR 123.2m, resulting in a 139 bp adjusted EBITA margin contraction, as the benefit of the cost savings plan in the region is not yet fully reflected in the results for the period. Conversion margin in H1 2025 was 49.5%.

Americas

Revenue in the Americas was EUR 759.7m in H1 2025, representing a year-on-year decrease of 3.4% (-0.2% in constant currency). Organic revenue and M&A revenue growth contribution were broadly stable, whilst FX translation represented a negative impact of 3.2%. In Q2, revenue decreased by 9.5% driven by a significant FX headwind of 6.3% and an organic decline of 3.2%, reversing the organic growth in Q1. The organic decline was due largely to further deterioration in Personal Care as consumer sentiment over the near-term economic outlook weighed on demand.

Gross profit in the region declined by 6.0% to EUR 181.9m, resulting in gross profit margin of 23.9%. The 67 bp gross margin step-down reflects the negative mix effect from higher contribution from Industrial Chemicals and Latin America. During the period, adjusted EBITA was EUR 88.1m, leading to a 93 bp contraction in adjusted EBITA margin, due to softer topline and gross profit and dilution from our less mature Latin America business. The results similarly only reflect preliminary impact from recently initiated cost measures. Conversion margin contracted by 246 bp to 48.4% for the period.

Asia Pacific

In H1 2025, revenue in APAC was reduced by 4.9% compared to the prior year (-2.2% in constant currency). Organic revenue declined by 3.6% due to slowing volume growth in India and Southeast Asia, continued weakness in Australia and New Zealand, and residual impact of our portfolio optimisation programme in the region. Revenue growth contribution from acquisitions was 1.5%, while FX translation represented a 2.7% headwind. In Q2, revenue decreased by 9.1% year-on-year, driven by a 5.1% organic decline and a negative impact from FX translation of 5.2%.

Gross profit in the region decreased by 8.5% year-on-year (-5.9% in constant currency) to EUR 84.4m, representing gross profit margin of 20.1%. The 80 bp gross margin contraction reflects negative mix effects, as well as competitive pressure in Southeast Asia. Adjusted EBITA declined by 4.9% year-on-year (–2.6% in constant currency), reflecting only an initial contribution from cost-saving measures. Despite the topline pressure, the adjusted EBITA margin remained stable at 10.1%, and conversion margin expanded by 194 basis points to 50.5%.

Holding companies

Operating costs at the Group’s holding companies, which relate to the Group’s non-operating entities as well as the head office in Belgium, rose by 11.5% to EUR 19.3m, or 0.9% of Group revenues. The increase was due mostly to higher costs from the expansion of the Group’s shared service centres and general cost inflation in various professional services.

OUTLOOK

The market for speciality chemical and food ingredient distribution remains highly attractive. Azelis is confident that it has the right strategy to navigate the challenges and benefit from the opportunities generated by the trends shaping its industry.

FINANCIAL REVIEW

Revenue

Revenue in H1 2025 increased by 0.6% year-on-year to EUR 2.2bn, with organic growth and revenue growth contribution from acquisitions offset by the negative impact of F/X translation. During the period, Group organic revenue increased by 1.2%, driven by continued growth in EMEA. Revenue from acquisitions represented topline growth contribution of 2.2%, while FX translation represented a 2.7% headwind.

Revenue in Life Sciences was stable compared to the prior year at EUR 1.3bn (+2.6% in constant currency), supported by robust performance across most of the end markets in EMEA, offsetting the impact of weak Personal Care in the Americas and soft demand in Southeast Asia. Revenue in Industrial Chemicals increased by 1.5% to EUR 809m (+4.6% in constant currency), driven by continued growth in EMEA and broadly stable performance in the Americas.

Profitability

For H1 2025, gross profit was EUR 515m, down 2.2% (+0.3% in constant currency) compared to the prior year, resulting in a gross profit margin of 23.9%. The 68 bp gross margin contraction reflects the negative mix effect across our businesses, as well as dilution from recent acquisitions. Adjusted EBITA was EUR 234m, representing a 7.7% year-on-year decline, and adjusted EBITA margin of 10.9%. The 98 bp contraction was driven by higher operating costs compared to the prior year; meanwhile, the recently-launched cost savings programme is not yet fully reflected in the results for the period.

Net financial expense in H1 2025 was EUR 69.9m, representing a decrease of 3.4% compared to the prior year, as lower financial expense offset the decline in financial income during the period. The lower financial expense was mainly driven by the significant reduction in interest expense, -14.7% compared to the prior year, as well as a 5.9% year-on-year decrease in other financial costs.

Tax expense for the first half of the year was EUR 35.5m, implying an effective tax rate (ETR) of 29.3%, versus 29.6% in the prior year.

Net profit was EUR 85.5m, resulting in cash earnings per share of EUR 0.51 for the first half of the year.

Cash flow and financing

Net working capital to revenue normalised for acquisitions was 15.8% at the end of June 2025, versus 15.9% in December 2024, and 15.4% in June 2024. The Group is committed to managing its working capital in line with slower demand, and expects to reduce working capital investments in the second half of the year.

Free cash flow increased by 10.8% year-on-year to EUR 151.2m despite lower EBITDA, driven by lower investment in working capital compared to the same period in 2024. This resulted in a 10.6 percentage point uplift in FCF conversion ratio to 63.8% for H1 2025, compared to 53.3% in H1 2024.

Net debt was EUR 1.6bn and leverage ratio stood at 3.1x at the end of June 2025, reflecting the slower EBITDA evolution and the payment of EUR 99m in deferred considerations and put options in H1 2025. The Group remains committed to its leverage policy and is focused on managing leverage back within the targeted 2.5x - 3.0x range. At the end of the period, the Group had liquidity of EUR 702m in cash and unused revolving credit facility (RCF).

POST-CLOSING EVENTS

On the 9th of July, Azelis announced that it had completed the acquisition of Azienda Chimica e Farmaceutica (ACEF), a distributor of speciality raw materials and ingredients for the cosmetic, nutraceutical, galenic and pharma industries in Italy. This acquisition significantly expands Azelis's footprint in Italy and strengthens its position as industry leader in the relevant end markets.

ALTERNATIVE PERFORMANCE MEASURES

Throughout its financial communication (annual and interim reports, website, press releases, presentations, etc.), Azelis presents certain financial measures and adjustments that are not in accordance with IFRS, or any other internationally accepted accounting principles. Certain of these measures are termed 'alternative performance measures' (APMs) because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with IFRS, or are calculated using financial measures that are not calculated in accordance with IFRS. For more information regarding these APMs, including definitions and calculation methodology, refer to the section 'alternative performance measures' in the Azelis GroupIntegrated reports.

APPENDIX

All figures and tables contained in this appendix have been extracted from Azelis's unaudited condensed consolidated interim financial statements for the first six months of 2025, which have been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the European Union.

The statutory auditor, PwC Bedrijfsrevisoren BV / Reviseurs d’Entreprises SRL, represented by Peter D'hondt, has reviewed these condensed consolidated interim financial statements and concluded that based on the review, nothing has come to the attention that causes them to believe that the condensed consolidated interim financial information is not prepared, in all material respects, in accordance with IAS 34, as adopted by the European Union.

For the condensed consolidated interim financial statements for the first six months of 2025 and the review report of the statutory auditor we refer to Azelis'swebsite.

Consolidated income statement for the period ended 30 June

Consolidated statement of financial position

Consolidated statement of cash flows

NOTES TO THE EDITOR

About Azelis

Azelis is the reference global innovation service provider in the speciality chemical and food ingredients industry present in 65 countries across the globe with over 4,300 employees. Our knowledgeable teams of industry, market and technical experts are each dedicated to a specific market within Life Sciences and Industrial Chemicals. We offer a lateral value chain of complementary products to more than 62,000 customers, supported by +2,800 principal relationships, creating a turnover of €4.2 billion (2024). Azelis Group NV is listed on Euronext Brussels under ticker AZE and is included in the BEL20 and BEL^® ESG indices.

Across our extensive network of more than 70 application laboratories, our award-winning teams 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, Azelis is a leader in sustainability. We believe in building and nurturing solid, honest, and transparent relationships with our people and partners.

Impact through ideas. Innovation through formulation.

Important disclaimer

This press release may contain statements relevant to Azelis Group NV (the Company) and/or its affiliated companies (collectively Azelis or the Azelis Group) which are not historical facts, contain wording like 'potential', 'believes', 'anticipates', 'expects', 'intends', 'plans', 'seeks', 'estimates', 'may', 'will', 'continue' and similar expressions, and are hereby identified as 'forward-looking statements'. Such forward-looking statements include, without limitation, those relating to the future business prospects, revenue, working capital, liquidity, capital needs, interest costs, and income, in each case relating to the Azelis Group.

The forward-looking statements and estimates contained herein represent the judgment of and are based on the information available to the Board of Directors and the Company’s management as of the date of this press release. They are subject to a number of known and unknown risks, uncertainties, assumptions and other factors that could cause actual results, financial condition, performance or achievements, or industry results to differ materially from those expressed or implied by the forward-looking statements.

These forward-looking statements should not be considered as guarantees for the future performance of the Azelis Group and should, therefore, be considered in light of various important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements. These include without limitation global spread and impact of military conflicts and pandemics, changes in economic, and business cycles, the terms and conditions of Azelis's financing arrangements, foreign currency rate fluctuations, competition in Azelis's key markets, acquisitions or disposals of businesses or assets, potential or actual data security breaches, changes in laws and regulations, changes or uncertainties in tax laws or the administration thereof, hiring and retention of employees, and trends in Azelis's principal industries or economies. Azelis's efforts to acquire and integrate businesses may not be as successful as Azelis may have believed at the moment of acquisition. Last but not least, a breakdown, cyberattack or information security breach could compromise the confidentiality, integrity and availability of Azelis's data and systems.

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 Belgian Financial Services and Markets Authority (FSMA) or on the Azelis website from time to time. No undue reliance should be placed on such forward-looking statements, which are relevant only as of the date of this publication and do not reflect any potential impacts from the evolving military conflicts, pandemics or other adversity, unless indicated otherwise. Except as required by the FSMA, Euronext, or otherwise in accordance with applicable law, the Company disclaims any obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Certain financial information in this press release has been rounded according to established commercial standards. As a result, this press release may show minor rounding differences versus comparable periods as presented earlier. Pursuant to Belgian Law, Azelis is required to prepare this press release in Dutch. Azelis has also made this report available in English.

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Azelis Investor Relations
T: +32 3 613 01 27
E: investor-relations@azelis.com

Source: Azelis