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Vitrolife: Sales beat and positve margin outlook - ABG

Sales 7% above cons, EBITDA 8% Streamlining in Genetic Services Cons ‘22e EBITDA to come up ~5% Q2 figure

Sales: SEK 829m (7% vs. ABGSCe at SEK 775m and 7% vs. cons. of SEK 774m). EBITDA: SEK 273m (12% vs. ABGSCe at SEK 244m and 8% vs. cons. of SEK 253m). EBIT: SEK 175m (18% vs. ABGSCe at SEK 148m and 6% vs. cons. of SEK 165m). Net profit: SEK 130m (31% vs. ABGSCe at SEK 99m and 15% vs. cons. of SEK 113m). EBIDTA margin of 32.9% (ABGSCe 31,4%, cons 32.7%). Strong organic growth of 18% (ABGSCe 13%), Pro Forma organic growth 14%. Beat driven by Americas and ASIA, EMEA on the weaker side driven by lower COVID-19 testing and phasing out of a large customer. All business areas contributing to the sales beat and particularly technologies continue to be strong.

Estimates and outlook Will discontinues GPDx (except those related to Reproduction) and oncology business within Genetic Services. Furthermore, it has cut staff in Genetic Services by 7% at the end of the quarter. The long-term outlook for the market to grow 5-10% is reiterated and the report does not mention any concern regarding the weaker outlook for consumers. The beat mechanically increases cons EBITDA by 2%. We expect the consensus to increase their sales for H2 and increase margin on the back of the cuts in Genetic Services, and Cons ‘22e EBITDA could come up 5%

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