A comprehensive and profitable pharmaceutical player

Faes Farma is an integrated pharmaceutical company that covers the entire value chain — from research and development to production, distribution, and marketing. It stands out for its dual focus: prescription drugs (Rx), with flagship products like bilastine (an antihistamine), calcifediol (an active form of vitamin D), and mesalazine (used to treat ulcerative colitis), and a growing portfolio of OTC products, dietary supplements, medical devices, and cosmetics. The company also benefits from a high-margin business in pharmaceutical raw materials and animal nutrition. Its balanced model, combining organic growth, targeted innovation, and gradual international expansion, has delivered strong financial results: in 2024, sales rose by 7.8%, net profit surged 21% to €111.4 million, and EBITDA reached nearly €129 million — all in a challenging environment of regulatory pressures, generic competition, and rising production costs.

Strong and controlled international momentum

Long focused on the Iberian Peninsula, Faes Farma has successfully transformed into a global company in just a decade. Today, over 57% of its sales come from international markets. The group has built a presence in Latin America, the Middle East, Africa, and more recently Italy, through a majority acquisition. Its expansion strategy rests on two pillars: exporting flagship products like bilastine through licensing agreements, and establishing local operations with dedicated sales teams. The €75 million acquisition of Laboratorios Edol, a Portuguese ophthalmology specialist, is a good example of this approach — allowing Faes Farma to double its presence in Portugal and broaden its high-value portfolio.

New management and an ambitious strategic plan for 2030 

The recent leadership change is another important catalyst. Eduardo Recoder, a former AstraZeneca executive, has taken over as CEO, bringing a clear, ambitious, and disciplined strategic vision. At the latest Capital Markets Day, he unveiled a 2025–2030 roadmap aiming to double revenue to €1 billion by 2030, targeting a CAGR of +11% to +12%, including +8% to +9% organic growth.

This growth will be driven by four major levers:

  • The pharmaceutical core business: developing innovations in traditional therapeutic areas and integrating new solutions through external growth, while continuing international expansion, particularly in Latin America and the Gulf region.
  • Animal nutrition: diversification of species (beyond the swine sector) and leveraging the new ISF plant in Huesca, designed to produce up to 7,500 tons of specialized feed per month. The goal is to double revenues from this activity by 2027-2028.
    Research and development: gradually increasing R&D spending to 10% of pharmaceutical sales by 2030 (compared with 6% currently). The aim is to fully exploit the capacity of the new Derio plant and strengthen the intellectual property of the portfolio.
  • M&A operations: external growth is fully integrated into the development strategy. Faes is targeting companies capable of adding around €170 million in revenue by 2030, while maintaining strict financial discipline (debt < 2x EBITDA).

Attractive valuation in a changing sector

Despite these solid fundamentals, Faes Farma shares remain attractively valued. Trading at just 13.6 times 12-month forward earnings (P/E), the stock is still under the radar for many institutional investors, creating an appealing medium-term opportunity. The estimated dividend yield of 3.7% also adds to the investment case for those seeking stable income.

While 2025 EBITDA could be temporarily affected by the expiry of the bilastine patent in Japan and Canada, as well as initial start-up costs for the Derio plant, these headwinds are well-identified, non-recurring, and already factored into the forecasts. Excluding these one-off effects, adjusted EBITDA is still expected to grow by +3% to +5%.

In addition, the medium-term outlook is promising: the 2026-2027 forecasts have been raised slightly (+2 to +5% per year). This level implies a valuation between 10x and 12xEV/EBITDA for 2025-2026, which we believe is entirely reasonable for a company with very low debt and double-digit earnings growth.

A bet on controlled growth and strategic transformation

Our decision to add Faes Farma to Zonebourse’s European Investor portfolio is driven by a combination of factors: a profitable, well-managed company operating in a promising sector, with a clear and ambitious roadmap — yet still undervalued. The leadership change, the growing international footprint, the increased focus on R&D, and the synergies from recent acquisitions are all strong catalysts for the coming years.

We see Faes Farma as a quiet champion, steadily completing its transformation into a global group. In a market where sustainable growth, geographic diversification, and innovation are more critical than ever to long-term performance, we believe this stock deserves a strategic place in a European portfolio built for the future.