SYNLAB AG QUARTERLY REPORT Q1 2024
AS OF 31 MARCH 2024
SYNLAB AG
Inhaltsverzeichnis | 2 |
Content
PREAMBLE _________________________________________________________________________________________ 4
ABOUT SYNLAB _____________________________________________________________________________________ 4
FINANCIAL PERFORMANCE ___________________________________________________________________________ 4
OPPORTUNITIES AND RISKS __________________________________________________________________________ 6
Condensed consolidated statement of changes in equity __________________________________________________ 11
Condensed consolidated statement of cash flows ________________________________________________________ 12
3 |
Key Figures
CONDENSED P&L
In €M, unless stated otherwise | |||||||
Q1 2024 | Q1 2023 | Change in % | |||||
Revenue | 682.4 | 702.4 | (2.8) | ||||
AEBITDA | 123.1 | 118.5 | 3.9 | ||||
As % of revenue | 18.0% | 16.9% | 1.1ppt | ||||
Adjusted operating profit (AOP) | 64.8 | 60.5 | 7.1 | ||||
As % of revenue | 9.5% | 8.6% | 0.9ppt | ||||
Operating profit | 53.9 | 45.3 | 19.0 | ||||
Financial result | (17.2) | (20,5) | (16.1) | ||||
Income tax expenses | (11.0) | (11.5) | (4.3) | ||||
Adjusted net profit | 33.0 | 24.9 | 32.5 | ||||
Net profit (Group share) | 25.0 | 27.9 | (10.4) | ||||
CONDENSED CASH FLOW | |||||||
In M€, unless stated otherwise | |||||||
Q1 2024 | Q1 2023 | Change |
Operating cash flow | 109 | ||
Unlevered free cash flow | 45 | ||
53
(7)
56
52
NET DEBT AND LEVERAGE
In M€, unless stated otherwise
31 Mar 2024 | 31 Dec 2023 | Change |
Net debt | 1,285 | ||
Adjusted net debt | 1,249 | ||
Leverage ratio | 2.75x | ||
1,341
1,303
2.90x
(56)
(54)
0.15x
4 |
Business performance of SYNLAB Group
PREAMBLE
This quarterly statement should be read in conjunction with the Annual Report 2023.
ABOUT SYNLAB
SYNLAB Group ("the Group", or "SYNLAB"), with headquarters in Munich, Germany, is the leader in medical diagnostic services and specialty testing in Europe. SYNLAB offers a full range of innovative and reliable medical diagnostics for patients, practicing doctors, hospitals and clinics, governments and corporations. Providing a high level of service within the industry, SYNLAB is a partner of choice for diagnostics in human medicine. The Group continuously innovates medical diagnostic services for the benefit of patients and customers.
SYNLAB operates in 33 countries across four continents and holds leading positions in most markets. More than 27,000 employees contribute to the Group's worldwide success. SYNLAB carried out around 600 M€ laboratory tests and achieved revenues of €2.64 billion in 2023.
KEY ACHIEVEMENTS IN Q1 2024
Underlying organic growth (excluding COVID-19)
Underlying organic growth (excluding COVID-19 testing revenue) amounted to 3.9% in Q1 2024 driven by a price increase of 0.7% and a strong volume growth of 3.2% across the Group's portfolio.
Adjusted for working days (Easter holiday being in March this year vs. in April in 2023), the volume is very strong at 4.5% and the underlying organic growth is at 5.2%.
Operational excellence
Within SALIX, a multi-year efficiency programme, SYNLAB achieved €8 million savings in Q1 2024.
ESG
SYNLAB is actively preparing for the implementation of the new EU Corporate Sustainability Reporting Directive (CSRD). Double Materiality Assessment aligning with the new reporting framework has been kicked off and is underway.
FINANCIAL PERFORMANCE
Revenue and underlying organic growth
Q1 2024 revenue was reported at €682 million (Q1 2023: €702 million), reflecting a particularly sharp reduction in COVID-19
testing revenue to €3 million (Q1 2023: €25 million).
SEGMENT VIEW
In M€, unless stated otherwise | ||||||||
Q1 2024 | Q1 2023 | Underlying | Organic | |||||
organic growth | growth | |||||||
France | 135.2 | 143.3 | (1.7)% | (5.7)% | ||||
Germany | 141.7 | 139.8 | 6.9% | (1.1)% | ||||
South | 198.5 | 225.4 | (1.2)% | (1.5)% | ||||
North & East | 207.0 | 193.9 | 11.3% | 9.9% | ||||
SYNLAB Group | 682.4 | 702.4 | 3.9% | 0.6% | ||||
5 |
France (20% of Group revenue) decreased by (1.7)% due to price decreases of (5.6)% more than offsetting strong volume growth of 3.9%.
Business in Germany (21% of Group revenue) grew organically (excluding COVID-19 testing revenue) by 6.9% in Q1 2024 driven by a volume growth of 6.4 % and a price increase by 0.5 %.
In the South segment (29% of Group revenue), underlying organic growth was (1.2)% due to a weak volume in Spain and despite higher prices. Adjusted for a one-off effect from the previous year relating to revenue in Italy, the underlying organic growth in the South segment reached 1.0%.
The underlying organic growth in the North & East segment (30% of Group revenue) was very strong at 11.3% owing to strong volume growth and a favorable pricing environment driven by health authorities partially mitigating the effects of inflation.
AEBITDA and AOP
Q1 2024 adjusted EBITDA (AEBITDA) was €123 million (Q1 2023: €119 million) while adjusted operating profit (AOP) was €65
million (Q1 2023: €61 million) with margins of 18.0% (Q1 2023: 16.9%) and 9.5% (Q1 2023: 8.6%), respectively. The AEBITDA margin was at the upper end of the guided range for FY 2024 of 17-18%.
The year-on-year increase in AEBITDA margin was mainly driven by the 2023 disposals, a strong rebound of the profitability in Germany and cost savings from SALIX initiatives (€8 million) across the portfolio. The inflation in Q1 2024 was at 1.7% (Q1 2023: 3.8%) benefitting from a 1% deflation in OPEX (mainly lower energy prices compared to Q1 2023).
AOP: SEGMENT VIEW
In M€, unless stated otherwise
France
Germany
South
North & East
SYNLAB Group
Q1 2024 | Q1 2023 | Margin Q1 2024 | Margin Q1 2023 | |||
14.2 | 18.6 | 10.5% | 13.0% | |||
4.2 | (2.6) | 3.0% | (1.9)% | |||
21.3 | 23.2 | 10.8% | 10.3% | |||
25.0 | 21.3 | 12.1% | 11.0% | |||
64.8 | 60.5 | 9.5% | 8.6% | |||
Adjusted net profit (Group share)
In Q1 2024, adjusted net profit (Group share) was €33 million (Q1 2023: €25 million), mainly from increased adjusted Operating profit, lower Net finance cost and lower income tax expenses.
Debt and leverage ratio
Q1 2024 unlevered free cash flow (uFCF) was €45 million (Q1 2023: €(7) million) with a cash conversion rate (uFCF / AEBITDA) of 37%.
Net debt of the Group decreased by €56 million to €1,285 million at the end of March 2024 (year-end 2023: €1,341 million).
Adjusted (as per covenant definition) net debt at the end of March 2024 was at €1,249 million (year-end 2023: €1,303 million).
The leverage ratio decreased from 2.90x at the end of December 2023 to 2.75x at the end of March 2024.
SYNLAB hold €260 million in cash at the end of March 2024 (year-end 2023: €221 million).
Events after the quarterly reporting date
In April 2024, SYNLAB AG entered into a new loan of €535 million with the related party company Ephios Subco 3 S.à r.l. and has cancelled and repaid in full its Term Loan A Facility.
6 |
FY 2024 OUTLOOK
For 2024 SYNLAB continues to expect revenues of around €2.7 billion (at current perimeter) with an underlying organic growth around 4%.
SYNLAB also continues to expect the AEBITDA margin to improve from its low point in 2023 with a minimum increase of 50bp. The AEBITDA margin is expected to be within the range of 17-18% considering the ongoing effort on the portfolio management, the continuous delivery of SALIX initiatives and the price net of inflation trajectory.
SYNLAB will continue in 2024 its bolt-on M&A strategy with an expected EV spend to be within the range of €50 million to €100 million.
OPPORTUNITIES AND RISKS
The opportunities and risk situation of SYNLAB has not changed materially since the publication of the Company's 2023 Financial Report in March 2024, available on its website.
SYNLAB is not significantly affected by the situation in Ukraine. The Israeli-Palestinian conflict has no impact on the business of
SYNLAB.
However, SYNLAB remains impacted by the inflationary pressure. The Group is notably experiencing the direct impact on energy prices and the indirect impact on salaries and other operating expenses (material expenses).
This was considered when elaborating the current forecast for 2024.
A detailed discussion of SYNLAB's opportunity and risk factors can be found in the Forecast Report and Opportunity and Risk Report of the Company's 2023 Annual Report, also available on its website.
SYNLAB Italy is affected by the consequences of a cyber-attack. As a precaution and in accordance with the SYNLAB IT security procedures, all IT systems in Italy were immediately deactivated as soon as the attack was identified in the early morning of 18 April 2024. As a result of the incident, the operations of SYNLAB in Italy were suspended. SYNLAB Italy has now restored operations and is gradually resuming all services for patients and customers. SYNLAB operations outside of Italy were not affected by the incident. The financial impact of the incident on SYNLAB cannot be evaluated at this point in time.
7 |
Condensed consolidated statement of income
from 1 January to 31 March 2024
€ 000, unless stated otherwise | From 1 January to 31 March | |||||
2024 | 2023 | |||||
Revenue | 682,421 | 702,371 | ||||
Material and related expenses | (158,262) | (169,075) | ||||
Payroll and related expenses | (284,937) | (288,974) | ||||
Other operating income | 8,193 | 9,855 | ||||
Other operating expenses | (124,549) | (136,769) | ||||
Depreciation and amortisation | (68,949) | (72,138) | ||||
Operating profit | 53,917 | 45,270 | ||||
Share of loss of associates and other non-controlling interest | (475) | (225) | ||||
Profit on disposal of investment | 0 | 15,151 | ||||
Finance income | 22,575 | 14,967 | ||||
Finance costs | (39,810) | (35,493) | ||||
Profit before taxes | 36,207 | 39,670 | ||||
Income tax expenses | (11,015) | (11,515) | ||||
Net profit for the period | 25,192 | 28,155 | ||||
thereof attributable to non-controlling interests | 215 | 253 | ||||
thereof attributable to equity holders of the parent company | 24,977 | 27,902 | ||||
Earnings per share (basic and diluted, in €) | 0.11 | 0.13 | ||||
8 |
Condensed consolidated statement of comprehensive income
from 1 January to 31 March 2024
€ 000 | From 1 January to 31 March | |||||
2024 | 2023 | |||||
Net profit for the period | 25,192 | 28,155 | ||||
Actuarial gains/(losses) on pension obligations | 31 | (47) | ||||
Taxes on actuarial gains/(losses) on pensions obligations | 2 | (2) | ||||
Items that will not be reclassified to profit or loss (A) | 33 | (49) | ||||
Foreign exchange gains/(losses) | 4,832 | (6,644) | ||||
Items that may be reclassified subsequently to profit or loss (B) | 4,832 | (6,644) | ||||
Other comprehensive income for the year (A) + (B) | 4,865 | (6,693) | ||||
Total consolidated comprehensive income attributable to: | 30,057 | 21,462 | ||||
Equity holders of the parent company | 29,757 | 21,179 | ||||
Non-controlling interests | 300 | 283 | ||||
9 |
Condensed consolidated statement of financial position
as at 31 March 2024
ASSETS
€ 000 | |||||
31 Mar 2024 | 31 Dec 2023 | ||||
Goodwill | 2,204,182 | 2,198,943 | |||
Intangible assets | 589,528 | 598,977 | |||
Property, plant and equipment | 359.495 | 358,513 | |||
Right of use assets | 575,985 | 594,583 | |||
Investments in associates | 625 | 575 | |||
Financial non-current assets | 63,011 | 71,006 | |||
Other non-current assets | 4,755 | 4,607 | |||
Deferred tax assets | 49,393 | 46,914 | |||
Total non-current assets | 3,846,974 | 3,874,118 | |||
Inventories | 62,887 | 65,037 | |||
Trade accounts receivables | 437,672 | 397,601 | |||
Financial current assets | 40,228 | 44,651 | |||
Other current assets | 59,236 | 60,921 | |||
Cash and cash equivalents | 260,240 | 220,938 | |||
Total current assets | 860,263 | 789,148 | |||
Total assets | 4,707,237 | 4,663,266 | |||
10 |
EQUITY AND LIABILITIES
€ 000 | |||||
31 Mar 2024 | 31 Dec 2023 | ||||
EQUITY | |||||
Contributed capital | 222,222 | 222,222 | |||
Additional paid-in capital | 2,940,464 | 2,938,715 | |||
Treasury shares | (34,697) | (34,711) | |||
Cumulative translation adjustment | 17,847 | 13,100 | |||
Accumulated deficit | (773,918) | (798,928) | |||
Total parent company interests | 2,371,918 | 2,340,398 | |||
Non-controlling interests | (1,890) | (2,167) | |||
Total equity | 2,370,028 | 2,338,231 | |||
NON-CURRENT LIABILITIES | |||||
Loans and borrowings | 904,471 | 904,212 | |||
Lease liabilities | 483,324 | 499,878 | |||
Employee benefits liabilities | 28,490 | 27,680 | |||
Provisions | 3,579 | 3,590 | |||
Contract liabilities | 10,282 | 10,569 | |||
Other liabilities | 54,103 | 34,501 | |||
Deferred tax liabilities | 159,108 | 161,752 | |||
Total non-current liabilities | 1,643,357 | 1,642,182 | |||
CURRENT LIABILITIES | |||||
Loans and borrowings | 20,359 | 19,117 | |||
Lease liabilities | 137,370 | 138,152 | |||
Trade accounts payable | 289,130 | 289,742 | |||
Provisions | 8,068 | 8,509 | |||
Contract liabilities | 23,132 | 9,786 | |||
Income tax liabilities | 21,183 | 13,214 | |||
Other liabilities | 194,610 | 204,333 | |||
Total current liabilities | 693,852 | 682,853 | |||
Total liabilities | 2,337,209 | 2,325,035 | |||
Total equity and liabilities | 4,707,237 | 4,663,266 | |||
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Synlab AG published this content on 07 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2024 16:52:01 UTC.
