Genomma Lab Internacional (LABB) Q2 2025 earnings summary

Executive summary

• Q2 2025 net sales grew 0.5% year-over-year, or 5.5% excluding Argentina, with solid profitability despite currency headwinds and a weak beverage season in Mexico.

• EBITDA increased 4.4% year-over-year, with margin expanding 89 bps to 23.8%, driven by productivity initiatives and cost efficiencies.

• Pro forma net income rose 16.6% year-over-year, excluding non-cash FX and hyperinflationary effects from Argentina; reported net income declined 43.8% due to these non-cash items.

• Free cash flow for the trailing twelve months surged 65% to MXN 2.7 billion, supported by a seven-day improvement in the cash conversion cycle.

Financial highlights

• Consolidated net sales reached MXN 4,676.4 million, up 0.5% year-over-year; excluding Argentina, sales grew 5.5%.

• EBITDA margin expanded to 23.8%, up 89 bps, reflecting cost efficiencies and favorable sales mix.

• Net income declined 43.8% to MXN 355 million due to non-cash FX and inflationary losses in Argentina; pro forma net income up 16.6%.

• Pro forma EPS grew 16.6%; reported EPS declined 43.8%.

• Free cash flow conversion reached 14.4% of trailing 12-month net sales.

Outlook and guidance

• Full-year 2025 sales growth expected to be near zero due to ongoing headwinds and hyperinflationary adjustments.

• Q3 projected to be the weakest quarter, with a single-digit contraction anticipated.

• Profitability to be sustained with a targeted 24% average EBITDA margin for the year.

• Gradual growth expected in 2026, aiming for mid-term double-digit sales growth.

• CapEx projected at MXN 500 million for year-end 2025, with a return to normal levels in 2026.