Genomma Lab Internacional (LABB) Q3 2024 earnings summary

Executive summary

• Net sales rose 15.9% year-over-year to MXN 5.093 billion, with strong growth in Mexico, Brazil, Argentina, the US, and Central America.

• EPS increased 81.6%, and EBITDA margin expanded to 23.7%, up 245 basis points, driven by productivity initiatives.

• Free cash flow reached a record MXN 2,404 million for the trailing twelve months, up 68%.

• 73% of sales maintained or gained market share, and 92% outpaced inflation.

• All key metrics surpassed last year, previous periods, and internal targets.

Financial highlights

• Gross margin improved by 184 basis points to 64.3%, with gross profit at MXN 3,272 million.

• Operating income rose 27.4% to MXN 1,128.8 million, representing 22.2% of sales.

• Net income surged 78.1% year-on-year to MXN 660.1 million; net margin at 13.0%.

• Adjusted for IAS 29 & 21, net sales grew 10.2% and net income 112.7% year-on-year.

• Free cash flow for the last twelve months increased 68% to MXN 2,404 million.

Outlook and guidance

• EBITDA margin expected to average 24% through 2025, with Q4 2024 guidance between 23% and 24%.

• By end of 2025, margin is projected in the 24%-25% range.

• Focus remains on strengthening core brands and achieving MXN 1.8 billion in annual cost savings by 2027.

• Guidance does not depend on recent GMP approvals; any upside will be incremental.

• Company intends to continue quarterly dividend payments.