Genomma Lab Internacional (LABB) Q3 2025 earnings summary

Executive summary

• Net sales declined 12.8% year-over-year, mainly due to FX headwinds and hyperinflationary effects in Argentina, while like-for-like sales were down 2.9%.

• EBITDA margin remained resilient at 23.7%, supported by cost discipline and productivity initiatives.

• Productivity program launched in 2023 secured MXN 1.1 billion in savings YTD, targeting MXN 3.0 billion by 2026, with reinvestment in growth initiatives.

• Innovation, distribution expansion, and digital channels are key pillars of the growth strategy.

• Proforma net income, excluding non-cash FX effects, decreased 3% year-over-year; reported net income fell 34.2% due to hyperinflationary impacts.

Financial highlights

• Q3 2025 net sales: MXN 4,441.4 million (down 12.8% YoY).

• EBITDA: MXN 1,053.6 million (down 12.7% YoY), margin 23.7%.

• Adjusted net income, excluding non-cash hyperinflation effects, declined 3% to MXN 632 million.

• Free cash flow reached nearly MXN 1.6 billion, down 35% year-over-year, mainly due to lower net income and a longer cash conversion cycle.

• Leverage ratio stood at 1.2x net debt/EBITDA, a historical low.

Outlook and guidance

• Management expects a few more challenging quarters in Mexico, with gradual top-line recovery anticipated in the first half of 2026.

• Growth plan aims to restore and potentially exceed historical growth rates by 2026-2027.

• CapEx will remain elevated in the next two quarters, then normalize, with free cash flow expected to return to MXN 2.7–3 billion annually by 2026.

• Productivity savings will be reinvested in product innovation, distribution, pricing, communication, and e-commerce.

• EFS tax impact on beverages is expected to be less severe than competitors due to product formulation.