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Total Revenue: EUR589 million, a 2% increase from last year.
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Revenue ex-COVID: Grew 6% at constant exchange rate in H1 2024.
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COVID Sales: EUR40 million in H1 2024.
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Gross Profit: EUR390 million, representing 66% of revenues.
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Adjusted Operating Expenses: EUR229 million, maintaining a 39% revenue ratio.
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Adjusted EBIT: EUR153 million, 26% of revenues, a 6% increase from last year.
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Adjusted Net Result: EUR120 million, 20% of revenues, a 6% increase from last year.
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Adjusted EBITDA: Just under EUR200 million, 34% of revenues, a 4% increase from last year.
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Net Debt: EUR781 million as of June 2024.
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2024 Guidance: Revenue ex-COVID expected to grow between 6% and 7%, with an adjusted EBITDA margin of about 33%.
Release Date: July 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Diasorin SpA (STU:34D) reported a strong quarter with a 7% growth ex-COVID, driven by an 11% increase in immunoassay and a 13% growth in CLIA.
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The company is on track to meet its 2027 plan of expanding to 600 hospitals, having already closed 50 new accounts in H1 2024.
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Strong performance in Europe with a 12% growth in the quarter, supported by increased testing volumes across major geographies.
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The molecular diagnostics segment showed a 5% growth ex-COVID, with potential for further growth as new platforms like PLEX are launched.
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The company increased its 2024 guidance, expecting revenues ex-COVID to grow between 6% and 7%, with an adjusted EBITDA margin of about 33%.
Negative Points
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China experienced a high single-digit decrease in Q2, with ongoing headwinds from local competition and government preference for Chinese-made products.
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The LTG segment saw a 7% decline due to a decrease in instrument placements, reflecting a broader slowdown in the life science market.
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The Italian payback mechanism remains a financial risk, with potential cash outflows despite existing provisions.
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There is no significant contribution from the PLEX platform yet, as it was only launched two months ago.
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The company faces challenges in the Middle East, particularly in Iran, due to geopolitical issues affecting product shipments.
Q & A Highlights
Q: Can you provide more details on the US hospital strategy and the role of Luminex in acquiring new accounts? A: The majority of new accounts are completely new, not from the Luminex pool. The US CLIA business is growing almost 20%, focusing on mid to high-volume accounts. MeMed is a valuable asset for initiating discussions with hospitals. (Carlo Rosa, CEO)
Q: Could you elaborate on the profitability impact of the US hospital strategy and the guidance phasing for the rest of the year? A: Immuno business carries high margins, and the hospital pricing in the US supports margin-rich assays. For guidance, H2 typically sees increased OpEx due to salary increases and discretionary spending, leading to a slightly more than 32% EBITDA margin. (Piergiorgio Pedron, CFO)
Q: How is MeMed included in US hospital guidelines, and what are the strengths of the immuno sales in Q2? A: MeMed is implemented variably across hospitals, often starting with pediatric patients. The JUPITER study will address reimbursement issues. Immuno sales strength is driven by specialty strategy, with QuantiFERON and stool testing as key products. (Carlo Rosa, CEO)
Q: Can you update on the growth momentum of PLEX and its comparison to existing syndromic testing systems? A: PLEX offers ease of use and flexibility, allowing hospitals to optimize panels based on population and season, leading to significant cost savings. The respiratory market is a key focus, with potential savings of 30-40% compared to current spending. (Carlo Rosa, CEO)
Q: What is driving the increased volume growth in Europe, and how sustainable is it? A: The growth is primarily in infectious disease testing, with increased attention post-COVID. Volume growth is around 3-4%, higher than the traditional 1%. Sustainability is uncertain, but pricing control measures are in place. (Carlo Rosa, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
