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EQS-News: SYNLAB AG / Key word(s): Quarter Results
SYNLAB delivers strong performance in Q1 2024
2024-05-08 / 07:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
SYNLAB delivers strong performance in Q1 2024

. Revenue at EUR682 million
. Strong underlying organic growth at 3.9% (Q1 2023: 10.0%); 5.2% adjusted for working days
. Adjusted EBITDA at EUR123 million (increased by 4% compared to Q1 2023)
. Strong Adjusted EBITDA margin at 18.0% (Q1 2023: 16.9%), at the upper end of the guided range for FY 2024
of 17-18%
. EUR8 million of SALIX savings
. Strong unlevered free cash flow at EUR45 million
. Active portfolio management strategy improving business performance
. Adjusted net debt at EUR1.25 billion at the end of March 2024

SYNLAB AG ("SYNLAB" or "the Group", FSE: SYAB), the leader in medical diagnostic services and specialty testing in
Europe, today announced its unaudited Q1 2024 results. The Group reports strong financial performance driven by strong
underlying organic growth (excluding COVID-19 testing revenue) of 5.2% working days adjusted. Revenue reached EUR682
million (Q1 2023: EUR702 million) in Q1 2024 with an adjusted EBITDA (AEBITDA) of EUR123 million (Q1 2023: EUR119 million)
and a strong AEBITDA margin of 18.0% (Q1 2023: 16.9%) at the upper end of the guided range for FY 2024 of 17-18%.
The Q1 2024 report is available for download on the investor relations website: https://ag.synlab.com
"SYNLAB had a successful start to the year, with steady progress on our strategic priorities and strong underlying
organic growth. Our first quarter results show that our portfolio management focus and the densification of our
operations have enabled continuous productivity delivery reflected in a stronger adjusted EBITDA margin of 18.0%,"
commented Mathieu Floreani, CEO of the SYNLAB Group. He adds: "Following the successful settlement of the public
acquisition offer by Cinven on 18 April, we look forward to continue growing SYNLAB as a leading provider for medical
diagnostic services together with our long-standing shareholder."

Financial performance

SYNLAB Key figures Q1 2024 Q1 2023 Change
(EURmillion, unless stated otherwise)

Revenue                                682.4   702.4   (3)% 
Operating profit                       53.9    45.3    19% 
Net profit (Group share)               25.0    27.9   (10)% 
Adjusted EBITDA (AEBITDA)              123.1   118.5    4% 
AEBITDA margin                         18.0%   16.9%  1.1ppt 
Adjusted operating profit (AOP)        64.8    60.5     7% 
AOP margin                             9.5%    8.6%   0.9ppt 
Adjusted net profit (Group share)      33.0    24.9    33% 
Adjusted EPS (basic and diluted, EUR)*   0.15    0.11    0.04 
Unlevered free cash flow (uFCF)        44.5    (7.0)    52 

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* Based on a weighted average of 219,775,252 (basic) or 220,943,418 (diluted) shares outstanding in Q1 2024 and 219,705,767 (basis) or 220,241,309 (diluted) in Q1 2023, respectively

Strong underlying organic revenue growth

Q1 2024 revenue was reported at EUR682 million (Q1 2023: EUR702 million), reflecting a particularly sharp reduction in COVID-19 testing revenue to EUR3 million (Q1 2023: EUR25 million).

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%.

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. The South segment underlying growth was at 1.0% adjusted for prior year revenue one-off in Italy.

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.

Strong Q1 2024 AEBITDA margin

Q1 2024 adjusted EBITDA (AEBITDA) was EUR123 million (Q1 2023: EUR119 million) while adjusted operating profit (AOP) was EUR65 million (Q1 2023: EUR61 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 (EUR8 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).

M&A activities

The M&A contribution was minimal in Q1 2024 as SYNLAB completed one small bolt on acquisition.

The business continues to focus on portfolio management.

Increase of adjusted net profit

In Q1 2024, adjusted net profit (Group share) was EUR33 million (Q1 2023: EUR25 million), mainly from increased adjusted Operating profit, lower Net finance cost and lower income tax expenses.

Reduction of adjusted (for covenant purpose) net debt

Q1 2024 unlevered free cash flow (uFCF) was EUR45 million (Q1 2023: EUR(7) million) with a cash conversion rate (uFCF / AEBITDA) of 37%.

Net debt of the Group decreased by EUR56 million to EUR1,285 million at the end of March 2024 (year-end 2023: EUR1,341 million).

Adjusted (as per covenant definition) net debt at the end of March 2024 was at EUR1,249 million (year-end 2023: EUR1,303 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 EUR260 million in cash at the end of March 2024 (year-end 2023: EUR221 million).

In April 2024, SYNLAB AG entered into a new loan of EUR535 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.

Outlook

For 2024 SYNLAB continues to expect revenues of around EUR2.7 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 spent to be within the range of EUR50 million to EUR100 million.

Cinven successfully settled the public acquisition offer to the shareholders of SYNLAB AG and now controls approximately 85% of the SYNLAB share capital and 86% of its voting rights.

SYNLAB Italy has been affected by the cyber security attack on 18 April 2024. SYNLAB has now restored operations and is gradually resuming all services for patients and customers.

Conference call

SYNLAB Management will hold a conference call for analysts and investors today at 3:00 p.m. CET (10:00 a.m. ET). Please register at least 10 minutes before the start of the event by clicking on the registration link on SYNLAB's website (https://ag.synlab.com/conference-call).

- Ends -

For more information:

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Media contact:                    +49 (0) 171 5565 996 
Steffi Susan Kim, FTI Consulting  steffi.kim@fticonsulting.com 
Investor contact:                 +49 (0) 151 6701 3130 
Etienne Ziller, SYNLAB            ir@synlab.com 

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About SYNLAB . SYNLAB Group is the leader in medical diagnostic services and specialty testing in Europe. The Groupoffers a full range of innovative and reliable medical diagnostics to patients, practising doctors, hospitals andclinics, governments and corporates. . Providing the leading level of service within the industry, SYNLAB is the partner of choice for routineand specialty diagnostics in human medicine. The Group continuously innovates medical diagnostic services for thebenefit of patients and customers. . SYNLAB operates in more than 30 countries across four continents and holds leading positions in mostmarkets, regularly reinforcing the strength of its network through a proven acquisition strategy. More than 27,000employees, including over 2,000 medical experts, contribute every day to the Group's worldwide success. . SYNLAB performed around 600 million laboratory tests and achieved revenues of EUR2.64 billion in 2023. . Ticker symbol: SYAB; ISIN: DE000A2TSL71 . More information can be found on www.synlab.com

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