Vitrolife: Genetics holding back growth short-term - ABG

Flat organic sales growth, due to Genetics
EBITDA revised down 1.5%-2.3% for '24e-'26e
41-43% below historical multiples, but above sector peers


Solid Q1 despite low growth

Vitrolife reported a solid set of numbers in Q1, but with lower-than-expected organic sales growth (0% vs ABGSCe +1.8%). The Consumables and Technologies business areas delivered strong sales growth, +12% and +8% respectively, but the Genetics business was down 12% in Q1 due to a combination of ERA and PGTA, but also tough comps for Genetic kits from last year. The issues in the Genetics business are expected to continue into Q2 according to management, but ease in the second half of '24e. The gross margin held up well at 57.2% vs AGBSCe at 57.0%, and the opex was 3% lower than we expected. All in all, Vitrolife reported Q2 EBITDA of SEK 272m (+3.9% vs ABGSCe and -2.4% vs Modular Finance consensus) for an EBITDA margin of 32.3%.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/Vitrolife/Equity-research/2024/4/vitrolife---genetics-holding-back-growth-short-term/