Azelis Inc's revenue increased 59.4% to EUR 975.3 million in Q1 2022, largely driven by organic growth of 32.6% as demand remains strong across most of our end-markets. Revenue contribution from acquisitions was EUR 147.5 million representing topline growth contribution of 24.1%, whilst FX translation represented a 2.7% revenue tailwind.

 

Revenue in Industrial Chemicals increased 60.0%, reflecting continued strong demand in the segment, and in particular in the CASE end-market supported by strong building and construction activities. Likewise, the recovery in Life Sciences market continued to strengthen, generating 59.1% revenue growth, with Food & Health as well as Pharma end segments starting to normalize to pre-Covid levels.

 

Gross profit increased by 71.3% to EUR 235.9 million in Q1 2022, implying gross profit margin of 24.2%. The 167 bps improvement in gross profit margin was due to positive mix effect as well as the Group’s pricing management discipline.

 

During the period, adjusted EBITA increased by 94.6% to EUR 116.0m, resulting in a step-up of 215 bps in adjusted EBITA margin to 11.9% as strong organic growth and the benefits of scale mitigated the impact from the ongoing pressures on the supply chain.

 

Comment from Dr. Hans Joachim Müller, CEO: Azelis had a very good start to the year, with strong momentum across our businesses translating to a 33% organic growth in the first quarter. We also completed 3 acquisitions with combined 2021 revenue of over EUR 160 million. Adjusted EBITA increased by 95% to EUR 116 million, translating to a significant improvement of 589 bp in the Group’s conversion margin over the period. Given the Group’s strong performance in the first three months despite ongoing supply chain disruptions as well as sustained inflation, I am confident that we should be able to exceed the recently-upgraded consensus estimate for the full year by at least 10%.

 

Our strategy of driving growth is underpinned by a constantly strengthening lateral value chain, supported by continuous investments in innovation capabilities and digitalization, as well as a commitment to sustainability to create long-term value. In line with this, we are positive that we should be able to generate 8-10% of revenue growth and deliver 10-15 bps adjusted EBITA margin expansion per year in the medium-term.

 

Although uncertainty from ongoing supply chain disruptions as well as sustained inflation persist, the outlook for the full year 2022 remains positive for Azelis. Given the strong performance in the first three months of the year, the management expects the Group to exceed the recently-upgraded consensus estimate of EUR 325 million in adjusted EBITA for the full year by at least 10%.