Q3 2026 Fagron NV Earnings Call

October 8, 2026

Ignacio Artola: Hello, and good morning, everyone. Welcome to Fagron's Q3 2026 Trading Statement webcast. I am joined today by our CEO, Rafael Padilla, and our CFO, Karin de Jong. We will start by discussing the company's performance and a closer look at regional developments. Afterwards, we will open the floor for questions. With that, I will hand over to Rafael.

Ignacio Artola: Hello, and good morning, everyone. Welcome to Fagron's Q3 2026 trading statement webcast. I am joined today by our CEO, Rafael Padilla, and our CFO, Karin de Jong. We will start by discussing the company's performance and a closer look at regional developments. Afterwards, we will open the floor for questions. With that, I will hand over to Rafael.

Speaker #1: And good morning, everyone. Welcome to Fagron's Q3 2026 trading statement webcast. I'm joined today by our CEO, Rafael Padilla, and our CFO, Karin De Jong.

Speaker #1: We will start by discussing the company's performance and take a closer look at regional developments. Afterwards, we will open the floor for questions. With that, I will hand over to Rafael.

Speaker #2: Thanks, Ignacio, and good morning, all. We're pleased to report another quarter of growth. Revenue reached €281.3 million, up 23.2%, or 19.5% at constant exchange rates.

Rafael Padilla: Thanks, Ignacio, and good morning all. We are pleased to report another quarter of growth. Revenue reached EUR 281.3 million, up 23.2%, or 19.5% at constant exchange rates. Organic growth at CER was 3.4%. Performance was led by EMEA and Latin America, together with Brands and Essentials in North America, which grew 26.1% organically. Our acquisitions also made a strong contribution. In North America, compounding services was impacted by the third-party industry-wide IV bag recall earlier in the year. Supply has now stabilized, and we expect volumes to recover progressively through Q4. During the quarter, we completed the acquisition of Injeplast in Brazil. This means all previously announced acquisitions are now closed and integration is on track. Finally, we are confirming our full year outlook to revenue of EUR 1.125 to EUR 1.150 billion with an adjusted EBITDA margin of 19.5% to 20%. Let's now look at the regions.

Rafael Padilla: Thanks, Ignacio, and good morning all. We are pleased to report another quarter of growth. Revenue reached EUR 281.3 million, up 23.2%, or 19.5% at constant exchange rates. Organic growth at CER was 3.4%. Performance was led by EMEA and Latin America, together with Brands and Essentials in North America, which grew 26.1% organically. Our acquisitions also made a strong contribution. In North America, compounding services was impacted by the third-party industry-wide IV bag recall earlier in the year. Supply has now stabilized, and we expect volumes to recover progressively through Q4. During the quarter, we completed the acquisition of Injeplast in Brazil. This means all previously announced acquisitions are now closed and integration is on track. Finally, we are confirming our full year outlook to revenue of EUR 1.125 to 1.150 billion with an adjusted EBITDA margin of 19.5% to 20%. Let's now look at the regions.

Speaker #2: Organic growth at CR was 3.4%. Performance was led by EMEA and Latin America, together with Brands and Essentials in North America, which grew 26.1% organically.

Speaker #2: Our acquisitions also made a strong contribution. In North America, compounding services were impacted by the third-party, industry-wide IV bag recall earlier in the year; supply has now stabilized, and we expect volumes to recover progressively through the fourth quarter.

Speaker #2: During the quarter, we completed the acquisition of Ingeplast in Brazil. This means all previously announced acquisitions are now closed, and integration is on track.

Speaker #2: Finally, we're confirming our full-year outlook for revenue of €1.125 to €1.150 billion, with an adjusted EBITDA margin of 19.5% to 20%. Let's now look at the regions.

Speaker #2: In EMEA, growth was broad-based across countries, with organic growth of 6.5%. Compounding services led the way with 13.3% organic growth, driven by important new customer wins and strong underlying demand.

Rafael Padilla: EMEA growth was broad-based across countries with organic growth of 6.5%. Compounding services led the way with 13.3% organic growth, driven by important new customer wins and strong underlying demand. Brands grew 7.3%, supported by new product launches. Growth in Essentials came mainly from our recent acquisitions. In Latin America, organic growth was 9.7%. Essentials grew 11.9% organically at CER, supported by a successful Consulfarma fair. Our acquisitions in Brazil added further growth, and reported revenue also benefited from currency. In North America, Brands and Essentials had another strong quarter, with organic growth of 16.1% in Brands and 28.8% in Essentials. Compounding services was impacted by the third-party industry-wide IV bag recall, now fully resolved, and this explains the organic decline of 2.8% for the region. We continue making progress across our expansion projects and expect to bring them online over the next two years.

Speaker #2: Brands grew 7.3%, supported by new product launches. Growth in Essentials came mainly from our recent acquisitions. In Latin America, organic growth was 9.7%. Essentials grew 11.9% organically at CR, supported by a successful Consult Pharma Fair.

Speaker #2: Our acquisitions in Brazil added further growth, and reported revenue also benefited from currency. In North America, Brands and Essentials had another strong quarter, with organic growth of 16.1% in Brands and 28.8% in Essentials.

Speaker #2: Compounding services were impacted by the third-party, industry-wide IV bag recall, now fully resolved, and this explains the organic decline of 2.8% for the region.

Speaker #2: We continue making progress across our expansion projects and expect to bring them online over the next two years. Moving to our outlook, we now expect full-year revenue of €1.125 to €1.150 billion and an adjusted EBITDA margin of 19.5% to 20%. Capex will remain at around 3.5% of revenue, excluding the one-off projects already announced.

Rafael Padilla: Moving to our outlook, we now expect full year revenue of EUR 1.125 to EUR 1.150 billion, and an adjusted EBITDA margin of 19.5% to 20%. CapEx will remain at around 3.5% of revenue, excluding the one-off projects already announced. Looking ahead, we believe compounding services in North America has reached an inflection point, with IV bag supply stabilized. At the same time, our expansion projects remain on track. Together, we add more than $500 million of revenue capacity in the 2025, 2028 period, including Tampa, Wichita and Las Vegas. All announced acquisitions now closed, and they will contribute for the full year in 2027. We are also happy to announce that we will hold a Capital Markets Day at our Wichita facility in October 2027. We will discuss our upcoming growth cycle, as well as visiting the current Wichita site, and at that time, the almost completed expansion.

Rafael Padilla: Moving to our outlook, we now expect full year revenue of EUR 1.125 to 1.150 billion, and an adjusted EBITDA margin of 19.5% to 20%. CapEx will remain at around 3.5% of revenue, excluding the one-off projects already announced. Looking ahead, we believe compounding services in North America has reached an inflection point, with IV bag supply stabilized. At the same time, our expansion projects remain on track. Together, we add more than $500 million of revenue capacity in the 2025, 2028 period, including Tampa, Wichita, and Las Vegas. All announced acquisitions now closed, and they will contribute for the full year in 2027. We are also happy to announce that we will hold a Capital Markets Day at our Wichita facility in October 2027. We will discuss our upcoming growth cycle, as well as visiting the current Wichita site, and at that time, the almost completed expansion.

Speaker #2: Looking ahead, we believe compounding services in North America have reached an inflection point, with IV bag supply stabilized. At the same time, our expansion projects remain on track.

Speaker #2: Together, we add more than $500 million of revenue capacity in the 2025–2028 period, including Tampa, Wichita, and Las Vegas. All announced acquisitions are now closed, and they will contribute for the full year in 2027.

Speaker #2: We're also happy to announce that we'll hold a Capital Markets Day at our Wichita facility in October 2027. We'll discuss our upcoming growth cycle, as well as visit the current Wichita site and, at that time, the almost completed expansion.

Speaker #2: To conclude, Fagron is the only global, vertically integrated player in the fast-growing, fragmented pharmaceutical compounding market, with a defensive, high-cash-generating business model. Our diverse geographical footprint makes this model resilient, and this quarter shows the strength of that diversification.

Rafael Padilla: To conclude, Fagron is the only global vertically integrated player in fast-growing, fragmented pharmaceutical compounding market, with a defensive, high cash generating business model. Our diverse geographical footprint makes this model resilient, and this quarter shows the strength of that diversification. Together with demographic trends and our focus on personalization, this is the basis for our success. Our quality focus and operational excellence initiatives continue to unlock global synergies, while disciplined M&A remains a key part of our growth. Sustainability is a strategic cornerstone for us, as together we create the future of personalized medicine. With that, let's open the line for questions.

Speaker #2: Together with demographic trends and our focus on personalization, this is the basis for our success. Our quality focus and operational excellence initiatives continue to unlock global synergies, while disciplined M&A remains a key part of our growth.

Speaker #2: Sustainability is a strategic cornerstone for us, as together we create the future of personalized medicine. With that, let's open the line for questions.

Speaker #3: Ladies and gentlemen, we are now ready to take your questions. If you wish to ask a question, please press the pound key (5) on your telephone keypad.

Operator: Ladies and gentlemen, we are now ready to take your questions. If you wish to ask a question, please press pound key 5 on your telephone keypad. The first question comes from Stijn Demeester. Your line is open, go ahead.

Speaker #3: The first question comes from Stijn de Meijster. Your line is open; go ahead.

Speaker #4: Yes, good morning. I'm Stijn de Meijster, ING. Thanks for taking my question. I have a couple. The first one is on US compounding. Can you take us through the quarterly performance there? Because despite the absence of GLP-1 comps, organic growth actually declined versus the first half.

Stijn Demeester: Yes. Good morning. It's Stijn Demeester, ING. Thanks for taking my question. I have a couple. The first one is on US compounding. Can you take us through the quarterly performance there? Because despite the absence of GLP-1 comps, organic growth actually declined versus the H1. So what visibility do you have on resolution of the IV bag issue and the subsequent volume recovery in the Q4? Can you help us understand what the underlying performance of the life cycle related to that and the CEO last year in quarter? Second question is on the guidance. The upper and the lower end of the range suggests around EUR 25 million revenue delta for Q4. Is US compounding here the main driver, or should we take into account other moving parts?

Speaker #4: So what visibility do you have on resolution of the IV back issue and the subsequent volume recovery in the fourth quarter? Can you help us understand what the underlying performance of the lines are related to that, and the sales during the quarter?

Speaker #4: The second question is on the guidance. The upper and lower end of the range suggest around $25 million in revenue delta for Q4. Is U.S. compounding here the main driver, or should we take into account other moving parts?

Speaker #4: And then in 2027, you mentioned there's a strong outlook. The midterm objective, if I'm recalling correctly, is that an acceleration of organic growth is actually embedded as of 2027.

Stijn Demeester: On 2027, you mentioned there a strong outlook, the midterm objectives, if I'm recalling right, an acceleration of organic growth actually embedded as of 2027. Can you reassure that that is still in the cards for next year? Thanks.

Speaker #4: Can you reassure that that is still in the cards for next year? Thanks.

Speaker #2: Good morning, Stijn, and thanks for your question. Very good question. The first one on the US compounding business. When you look at the last five quarters—so we have had, of course, two quarters last year with the normalization of the GLP-1s, which we already announced, and we have commented many times.

Rafael Padilla: Good morning, Stijn, and thanks for your question. Very good question, the first one on the US compounding business. When you look at the last five quarters, we have had, of course, two quarters last year with the normalization of the GLP-1s, which we already announced, and we have commented many times. Then the Q1 of this year having the same pattern as the other two quarters with the normalization of the GLP-1. In Q2, we had this effect of the GLP-1 effect and the third-party industry-wide IV bag recall that we also commented. That impacted the last part of the quarter in Q1 and then full in Q2. Also as explained, we would have an impact during Q3 because of the revalidation of these IV bags, the prefilled IV bags. This is what we have seen during this Q3.

Speaker #2: Then the first quarter of this year had the same pattern as the other two quarters, with the normalization of the GLP-1s. In Q2, we had this effect of the GLP-1 effect and the third-party, industry-wide IV bag recall, which we also commented on, that impacted the last part of the quarter in Q1, and then fully in Q2. Also, as explained, we would have an impact during Q3 because of the revalidation of this IV bag, the fulfilled IV bag.

Speaker #2: So, this is what we have seen during this third quarter. When you compare it with the first half, it is, of course, lower, and that's because during the second quarter—the last weeks of the first quarter and the second quarter—we still had some batches from some plants of this vendor. So, this vendor has factories, and we had different batches from these different factories. Not all these factories were affected, only some of them, and, of course, we were holding these batches for our committed supply program, which we have discussed many times since we started with FSS.

Rafael Padilla: When you compare with the H1, it is, of course, lower, and that is because during the Q2, of course, the last weeks of the Q1 and the Q2, we still had some batches from some plants of this vendor. This vendor has different plants, different factories, and we had different batches from these different factories. Not all these factories were affected, only some of them. Of course, we were holding these batches for our committed supply program, which we have discussed many times since we start with FSS. Remember, we have said we have always standing orders, daily standing orders that suits the committed supply program. Those are the loyal customers which reserve, and we reserve inventory for them, so therefore, we have good visibility on our sales.

Speaker #2: Remember, we have said we always have standing orders daily—standing orders that suit the committed supply program. Those are the loyal customers whom we serve, and we reserve inventory for them. Therefore, we have good visibility on our sales, and then, of course, on top are the new customers that we're adding or new SKUs to those customers.

Rafael Padilla: On top is the new customers that we are adding or new SKUs to those customers. During Q3, we did not have this inventory while we were revalidating. At the end of Q3, we had that one revalidated, so we can now again compound with those IV bags. At this moment, so we are now in Q4, some days, 8 days in October. So we are gaining traction and we are delivering, of course, first to the loyal customers and then the business on top. Of course, during Q4, it will not be one big step or big jump because we need to respect the sales cycle of the customers. That is quite clear to all of us. However, we see a nice pace of recouping these sales. We also need to say that we-

Speaker #2: So during Q3 we're going to have this inventory while we're revalidating, so at the end of Q3 we had that one revalidated, so we can now again compound with those IV back, and at this moment so we are now in Q4, some days, eight days in October, so we're gaining traction and we are delivering of course first to the loyal customers and then the business on top.

Speaker #2: Of course, during Q4, it will not be one big step or big jump, because we need to respect the sales cycle of the customers. That's quite clear to all of us. However, we see a nice state of overcoming these sales.

Speaker #2: We also need to say that when—oops. Yes?

Stijn Demeester: Then-

Rafael Padilla: Oops. Yeah.

Speaker #4: Sorry.

Stijn Demeester: Sorry.

Speaker #2: Go ahead, please. I don't know, please. Just I was wanting to finish that saying that the normalizing the GLP-1s would be at the year-to-date growth 6% this time, and the last comment is that we see a strong underlying demand of the hospital sourcing market and as you would you also ask.

Rafael Padilla: Go ahead, please.

Stijn Demeester: Go on.

Rafael Padilla: No, please. I was wanting to finish that saying that normalizing the GLP-1s would be at the year-to-date growth, 6%, Stijn. The last comment is that we see a strong underlying demand of the hospital sourcing market. Anne Zijl, would you also add?

Speaker #4: Yeah. When do you expect to be at, yeah, the normal run rate? Is that somewhere along the first half, or is that end of Q4?

Stijn Demeester: Yeah. When do you expect to be at the normal run rate? Is that somewhere along the H1 or is that end of Q4?

Speaker #2: Yes, we believe that will be during the first quarter of next year. You said first half, that's correct; however, we see good pace and we're now almost completed with getting the assortment back online. So we're quite confident that during Q1 we should have the business back where we left it during Q1.

Rafael Padilla: Yes. We believe that will be during Q1 of next year. You said H1. That's correct. However, we see good pace and we're having now almost the assortment back online, completed. We're quite confident that during Q1, we should be the business back where we left it during Q1 this year.

Speaker #2: This year. And then maybe it's time to comment on Anazil, because we also asked a question on Anazil. So, how is Anazil performing?

Stijn Demeester: Understood.

Rafael Padilla: Then maybe it's time to comment on Anazao, because you also asked a question on Anazao. How is Anazao performing? We see nice developments at our Anazao, mainly driven by our Tampa facility. Remember, Stijn, that our 503B facility in Vegas is at 90% capacity, so therefore now we are expanding that site. The whole growth comes from the 503A facility in Tampa, the new one, and that's mainly driven by strong health and wellness driver longevity, and of course, the telehealth platforms, which in the US, as you have asked many times during the calls, it's huge, the telehealth platforms impact.

Speaker #2: We see nice developments at our Anazil location, mainly driven by our Sampa facility. Remember, Stijn, that our 503(b) facility in Vegas is at 90% capacity. Therefore, we are now expanding that site, so all the growth comes from the 503(a) facility in Tampa, the new one. That's mainly driven by strong health and wellness drivers, longevity, and of course, the telehealth platforms, which in the US—as you have asked many times during the calls—it's huge, the telehealth platforms' impact.

Speaker #3: Yeah, and maybe to comment on the guidance. So indeed, the range in the guidance—the $25 million—is driven by compounding services in the US and the pace of the sales increase in Q4. So as Rafa mentioned, the industry-wide recall had an impact on our outputs that is stabilized now, and the volumes are increasing throughout Q4.

Karin de Jong: Yeah, maybe to comment on the guidance. Indeed, the range in the guidance, the EUR 25 million, is driven by compounding services in the US, and the pace of the sales increase in Q4. As Rafa mentioned, the industry-wide recall had an impact on our outputs that is stabilized now and the volumes are increasing throughout Q4. We do have an impact of timing of sales cycles and also commitment of orders to other players in the market, and that determines the pace of growth in Q4 and therefore the range that we have given in our guidance. That's the main driver. Then at the last question on 2027. The operational elements are behind us, so we expect 2027 to be full on track. We have all the M&A integrations behind us. We have the capacity expansion coming online.

Speaker #3: We do have an impact from the timing of sales cycles and also commitment of orders to other players in the market, and that determines the pace of growth in Q4. Therefore, the range that we have given in our guidance—that's the main driver.

Speaker #3: And then, for the last question on 2027: The operational elements are behind us, so we expect 2027 to be fully on track. We have all the M&A integrations behind us, we have the capacity expansion coming online, we invested in quality and in operations this year, so 2027 will be a very good year for us.

Karin de Jong: We invested in quality and in operations this year. So 2027 will be a very good year for us. Remind that the demand in the market in the US is very strong and that remains strong. So, we keep on track to our long-term guidance.

Speaker #3: Remind that the demand in the market in the US is very strong, and that remains strong, so we keep on track for our long-term guidance.

Speaker #2: Thank you.

Stijn Demeester: Thank you.

Speaker #1: Thank you, Stijn.

Rafael Padilla: Thank you, Stijn.

Speaker #3: Thank you, Stijn.

Karin de Jong: Thank you, Stijn.

Speaker #2: Thank you.

Stijn Demeester: Thank you.

Ignacio Artola: Thank you.

Stijn Demeester: The following question comes from Frank Claassen from Degroof Petercam. Please go ahead.

Speaker #1: The following question comes from Frank Claze from De Groof Bierenkamp. Please go ahead.

Speaker #5: Yes, good morning, all. I have two questions. First of all, on EMEA—well, that was a strong organic growth, the strongest I can remember: 6.5%.

Frank Claassen: Well, good morning, all. I have two questions. First of all, on EMEA. Well, that was a strong organic growth, the strongest I can remember, 6.5%. Could you elaborate what are the main drivers and is this growth the new normal? Is this sustainable? That's my first question. Secondly, on the situation in the Middle East, it continues to be, let's say, volatile there. Is there a change in the impact of the situation in the Middle East? Do you see impact of higher oil prices, higher API prices, logistical costs? Could you elaborate on that one? Thank you.

Speaker #5: Yeah, could you elaborate on what were the main drivers, and is this growth the new normal? Is this sustainable? That's my first question. And then secondly, on the situation in the Middle East, it continues to be, let's say, volatile there.

Speaker #5: Is there a change in the impact of the situation in the Middle East? Do you see the impact of higher oil prices, higher API prices, and logistical costs?

Speaker #5: Could you elaborate on that one? Thank you.

Speaker #2: Yes, thanks. Frank, good morning. And starting with the second question, we now see a stabilization of pricing for raw materials. For some raw materials, we even see a decline, mainly on the physical market. So we see a decline, and that tells us the situation has stabilized. With transportation, we see a slight increase; however, not the huge increases that we have seen in the past.

Rafael Padilla: Yes, thanks. Frank, good morning. Starting with the second question, we see now a stabilization of pricing of raw materials. Even some raw materials, we see now a decline mainly on the pharmaceutical market. We see a decline, and that tells us that the situation has been stabilized. With transportation, we see slight increase, however, not the huge increases that we have seen in the past. Of course, that's always the question that you always ask about operational excellence. We are now bundling a lot our volumes. The Pharmavit acquisition, which has an 80% of product comparable with the rest of the assortment, is helping us with these volumes. The teams there have a lot of experience on procuring in Asia Pacific. That's good for us. On the EMEA side, the new normal, we would like to. That's a nice question, the new normal.

Speaker #2: Of course, that's always the question that you ask about operational excellence. We are now bundling a lot of our volumes. The Pharmavit acquisition, which has an 80% product comparison comparable with the rest of the assortment, is helping us with these volumes. The teams there have a lot of experience in procuring in Asia Pacific, so that's good for us.

Speaker #2: On the EMEA side, the new normal—we would like to, so that's a nice question. The new normal, we don't believe that that's the new normal. It has been an exceptional and amazing quarter for us.

Rafael Padilla: We don't believe that that's the new normal. It has been an exceptional and an amazing quarter for us. During this year, we have seen a really nice performance. Also during last year since Kostas, the new area leader in EMEA, took over. We have seen a strong operational performance with product portfolios alignment throughout the countries, which was always our challenge. Different countries, different languages, different labels. This has been addressed by Kostas and the team. Of course, a strong operational strategy with our factories in the Czech Republic and in Poland as well. For sure, the procurement synergies that we have just spoken, discussed. Next to that, what we're seeing is that our compounding services business, and that's mainly the Netherlands, as you know, it's doing quite well, better than expected.

Speaker #2: During this year we have seen a really nice performance, also during last year since Kostas, the new area leader in EMEA, took over, we have seen an A strong operational performance, with product portfolios alignment throughout the countries, which was always our challenge, different countries, different languages, different labels, so this has been addressed, by Kostas and the team, of course a strong operational strategy with our factories in the Czech Republic, and in Poland, as well for sure the procurement synergies that we have just spoken, discussed and then next to that what we're seeing is that our compounding services business, and that's mainly the Netherlands as you know, it's doing quite well, better than expected, we see next to the wholesalers, we see nice customer groups like GPOs, Dutch GPOs, which are now giving business to us, and that's because the breadth of our assortment, we have the biggest assortment in the industry, so this plays a very important role, commercial excellence strategy that we have together with the teams in the Netherlands, and this is paying off.

Rafael Padilla: Next to the wholesalers, we see nice customer groups like GPOs, Dutch GPOs, which are now giving business to us. That's because the breadth of our assortment, we have the biggest assortment in the industry. This plays a very important role. Commercial excellence strategy that we have together with the teams in the Netherlands, and this is paying off. We believe that we will see nice developments in Europe. The new normal, we wish that would be.

Speaker #2: So, we believe that we will see nice developments in Europe. The new normal—we wish that would be.

Speaker #3: And maybe to add, Frank, on the guidance for EMEA: we indeed had a very strong third quarter, and we guide for this year at a mid-single-digit percentage of growth.

Karin de Jong: To add, Frank, on the guidance for EMEA. We indeed had a very strong Q3, and we guide for this year at a mid-single digit percentage of growth.

Speaker #5: Okay, that's clear. Thank you very much.

Frank Claassen: Okay. That's clear. Thank you very much.

Speaker #2: Thanks all. Thank you, Frank.

Karin de Jong: Thanks, Frank.

Rafael Padilla: Thank you, Frank.

Operator: The next question comes from Michael Heider from Deutsche Bank. Please go ahead.

Speaker #1: The next question comes from Michael Haider from Vredenberg. Please go ahead.

Speaker #6: Yes, good morning, Rafael, Karin, and Ignacio. I have a couple of questions—some housekeeping here. Can you tell us when exactly is the Engine Plus consolidation, and remind us on the cash out of the acquisition?

Michael Heider: Yes. Good morning, Rafael, Karin, and Ignacio. I have a couple of questions. Some housekeeping here. Can you tell us when exactly is the Injeplast consolidation and remind us on the cash out of the acquisition? How much extension CapEx do you expect for full year 2026? Maybe a word on your M&A pipeline. We know you have been very active over the last 18 months, and you said you would slow activities down somewhat, and focus on integration, but maybe you can elaborate a bit on your pipeline. The last one, just on the IV bags. I am not sure that I got it right. You said the underlying growth would have been 6%? Can you repeat what you have been saying on the underlying growth you have been seeing? Thanks.

Speaker #6: Then, how much expansion capex do you expect for the full year '26? And then, maybe a word on your M&A pipeline. We know you have been very active over the last 18 months, and you said you would slow activities down somewhat and focus on integration. But maybe you can elaborate a bit on your pipeline.

Speaker #6: And last one, just on the IV pax, I'm not sure that I got it right—so you said the underlying growth would have been 6%, or can you remind me, or Pete, what you have been saying on the underlying growth you have been seeing?

Speaker #6: Thanks.

Speaker #3: Yeah, so good morning, Michael. I will start with the first question on the Engine Plus acquisition. We are happy that we could complete the Engine Plus acquisition as of September 1st.

Karin de Jong: Yeah. Good morning, Michael. I will start with the first question on the Injeplast acquisition. We are happy that we could complete the Injeplast acquisition as of 1 September. If we look at the financials of the acquisition, the revenue is a low double-digit amount with margins that are in line with group average and a multiple that is between the average rates that we have, that is 6 to 9 times EBITDA. Injeplast, maybe a short reminder, is a packaging company. We are adding product capabilities to that region, and it fits nicely with the Vepakum acquisition that we announced earlier in that region. That is one on the Injeplast. On the expansion CapEx, we have roughly EUR 70 million of expansion CapEx, 2 in the US and 1 in the Netherlands.

Speaker #3: If we look at the financials of the acquisition, the revenue is a low double-digit amount, with margins that are in line with group average, and a multiple that is paid between the average rates that we have, which is 6 to 9 times EBITDA.

Speaker #3: And Engine Plus, maybe as a short reminder, is a packaging company. So we are adding product capabilities to that region, and it fits nicely with the Verpacking acquisition that we announced earlier in that region.

Speaker #3: So that's one on the engine. Plus, then on the expansion CapEx, we have roughly $70 million of expansion CapEx—two in the US and one in the Netherlands. We had roughly $10 million of that spent in H1.

Karin de Jong: We had roughly EUR 10 million of that spent in H1. The rest is spread in H2 and next year. The exact split is a bit difficult to give because of timing of ordering, invoices coming in, and payments. But the split is between H2 of this year and H1 of next year. Your third question, the 6% was related to the growth if we normalize for the GLP-1s year to date. If we come back to the IV bag part in North America, what we see there is that compounding services in Q3 showed a decrease of 12.9% organically against constant exchange rates. What we would have expected was a low double-digit percentage of growth. The delta between those two, that is the impact that we have of the IV bags. That is not the 6%.

Speaker #3: The rest is spread in H2 and a part next year, and the exact split is a bit difficult to give because of the timing of ordering, invoices coming in, and payments.

Speaker #3: But the split is between H2 of this year and H1 of next year. And then, your third question: no, the 6% was related to the growth if we normalize for the GOP1s year to date.

Speaker #3: So if we come back to the IV bag part in North America, what we see there is that compounding services in the third quarter showed a decrease of 12.9% organically.

Speaker #3: Against constant exchange rates, what we would have expected was a low double-digit percentage of growth. And so the delta between those two, that's the impact that we have of the IV pax.

Speaker #3: So that's not the 6%. I hope that clarifies it. Maybe on the M&A pipeline? Yeah, as you know, we did a lot of acquisitions at the end of last year and early this year. Integration is on track.

Karin de Jong: I hope that clarifies it. Maybe on the M&A pipeline. As you know, we did a lot of acquisitions at the end of last year and early this year. Integration is on track. There was strong focus on the integration this year and in the first 3 quarters because we want to benefit from the synergies of those acquisitions. We have a pipeline, a pipeline that fits within the strategic rationale that we have on acquisitions. That is geographical expansion, market consolidation or new products or process capabilities like Injeplast, for instance. We have a full pipeline spread over the 3 regions and in the new one, and in Asia. We expect to do deals in the course of the next quarters. Timing is a bit more difficult to predict. As you know, it is family-owned smaller companies that we acquire.

Speaker #3: There was strong focus on the integration this year and in the first three quarters, because we want to benefit from the synergies of those acquisitions.

Speaker #3: We have a pipeline—a pipeline that fits within the strategic rationale that we have for acquisitions. So, is that geographical expansion, market consolidation, or new product or process capabilities, like Engine Plus, for instance.

Speaker #3: So, we have a full pipeline spread over the three regions and in the new one, so in Asia. We expect to do deals in the course of the next quarters. Timing is a bit more difficult to predict.

Speaker #3: As you know, it's family-owned, smaller companies that we acquire, but we continue to have a disciplined approach on pricing. So, we expect to do a couple of deals and then accelerate again next year with our inorganic growth strategy.

Karin de Jong: But we continue to have a disciplined approach on pricing. We expect to do a couple of deals and then accelerate again next year with our inorganic growth strategy.

Speaker #6: Great, many thanks. Very clear.

Michael Heider: Great. Many thanks. Very clear.

Speaker #3: Thanks, Michael.

Karin de Jong: Thanks, Michael.

Speaker #2: Thank you very much, Michael.

Ignacio Artola: Thank you very much, Michael.

Operator: The following question comes from Eric Wilmer from Kempen. Please go ahead.

Speaker #1: The following question comes from Eric Wilmer from Kempa. Please go ahead.

Speaker #6: Good morning, everyone. I have a follow-up on the IV PAX situation. It seems like the wording has moderated somewhat over the past months, or maybe weeks, where I believe that the previous and relatively recent expectation was that the IV PAX situation would see its historical run rate in Q4.

Eric Wilmer: Good morning, everyone. I have a follow-up on the IV bag situation. It seems like wording has moderated somewhat over the past months or maybe weeks. I believe that the previous and relatively recent expectation was that the IV bag situation would see its historical run rate in Q4. I believe that you now have that the situation has stabilized with progressive recovery during Q4. Could you perhaps take us along what has the last few weeks or maybe months that this step up is taking a bit longer than expected? Could this also risk push any recovery into maybe Q2? I think you highlight Q1 next year, but I am kind of wondering if you can provide a bit more granularity there. Thank you.

Speaker #6: I believe that now the situation has stabilized, with progressive recovery during Q4. So, could you perhaps walk us through what has happened over the last few weeks, or maybe months, that this step-up is taking a bit longer than expected?

Speaker #6: And could this also risk pushing any recovery into maybe Q2? I think you highlight Q1 next year, but yeah, I'm kind of wondering if you can provide a bit more granularity there.

Speaker #6: Thank you.

Speaker #3: Yeah, so if we look at the situation indeed, we had a soft Q3, on the back of the IV pax issue. So at the end of the quarter, so that is a bit later than we anticipated the pax were back online.

Karin de Jong: Yeah. If we look at the situation, indeed, we have a soft Q3 on the back of the IV bag issue. At the end of the quarter, that is a bit later than we anticipated, the bags were back online. As you know, quality is key for us, Eric. If we have to push it a couple of weeks to be sure that quality and operations are at the best, we do that. We see a bit of delay there in timing, and therefore it runs more through Q4. As Seth and as Rafa also mentioned, we have a timing of sales cycles from our customers that we have to deal with, and that is a bit difficult to estimate. It is not a linear process, so we need to see how that plays out in the fourth quarter.

Speaker #3: As you know, quality is key for us, Eric. So, if we have to push it a couple of weeks to be sure that quality and operations are at their best, we'll do that.

Speaker #3: And so we see a bit of delay there in timing, and therefore it runs more through Q4. As said, and as Rafa also mentioned, we have a timing of sales cycles from our customers that we have to deal with.

Speaker #3: And that's a bit difficult to estimate. It's not a linear process, so we need to see how that plays out in the fourth quarter.

Speaker #3: However, as we already mentioned, we see very strong demand. We have good sales teams with a lot of experience in the market, historically, so we have kept good contact with our customers.

Karin de Jong: However, as we already mentioned, we see a very strong demand. We have good sales teams with a lot of experience in the market historically, so we kept good contact with our customers. We are confident that during the course of Q4, we will pick up in sales again. But we see a bit of delay early on because, yeah, we do not jeopardize on quality.

Speaker #3: So we're confident that during the course of Q4, we will pick up in sales again. But we see a bit of delay early on, because, yeah, we don't jeopardize on quality.

Speaker #6: Yeah, understood. Thank you.

Eric Wilmer: Yep, understood. Thank you.

Operator: It appears there are currently no more questions. If you have a question, please press pound key five to enter the queue. We will now take a few minutes to give you the chance to do so.

Speaker #1: It appears there are currently no more questions. So if you have a question, please press pound key five to enter the queue. We will now take a few minutes to give you the chance to do so.

Speaker #2: Okay, well, thank you very much for your participation today. I will remain at your disposal so you have further questions. Thank you all. And goodbye.

Ignacio Artola: Well, thank you very much for your participation today. I will remain at your disposal should you have further questions. Thank you all, and goodbye.

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