Uniphar plc (UPR) Earnings Call Transcript & Summary

Good morning everyone, I welcome to today's Uniphar 2025 Results Conference Call. My name is Seb, and I'll be the operator for your call today. [Operator Instructions] I will now hand over to Allan Smylie to begin.

Good morning everyone, and welcome to Uniphar plc's full year results presentation, which covers the period from the 1st of Jan '25 to 31st of December '25. I'm Allan Smylie, and I look after IR here at Uniphar. Presenting our results today is Ger Rabbette, our CEO; and Tim Dolphin, our CFO. We're also joined on the call today by Brian O'Shaughnessy, our Chief Commercial Officer; and Dermot Ryan, our Chief Operating Officer. Before we begin, I'd like to remind everyone that you can access the presentation either on our website under latest results and presentations or via the link sent to you when you register for the conference call. The results presentation will last approximately 20 minutes and will be followed by Q&A. Please note, the full year results presentation may contain certain forward-looking statements, beliefs or opinions, which are based on current expectations and projections about future events. Actual results may differ materially from those expressed or implied in such forward-looking statements. I'll now hand you over to our CEO, Gerard.

Good morning, everyone, and thanks for joining us. We're going to start on Slide 5, where we outline who we are. We're a diversified healthcare services business who partner with over 200 of the world's leading Pharma and Medtech manufacturers. We have operations in Europe, US, APAC and MENA, delivering to more than 160 countries. We have 3 divisions who all operate in different parts of the healthcare ecosystem. But essentially, our job is to get products to patients. That may be as straightforward as Supply Chain or as complex as taking charge of the whole commercialization process for our products in a market or region. Our strategic focus is on specialty products, and we've delivered an excellent 6-year EPS CAGR of 16% since we IPO-ed our business back in 2019. Our ambition today is to deliver EUR 200 million EBITDA by '28, largely organic, and we're investing heavily in our infrastructure across our people, our IT and facilities in order to really scale our business for the longer term. On Slide 6, we outlined the ecosystem we operate in. We sit in the middle between the manufacturer and their stakeholders, and we have both of them to overcome the problems of approval, access payment, logistics and commercialization in this new far more complicated healthcare environment. On Slide 7, we outlined the group's financial highlights. And as you can see, this strategy is delivering well for us. 2025 has been an excellent year. We delivered organic gross profit and EBITDA growth of 9%, Return On Capital Employed of 16%, Earnings Per Share grew by 21%. Free Cash Flow conversion landed at 99% with Leverage finishing at 1.6x. In the year, we generated EBITDA of EUR 131 million with robust organic gross profit growth of EUR 38 million, with each division delivering a strong performance. If you look at Slide 8, you can see that the strong growth is a continuation of our excellent track record since IPO. Since then, we've more than doubled our gross profit and our EBITDA, and we've seen consistent growth in margins and EPS. EPS has grown from EUR 0.10 back in 2019 to reach EUR 0.25 today. On Slide 9, we outline our strong focus on ESG as we continue to maintain excellent scores from independent rating agencies. If you move to Slide 11, we give more detail on our 3 divisions. Pharma, we see this as a global opportunity. It's high growth, and we're seeing increased margins as our product mix develops. Medtech is a European opportunity, high growth, high margin. We offer full-service distribution and commercialization solution for our partners with a clear focus on specialty. Retail, we see as a U.K. and Ireland opportunity. It's lower growth, lower margin. However, we see this business or this division as the foundation of our wider business. So let's look at Pharma first, which we believe is our biggest opportunity in the long term. On Slide 12, we gave an overview of the structural drivers shaping this opportunity. So healthcare-wide macro factors make a company like Uniphar increasingly more important to both the makers and users of specialty healthcare products. If you look at Biotech, most innovation in healthcare today is in specialty products. 85% of the global development pipeline is in the hands of small and emerging Biotech companies, with Biotech accounting for circa 60% of all drugs launched in the US in recent years. These emerging companies tend to have limited infrastructure outside of the US and limited management bandwidth to launch their complex products into other markets. Secondly, there is increasing complexity within the Supply Chain. These new specialty products are high priced, high growth, high margins. But rare disease products are not just hard to make, they're more complex to ship. They require cold chain, specialized prep, need to be administered in a hospital setting. And all of this makes it harder for these R&D-focused biotechs to unlock the commercial opportunities that they have created for themselves. Even the larger companies who are in the space are making the decisions to focus only on larger markets because of this complexity. So what does this mean for clinicians and their patients? Mr. [indiscernible] means that there is awareness that this treatment exists, but access is a real challenge for people outside the larger markets. On Slide 13, we summarize our platforms and our capabilities. And on Slide 14, we outline the Pharma division's strong financial performance with gross profit growing by 9% to EUR 132 million on a revenue base of EUR 691 million and EBITDA growing strongly by over 20% to EUR 31 million. The division delivered strong double-digit organic growth. And if you look at it, we started this business organically in Ireland and has grown strongly and now the EU and Rest of World together represent 75% of the business. On the other hand, Global Sourcing had a busy year, strong demand for unlicensed medicines and medicine shortages from hospitals, supplemented by increased demand in clinical trial supplies. We continue to invest heavily in our global ex-US launch and commercialization platform, which is affecting our margin in the short term. However, we have a strong pipeline of high-value opportunities, and we remain confident that Pharma will continue to grow double digits in the years ahead. So, let's now just move to Medtech on Slide 15. European market is large but fragmented. It's worth over EUR 60 billion. It's growing at a 3% to 4% CAGR. And as we see it today, there's a lot of change with manufacturers reevaluating their portfolios, their routes to market. And this ongoing change in the industry, we see it very beneficial to us, as the market moves towards a hybrid indirect model. On 16, we summarized our platform, our capabilities and our specialisms within Medtech. And on Slide 17, we outlined Medtech's strong financial performance. for the period, with gross profit increasing to EUR 120 million, which is 11%. All of this was organic, with EBITDA increasing to EUR 49 million. This is a really strong set of results, and we continue to see a great opportunity to leverage our strong manufacturer relationships to enter new geographies with existing partners, leveraging our existing platforms and sharing the resources with our Pharma business as we do in the [Lelystad] in the Netherlands. With 86% of the business recurring in nature, Medtech is now 26% of the group's gross profit, and we are confident that this division will continue to grow high single digits in the years ahead. On Slide 18, we talk about Supply Chain & Retail. This division is an integral part of Ireland's healthcare infrastructure, and we continue to grow share. We are vertically integrated, linking the manufacturer to the healthcare professional with a world-class service offering. Working with both retail and hospital pharmacy, we are moving up the value chain to deliver a market-leading service offering. And we also have the largest pharmacy network in the country with 482 owned or franchise stores. On Slide 19, we outlined the division's strong financials. Supply Chain & Retail delivered 4% growth in gross profit to EUR 205 million on a revenue base of EUR 2 billion. Wholesale grew across both Rx and Consumer helped by the addition of 37 new pharmacies into the network, while Retail saw good growth in the core area of Rx but faced slower growth in front-of-shop. EBITDA came in at EUR 51.2 million. It was impacted by our continued significant investment in people and cybersecurity. We're entering a very critical stage as we look to go-live with our new DC in H2 of this year. And as part of this project, we're taking the opportunity to ensure that our cybersecurity is reinforced right across our business. So, Supply Chain & Retail is a very strong cash-generative business, which provides infrastructure, resources and skills that we use in other parts of our business. On Slide 21, we give an update on our investments as well as our flagship investment in Ireland. We've invested in our Pharma and Medtech platform in the Netherlands, where we've built a world-class distribution hub to help us scale this business in Europe. At the same time, we've invested in a work Logistics facility in North Carolina to help us grow our Pharma services and specialty offering in the US, and we plan to operationalize a similar facility in the U.K. this year. These facilities give us the capacity we need to grow and hit our 28 EBITDA target of EUR 200 million. On Slide 22 and 23, we give some more detail on our flagship distribution facility in Ireland, which we call Greenogue 2. As we see it, this significant investment future-proofs our strong market position in Ireland. It transforms our cost base and allows us to deliver the pharmacy of the future. It's also key to delivery and growth of our European Pharma business, hugely complex and demanding project with 40 of our best people on it. This has been our [Technical Difficulty] management resource. So, we've been strengthening the senior team at the same time, ensure that we will have the capacity to successfully manage the project, including a dual running period in H2 of this year. The project is tracking well for a July go-live. We see this as a generational investment in our infrastructure and in our IT, and we will reap the benefits for many years to come. I'll now hand over to Tim to talk through the financials.

Thanks, Gerard. I would now like to take you through the financial highlights for 2025. I am pleased to say that the group has delivered a strong performance during the period with gross profit growth across all 3 divisions. At an overall group level, we generated gross profit of EUR 457.7 million, up 7% on 2024. The group delivered strong organic gross profit growth of 8.9%. EBITDA has increased by 6% to EUR 130.9 million. On an organic basis, this was 9%. Adjusted EPS is up from EUR 0.205 to EUR 0.248, representing an increase of 21%. This has resulted in a Return On Capital Employed of 16.3%, above our medium-term guidance of 12% to 15%. Leverage for the period was lower than expected at 1.6x, helped by favourable working capital movements. Looking at divisional performance on Slide 26. Gross profit and gross margin percentage are the key financial metrics we use to track profitability at a divisional level. To improve disclosure and help analysts and investors better understand our business, we are now also disclosing EBITDA by division. Uniphar Pharma delivered gross profit growth of 8.5% and very strong organic growth of 15.5%. This was led by a very strong performance in our Global Sourcing business. The divisional gross profit margin increased to 19.1%, reflecting our continued move into higher-margin activities. EBITDA increased by 20.5% to EUR 30.6 million and a margin of 4.4%. This margin reflects continued investment in our European commercialization platform and other growth initiatives. Uniphar Medtech delivered a strong outturn in 2025. The division delivered reported gross profit growth of 10.5%, all of which was organic and ahead of its divisional guidance. This performance reflects the strength of our business, the deep expertise of our teams, and the diversity across our service offerings. The gross profit margin increased during the period to 41.1%. EBITDA increased by 8.9% to EUR 49.1 million and an EBITDA margin of 16.8%, which was stable compared to last year. Uniphar Supply Chain & Retail also performed ahead of its divisional guidance with gross profit growth of 4.2%, all of which was organic. This division has strong recurring revenues plus a stable and robust gross profit profile. Its gross profit margin was down modestly compared to prior year at 9.8% as a result of stronger growth in the lower-margin Supply Chain business. EBITDA declined by 3.3% in the year to EUR 51.2 million and a margin of 2.5%. This reflects 3 factors: the investment in our management teams that Ger mentioned earlier, statutory wage inflation that we had anticipated, and investment in IT, in particular, cybersecurity across the group. As you know, 2026 will be a transformative year for the Supply Chain & Retail division as we migrate from our existing distribution center and IT systems to a new state-of-the-art distribution center and cloud-based IT systems. This will entail a significant level of one-off expenses as we are already incurring running costs for the new distribution facility and the IT systems in the first half of 2026, and then dual running costs in the second half of the year as we transition facilities and right size our cost base. Taking these and other items into consideration, we expect total one-offs to be in the region of EUR 20 million to EUR 25 million, and we will treat them as exceptional. We will also need additional working capital investment for a short period of time as we transition to the new facility but expect this number will not be material. Moving on to Slide 27 now to have a look at net debt. At a high level, we finished the period with a net bank debt position of EUR 171.1 million, driven by OP net debt of EUR 147.7 million, strong EBITDA of EUR 130.9 million, a working capital inflow of EUR 46.9 million, helped by the prepayment in Uniphar Pharma. CapEx includes a strategic CapEx of EUR 62.8 million and a share buyback of EUR 35.1 million. And other items totaling EUR 103.2 million, including tax, finance costs, and deferred considerations on prior M&A. Our strategic CapEx reflects the significant multiyear investments we are making in our new distribution center, Greenogue 2, our new SAP platform, and the other projects that Ger mentioned earlier. Our reported free cash flow for the period was EUR 129.7 million, and I'll take you through the details of that on the next slide. Free Cash Flow. Here, we outline our free cash flow generation and free cash flow conversion for the year. Our definition of free cash flow is EBITDA less investment in working capital, less maintenance CapEx, less lease payments. For the full year of 2025, this translated into free cash flow conversion of 99.1%, helped by the favourable working capital movements in Uniphar Pharma I referred to earlier. The timing of these prepayments is hard to predict, and some or all of them may unwind in 2026. We continue to expect free cash flow conversion of 60% to 70% by 2028 at EUR 200 million EBITDA. Just moving on now to Slide 30. Capital allocation has and remains a key focus for the group as we adopt a very disciplined and balanced investment approach to creating shareholder value. As we have always said, we will invest in organic and inorganic opportunities across each of our 3 divisions, which support our strategic objectives and deliver a return on capital employed at or above our hurdle rate of 12% to 15%. We maintain a prudent approach to leverage and aim to keep our net bank debt to EBITDA below 2.5x over the medium term. In addition to a progressive dividend policy, we will also look at share buybacks subject to market conditions. Slide 31 outlines our priorities for M&A. We have a strong track record on completing M&A, with 18 acquisitions completed in the last 6 years across all 3 divisions. We continue to work with people before we engage on any M&A discussions and now have a reputation for being a responsible owner in the market. So, we provide competitive auction processes can buy off-market and get good value. Our pipeline is mainly focused on Pharma. We are looking for acquisitions across areas like market access, as well as commercialization platforms and specialist distributors. I'll now hand back to Gerard to finish on our medium-term ambition and investment case.

Thanks, Tim. If you move to Slide 32, we outlined our ambitious target, which is to deliver 200 million EBITDA by '28. We will achieve this target through robust organic growth across all 3 divisions, made possible by our investment in technology and infrastructure, complemented with some strategic M&A. Our expected organic split remains at 80-20 as we leverage our platforms, and we remain confident that we will deliver. And finally, on Slide 33, we outlined our investment case. We're going in this next stage of growth armed with a much greater number of capabilities than we had at IPO. We've demonstrated a strong track record of delivery. We know the industry well. We will follow the money. There is a compelling market opportunity for ourselves, a very favourable market backdrop, and plenty of scope for growth across each of our 3 divisions. And each division has a strong competitive moat, and we have concrete plans in place to grow and deliver on our ambitions. Thanks for listening. And I'll hand back to the operator for Q&A.

[Operator Instructions]. Our first question comes from Colin Grant from Davy.

[Indiscernible].

We can't hear you. Could you please check if your mic is unmuted? So unfortunately, Colin, we're not getting anything from your line. If you could redial and we move on to the next question for now. The next question is from Charles Weston with RBC.

My 2, the first would be, you're talking about ex-US launch and commercialization capabilities in Pharma, whereas I think previously, you'd had more of a European focus. So, could you help us understand what breadth of capabilities you have outside Europe on the commercialization side? And what's the sort of scale of business opportunities you're seeing here? And my second question is on Supply Chain & Retail. You've talked about the investments you're making in team and cyber. If we look forward post the full transition to the new logistics center, what could be the potential level of gross and EBITDA margin in this division?

Brian, you might answer the ex-US question, please.

Yes. Charles, thanks for the question. So, we highlighted in the presentation, Charles, that one of the key structural drivers is the increasing number of companies launching in the US with no infrastructure outside of the US or an intention to build one. So, we focus on supporting those partners, accelerating access to patients globally, and with a focus on the commercial support in Europe, APAC, MENA, and now with a focus on Latin America as well because all of these structural drivers apply to all of those regions. So, the capabilities required for that service span across medical, regulatory, market access, expanded access, commercial Supply Chain quality. And we have capabilities, the core capabilities we have in-house, and then complemented by a strong regional partnership network for the capabilities that we need local on the ground. So, in terms of the scale, you can see 60% of assets launched in the US are making, I suppose, the way outside of the US. So, there's a significant opportunities to support these companies through our platform, I suppose, not just in Europe, but also MENA, Latin America, Asia Pac and we made good progress this year in signing a number of those commercialization deals in MENA and then also global distribution for, on a nameplate sale basis.

And probably, Charles, in relation to Supply Chain & Retail, our core focus is to expand our market share into our Symbol Group offering, which has a lot of value to our partners and ourselves. I think it's too early to really call out what that is post the go-live of Greenogue 2, but we do expect, as we said previously, to upgrade our guidance in this division within the next 12 months when we have fully successfully integrated the new DC facility. So, we do see Supply Chain & Retail moving away from low single-digit gross profit growth. But I think, Charles, at this point, it's too early to make that call. Our focus today is to get the DC up and running. We've done the TouchStore acquisition to help us add more value to our pharmacy customers. And ultimately, we do believe we'll be coming back to the market with post go-live with new guidance relates to Supply Chain & Retail.

If I can just add a quick follow-up on the commercialization side. Previously, you had talked about the potential for doing deals in Europe, potentially quite sizable deals. Do you have any sense of progress there in terms of when you might be able to announce something on the larger side?

Brian?

Yes. So Europe is more complicated and I suppose not helped by things like most favour nation pricing. And one of the reasons we focus on MENA in terms of supporting our partners is you can get accelerated approval in MENA on the back of your FDA approval. So it's a strong market in terms of speed of access to patients and revenue generation for our partners. So our pipeline is strong, Charles. As you know, it's been an organic build. We've got a very strong platform, leveraging off the capabilities globally and specifically in Europe through our global sourcing platform and then augmenting that with strong service across medical and regulatory. So very strong platform, Charles. But these things take time. And I suppose the macro factors just add complications. But in theory, that will add to the opportunity for us. So very happy with the progress on this platform.

Next question is from Colin Grant with Davy.

Great. I had a technical issue there. But I have a couple of questions. Firstly, just in your Pharma division, you had very strong growth in margins. And I think there was a question there about the commercialization side of it. But I wonder if you can give us a bit more colour on some of the opportunities that you have in global sourcing and just continue the great growth that you're seeing in Pharma. And secondly, just on the Medtech division, there was a big pickup in the rate of EBITDA growth in the second half of the year versus the first half, which I think was in line with your expectations. Can you just maybe give us how you see the shape of growth in that division looking ahead?

So just on the Pharma side, Colin, we have the global sourcing and the services aspect to it and both are huge opportunities, leveraging the common platform. I think Dermot, do you want to talk about global sourcing and Brian take Pharma?

Yes. Hi, Colin. As you know, we're trying to build, I suppose, a global platform across multiple markets, like we've built a very strong team in that business, and we're trying to provide solutions across unlicensed medicines, bespoke distribution. Obviously, there's tailwinds in this business in terms of the depth of supply in the market and shortages. But it's really about building out our service lines in our current geographies and expanding our portfolio and leveraging, I suppose, those existing business relationships with hospitals to continue to grow the business. All parts of the platform grew quite strongly, as you can see in 2025. So really, it's about continuing to build out that, leveraging the group infrastructure to help us continue to grow.

And just to add to that, that gives a really strong base for the Pharma Services business, leveraging off the global sourcing platform where we delivered into over 160 countries last year. So that gives really strong capabilities in terms of complicated supply chains for high-tech medicines, understanding of regulatory landscapes, particularly for pre-commercialization of licensed medicines that we can then wrap that up with additional services across medical, regulatory, market access to work directly with the sponsors, being able to accelerate access to patients around the world and then also help achieving higher peak sales sooner through that unique platform and that sort of service offering that we can leverage off the Global Sourcing platform. So very strong opportunities across both and happy with the progress.

In relation to Medtech, I mean really strong H2. But as we look at the business, 86% of the margin is recurring, put a huge investment into growth. When we invest, it takes roughly 24 months to get a return on investment. So it can be lumpy when you look at H1 and H2 growth, but we look at it on a 12-month by 12-month basis. And ultimately, we continue to see this business grow high single digits with loads of opportunity for us to expand our business within Northern Europe.

Next question is from Christian Glennie with Stifel.

A couple of questions then on my side. We'll start with Pharma, I guess, and just to follow-up if, is there any particular updates around EAP contract wins in the year or the second half? And then related to that, I think previously, just to make sure we sort of clarify maybe a nuance here. Previously, I think you talked about a pipeline of opportunities in terms of converting some of those existing EAP contracts into more formal full-scale commercialization. Is that something that you've struggled to sort of win the argument there? And then, so we're now talking a bit more about sort of the US biotech, US spec Pharma opportunity rather than maybe rare disease assets within big Pharma, for example? That's the first question.

Brian, you might take that.

Yes. Thanks. So the contract wins were in line with expectations on EAP, so double digits as per previous years. So we've moved away from disclosing about that specifically because expanded access is just part of a much bigger value proposition. So while we still provide that as a stand-alone service, we are focused on delivering this as, I suppose, a broader offering to biotechs where we can support partners, accelerating access to patients and reaching peak sales sooner. So 60% of our opportunities across the broader value proposition would come from either EAP clients or clients that we started with an expanded access conversation, but the offering is much, much stronger. So for larger organizations, selling a discrete service, expanded access where we have best-in-class service, particularly around cell and gene. We have an unrivaled offering there. We'll continue to leverage off that experience. But I suppose the focus for the rare disease biotechs with no infrastructure out of the US is where expanded access is just one piece of the offering, one piece of the jigsaw, quite unique to us in terms of our experience. But I suppose we're now focused on talking about that as a broader value proposition and not just focusing on what is one part of the jigsaw.

Yes. Okay. And then on the Supply Chain, particularly maybe on the Retail side, the 37 pharmacies added to the group last year, presumably that was all them joining the franchise versus acquired, if I'm right. So how would that compare generally versus, in terms of pharmacies coming to the group versus previous years? And what is the sort of, is there an expected sort of cadence for pharmacies to be joining the group, do you think, over the next few years and maybe accelerate as you've obviously got more capacity to serve?

Dermot, do you want to take this?

Yes. It's probably a pretty similar number compared to previous years. I think our focus in that business is on our new distribution center and our pharmacy of the future model. And that obviously then supports the franchise model. So we're investing in the franchise model by both of those initiatives. I think the new community pharmacy agreement probably strengthens that offering as well in terms of the focus on the patient and then trying to simplify the back office and free the pharmacists up to be patient-facing. So everything we're trying to do in that space supports where the market is ultimately going. So we'd be quite hopeful that we can continue to build out that franchise model over the next couple of years.

Our next question is from Sam England with Berenberg.

First one, just in Pharma. Can you give us a bit more colour on the contribution from the clinical trial Supply Chain business in '25? And then how you expect that business to develop in '26? And then I suppose more broadly, how big you think the opportunity there is in the midterm? And then second question, can you talk a bit about what you see as the biggest risks involved in the go-live for the new distribution site this year as you sit here today and what you're doing to mitigate those? And then I suppose, give us a sense for some of the metrics that you'll evaluate the sort of the go-live and then the ongoing progress with going forward.

I think I'll hand the first question to Dermot. Dermot, you take that.

Yes. In terms of our clinical trial supply, I suppose it is a new pillar for us. We have we had a lot of the capability within global sourcing to support that business. We are seeing demand for clinical trials growing. We're seeing the demand for commercial medicines within trials growing. But it's very early for us. We've added our pack and label facility in the US. By the end of the year, we will have our pack and label site in the Netherlands. But it is a new pillar, and it's something that we are focused on, but it's very early days for us in that space.

But we do see a really good opportunity here, leveraging our global sourcing platform. So that's we are excited about it. I think it's too early to call that, but it is significant. It relates to the biggest risk of the ERP system is it doesn't work. And that's why we're doing it in a non-life environment and remove that risk totally. We can scale it as we see fit and it works, the negative is it costs more money. You have dual running cost, it does create complexity. But we're very confident with how we're doing it. The risk has gone, and we'll go-live later this year but it does, it is an enormous body for us now. And we are still on red alert, but we are in a really good place to get this done and to drive the business forward very quickly from the next year onwards.

I'll take the last part of your question there where you're asking about the targets and the metrics. As you know, for every investment we do, our objective is to get a 15% return on capital employed after three years. And as we said to you before, it will probably take a little bit longer here to get to that, and we forecast that it could be just around four years in this case. So our business case is quite comprehensive. We are forecasting gross margin efficiencies, which will probably take 12 to 18 months to come through after we've gone live. And we also have some operational efficiencies, which will roughly come in at the same time, if not a little bit later. How do we track that and have we got metrics, what we've done is we've actually operationalized our business case. Everybody in Uniphar is probably completely set up to be talking about this. But what I do is just take at a high level, with the 15% target that has to be delivered. But then how do you convert that down to pick rate in the DC? How do you convert it down to new customer margin enhancements. So we split the business case a part and we've drilled down into KPIs that we can track at an operational level to make sure we deliver. It's quite granular, so I'm not going to bore everybody on that, but we can take you through it at any point in time.

Probably the big plus here is beyond the 4 years, the return on capital becomes very significant as you put more volume through a pretty much a fixed cost base with significant operational savings. So if you look at a 10-year view, the return will be very significant.

Our next question comes from Brian White with Shore Capital Group Ltd., Research.

Most of mine have already been asked, but I just have one which is perhaps a little bit more nebulous in nature. And really, it looks the company is spoiled for choice with respect to investing across the business. And I wonder how do you prioritize allocation of investment across the businesses? For example, does Pharma get more because there's more opportunity? And I guess a part of that is how constrained or not, are you in accelerating your ability to capitalize on these opportunities by the current level of debt?

It's a good question. I think we IPO-ed our focus on our growth divisions, we saw Pharma Services and Supply Chain & Retail has outperformed and that's caused us the need to double down and improve our investment there, but the investment case is very strong. I think when we get through the current investment phase, I think we'll become more an asset-light business. I think we can drive the opportunity we see within both Pharma services and Medtech with limited amount of capital because of strong organic growth. Now that opportunities do come along. But we don't see ourselves as capital constrained the business. For me, driving strong organic growth is a key thing. And once we build the platforms out in our Global Sourcing platform, we did use that platform to drive out our services within Pharma. So it works for us. And I think we don't believe the business is capital constrained. What we are doing is building a platform to get us to EUR 200 million EBITDA. But hopefully, when we get to '28 and beyond, we'll be on a very strong trajectory, leveraging these significant investments to really drive the business on beyond the EUR 200 million. And that's how we look at life. So to me, organic growth is everything guys. If we can drive strong organic growth, you have the right strategy, you're doing the right things and that's for me is how we're really going to grow and scale this business. But the platforms and the investments we're making are to really grow this business for the long term, not for the short term.

Next question is from Michele Mombelli from TPICAP Midcap, Research Division.

Michele from TPICAP Midcap based in Paris. Lots of questions have already been asked and answered. I have just 2 out of curiosity. The first one is, do you still have room to expand your pharmacy network in Ireland? If yes, how much? Because you're currently at 482 pharmacies, you added 27 in one semester compared to 455, if I mistake in the first half. And if you don't have that much room left on acquisition, maybe franchising, are you focusing instead on adding additional services for pharmacies, for example, through acquisition like TouchStore? Do you plan to do more M&A of this kind to secure fully integrated data management capabilities?

I think with the TouchStore acquisition, is the final piece of our jigsaw that we can drive significant synergies for both our pharmacy customers and ourselves linking our distribution network with the pharmacy lounge. So for us, basically, we don't see ourselves needing to deploy much more capital in Supply Chain & Retail. We have the magic sauce. I think within 2 years, we will have a very significant service offering for our customer base. From regression to growth, I think we have roughly, as you know, under 500 in our group offering. We would like to double that in line with our wholesale number. And we want to do that through add significant value for our partners, help them provide more services to the community. Pharmacy today is the #1 healthcare professional. People can't get access to the GPs. Secondary care is a challenge. So the government, you can see a moving up trying to get more and more service out in the community. And our community base and our customer base is basically community pharmacy. So we see ourselves in a really good place here to add value to our partners to help them, and help them deliver more services to the community. So I think once we go through this initial phase, it's all about growth for us going forward and leveraging the significant returns with our investments we've made over the last several years. The plus for us is a big competitive moat of this business. It's taken us we've got 8 years to get done, 4 years planning, 4 years live. And that's a big competitive moat. So when we get through the initial phase this time next year, our whole focus will be on growing our Pharma services global opportunity and growing Medtech and switching our focus to those areas while Supply Chain & Retail will continue to drive strong organic growth. So we think we're in a good place when we get through this current year.

And maybe just a residual question. Can you tell me more about how you see your expansion in the Pacific area since you mentioned it will be residual or is there a meaningful potential? Maybe just some details around that, also high quality, it's fine.

Dermot, would you take it.

Yes. I mean our global sourcing business has done very well in Australia, but it's a small business today. So we'd like to continue to invest in that business. We see opportunity by introducing new service lines. And obviously, if you clinical trials in APAC is an interesting area as well. So maybe in the future, we will end up by having some infrastructure on the ground in Asia or in Australia to support that business as it continues to grow.

Next question is a follow-up from Christian Glennie with Stifel.

I thought it's just worth, I guess, just the target, the EUR 200 million EBITDA 2028 or EUR 180 million organic. Just the usual kind of, I guess, check in on levels of confidence around that. Obviously, the EUR 180 million would imply you're going to need to do about 11% CAGR in terms of the EBITDA. Just your level of confidence in that target. Obviously, it's coming closer under review. And then just and then related to that, the sort of mix effect of how you get to that EBITDA in terms of the, obviously, top line growth and then potential for margin expansion that should optimally come through, particularly I'm thinking in Supply Chain and Pharma, particularly as the mix changes there. So any extra sort of levels of confidence in that target and some colour around the mix of driving that growth?

I think we remain confident. When we IPO-ed we said we doubled our business within 5 years, we got there quicker. We see the same opportunity today. The probably the investments we're making in our facilities across Lelystad, the US, the U.K., just takes for those investments to come through. So in a worst-case scenario, we might be 6 months later. We don't believe we will be. But the most important thing for me is when we hit the EUR 200 million EBITDA target, we're growing strongly, and we're heading for strong growth beyond the EUR 200 million. And we committed to investments today in '26, '25, '26 to ensure that we're in a position to grab these opportunities. As the guy said, we see great opportunities in Pharma Services across the services side and the global sourcing, big opportunity in Medtech and Ireland, we think will really drive forward strongly once the new facilities up and running once we get TouchStore integrated and start real significant value to our partners. So we're in a good place, and we remain confident that we will get there by '28.

And then we also have a follow-up from Charles Weston, RBC.

This follows quite nicely from Christian's question, and that's because I just wanted to touch on the inorganic side. Clearly, a lot of your focus at the moment is on the organic investments, delivery of these big projects. But the EUR 200 million does include EUR 20 million or so of EBITDA from inorganic. So when you look at the inorganic opportunities that are crossing your desk now, are you seeing any trends in terms of sort of the number of opportunities or the valuation expectations or particular also, I guess, the sector that they're in the Medtech versus Pharma?

I think, I mean there's definitely a mismatch between the capital markets and the PE world. I think there are multiples, Charles, as you know. But we're still confident that we can, as Tim said earlier on, get strong strategic bolt-on acquisitions at a good number that we can drive forward on. And we have a good pipeline. Probably Charles, our focus for the next 12 months is to get these projects done, but at the same time, keeping our pipeline warm. And then we'll be back in an active M&A sense within the next 12 months. But if the opportunity comes along Charles and we have to grab them then we have to grab it. But our preference would be to double down in the next 12 months, get these projects in place and then go back on the acquisition trail after that. But it will be what it will be, Charles. But the opportunity is still there. So we don't see any problem deploying capital with a strong M&A and hitting our 15% hurdle within 3 years that those opportunities are still there for us.

So this concludes the Q&A session, and I'll hand the floor back to Gerard for any closing comments.

I just want to thank everybody for joining the call today and shareholders for your continued support, and we look forward to seeing you over the next couple of weeks. And we look forward to having another strong set of results in the current year.

Thank you, everyone. This concludes today's call, and you may now disconnect your lines.