New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>EBOS Group's (EBO) 1H24 result was solid. Importantly, (1) EBO's pharmacy performance and commentary should help allay fears around deteriorating industry dynamics, and (2) EBO continues to see solid cost-out opportunities.</li><li>While broader business trends remain constructive, EBO is trading on a FY25 PE of ~22x, modestly ahead of its 10 year average, and a ~+30% premium to the market median.</li><li>We back management to negate the possible negative operating leverage (EBO has several levers it can pull), but FY25 earnings are not risk-free as EBO transitions through the Chemist Warehouse (CW) contract loss. </li></ul>

EBOS Group's (EBO) 1H24 result was solid. Importantly, (1) EBO's pharmacy performance and commentary should help allay fears around deteriorating industry dynamics, and (2) EBO continues to see solid cost-out opportunities.While broader business trends remain constructive, EBO is trading on a FY25 PE of ~22x, modestly ahead of its 10 year average, and a ~+30% premium to the market median.We back management to negate the possible negative operating leverage (EBO has several levers it can pull), but FY25 earnings are not risk-free as EBO transitions through the Chemist Warehouse (CW) contract loss. 

EBOS Group - 1H24 Result — In Good Health

<ul><li>With the first four months of trading already released, it is unlikely that EBOS Group's (EBO) 1H24 result will surprise.</li><li>We expect it to be a typically solid result. Key focus areas are: (1) cost out initiatives in light of the pending Chemist Warehouse (CW) contract loss (or at least commentary on the outlook), (2) pharmacy industry dynamics, and (3) M&amp;A outlook/strategy in light of the considered Greencross deal in November.</li></ul>

With the first four months of trading already released, it is unlikely that EBOS Group's (EBO) 1H24 result will surprise.We expect it to be a typically solid result. Key focus areas are: (1) cost out initiatives in light of the pending Chemist Warehouse (CW) contract loss (or at least commentary on the outlook), (2) pharmacy industry dynamics, and (3) M&amp;A outlook/strategy in light of the considered Greencross deal in November.

EBOS Group - 1H24 Preview — Costs & Chemist Warehouse

<ul><li>EBOS Group's (EBO) 1Q24 ASM trading update was broadly in line with our expectations, showing a solid start to FY24.</li><li>1Q24 organic EBITDA growth of ~+8% is consistent with 2H23, and the update is further evidence that EBO has entered its new phase of organic growth more akin to historical levels (mid to high single digits), rather than sustaining its growth rates over the past three years.</li><li>Consistent with history, no full year guidance was provided and given the in line trading update we leave our earnings estimates unchanged. </li></ul>

EBOS Group's (EBO) 1Q24 ASM trading update was broadly in line with our expectations, showing a solid start to FY24.1Q24 organic EBITDA growth of ~+8% is consistent with 2H23, and the update is further evidence that EBO has entered its new phase of organic growth more akin to historical levels (mid to high single digits), rather than sustaining its growth rates over the past three years.Consistent with history, no full year guidance was provided and given the in line trading update we leave our earnings estimates unchanged. 

<ul><li>FY23 was another strong period for EBOS Group (EBO) with EPS +15%, which rounds off an impressive three-years of growth (FY20–FY23 EPS CAGR of +14%).</li><li>While strong and in-line with our expectations there were numerous signs in 2H23, across both its Healthcare and Animal Care segments, that growth is slowing.</li><li>This is not surprising; reality has now hit and sustaining recent growth is unlikely as industry tailwinds abate and EBO cycles elevated periods. </li></ul>

FY23 was another strong period for EBOS Group (EBO) with EPS +15%, which rounds off an impressive three-years of growth (FY20–FY23 EPS CAGR of +14%).While strong and in-line with our expectations there were numerous signs in 2H23, across both its Healthcare and Animal Care segments, that growth is slowing.This is not surprising; reality has now hit and sustaining recent growth is unlikely as industry tailwinds abate and EBO cycles elevated periods. 

EBOS Group - FY23 Result — Back to Reality

<ul><li>We expect EBOS Group (EBO) to report a solid FY23 result on Wednesday, 23 August.</li><li>Similar to recent results, we expect  a continuation of robust organic growth across the portfolio combined with the full year impact of the LifeHealthcare (LHC) acquisition.</li><li>Key focus areas will be; (1) exit run-rates in Community Pharmacy and Animal Care as broader industry tailwinds abate, (2) further details on the Chemist Warehouse (CW) contract loss and its broader implications, (3) SG&amp;A discipline, (4) LHC performance, and (5) potential M&amp;A. </li></ul>

We expect EBOS Group (EBO) to report a solid FY23 result on Wednesday, 23 August.Similar to recent results, we expect  a continuation of robust organic growth across the portfolio combined with the full year impact of the LifeHealthcare (LHC) acquisition.Key focus areas will be; (1) exit run-rates in Community Pharmacy and Animal Care as broader industry tailwinds abate, (2) further details on the Chemist Warehouse (CW) contract loss and its broader implications, (3) SG&amp;A discipline, (4) LHC performance, and (5) potential M&amp;A. 

EBOS Group - FY23 Preview — Checking Up

Australia

EBOS Group Limited supplies and distributes medical consumable products and equipment to the hospital and primary care sectors of the New Zealand and Australian healthcare markets. The Company's products include diagnostic instruments, surgical instruments and prosthesis, feminine protection, anesthetic equipment, and other consumer products.

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EBOS Group (EBO AU)

EBOS Group - 1H24 Result — In Good Health

While broader business trends remain constructive, EBO is trading on a FY25 PE of ~22x, modestly ahead of its 10 year average, and a ~+30% premium...

Forsyth Barr

EBOS Group - 1H24 Preview — Costs & Chemist Warehouse

With the first four months of trading already released, it is unlikely that EBOS Group's (EBO) 1H24 result will surprise. We expect it to be a...

Forsyth Barr

EBOS Group - 101st AGM — On Script

Consistent with history, no full year guidance was provided and given the in line trading update we leave our earnings estimates unchanged.

Forsyth Barr

EBOS Group - FY23 Result — Back to Reality

FY23 was another strong period for EBOS Group (EBO) with EPS +15%, which rounds off an impressive three-years of growth (FY20–FY23 EPS CAGR of +14%).

Forsyth Barr

EBOS Group - FY23 Preview — Checking Up

We expect EBOS Group (EBO) to report a solid FY23 result on Wednesday, 23 August. Similar to recent results, we expect a continuation of robust...

Forsyth Barr

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