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) 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

<ul><li>EBOS Group (EBO) has been dealt a material and surprising blow with the loss of its Chemist Warehouse (CW) Pharmaceutical supply contract from 1 July 2024 to its largest competitor, Sigma</li><li>We estimate current EBITDA contribution of ~A$60m–$70m (~11% of FY23 EBITDA). </li><li>While disappointing and we make material earnings downgrades (medium-term EBITDA down -10–12%), the core defensive growth story remains intact.</li></ul>

EBOS Group (EBO) has been dealt a material and surprising blow with the loss of its Chemist Warehouse (CW) Pharmaceutical supply contract from 1 July 2024 to its largest competitor, SigmaWe estimate current EBITDA contribution of ~A$60m–$70m (~11% of FY23 EBITDA). While disappointing and we make material earnings downgrades (medium-term EBITDA down -10–12%), the core defensive growth story remains intact.

<ul><li>EBOS Group’s (EBO), largest competitor Sigma (SIG.ASX) has confirmed it has signed a binding term sheet with Chemist Warehouse (CW) for both the Pharmaceutical and FMCG supply contracts for a period of five years commencing on 1 July 2024</li><li>EBO was previously the supplier for the pharmaceutical contract while SIG held the FMCG contract.</li><li>This is a material and surprising announcement for EBO given its high levels of service for CW, particularly considering SIG’s relative underperformance.</li></ul>

EBOS Group’s (EBO), largest competitor Sigma (SIG.ASX) has confirmed it has signed a binding term sheet with Chemist Warehouse (CW) for both the Pharmaceutical and FMCG supply contracts for a period of five years commencing on 1 July 2024EBO was previously the supplier for the pharmaceutical contract while SIG held the FMCG contract.This is a material and surprising announcement for EBO given its high levels of service for CW, particularly considering SIG’s relative underperformance.

EBOS Group (EBO): Chemist Warehouse Update – Sigma Wins Both Contracts

New Zealand

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.

Ebos Group Ltd (EBO NZ)

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

EBOS Group: Back to the Core

EBOS Group (EBO) has been dealt a material and surprising blow with the loss of its Chemist Warehouse (CW) Pharmaceutical supply contract from 1...

Forsyth Barr

EBOS Group (EBO): Chemist Warehouse Update – Sigma Wins Both Contracts

EBOS Group’s (EBO), largest competitor Sigma (SIG.ASX) has confirmed it has signed a binding term sheet with Chemist Warehouse (CW) for both the...

Forsyth Barr