Genomma Lab Internacional-b Stock price
Is Genomma Lab Internacional-b a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = Mex$12.79b | Revenue (TTM) = Mex$17.05b
Market Cap = Mex$12.79b | Estimated Revenue = Mex$17.84b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = Mex$18.20b | Revenue (TTM) = Mex$17.05b
Enterprise Value = Mex$18.20b | Forward Revenue = Mex$17.84b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF) | ex SBC
📈 What is it?
EV/FCF compares a company’s enterprise value with its free cash flow. The metric therefore shows the multiple of current free cash flow at which a company is valued. EV/FCF ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted version.
🧮 How is it calculated?
EV/FCF ex SBC = Enterprise Value ÷ (Free Cash Flow (TTM) − SBC)
🏛️ Why is it important?
EV/FCF provides a valuation based on free cash flow and therefore complements earnings-based valuation metrics such as the P/E ratio. The ex SBC version additionally accounts for the economic impact of stock-based compensation and provides a more conservative view from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF means that enterprise value is low relative to current free cash flow. The reasons should always be considered in the context of the company and its industry.
- A high EV/FCF means that enterprise value is high relative to current free cash flow. This can, for example, reflect high growth expectations or temporarily weak cash generation.
- When SBC is positive and adjusted free cash flow remains positive, EV/FCF ex SBC is generally higher than the standard EV/FCF.
- The metric is particularly useful for companies with relatively stable and predictable cash flows.
- If free cash flow is negative or very low, EV/FCF has limited usefulness and should not be interpreted like a standard valuation multiple.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF) | ex SBC
📈 What is it?
Free cash flow shows how much cash remains after a company has covered its operating and capital expenditures. FCF ex SBC additionally deducts stock-based compensation (SBC) to adjust the cash flow for the effect of non-cash SBC.
🧮 How is it calculated?
Free Cash Flow ex SBC = Operating Cash Flow − SBC − Capital Expenditures (CAPEX)
🏛️ Why is it important?
FCF reflects a company’s actual financial strength – independent of reported accounting earnings. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction. FCF ex SBC also deducts stock-based compensation and shows how much cash generation remains after SBC.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow indicates that a company has strong financial strength – independent of reported earnings.
- It is often a solid basis for sustainable dividends and share buybacks.
- Declining FCF can be a warning sign, even if reported earnings remain stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free Cash Flow Margin | ex SBC
📈 What is it?
The Free Cash Flow Margin shows how much free cash flow a company generates relative to its revenue. In simplified terms, free cash flow is calculated as operating cash flow minus capital expenditures. The Free Cash Flow Margin ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted metric.
🧮 How is it calculated?
Free Cash Flow Margin ex SBC = (Free Cash Flow − SBC) ÷ Revenue × 100
🏛️ Why is it important?
The Free Cash Flow Margin shows how efficiently a company converts its revenue into free cash flow. Strong free cash flow can provide financial flexibility for dividends, share buybacks, debt repayment, or further investments. The ex SBC version additionally accounts for the economic impact of stock-based compensation and therefore provides a more conservative view of cash generation from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A high Free Cash Flow Margin shows that a company converts a high proportion of its revenue into free cash flow.
- This can provide greater financial flexibility for dividends, share buybacks, debt repayment, or investments.
- The Free Cash Flow Margin ex SBC additionally accounts for potential shareholder dilution from stock-based compensation.
- The long-term trend is particularly important. Declining margins can, for example, result from higher investments, changes in working capital, or weaker operating performance.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Revenue per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Genomma Lab Internacional-b Stock Analysis
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Genomma Lab Internacional-b Events
Past Events
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JUL
23
Q2 2026 Earnings Call
2 months ago
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APR
23
Q1 2026 Earnings Call
6 months ago
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26
Q4 2025 Earnings Call
7 months ago
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OCT
23
Q3 2025 Earnings Call
12 months ago
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Genomma Lab Internacional-b — Q2 2026 Earnings Call
1. Management Discussion
Good day, ladies and gentlemen. Thank you for joining Genomma Lab's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this meeting is being recorded and will be available for replay from the Investor Relations section of Genomma's website following the call.
I'll now turn the call over to Christianne Ibanez, Genomma's Head of Investor Relations. Please go ahead.
Thank you, and welcome everyone. On today's call are Marco Sparvieri, Chief Executive Officer; and Antonio Zamora, Chief Financial Officer. Before we get started, I would like to remind you that the remarks today will include forward-looking statements such as the company's financial guidance and expectations, including long-term objectives and forecasts, as well as expectations regarding Genomma's business, products, strategies, demand, and markets. These statements are subject to risks and uncertainties that could cause actual results to differ materially. They are also based on assumptions as of today, and the company undertakes no obligation to update them as a result of new information or future events. Let me turn the call over to Mr. Marco Sparvieri. Please go ahead.
Thank you, Chris, and thank you everyone for joining our second quarter 2026 earnings call. Let me open with the quarter highlights. First, the quarter came in line with our expectations. Our growth initiatives are gaining traction. Mexico delivered a sequential sales improvement as we maintained or grew market share across all our business units, despite full market category contraction. The consumption environment remains challenging. Full market category contractions in Mexico continue to weigh on the company's sell-out. The United States remains pressured by Hispanic retail disruption and a weak cough-and-cold category. We are executing targeted actions on each front. We expect a continued gradual recovery during the second half of 2026. Second, productivity remains a significant buffer against operational deleverage and increased operational expenses. Our gross margin increased during the quarter, while SG&A expenses remained flat. All in all, EBITDA came in line with our expectations.
Lastly, I would like to highlight that we remain confident in our strategy and in the path we are on. We are beginning to see clear signs of recovery in the Mexican market. I want to thank our investment community for your continued trust. Turning to Mexico, sell-in declined minus 4.4%, a sequential improvement from minus 8.6% in the first quarter of 2026, and minus 22% in the fourth quarter of 2025. Sell-out declined minus 4%, also a sequential improvement, while the sell-in to sell-out gap narrowed to 43 basis points, a sign that channel health is improving. Last quarter, we told you momentum would be rebuilt. This slide shows it's happening. With both curves converging, our reported sales now reflect real consumer demand, not inventory movements, though additional adjustments may be required if market weakness persists.
This view shows the sell-out recovery path across Mexican monitored retailers, reflecting the most demanding channel behavior for the company, from minus 15.7% in April to minus 10% in May and minus 6.8% in June. We delivered a 9-point improvement within the quarter. In the first 2 weeks of July, monitored sell-out turned positive at plus 2.4%, back to growth and 21 points above the low point of Q2 2025. This is not one good data point. It is a consistent month-by-month recovery showing through our most demanding channels. At the leading retailer, our largest client in Mexico, the recovery is ahead of the curve. Sell-out growth went from minus 7% in April to plus 4% in May and plus 5.2% in May and accelerated to plus 15.3% in the first 2 weeks of July. That is a 34 points recovery from the low point of Q2 2025. This matters because it is a leading indicator.
Not only does it show the recovery in our largest client in Mexico, it also shows we can replicate this performance across our other clients as we execute the same strategy with each of them. A key driver behind the acceleration is Suerox. This graph shows Suerox growing in a sustained double-digit at the leading retailer in the last month, supported by our growth strategies and specific to this client. We will continue to support momentum through the second half of 2026. The share data confirms it. Suerox share at the leading retailer climbed to 12.2% in the second week of July, an historic high level, up 3.6 percentage points versus the first quarter of 2026.
These are early weeks at a single retailer, so we remain measured, but the trajectory tells us that our strategy is pulling the brand up. Let me go deeper on Suerox's economics in Mexico because they show our model is working. We moved pricing from MXN 25 to MXN 22 to stay competitive. We fully absorbed Mexico's new MXN 1 per bottle tax on non-caloric sweetened beverages, and we held market share at 6.9% at the full Mexican market level. And yet, Suerox's Mexico gross margin grew 11.7 percentage points year-over-year during Q2 2026, and is 2.8 points above pre-discount levels, a testament to the impact of our productivity initiatives and manufacturing capabilities. Suerox is one example of many productivity initiatives across the company that are funding our competitiveness without sacrificing profitability. Against that backdrop, it is important to size the market we are operating in.
At the full market level, per NOBLE and Nielsen data through May, every category where we compete in Mexico is contracting. Isotonic beverages is down minus 6.6%, OTC minus 6.3%, and personal care minus 1.4%, and infant nutrition minus 1.1% year-to-date. This is a full market headwind, and it continues to weigh directly on our sellout. Within that contracting market, we maintained or increased year-to-date market share across all business units versus 2025 year-end levels. Isotonic beverages, OTC, and personal care remain stable, while infant nutrition stepped up from 4.2% to 5.2%, up a full percentage point. These moves are modest, but they confirm our initiatives are working where it counts, and defending market share today is what protects the company's value tomorrow.
Turning to our consolidated results, like-for-like sales declined minus 3.6%, and net sales declined minus 6%, reflecting the ongoing recovery in Mexico, continued softness in the U.S. Hispanic market, and a 10.8% appreciation of the Mexican peso during the quarter. Gross margin expanded 106 basis points to 64.6%, driven by productivity gains, partially offset by higher promotional investment. EBITDA margin declined minus 200 basis points to 21.8% on operational deleverage, with SG&A flat as productivity offset higher OpEx and inflation. Net margin expanded 93 basis points to 8.5%, driven by lower financial expenses and reduced foreign exchange losses. Let me be direct about the margin implication. Last quarter, we guided to EBITDA pressure over 3 to 6 months. As we prioritize market share, this quarter landed within that window.
The choice to invest remains deliberate, and we expect operational leverage to improve as sales recover gradually in the second half of 2026. This view shows the geographic picture in gross sellout and local currency. LatAm ex Argentina, 30% of the mix grew plus 5.6%, driven by Central America and the Andean region, with OTC and beverage market shares gains in key markets and traditional channel expansion. Argentina, 15% of the mix grew 37.7%, outpacing inflation by 4.5 percentage points. The U.S., 8% of the mix declined minus 7.9% in local currency, pressured by Hispanic retail disruption and a cough and cold category weakened by 2 consecutive milder seasons. We are realigning our commercial footprint and distribution model to stabilize performance, with Suerox sellout growing double-digit and e-commerce expanding. All in all, LatAm is compensating, but the recovery works sit squarely on Mexico and the U.S.
Before I close, let me leave you with four messages that summarize how we see the path forward. First, Mexico performed in line with our expectations, with a sequential sales improvement and monitored sellout back to growth in early July. Second, we defended market share across our business units despite full market category contraction, which is the foundation every recovery is built on. Third, margins behaved as we guided. Productivity expanded, gross margin and held SG&A flat, while EBITDA contracted on operational deleverage within the window we communicated. Fourth, we expect a continued gradual recovery towards the second half of 2026, supported by four commercial levers. Stronger in-store execution, competitive pricing, expanded digital and TV communication, and e-commerce growth, reinforced by our innovation pipelines of OTC launches and Suerox ramp-up. To close, the quarter confirmed we are on the right path towards sales recovery.
Momentum is rebuilding, our initiatives are gaining traction, and our fundamentals position us to emerge stronger as the consumption cycle recovers. I want to thank our team for their disciplined execution and our investors for your continued trust.
Thank you, Marco, good morning, everyone. The second quarter showed the underlying dynamics we have been pointing to all year. Mexico is turning the corner as our growth initiatives gain traction. Latin America continues to compound solid growth, and the organization is converting discipline into margin, even as the operating environment in Mexico and the U.S. remained difficult. Productivity, once again, drove gross margin expansion, absorbing both higher promotional investment and the full quarter impact of Mexico's new IEPS tax on non-caloric sweetened beverages. Lower financial expenses and reduced FX losses supported net income growth, and we closed the quarter with a solid balance sheet and ample liquidity. Let me take you through the numbers. Net sales were MXN 4.397 billion, down 6% year-on-year. The headline decline is largely a currency story.
The 10.8% appreciation of the MXN against the U.S. dollar created a significant translation headwind in our international operations. Stripping that out, like-for-like sales declined 3.6% as the ongoing recovery in Mexico and 3.9% like-for-like growth in Latin America, led by the Andean region and Central America, were not enough to fully offset continued disruption in the U.S. Hispanic retail channel. Gross margin expanded 106 basis points to reach 64.6%. Productivity gains, once again, more than offset both higher promotional spend and the fully absorbed impacts of the IEPS tax. A clear signal that our productivity program is structural rather than a one-quarter effect. EBITDA totaled MXN 959 million with a margin of 21.8%, down 200 basis points year-over-year. The decline was driven primarily by operating deleverage on lower volumes, not by a loss of cost control.
SG&A was essentially flat as productivity savings offset both higher operating expenses and inflation. Net income increased 5.5% to MXN 375 million with a net margin expanding to 8.5%. Lower financial expenses and reduced FX losses more than offset a lower EBITDA margin and a higher inflationary loss on our monetary position in our hyperinflationary subsidiary. Going to Mexico, net sales declined 4.5%, continued to improve sequentially as growth in beverages and infant nutrition partially offset continued softness in OTC and personal care. We maintained or grew year-to-date market share across every business unit, despite broad category contraction in the market. Gaining share in a shrinking market is the clearest evidence our initiatives are working. Sell-out also improved sequentially, and the sell-in sell-out gap narrowed to only 43 basis points, reflecting healthier trade inventories.
We were encouraged to see monitored retailer sell-out increase 2.4% during the first 2 weeks of July, an early signal that the recovery is carrying into the third quarter. The 10.8% appreciation of the MXN creating a headwind when we consolidated U.S. results into MXN. Local currency sales in the United States declined 21.3%, reflecting ongoing disruption in the Hispanic retail landscape and continued pressure in cough and cold following a milder season, compounded at the reported level by the 10.8% peso appreciation on consolidation, as we described earlier. Even so, Suerox continued to grow at a double-digit rate, and our e-commerce channel kept expanding as we advanced our commercial realignment strategy in that country. Going into LatAm, generalized FX depreciation against the MXN also created a severe translation headwind for the region, as you can see in this chart.
Like-for-like sales grew 3.9% in Latin America, led by strong performance in the Andean region and Central America, continued share gains in OTC and beverages, and expansion in the traditional channel, despite a generalized ForEx depreciation against the MXN, as described earlier. Regional EBITDA margin improved 41 basis points to reach 25.1%, a direct result of our productivity initiatives in that region as well. Our cash conversion cycle reached 129 days, 10 days increase versus the first quarter, reflecting a 4-day increase in receivables, 3-day increase in inventories, and a 3-day decrease in payables. This was a deliberate build as we invested in inventory to support new product rollouts and innovation initiatives in Mexico during the launch phase. Trailing 12 months free cash flow totaled MXN 1.259 billion, down 53% versus the prior year, reflecting lower operating income and higher working capital requirements.
We expect working capital to normalize as the innovation and product launches mature. We paid our sixteenth consecutive quarterly dividend of MXN 0.20 per common share, totaling MXN 200 million, a reflection of our consistent cash generation and our continued commitment to returning capital to shareholders. We remain committed to maintaining quarterly dividend payments in the future. CapEx totaled MXN 120 million, including MXN 102 million in a manufacturing plant and distribution center. CapEx is required to drive the productivity programs that are driving these savings. Our balance sheet remains solid, with net debt to EBITDA of just 1.38x and a debt service coverage ratio of 5.2x.
Yesterday, after the quarter end, we further strengthened our capital structure by securing MXN 1.5 billion amortizing term loan with a 10-year maturity, allowing us to refinance existing debt on more favorable terms and reinforcing our financial flexibility going forward. In summary, while market conditions remain challenging, we are encouraged by the sequential improvement in Mexico that Marco described earlier and by the continued strength of our productivity agenda in offsetting a difficult top line. We remain focused on executing our growth strategy, investing behind innovation and commercial execution, improving working capital as recent launches mature, and preserving the financial discipline that underpins a strong balance sheet and long-term value creation. With that, I will hand the call back to the operator for questions.
[Operator Instructions] Our first question comes from Alvaro Garcia from BTG Pactual.
2. Question Answer
Hi, Marco, Antonio. Can you hear me?
Yes.
Awesome. Thanks for the space for questions. I have a couple questions. One on accounts receivable in Mexico. I know you mentioned new product rollouts, Antonio, in your prepared remarks in Mexico specifically, feels a little bit more aggressive than usual, I'd suppose. Any color on accounts receivable would be helpful. My second one on LatAm ex-Argentina. Seems you're seeing sort of a pocket of your portfolio that's still seeing decent growth, especially in the sell-out chart you showed there. What products are you seeing the best results in or what categories? That'd be helpful to get some color on. Thank you.
Yes. Thank you, Alvaro. In general, regarding to accounts receivables, the way I would put it is, as we said in the last 2 calls, we are moving into a phase of actually being more aggressive with our customers, playing harder in the seasons, and be stronger with the execution of our new initiatives. This past quarter, we launched, as you know, Suerox Mineral, which is a core initiative for the company, which is actually now driving the growth.
Of the brand, it's proving to be very successful. We are now seeing very strong growth of Suerox across the market where we launched Suerox Mineral. In general, we are putting more product out there because we want to have larger displays at the stores. We want to have more presence than our competitors. We are playing harder in the seasons. We are being extremely aggressive commercially with the launch of Suerox Mineral, which launched at the end of the quarter and represented a very large portion of the receivables that we are showing. We were expecting this. It's a choice we're making, and I think it's working out for us because we are growing share in many brands. We are maintaining share and especially on innovation, the results are very strong.
I appreciate that. That's a candid answer there.
On LatAm ex Argentina, there's several brands and actually segments that are driving the growth. I would say we have 2 brands in Andean and Central America, which are X-Ray and Nikzon, that are performing extraordinarily well. The whole expansion of our footprint in the traditional channel in Central America and Colombia is working really well as well. In the case of Brazil, we continue to see a strong performance of Tio Nacho. In Chile, we are seeing a very strong performance of OTC in general, while we are also starting to see an improvement in personal care, which was a problem in the past. Let me think. Suerox continues to perform extraordinarily well across the board. We have markets like Chile, for example, we are almost reaching a 20% market share in that market.
Argentina, we launched 2 years ago, and we are approaching almost 10 points of market share. We are at nine plus right now. In Brazil, Suerox continues to perform well. I think that's kind of like the 80% move.
Our next question comes from Alejandro Fuchs with Itau.
I have 2 quick ones, if I may. The first one in Mexico, Marco, want to see if maybe you can elaborate a little bit how have you seen competition on the OTC segment under this tougher consumer environment? The second one, thank you for all of the detailed sellout explanation. I thought that was very interesting. Wanted to ask you, Marco, maybe where are you more excited about for the second half of the year in terms of innovation? What's driving this sellout improvement at these retailers? What part of the portfolio you think has more runway to recover faster? If you can elaborate a little bit more on your expectations. Thank you.
Yes, absolutely. Well, this is not the first time we are going through a period of category contractions. In my case, not only my 12 years in this company, but also my almost 20 years at P&G. When these things happen, when you are competing in categories that are declining, it's a really tough environment. In terms of behaviors, what you normally see and what we are seeing today across the board, not just in OTC, but in every single category, is that competitors are trying to protect or gain market share, and the way they do that is with very heavy promotional activities. Okay? We are seeing promotions across the world, in every channel. We're seeing competitors that are being extremely aggressive in terms of pricing, in terms of value packs, in terms of fighting for shelf space. It's really tough.
In this kind of environments, you have to be tougher than competitors. We have not seen a lot of very significant innovation. We're seeing things here and there, but nothing very relevant except for a few. It's been tough. Everybody wants a piece of share in a market that is declining, pricing is very predominant. Shelf displays, shipping volume into the stores to have more presence. That's the kind of behaviors that we are seeing. In our case, as we said, we are defending and fighting back really hard, which is working. Also, we are betting very strongly on innovation. This quarter, we just launched Suerox Mineral. That is working extremely well. As you just saw in the presentation, the results of Suerox are outstanding and as we expand the initiative, we continue to see very strong results in the retailers.
We have five new launches that we are planning for the second half of 2026, in which we are betting everything as well. To your second question on what am I excited about for the second half, I am right now cautiously optimistic, but in reality, very optimistic about what is coming. I think the full expansion of the launch of Suerox Mineral is going to be a hit big time. We are also starting to expand or planning the expansion of Suerox Mineral to other markets. I think that's going to be huge. I think that the preparation and the plans that we have for the winter season in our cough and cold categories here in Mexico and honestly across the board, but mostly in Mexico, I am very confident because we have already discussed our plans with the retailers, with customers.
We have already sold many of these plans and everything looks extremely encouraging. The innovation. If I have to put it in 3 bullet points, I would say Suerox Mineral, number one, the execution of the winter season across the board, third, the execution and the five initiatives that we have for the second half. That's it. Yes. Those are the 3 I would say.
Our next question comes from Froylan Mendez from J.P. Morgan.
Marco, would you describe the third quarter to be a turning point for sales and margins in Mexico and what would need to happen for the third quarter to be the turning point? Second question would be, how do you see inventory levels for the isotonic segment for you and for competition into the second half? I'm asking this question because I guess there was a lot of excitement around the World Cup and probably many people flooded the channels with extra inventory, and I don't see that the expected demand was actually there. Is there a risk that we see another episode of high inventory in the channels given the more depressed demand and the seasonality not coming as strong as expected? Thank you.
No, thank you for the questions, Froylan. Good to hear from you. For the third quarter, I will divide the discussion into 3 or 4 points. Number one is sell-out. In terms of sell-out, I have a very high level of confidence that our sell-out in Mexico, all of what I am going to talk is right now Mexico and then I will give you the highlights for overall. For the third quarter, I feel highly confident that all the plans that we are putting in place in terms of sell-out and execution will pay out. I do believe that we will see positive numbers in terms of sell-out. We are already seeing, as I shared in the slides, we come from a situation where we are declining, we narrow that gap and now in July we're actually seeing our sell-out growing.
Okay, that's very positive. In terms of sell-in, I would like to be a little bit more cautious there because as you mentioned, we loaded the channels especially in isotonics beverages to play really hard during the World Cup and the summer season. As I shared, the categories as a whole didn't react very strongly or as strong as we expected. Inventories are high or are decently high in the trade. By the way, it was a choice. As I said a few quarters ago, we are playing tougher at the stores and so on. It's a choice that we made. There might be an inventory adjustment going forward. Nothing to be worried about, but sell-out, I think, is the most important measure and I feel very confident on that.
In terms of margins, as I said in the call last quarter, we are making the choice of reducing a little bit our guidance in terms of margin, and that we expect to last at least throughout 2026. In 2027, I am confident that we will see a gradual recuperation of our margin levels that were in the range of 23% to 24%. For now, for the balance of the year, I am not planning to report higher margins than what we are today. I talked sellout, I talked sell-in, inventories, margin, and the inventories you referenced.
If I can just follow up?
Sure.
On the list of strategic projects that you were pushing, obviously Suerox Mineral is one of them. It was a big list of projects with different % of probability and different, let's say, sales uplift, et cetera. Given the way the consumer has behaved and your expectations of overall demand this year and probably next, have you shortened out that list? Are you focusing on something much more specific? Are some of those projects out already, or let's say, do not make sense to pursue at this point given the consumer backdrop?
Yes. The areas where we are focusing right now, and I think maybe a few of them dropped off the list, but the most important ones are innovation, number 1. As I said, we have five very strong innovations coming in the second half. We have Suerox Mineral that we just launched, and I think the potential is immense. So innovation is one. E-commerce is the second, and we are executing that exactly in line with the plan, and it's paying out really nicely. Number 3, it's the in-store execution. We revamped several of our execution platforms to make sure that everything that we design here in the office is executed with excellence at the stores, and that's working nicely. We continue to focus on the expansion of our distribution routes in the traditional market, and we will continue to do so.
We will continue to focus on productivity because we are going to need more space or more room in the P&L to continue to invest in the business. We are continuing to focus on increasing and improving our communication model with digital. I would say that we said that we're going to be 50% digital, 50% TV. If you look at the past quarter, I would say that we are more like in 65% or 70% digital, and the rest out of home and TV. We will continue to push that. I'm sorry, the other piece is we talk about hard discounters in that list, and we are making very nice progress with several key hard discounters throughout Mexico and Latin America. That's it.
Our next question comes from Antonio Hernandez with Actinver.
Just a quick one regarding internal inflation. You already mentioned productivity initiatives, and that, of course, is reflected in the gross margin. Overall, how do you see internal inflation or overall raw materials inflation going forward? Any expectations?
Raw materials and inflation is a reality, especially after all the mess with Iran. I had high hopes of seeing the U.S. reaching a peace agreement with Iran, and then the oil prices coming down. I think that there's a lot of uncertainty there. As long as the oil prices remain high, we will continue to see pressure on raw materials because of transportation costs, because of everything you know. If that is corrected in the short term, I think that that pressure is going to ease. Nevertheless, we have both scenarios modeled going forward, and we are aggressively working on productivity to offset most of the impact, as we have been doing over the past few years successfully.
Our next question comes from Regina Carrillo with GBM.
I have 2 on leverage. One is following the long-term liability refinancing that you did, what are the expected annual interest expense savings, and what impact could that have over the next 12 months for interests? Also, what are your expectations on free cash flow generation for the second half of the year, and what leverage could we expect for year-end?
Thank you, Regina. This is Antonio. Regarding the refinancing that we did, it's a 10-year term bilateral loan, that obviously expands the maturity profile of our debt, and that's something that we are working on. There's going to be more transactions like this that we are working on. Basically what we're doing is we're optimizing the maturity profile. Okay? In terms of interest savings, Yes, I think that Genomma has very competitive interest spreads in the different instruments that we use. As you know, we finance with commercial paper, with CEBURES, Certificados Bursatiles de Largo Plazo, also with multilateral loans from entities like the IFC, the IADB, this recent facility that we got from BANCOMEXT, we also have significant lines of credit with some of the most important banks in Mexico.
We want to diversify the sources of financing so that we lower the refinancing risk for the company. While we're doing this, we're optimizing and lowering the total interest expense. The key answer to your question, it's a little bit hard to answer because, as you know, most of our debt, the vast majority is in Mexican pesos. Actually, all of our debt is in variable interest rate. So the answer lies with what's your expectation for [ TA ], and that's a very hard answer. That would be one.
The second question that you have, the expectation regarding the cash conversion cycle and free cash flow generation. As Marco mentioned in this call and in the previous call, we decided this year that we need to invest in the market to launch innovation, to have more presence in the aisle, et cetera. That required some working capital investments. That's required in an environment like the one that we are facing, that everybody's facing. As the situation normalizes and as innovation matures and there's more volume there, obviously, the working capital requirements are going to be lower, you will see a better cash flow generation in the future. At this moment, I think that the right thing that we need to do is invest in the market.
As Marco described, holding market share or even expanding market share, it's the most important thing that a company in the consumer goods industry and the pharma industry needs to do at this time. Yes, a little bit of more investment right now. Fine. We are confident that this is temporary. That's why we're committed with the dividend payments, and they will continue. That's it. Hopefully the market will improve in the coming quarters, and we'll see more free cash flow, which is something that we're working on. Furthermore, I think that the productivity initiatives that Marco has described, they are really working. We've had a lot of questions about inflation regarding raw materials, and as Marco described earlier, we have been able to offset most of those impacts. That's also going to help in terms of cash flow generation for the future.
I don't know if we answered your question, Regina.
Our next question comes from Antonio Cardoso with Jefferies.
2 questions on my side. The first one, I would like you to explore a bit more the data point that you gave on the sell-out of July. Is this Genomma specific or overall the sell-out improved throughout the market within other brands as well, all the categories, across categories? Just more color on that. The second one, regarding margins, a colleague asked a bit about it, but I would like a bit more color on EBITDA margins. In a possible scenario that we don't see any recuperation this second semester, how much more operational deleverage can we see? In 2027, how much time it would take, how much growth would be necessary to come back to these 23%, 24% EBITDA margins that were shown in the last 2 years? Thanks so much.
Sure. Thank you, Antonio. Nice to meet you. On the sellout, no, that's our sellout. The data that I shared, in which we saw our sellout growing 14% at, well, the biggest customer we have in Mexico, it's Genomma's, it's not the category. I think the categories, as far as I know from the last data we have, they continue to be in a negative territory. We are starting to grow our business, which means growing share, and you also saw that in the chart that I shared on Suerox that we almost doubled the share in that retailer. That's the sellout. On margins, I don't know how to answer the question because there's a lot of uncertainty out there. The way I would put it is the priority is to protect our market shares.
I think that the plans we have and what we are investing right now, in the market in Mexico specifically, will achieve that. I think that as the business starts to recuperate, which I expect that to happen in the following quarters, at least from a consumption point of view, which is the most important thing, I think that we will be able to ease a little bit on the amount of money that we're pouring into the business, and that will help the margins to come back to the 23% to 24% range that we were before this whole situation. I cannot assure if the scenario that I'm seeing today is actually going to happen.
What I can assure you and everybody is that the priority of this company is to protect our brands, our market shares, a second priority will be to deliver on the margin targets. That's the way I would put it. For now, if you ask me right now, I do believe that after 2026, the third and fourth quarter, we will begin to see a gradual increase of the margins in 2027 to go back to that levels. That's our plan today. I don't know....
Okay. That's clear. I was just afraid on further operational deleverage, given maybe the scenario does not improve in the second semester. I think it's clear.
[Operator Instructions] That concludes Genomma's second quarter results conference call. Thank you for your attention.
Genomma Lab Internacional-b — Q2 2026 Earnings Call
Early signs of a Mexico recovery offset U.S. weakness and FX translation; productivity protects margins while the company invests in Suerox and innovation.
📊 Quarter at a Glance
- Net sales: MXN 4.397bn (-6% YoY)
- Like‑for‑like: -3.6% (excludes currency translation)
- Gross margin: 64.6% (+106 bps) driven by productivity
- EBITDA: MXN 959M, margin 21.8% (-200 bps)
- Net income & cash: MXN 375M (+5.5%); trailing FCF MXN 1.259bn (-53%)
🎯 What Management Says
- Mexico recovery: Monitored sell‑out improved sequentially and turned positive in early July; Suerox is a lead driver.
- Productivity focus: Manufacturing and cost programs expanded gross margin and funded competitive pricing.
- Commercial push: Investing in in‑store execution, digital/TV mix, e‑commerce and five new launches in H2 2026.
🔭 Outlook & Guidance
- H2 view: Expect gradual recovery through second half 2026; monitored sell‑out already showing early improvement.
- Margin trajectory: EBITDA pressure expected within the 3–6 month window communicated; recovery toward ~23–24% EBITDA targeted in 2027.
- Key risks: FX translation (MXN appreciated ~10.8%), U.S. Hispanic retail disruption, and full‑market category contractions in Mexico.
❓ Analyst Q&A
- Receivables & inventory: Higher receivables reflect aggressive channel loading for Suerox Mineral and seasonal displays; management expects working capital to normalize as launches mature.
- Competitive intensity: Peers running heavy promotions across OTC and other categories; Genomma is defending share via pricing, displays and innovation.
- Capital & leverage: Closed MXN 1.5bn 10‑year loan to extend maturities; net debt/EBITDA ~1.38x and dividend maintained (MXN 0.20/share).
⚡ Bottom Line
- Investor take: Early operational recovery in Mexico and strong productivity make the strategy credible; short‑term EBITDA pressure is a deliberate trade to protect share, while FX and U.S. market dynamics remain key risks. Investors should weigh improving sell‑out momentum against translation headwinds and near‑term cash conversion variability.
Genomma Lab Internacional-b — Q1 2026 Earnings Call
1. Management Discussion
Good day, ladies and gentlemen. Thank you for joining Genomma Lab's First Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this meeting is being recorded and will be available for replay from the Investor Relations section of Genomma's website following the call.
I'll now turn the call over to Christianne Ibanez, Genomma's Head of Investor Relations. Please go ahead.
Thank you, and welcome, everyone. On today's call are Marco Sparvieri, Chief Executive Officer; and Antonio Zamora, Chief Financial Officer.
Before we get started, I'd like to remind you that the remarks today will include forward-looking statements, such as the company's financial guidance and expectations including long-term objectives and forecasts as well as expectations regarding Genomma's business, products, strategies, demand, and markets. These statements are subject to risks and uncertainties that could cause actual results to differ materially. They are also based on assumptions as of today, and the company undertakes no obligation to update them as a result of new information or future events.
Let me now turn the call over to Mr. Marco Sparvieri.
Thank you, Chris, and thank you, everyone, for joining our first quarter 2026 earnings call. Let me open with where we stand. We are executing on our growth initiatives, expanding distribution, opening up new routes in the traditional channel, stepping up in-store execution, and increasing new investment. This execution is delivering early signs of market share recovery in Mexico, which is encouraging.
At the same time, sell-out is growing slower than we expected, driven by further full market category contraction in Mexico, most notably in OTC. The main performance issues are concentrated in three areas: beverage in Mexico, gastro in Mexico and Tukol in the United States. We are adapting our plans with targeted interventions on these issues, and we expect recovery between Q2 and Q3 2026.
We remain confident in our growth initiatives as we navigate a tough consumption environment in Mexico. I would also like to thank our investment community for your continued trust. We will continue to operate with the highest level of transparency and please do not hesitate to reach out with any questions beyond this call.
Now let me address five key highlights of the quarter. Number one, LatAm continues to deliver solid results, while net sales remain under pressure from a weak consumption environment in Mexico and Hispanic market disruptions in the United States. Two, we are facing the toughest comparative base of the year with significant FX headwinds offsetting LatAm's strong like-for-like performance. Three, in Mexico, specifically, full market category contractions are weighing on sell-out, and we are adjusting our plans to offset targeted weakness. Number four, our disciplined OpEx behind growth initiatives kept margins stable despite operating deleverage. Number five, increased investment is required to support sell-out and defend market share aiming to increase competition, while Mexican consumption remains soft.
Turning to our consolidated results. Like-for-like sales declined minus 3.9% and net sales, minus 4.9%, impacted by a 13.9% appreciation of the Mexican peso. The top line reflects a soft Mexican consumption environment, partially offset by plus 5.3% like-for-like growth in LatAm.
Gross margin expanded plus 61 basis points to 63.4%, reflecting the productivity gains we have been building. EBITDA margin declined minus 96 basis points to 22.8%, as we invested behind our growth initiatives into a weaker-than-expected demand environment. Net margin expanded plus 49 basis points to 11.8% on lower taxes and financial expenses.
This view shows where the pressure is coming from. Two geographies are driving the consolidated gap. Mexico representing 45% of our business -- sorry, Mexico representing 45% of our business contracted minus 5.8% in sell-out. And the U.S.A. at 8% of the mix declined minus 10.3%. On the other side, LatAm ex Argentina grew plus [ 4.5% ] and Argentina grew plus 96.6% in local currency. LatAm is compensating by the recovery work since Suerox on Mexico and the United States.
One of the macro headwinds we are navigating is remittances, which directly affect Mexican consumer purchasing power. After declining 5% in dollar terms in 2025, the peso value of remittances deteriorated sharply in early 2026, down minus 16.9% in January and minus 15.6% in February. This is the combined effect of lower dollars inflow and a stronger Mexican peso. It is a real drag on the consumer serve.
At the full market level, the categories where we compete are contracting. After a weak 2025, OTC is now down minus [ 6.3% ] year-to-date through March reflecting a softer consumer. Beverages, personal care and infant nutrition are all slightly negative as well. This is a full market headwind, not a Genomma-specific one, but it continues to wait directly on our sell-out.
Against that contracting market backdrop, this is one of the most encouraging signs of the quarter. Genomma Lab Mexico is improving market share sequentially across every key category. In full year 2025, market share remained largely stable across categories with the exception of oral Suerox which declined 1.8% points due to pricing pressure late in the year. With the available data for 2026, we can see sequential improvements versus the full year 2025 across categories. Our categories are gradually recovering terrain. These moves are modest, but they indicate that our growth initiatives are beginning to gain traction despite a challenging environment.
Let me walk you through the 3 priority issues we're actively addressing. These are the concentrated performance issues, and we wanted to be very specific about the challenges and the action plans behind each.
First, Suerox in Mexico, pressured by a contracting category and increased competition. We're launching [ Suerox Blast ] exclusively in Walmart, OXXO and the traditional channels, targeting 250,000 points of sales within 3 months.
Second, Gastro in Mexico under pressure from a contracting category and generics gaining. We're bringing Genoprazol to price parity to generics and investing in incremental media behind [ Cozingko ] and [ Nikzon ]. And third, Tukol in the United States, where the brand is pressured and the B2B Hispanic channel is contracting. Following the deep U.S. Hispanic marketing -- market disruptions, we're scaling perfect store execution and e-commerce while protecting cash. Recovery on these three priorities expected -- recovery on the three priorities is expected between Q2 and Q3 2026.
Let me go deeper on Suerox because it is the largest single priority. We launched a bolder new brand image in March, cleaner label, stronger self impact, a unified look across the portfolio. We are adding 60,000 new stores in the traditional channel and deploying 27,000 branded coolers at the point of sale.
We are also launching Suerox Mineral, a zero-sugar carbonated isotonic beverage that extends the brand beyond traditional hydration into functional carbonated refreshment. Same brand equity, generally new consumer experience. The launch is backed by cooler replacement at 25,000 OXXOs and all Walmex stores supported by AI power digital ads. We are timing the Mexican launch for summer 2026, the peak category season. This is the category bet with the biggest near-term upside on volume and share.
We're also evolving how we communicate with our consumers. We're shifting incremental media investment toward digital-first mix: TikTok, Instagram reels and YouTube shorts. At the same time, AI-powered creativity production is lowering our cost per asset, accelerating time to market and letting us test far more variants. Critically, this communication engine is directly aligned to our Mexico priorities. Nikzon reactivating the gastro category and Suerox support the [ Blast ] launch.
Let me be direct about the margin implications. Over the next 3 to 6 months, we expect EBITDA margin pressure as we prioritize market share. Through increased discounts, higher gaps and digital communication increases and stronger in-store and distribution spend. Beyond that window, we expect growth initiatives to ramp up and operational leverage to improve. The choice to invest now is deliberate, defending market share today is what protects the company's value tomorrow.
Our productivity engine is what is leading us self-fund this investment. What started as a modest program in 2023 has compounded into accumulated savings of MXN 1.8 billion through 2025. We have secured an additional MXN 1.1 billion in savings by 2026, bringing the accumulated total close to MXN 3 billion. These resources are secured and are fueling every growth initiative in our 2026 recovery plan. However, further resources are needed to defend market share in a weak consumption environment.
Let me give you a couple of examples of our growth initiatives. The traditional channel expansion is a key growth engine, and it is already executed. In 2026, we're opening 430 new routes and adding 138,000 new points of sales across Mexico and LatAm. We are also deploying in-stores media in 314,000 points of sales. So we are not just expanding coverage, we are activating it.
In-store execution is the single largest contributor to our growth plan. We are ramping up the perfect store model and expanding the pharmacist recommendation program across independent pharmacies, supported by better brand visibility in-store. We have a particular aggressive plan in analgesics and we are preparing top-notch in-store executions for both the summer and winter seasons ahead.
Innovation is what keeps our distinctive brands distinctive. In OTC, we are launching 5 new products that conquer new segments. In beverage, we are refreshing Suerox with a new image and opening new consumption occasions patients. In Haircare, we're delivering improved clean performance and an expected routine. And in Skincare, we are democratizing high-end formulations with clean formulas and a refresh design.
We're stepping up our media investment and rebalancing the mix toward a more efficient, more diversified structure with a stronger weight on digital. This is a conscious decision to put the investment where our consumer engagement is actually happening, and it directly backs the priority actions we just discussed.
E-commerce continues to be one of our highest growth channels. We expect to grow 30% in 2026, reaching 7% to 8% of consolidated sales and contributing MXN 310 million in incremental sales. We're investing in traffic generation tools and digital capabilities to sustain that trajectory.
Before I close, I want to step back and anchor on our long-term trajectory. Over the past 6 years, consolidated net sales had growth at a 5.5% CAGR and EBITDA at a faster 8.8% CAGR. The faster EBITDA expansion is not an accident. It is the reflection of the compounded benefits of vertical integration, manufacturing, efficiencies, cost discipline and the productivity program we have built over time. The same operating model that delivered this track record is what will carry through the cycle.
Let me leave you with four messages that summarize how we see the path forward. First, momentum is rebuilding at a lower-than-expected pace as Mexico sell-out remains pressured from a soft consumption environment. Second, increased investment is required to protect Mexico market share, and we expect short-term EBITDA margin pressure until the operational leverage normalizes. Third, our growth initiatives are starting to show early signs of recovery with year-to-date sequential market share improvements in Mexico. Third, LatAm remains a growth engine with growth projects yielding clear results and a disciplined focus on winning initiatives.
And to close, we are executing on our growth initiatives, and we are seeing early signs of market share recovery. And we understand where the concentrated issues are. We remain confident in our growth initiatives as we navigate this tough consumption environment. And we expect to be in a better place by Q2 and Q3.
Thank you for your continued support. Antonio, please go ahead.
Thank you, Marco, and thank you, everybody, for joining. As Marco mentioned, Q1 was a challenging quarter, particularly in Mexico and the United States, and our results reflect that. However, beneath the headline numbers, there are 3 things I want to take away from my remarks. First, our gross margin continued to expand, demonstrating that our productivity agenda is working. Second, Latin America is gaining momentum with like-for-like sales growing 5.3% in the quarter. And third, our balance sheet and liquidity remains solid, giving us the financial flexibility to invest through this period and emerge stronger in the future.
Let me now walk you through the numbers. Net sales were MXN 4.2 billion, a reported decline of 4.9% year-on-year. We all know that a large driver of this decline was currency. The Mexican peso appreciated 14% against the U.S. dollar and also against many other currencies. And this compressed the value of our international revenues when consolidated into Mexican pesos.
On a like-for-like basis, stripping out the FX effect, sales declined only 3.9%. This reflects two specific headwinds, continued inventory destocking and soft consumer demand in Mexico and disruption in the U.S. Hispanic retail channel. These were partially offset by solid underlying growth of 5.3% in Latin America. Put simply, our core business outside Mexico and the U.S. is growing. The near-term noise is concentrated in just two geographies for reasons we understand and are actively addressing.
In terms of profitability, as I mentioned, gross margin expanded 61 basis points to reach 63.4%, reflecting the continued impact of our productivity and cost efficiency programs. This is a meaningful result. It demonstrates that we are protecting our margins even as volumes are pressured. EBITDA margin was 22.8%, down 96 basis points. This reflects the impact of operating deleverage on a lower revenue base, combined with deliberate investment in our growth initiatives and market share defense. We are investing to support the recovery. This is intentional not structural.
Net income was broadly stable at MXN 495 million with net margin expanding 49 basis points to reach 11.8%. Lower financial expenses were the primary driver of this improvement, partially offset by higher inflationary losses in Argentina recognized under IAS 29.
Moving on to the geographies. Mexico sales declined 8.6%, driven by ongoing inventory destocking at retail and soft consumer demand. Some positive offsets, Infant Nutrition and Personal Care, both grew in the quarter in Mexico.
Going now to the international. As we mentioned, the 14% appreciation of the Mexican peso created a strong FX headwinds when consolidating the international figures. In the case of the United States, local currency sales declined 9.7%, reflecting disruption in the Hispanic retail channel, as we've seen over the past few months, and a weaker-than-expected cough and cold season. Additionally, the 14% appreciation created a significant translation headwind when consolidating U.S. results. We're working closely with our retail partners to stabilize distribution as well.
Moving on to the other geographies, and as mentioned earlier, there was generalized FX depreciation of the local currencies against the Mexican peso, which again created a severe translation headwind for the region. Latin America, on a like-for-like basis, sales grew 5.3%, driven by strong execution in Central America and the Andean region. Reported growth was limited by broad FX depreciation of the local currencies across Latin America relative to the Mexican peso. But the underlying businesses and momentum is real and encouraging. Like-for-like sales in Latin America I would say, is a highlight of the first quarter.
Moving on to cash flow and working capital. The cash conversion cycle reached 119 days, up just 3 days versus the prior year, driven by higher receivables and lower payables, partially offset by inventory improvements. Improving working capital efficiency is a clear priority for the team in the coming quarters, and we expect to see progress as the consumer demand in Mexico normalizes.
Free cash flow on a trailing 12-month basis was MXN 2 billion, down 31% year-over-year. This reflects lower operating income and higher working capital requirements in the short term.
As we all know, we paid a quarterly dividend of MXN 0.20 per share, totaling MXN 200 million. We remain committed to our quarterly dividend, which reflects confidence in the durability of our cash generation. CapEx totaled MXN 150 million with investment concentrated in our manufacturing plant and especially in the expansion of our distribution center, both are critical to our long-term operational efficiency.
On the financing activity, we remain active in the local debt market throughout the quarter, issuing a little bit over MXN 1 billion across multiple tranches. These are all refinancing. In Mexico, we placed MXN 427 million, in February MXN 409 million, in March, MXN 200 million, all of them with very attractive spreads, as you can see in this table. Every issuance received the highest available local short-term ratings, A1+ from Fitch and HR+1 from HR ratings. This is a clear market endorsement of our financial strength and a competitive cost of funding.
As we mentioned, our balance sheet remains strong. Net debt-to-EBITDA stands at 1.3x, clearly investment grade. And our debt service coverage ratio is 5.3x. We have the financial flexibility to fund our investment agenda while maintaining a conservative leverage profile.
In closing and to summarize, Q1 was a difficult quarter in terms of reported results, but the fundamentals of the business remain intact. Our margins are expanding, especially gross margin. Latin America is growing. Our balance sheet is strong. And we are taking the right actions in Mexico and the U.S. to stabilize performance and position the company for an eventual recovery. We are focused on what we can control, disciplined execution, working capital improvement and continued investment in the initiatives that Marco has described. And these initiatives will drive growth over the medium term.
With that, I would like to hand back to the operator to begin the Q&A.
[Operator Instructions] The first question will come from Froylan Mendez from JPMorgan.
2. Question Answer
Can you hear me now?
Clearly, Froylan.
So given the, let's say, slower than expected evolution of the destocking in the first quarter, does this move your annual outlook on being able to recover some of the margin in the second half and maybe start seeing some growth, especially in Mexico in second half? So should we expect that ramp up more into next year? And secondly, can you dig deeper into what is driving the performance in Latin America on a like-for-like basis, either country or product?
Thank you, Froylan, for your questions. On Mexico, the situation is the following. The plans that we discussed with you and with all the stockholders at the end of the last year and the beginning of this year. We are executing those plans with a lot of discipline, okay? And from a share point of view, you can see very early signs that these plans are actually starting to work. In every category, what you see is that, that versus where we were in 2025 in the first quarter, our shares are starting to recover.
The problem that we are seeing, that I am seeing is that the categories as a macro level are suffering beyond what I was expecting. So we -- I was actually expecting that the sell-out in the first quarter was going to be flat in Mexico or growing slightly, okay? But the reality is that we declined in the first quarter, okay? So I was expecting that by the second quarter, we're going to start to see growth.
In Mexico, I now believe that, that's going to be delayed at least to the third quarter. But I do see that during this year, at some point, either quarter 3, quarter 4, we're going to start seeing the business growing.
And in terms of margin, at the beginning of the year, I presented a guidance of 23% to 25% -- 23.5%. And given the current environment, both the macro environment and then the competitive environment because what we're suffering here in Genomma in the business is basically what every other player is suffering in the market. And everybody is reacting. It's reacting with more promotions, more discounts. There's a lot of activations at the point of sale because everybody is desperate to get their business back growing or to grow further, and we have to defend our market shares, and that will imply that we're going to have to use some of the money that we have in our margin beyond the productivity savings that we just explained, and that will put a little bit of pressure in the margin at least during second quarter and the third quarter.
I do believe and I feel very strongly that this is going to be a short-term situation. And so I expect to go back to the 23% to 24% EBITDA by the end of the year or the beginning of 2027. In terms of LatAm, we have several countries and brands that are performing really well. We have -- Argentina is performing extraordinary. We grew in Argentina, almost 100% versus the first quarter in 2025. And so that market is doing really well. Remember that the inflation in Argentina is in the range of 30%. So growing 100% means significant growth in dollars. Peru is performing also really well. We had a very strong 2025, especially the OTC business. Colombia and Central America are markets that are growing really fast. So yes, we feel very confident on what's happening in several markets in LatAm.
[Operator Instructions] That concludes Genomma's first quarter results conference call. Thank you for your attention.
Genomma Lab Internacional-b — Q1 2026 Earnings Call
Q1 2026: Sales pressured by weak Mexico demand and FX; productivity protects margins while management ramps investment to defend share.
📊 Quarter at a Glance
- Revenue: MXN 4.2 billion (reported -4.9% YoY; like-for-like -3.9%).
- Gross margin: 63.4% (+61 basis points) reflecting productivity gains.
- EBITDA: 22.8% (-96 bps); EBITDA is earnings before interest, taxes, depreciation and amortization.
- Net income: MXN 495 million (net margin 11.8%, +49 bps) aided by lower financial expense.
- Cash flow: Free cash flow (TTM) MXN 2.0 billion (-31% YoY); cash conversion cycle 119 days.
🎯 What Management Says
- Invest to defend: Management is increasing marketing, distribution and in-store execution to regain share in Mexico and the U.S. Hispanic channel.
- Product push: Priority launches include Suerox Blast, Suerox Mineral (zero‑sugar isotonic carbonated variant) and five new OTC SKUs to open segments.
- Self‑funding: Productivity program has generated ~MXN 3.0 billion in cumulative savings to finance these investments.
🔭 Outlook & Guidance
- Timing: Management expects recovery to occur between Q2–Q3 2026 but now acknowledges Mexico recovery likely delayed to Q3.
- Margins: Short‑term EBITDA pressure expected over next 3–6 months as discounts, media and distribution spend rise; target ~23–24% EBITDA by end‑2026/early‑2027.
- Targets & risks: E‑commerce growth targeted +30% for 2026 (7–8% of sales); main risks are FX translation, remittance decline and continued category contraction.
❓ Analyst Q&A
- Destocking & timing: Analyst asked if slower destocking delays margin recovery; management said recovery now likely pushed to Q3 and full margin normalization toward 2027.
- LatAm drivers: Management cited Argentina, Peru, Colombia and Central America as primary contributors to +5.3% like‑for‑like LatAm growth.
- Competitive pressure: Management acknowledged market‑wide promotions forcing short‑term price/investment responses to defend share.
⚡ Bottom Line
- Conclusion: Near‑term revenue and EBITDA will feel pressure from weak Mexican consumption and FX, but strong LatAm performance, sizable productivity savings and a solid balance sheet support deliberate investment to protect share and position for medium‑term recovery.
Genomma Lab Internacional-b — Q4 2025 Earnings Call
1. Management Discussion
Good day, ladies and gentlemen. Thank you for joining Genomma Lab's Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this meeting is being recorded and will be available for replay from the Investor Relations section of Genomma's website following the call.
I'll now turn the call over to Christianne Ibanez, Genomma's Head of Investor Relations. Please go ahead.
Thank you, and welcome, everyone. On today's call are Marco Sparvieri, Chief Executive Officer; and Antonio Zamora, Chief Financial Officer.
Before we get started, I'd like to remind you that the remarks today will include forward-looking statements such as the company's financial guidance and expectations, including long-term objectives and forecasts as well as expectations regarding Genomma's business, products, strategies, demand, and markets. These statements are subject to risks and uncertainties that could cause actual results to differ materially. They are also based on assumptions as of today, and the company undertakes no obligation to update them as a result of new information or future events.
Let me now turn the call over to Mr. Marco Sparvieri.
Thank you, Chris, and thank you, everyone, for joining our fourth quarter and full year 2025 earnings call. I would like to begin by expressing my sincere gratitude to our investment community for your continued trust and support. We remain fully committed to delivering strong, sustainable, valuable results, and I am confident that our growth plans will translate into meaningful results. We have maintained close and open communication with our investors, and we'll continue to operate with the highest level of transparency. Please do not hesitate to reach out with any questions beyond this call. We value our ongoing dialogue and look forward to strengthening our relationship with you.
Let me address 5 key messages. First, 2025 was a challenging year that tested our fundamentals. The Mexican consumption environment decelerated significantly and our own execution gaps impacted results. We take full responsibility.
Second, the 2025 downturn follows 8 years of consecutive and consistent growth in both sales and margins. That track record reinforces our conviction that this downturn is cyclical and we can emerge stronger.
Third, the Q4 sell-in contraction in Mexico was deliberate. It was a decision to normalize elevated retailer inventories following 2 weak OTC and beverage seasons. Sellout remained relatively stable, both in Mexico and in a consolidated basis, confirming that underlying consumer demand remains resilient.
Fourth, we responded decisively. We protected the core of the business and unlocked over MXN 1 billion in productivity savings to reinvest in growth initiatives.
And fifth, 2026 represents for us a disciplined reset, positioning the company to return to sustainable growth and expand into new revenue streams.
Let me now address our long-term trajectory. Over the past 5 to 8 years, consolidated net sales grew at a 7.9% CAGR, while EBITDA grew at an 11.6% CAGR. The faster EBITDA expansion reflects the benefits of vertical integration, manufacturing efficiency, cost containment, and sustained productivity initiatives across the organization. This team has been able to restructure the company, build new go-to-market and manufacturing capabilities from scratch, and delivered significant value. We plan to maintain our track record with a clear and disciplined plan.
Turning to full year 2025 performance. Consolidated sell-in underperformed sell-out for the full year, primarily driven by Mexico. In Mexico, full year sell-in declined minus 7%, while sell-out declined a more moderate minus 3.7%. The Q4 destocking decision explains most of this gap. Outside Mexico, performance was more resilient. LatAm continued to grow. Argentina expanded ahead of inflation. In the U.S., although the Hispanic consumer environment remains disrupted, the beverage category delivered strong sell-out results with growth, reflecting the company efforts to expand distribution in the region. On a like-for-like basis, consolidated sales declined minus 4.3%, while sell-out increased 1.3%.
Let's now double-click into the Mexican market. This slide represents growth trends in the Mexican categories where Genomma Lab competes. Over the past 3 years, these categories expanded strongly, supported in part by elevated federal social spending, which decelerated following the 2024 election cycle. Combined with broader macro pressures, this led to a marked slowdown in 2025.
The isotonic beverage category experienced a clear pendulum effect. In 2024, severe drought conditions and high summer temperatures drove nearly plus 60% market growth. In contrast, 2025 saw an unusual rainy and cold summer, resulting in a minus 5% market contraction. This sharp reversal materially disrupted our summer sell-out projections versus actual demand.
Let me go quickly over the macro factors affecting the Mexican categories. First, precipitation. Mexico Central region experienced the highest historical rains within decades. Second, remittances. Mexican remittances decreased minus 5% in U.S. dollars during 2025, which affected most by the second half of the year with the appreciation of the Mexican peso. And third, public investment. Mexican public investment has declined over the past 3 years, reaching its lowest level in 2025. Consumer spending continued to grow through 2024, supported by elevated social transfers. As this support plateaued in 2025, consumption weakened accordingly.
In this slide, you can see the Mexican household consumption trend. In 2025, Mexican households faced an economic deceleration with plateaued social spending, high leverage and lower savings.
Let me now explain how Genomma faced this challenging environment in 2025. First, it is important to note that nearly 40% of our Mexican business is executed in seasons, and seasons require preparations several months in advance, based on demand forecast derived from historical trends and forward expectations. Following several years of strong growth, ranging from high single digits to low teens, we planned 2025 using our most conservative sell-out assumption in 4 years, at 7% growth, already anticipating post-election softness. Actual demand declined materially beyond those expectations at minus 3.7%.
As I mentioned before, seasonality is critical to our model. 38% of Mexico sales are concentrated in beverage and OTC seasons. Winning requires early warehouse positioning, shelf dominance, and strong opening inventory to secure market share. In Q2, we preloaded beverage based on higher demand expectations. Excessive rainfall led to a contraction in sell-out, creating elevated trade inventories. In Q3, we preloaded OTC categories, expecting a strong season to offset beverage weakness. However, we entered the season with already elevated inventories from a flat prior cough and cold season, while the current cough and cold season improved versus prior year, it was insufficient to close the gap. As a result, trade inventories increased further.
In Q4, we made the disciplined decision to halt sell-in to actively destock the channel. Mexico sell-in declined minus 22.1% in the quarter to normalize inventories in the trade. I would like to highlight the following important points. First, underlying consumer demand remains resilient. Mexico sell-out declined a moderate minus 2.2% during Q4. Second, accounts receivables remain healthy. Third, trade inventories are now close to normalized levels. Fourth, a minor correction remains in Q1 2026, but the bulk of the adjustment was completed in Q4. And fifth, and currently, Q4 sell-out trends improved sequentially versus the first 3 quarters, and we continue to see improving trends at the start of 2026.
Let me now turn over to our market share performance in the region. Amid Mexico's slowdown, competitive intensity increased. During 2025, we maintained share in OTC and hair care, which represents 58% of our Mexico business. However, we lost share in skin care and more significantly in beverages, areas that will be a priority for our recovery in 2026. In beverages, we lost one point of market share to our main competitor who also faced elevated trade inventories. They implemented an aggressive price reduction from MXN 25 to MXN 20 per bottle. We chose to protect margins in Q3, expecting only a slight decrease in share. The brand didn't hold and by the time we reduced Suerox price from MXN 25 to MXN 18 per bottle, the season was largely over, limiting our ability to recover lost share. We own that mistake.
We have maintained this price into early 2026. Meanwhile, our competitor has begun raising prices as they absorb the impact of the new sugar tax. We have a clear plan to regain shares in beverage, supported by product innovation, brand relaunch initiative, expanded distribution, stronger in-store execution, cooler placement in strategic routes, all supported by enhanced communication.
Let me now focus on what is coming next for the company. 2026 represents for us a disciplined test, positioning the company to return to sustainable growth. Our recovery plan started with productivity. Despite 2025 top line pressures, the company delivered a resilient year-end 23.4% EBITDA margin, underscoring the strength of our operating model, disciplined execution, and cost containment across the organization.
This slide shows our productivity program, which started in 2023 with an initial target of MXN 1.8 billion in accumulated savings by 2027. We reached the target ahead of schedule in 2025. Importantly, we responded decisively to the sales downturn by unlocking an additional MXN 1.1 billion in productivity savings to organically reinvest in our 2026 growth initiatives. These resources are already secured and currently fueling our top line growth initiatives.
This slide shows a snapshot of our growth initiatives. Our OpEx allocation is concentrated on initiatives within our control, product innovation, distribution expansion, deeper penetration into emerging channels, stronger in-store execution, and enhanced brand communication. We estimate these initiatives could generate up to MXN 2.8 billion in incremental sales. When incorporating macroeconomic and execution risk of up to MXN 2.4 billion, our risk-adjusted incremental sales opportunity stands at approximately MXN 1.4 billion.
Let me now dig deeper into our growth pillars. On the distribution front, we have a solid track record of expanding our traditional channel network, and we are increasing efforts to accelerate expansion. We currently have a MXN 3 billion sales operation in the traditional channel across Mexico and LatAm markets. We plan to further expand our coverage from 730,000 to 860,000 points of sales by 2026 with the opening of 430 new routes. We will further support this growth by introducing in-store media within 314,000 points of sales within the channel.
Let me double check into the Mexican traditional channels. We currently operate 500 routes in the country, primarily concentrated in the Central region. We are adding over 240 new routes across the most densely populated areas in the Northwest, Northeast and Bajio regions, while continuing to increase our central region footprint. These expansions will increase our direct coverage from 180,000 to over 270,000 points of sales in the traditional channel. We also expect incremental indirect coverage to follow naturally from this direct expansion.
Let me now go into the details of our in-store execution plans. While we continue to ramp up the execution of our perfect store model, we are increasing the coverage of our pharmacist recommendation program across independent pharmacies, supported with improved visibility of our brands in the store. Additionally, we have a very aggressive in-store execution plan to improve our analgesics performance and preparing top-notch store execution for this year's summer and winter seasons.
In innovation, we have a robust pipeline across all key categories. In 2026, our OTC business unit is launching 5 new products, Novamil Comfort, an infant formula soothing baby colic by reducing gas and digestive discomfort, Tukol [ MUC ] based on acetylcysteine molecule, better known as NAC. This is a potent antioxidant with mucolytic agent indicated in Mexico for respiratory conditions with thick mucus. We are launching a new pharmaceutical form, an antimycotic nail lacquer through our Lakesia brand. We are launching a sleep aid line, leveraging the higher recognition of our Dalay brand in Mexico. Genozol is a [indiscernible] molecule based relief for heartburn.
In beverage, Suerox will debut a renewed image and expand into a new category. In hair care, we're fully relaunching Tio Nacho, strengthening its treatment positioning with second and third routine steps while revitalizing the entire product line with clean formulas, eliminating sulfates, parabens, [ phthalate ] while improving packaging at a competitive pricing. In skin care, we are democratizing high-end cosmetic formulations. We are reformulating and relaunching products with cleaner, higher-performing formulas at more accessible price points.
This slide presents a preview of our Suerox new brand image. The refreshed design will launch for the upcoming beverage season in Mexico and will be supported by expanded distribution along with cooler placements in 27,000 points of sales. I am pleased to introduce a new chapter for Suerox, Suerox Mineral. This is a zero-sugar isotonic beverage that delivers a refreshing carbonated experience, a differentiated proposition within the category. We are confident in strong consumer acceptance as it brings a truly new experience to the market while reinforcing Suerox leadership in healthy hydration.
For our emerging channels, deeper penetration plans, we aim at increasing sales in discounters and convenience stores by placing 1,200 coolers and 1,200 OTC end caps to drive performance in these channels. Let me share an example of our OTC end cap execution in discount stores across Mexico and Colombia. These end caps function as a mini-pharmacy within the store, securing premium retailers -- retail space for our brands. They combine strong brand visibility with dedicated inventory storage behind the display, enabling faster replenishment and more efficient in-store logistics.
Another high-growth channel where we are deepening our focus is e-commerce. Today, we generate over 1 billion in sales through this channel. We are investing in traffic generation tools and digital capabilities to drive approximately 30% growth in 2026. Finally, we are increasing our media spend by 28% and optimizing our media strategy towards a more efficient and diversified mix. In 2025, our media investment was concentrated in TV, which represented 87% of spend with 13% allocated to digital. In 2026, we are rebalancing to a more diversified structure: 50% TV, 30% digital, and 20% across other formats, including out-of-home and spectacular placements.
I would like to highlight the following points around our path to growth in 2026. Momentum is rebuilding, progressively returning to our historical growth rates as Mexico normalizing and executions ramp up. Q1 2026 is picking up. Like-for-like sales in growth is expected in the low single digits or closer to flat as we complete inventory normalization in Mexico. Healthy EBITDA at 23% to 23.5% in 2026. We expect higher OpEx and softer sales in the beginning of 2026, and we expect EBITDA margins in the range of 23% to 23.5%, while we step up growth investment. In 2027, we expect EBITDA to move back towards 24% as operating leverage kicks in. Strong cash generation. We expect an improved cash back by disciplined working capital, productivity, and lower CapEx.
Before handing it over to Antonio, I would like to finalize by highlighting the following: 2025 was tough, driven by external shocks and execution gaps, and we own it. We learned from our mistakes. Our fundamentals remain strong. Eight years of sustained growth prove we can rebound. Mexico is showing early recovery signs with gradual growth expected from Q2 onward. Margins stay healthy in 2025, regaining -- ranging between -- sorry, in 2026, ranging between 23% and 23.5% and will trend back towards 24% in 2027. With over 1 billion in reinvested OpEx, sharper execution, and new revenue engines, I am confident in the company's future.
Thank you for your continued support. Antonio, please go ahead.
Thank you, Marco, and good morning, everyone. As Marco said, 2025 was a challenging year in which we chose discipline over short-term optics. We operated in a softer consumer environment, deliberately reduced inventories in Mexico, absorbed significant ForEx volatility and continued investing in the structural capabilities of the company. Despite this, we expanded margins, generated strong cash flow, and maintained a conservative balance sheet.
Consolidated net sales for full year 2025 reached MXN 17.5 billion, representing a 5.7% year-on-year decline. In constant currency terms and excluding the hyperinflationary subsidiary, like-for-like sales were down 4.3%. Fourth quarter net sales totaled MXN 4 billion, decreasing 13.9% versus prior year. On a like-for-like basis, sales declined 12.9%, largely reflecting ForEx pressure and our intentional 22% reduction in Mexico sell-in as we work to normalize retailer inventories.
Importantly, Mexico sell-out only declined 2%. What changed was inventory, not brand co-equity, not marketing position, not competitiveness. Full year EBITDA margin expanded 43 basis points to 23.4% and Mexico expanded 174 basis points to 24.9%. These gains were not cyclical. They reflect structural improvements in manufacturing integration, cost discipline, procurement optimization and operational efficiency. The company is structurally more profitable today compared to a couple of years ago, even in a softer volume environment. That is the result of intentional operation decisions.
Fourth quarter EBITDA reached MXN 887 million with 22.1% margin, while lower volumes in Mexico created operational deleverage. Disciplined cost management in COGS and SG&A helped mitigate the impact. Full year net income totaled MXN 1.6 billion, declining 23% year-on-year, primarily driven by higher noncash ForEx losses linked to the Argentine peso depreciation, which we have covered earlier. In the fourth quarter, net income was MXN 320 million, down 13% versus last year as higher advance tax payments more than offset the benefit from lower net interest expenses and reduced FX losses.
Our fourth quarter cash conversion cycle reached a healthy 107 days, improving 2 days year-over-year. This reflects disciplined working capital management, particularly a 15-day reduction in inventory days, particularly offset by a 7-day decline in payable days associated with our strategic destocking in Mexico. Trailing 12 months free cash flow reached MXN 1.5 billion, even as we accelerated strategic CapEx to strengthen our long-term margin profile. Despite top line pressure during the year, we maintained disciplined capital allocation and continued funding strategic growth investments.
Moving to a brief overview of our results by region. In Mexico, full year net sales declined 7% and fourth quarter sales decreased 22%, reflecting softer consumption and our planned sell-in reduction. Importantly, as I mentioned before, sell-out was down only 2% in the fourth quarter, which represents the resilience of our underlying consumer demand. For the full year, Mexico's EBITDA margin expanded 170 basis points to reach 24.9%, supported by manufacturing efficiencies and productivity gains.
During the fourth quarter, the U.S. dollar depreciated against the Mexican peso. The exchange rate trended downward throughout the period, reflecting sustained peso strength. This ForEx movement created headwinds for the U.S. subsidiary. At our U.S. operations, local currency sales decreased 11.6% for the year and 5.1% in the fourth quarter amid continued disruption in the Hispanic retail environment. Promisingly, Suerox sellout rose 77% for the full year and 48% in the fourth quarter, reflecting successful distribution gains for Suerox.
U.S. EBITDA margin held at 14.7% for the full year and declined to 11.9% in the fourth quarter, reflecting lower operational leverage and increased advertising spend. During the fourth quarter, ForEx represented a challenge, most notably the 42% depreciation of the Argentine peso. In Latin America, excluding Argentina, on a like-for-like basis, net sales grew 3.6% for the full year, driven by strong performance in Brazil, Chile, Central America, and the Andean region. When we include Argentina, LatAm EBITDA margin was 23.6% for the year and 22.8% for the fourth quarter, reflecting the effects of hyperinflationary accounting.
Local currency sales in Argentina increased 39.7% for the full year and 55.3% in Q4, clearly outpacing inflation in that country. However, when translated into Mexican pesos, reported net sales declined 20.1% for the year and 10.1% in the fourth quarter. We closed the year with net debt-to-EBITDA ratio of just 1.1x, just 1.1x. And debt service coverage is 5.1x. As you can see, liquidity is ample. Leverage is conservative and flexibility for Genomma is high. We also maintained our quarterly dividend, reinforcing a balanced capital allocation framework. We paid a cash dividend of MXN 0.20 per share, totaling MXN 200 million, and we regained committed -- and we remain committed to maintain quarterly dividend payments, reflecting our sustained confidence in our long-term outlook.
Before closing, I would like to briefly address recent credit and financing developments that reinforce the strength of our financial position, particularly in the macro environment we discussed. Credit agencies reaffirm our long-term ratings, including a AA+ rating with stable outlook. HR Ratings also reaffirmed our short-term dual program rating of HR+1 and Fitch affirmed Genomma Lab local rating of AA+ with a stable outlook. These ratings highlight our resilient operational performance, steady cash flow profile, and prudent financial policy, allowing Genomma Labs to access the debt capital markets at competitive spreads, reflecting continued confidence in our financial discipline.
During the fourth quarter, we remain active in our Cebures, our local bond issuances, placing over MXN 370 million in the Mexican market at competitive spreads. Importantly, our ability to raise capital under attractive terms even in a softer sales environment reflects market confidence in our margin resilience, productivity program, and long-term growth trajectory.
In closing, in summary, we made deliberate decisions in 2025 to protect long-term value over short-term appearance. We strengthened our cost structure. We normalized our commercial base. We preserved financial flexibility. We continued investing in several growth platforms that Marco described earlier. And as we enter 2026, we do so with cleaner inventories, stronger margins, solid cash flow generation, a disciplined balance sheet, and most importantly, solid reinvestment initiatives to reignite growth that Marco described earlier. We are positioned not just to recover growth, but to expand profitability as volumes normalize.
Thank you. And now I'll turn the call back to the operator.
[Operator Instructions] Our first question comes from Alvaro Garcia with BTG Pactual.
2. Question Answer
I've got 3 questions. One, a bigger picture question on the shift towards digital media or the shift in your media spend away from TV. In the past, there's been some instances where you've tried this and some of your brands are relatively sensitive to seeing less TV spend. So just would love to hear your bigger picture thoughts on how this time is different and how this time maybe you have better targeting or just more productive media spend. Any discussion on that would be helpful. And then I'll ask my other questions after.
Thank you, Alvaro. On digital, the reason why I feel extremely confident this time, because as you mentioned, I mean, we've tried that in the past. I think that maybe one of the differences between us and many of our competitors is that we are extremely strict in measuring the ROI on every penny we invest in media, and we need to make sure that every peso that we spend or we invest has a return. And because we are very strict in digital, in general, is a lot harder to see a respond in consumer demand once you activate digital advertising.
We have hired a director that is going to be in charge of all the digital projects throughout the company across all markets. And this person is probably the best with a very proven success track record of delivering growth behind digital advertising. And he started in his position in January and the very few interventions that we have already made, we are showing positive payouts, which is the first time that we have seen this in the company. So that's kind of like the answer.
Great. And then I'll cycle back in the queue, but I'll ask one more for now, which is on Argentina. We saw a 50% growth in local currency in the fourth quarter. I thought that was actually quite strong. And I was just wondering if that was a function of easier comps. I know in recent meetings, you've mentioned some heightened competitive pressures there. But obviously, I understand the result in pesos, but I felt like the result in local Argentine pesos was quite strong. So if you can give us some color on that would be helpful as well.
Yes, it's a combination of easier comps because we had a situation. I don't want to get too technical here, but we had a situation in which like one of the forms that we sell with Tafirol got out of PAMI, which is the social service in Argentina. And we had that like comparison for the past 12 months prior to the fourth quarter, and that ended in the fourth quarter. So one is easier comps, as you mentioned. And the other one is the ongoing plans that we have across the board with like this morning, I saw the Suerox data reaching the highest market share levels ever in Argentina.
Tafirol also reaching a very high level of share by the end of the quarter 4. I think Argentina, in general, Alvaro, is in very good shape from a consumption standpoint and from a share point of view as well. So we -- I personally expect Argentina to continue to overperform inflation this year. And if the exchange rate continues to be controlled like it is right now, we will see a positive impact in our P&L driven by Argentina's share growth.
Our next question comes from Froylan Mendez with JPMorgan.
Given all the several growth initiatives and your thoughts on how much should that flow this year, 2026 versus 2027, can you give us some sense of top line growth expectations in peso terms for this year? Or what are you thinking so far? And secondly, if we were to see the -- where your confidence lies more, is it on top line growth for this year or maintaining margins in the levels that you have mentioned for the guidance? What has less risk to not be achieved given any changes in the macro FX, et cetera?
Okay. I am very confident that the plans that we are implementing are tangible, are within our control. And there is a pretty large amount of money being invested behind these plans, especially in Mexico. So from a top line point of view, I do expect the first quarter to continue to be soft. Even though we are seeing very clear signs, early signs of demand recovery, we are showing now sell-out growth in Walmart, for example, which is the largest customer for the company globally. We are starting to see our sell-out growth in the positive territory in the past few weeks. And that is directly related to the investments and to the plans that we are implementing in Mexico.
Nevertheless, we do recognize that the Mexican consumer environment in general continues to be soft across the board. And so while we are extremely confident about the plans and the expectations for growth, I want to be cautious in the short-term because we do expect the first quarter to maybe decline in the single digits or be closer to flat. But we do believe with high level of confidence that in the second quarter and the third quarter, we are going to see a gradual recovery of the top line, reaching the levels of growth that we have showed in the past, okay? So it's going to be gradual. The short-term will continue to be a little bit painful. But we do expect that these initiatives will put the company back to growth by the second or the third quarter. And then 2027 should be a very good year for the company.
On margin, I -- we will continue to operate this business in a very disciplined way. So I am very confident that the guidance that we are proposing for this year, that is in the range of 23% to 23.5%, will be delivered. We have the plans to deliver that. We are lowering a little bit the guidance on margin because we believe that we might need a little bit more investment to reignite growth in the top line. So we want to be a little bit more cautious on the expectations for margin, but that's going to be a short-living thing. 2027, as we see the top line continue to grow and to pick up, we will take the margin back to 24%. I don't know if that clarifies the...
Yes. Maybe just a follow-up. So last year, despite the top line deterioration, you still maintain very healthy levels of margins. Can that happen in 2026, if for any reason, we don't see this top line recovery that you're mentioning, especially in the second half? Can margins still be maintained at the guidance levels that you're expecting?
Yes. Yes, because the productivity program is very solid. I think that's one area that the company has handled extremely well. We have plenty of room in the P&L to support any surprises in the top line. I don't -- I hope we don't have to use it, but we have enough room to support any issues in the top line. We are being extremely cautious with our investments. We have a very financial-oriented mindset when it comes to investing back in the business. We are following a very disciplined approach to measure results and evaluate investments. And we are continuously making decisions in terms of where to invest, how to invest, and when to cut and stop investing if the financials are not good enough. So the answer is yes.
Froylan, this is Antonio. Good questions, both of them. I just wanted to add to what Marco described about top line and margins, a little bit of perspective on cash flow because in 2025, we have one-timers. One significant one-timer was the CapEx investment to expand the distribution center, okay, which we will not have in 2026 and beyond. So there's no significant -- I mean, there's maintenance CapEx, but not significant CapEx. So that's going to be a saving in terms of cash flow generation. #2, in 2025, we had to make higher advance tax payments, the pagos provisionales, which are calculated using the coefficient of the previous year. So the pagos provisionales were higher than what we required to pay for the full year. That's going to change for the next year, okay? So that's another one-timer or, let's say, it's going to be a positive for next year.
And finally, we've all seen what happened with the strengthening of the Mexico peso -- Mexican peso, but I don't know how long this is going to be the case. So we don't know how ForEx will look like next year. What we know -- and we don't know what the weather is going to be next year. But what we had in 2025, it's a record in terms of torrential rains, especially in Mexico City in Central Mexico. So if we don't have that, obviously, that's going to be more positive for cash flow. So cash flow in 2026 is going to be better than what it was in 2025. Just to complement the question that you had. I don't know if this helps.
[Operator Instructions] Our next question comes from Alvaro Garcia with BTG Pactual.
A couple for Antonio. One on CapEx, it was still sort of elevated in the fourth quarter, and I was wondering what was behind that? And if you can maybe provide some guidance for '26 after this uptick we saw in the second half of '25. And then in the release, when you discussed margins in Mexico, you referred to discontinued operations and you provided an adjustment. If you can give some color on that, that would be helpful as well.
Yes. Thank you, Alvaro. One of the major projects that we had in 2025 is the expansion of our distribution center. It is -- it is strategic and it was required for the company to grow in the future, especially for certain categories like Suerox, they have been so successful that we run out of space for future growth. So this year, we decided to make -- sorry, 2025, we decided to make a significant investment in the Suerox, basically reinforcing the floor, adding new racks, new equipment to expand more than 40% of the capacity, of the storage capacity that we have. So it was a significant investment, and part of that came at the end of the year. So if you look at the total CapEx that we spent, it was significantly higher than what we usually do, and it was significantly higher than what we will have next year.
Next year, it's going to be for the full year, the exact number could range between MXN 250 million, MXN 270 million. That's it. And that's going to be, as I said before, mostly maintenance CapEx as well as some CapEx for innovation, et cetera. But that's a normal level. So I don't know if I answered your question. And obviously, we invite everyone who is interested to go and visit the plant and go and see the new distribution center, which is -- we are very proud of it, and you will see what the kind of efficiencies we're going to be getting next year. And by the way, I also need to say that we incurred some additional OpEx in 2025 while we were doing this investment because we had to lease some outside warehouses, and that's not going to happen next year. So as Marco said, there's a number of productivity initiatives ongoing that will help us maintain the EBITDA margin that we mentioned. But that's mainly CapEx. I don't know if I was able to answer your question.
Super clear. Super clear there on the CapEx front.
And regarding your second question, and this is mostly based on what happened in 2024. Remember that we said back in 2024, the fourth quarter, that the EBITDA margin was going to be 24%, and it was 24%. However, during the audit process with the external auditors, there was some -- there was a one-timer that we had to record that was related to the discontinued operations of Marzam. So that's why we are presenting the adjusted EBITDA, which is the true performance of the business and the reported EBITDA that included that impact. But that's something from 2024, that's something related to the discontinued operations. Fortunately, by next quarter, we will not be reporting the discontinued operations anymore because the cycle of the 4 quarters had already passed. So that's -- so it was a one-timer charge that was recommended by the auditors in 2024. So nothing related to 2025 and beyond.
[Operator Instructions] This concludes Genomma's fourth quarter results conference call. Thank you for your attention.
Genomma Lab Internacional-b — Q4 2025 Earnings Call
Genomma Lab calls 2025 a deliberate reset: normalized trade inventories, preserved margins via productivity, and reinvestment to drive a mid‑2026 recovery.
📊 Quarter at a Glance
- Sales: MXN 17.5bn FY 2025 (-5.7% YoY); Q4 MXN 4.0bn (-13.9% YoY; like‑for‑like -12.9%).
- EBITDA: FY margin 23.4% (+43 bps); Q4 EBITDA MXN 887m, 22.1% margin (EBITDA = earnings before interest, taxes, depreciation and amortization).
- Net income: MXN 1.6bn FY (-23%); Q4 MXN 320m (-13%).
- Cash & leverage: TTM free cash flow MXN 1.5bn; net debt/EBITDA 1.1x; cash conversion cycle 107 days.
- Dividend: MXN 0.20/share paid (MXN 200m), maintained quarterly payments.
🎯 What Management Says
- Accountability: Management admits execution gaps in 2025 and intentionally cut Q4 Mexico sell‑in (-22.1%) to normalize elevated retailer inventories and protect margins.
- Productivity: Hit MXN 1.8bn target early and unlocked an additional MXN 1.1bn of savings to reinvest in growth initiatives.
- Growth plan: Expand traditional distribution (730k→860k points), relaunch brands (Suerox Mineral, Tio Nacho), launch five new OTC/skincare products, and rebalance media toward 50% TV/30% digital/20% other.
🔭 Outlook & Guidance
- 2026 sales: Q1 expected low single‑digit decline or near flat as inventory normalization completes; recovery targeted from Q2–Q3.
- Margins: FY 2026 EBITDA guidance 23.0%–23.5%; management expects margin to trend back toward ~24% in 2027 as operating leverage returns.
- Targets & risks: Management cites a gross incremental sales opportunity up to MXN 2.8bn, risk‑adjusted to MXN ~1.4bn after MXN 2.4bn macro/execution risk; key risks are weather, FX volatility and execution timing.
❓ Analyst Q&A
- Digital ROI: New digital director hired; management stresses stricter ROI measurement and early positive digital payouts versus prior attempts.
- Argentina: Strong local‑currency growth (Q4) driven by easier comps and market‑share gains (Suerox, Tafirol); translation hurt by peso moves.
- CapEx & one‑timers: 2025 CapEx spike due to distribution‑center expansion; 2026 CapEx guide MXN 250–270m; 2024 discontinued‑operations charge was a one‑timer affecting comparatives.
⚡ Bottom Line
Genomma treated 2025 as a controlled reset: volumes were traded off to fix trade inventories while structural productivity protected margins and cash. The balance sheet is healthy and management is funding targeted distribution, product and digital investments; successful execution and benign weather/FX are the main catalysts for a mid‑2026 rebound.
Genomma Lab Internacional-b — Q3 2025 Earnings Call
1. Management Discussion
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2. Question Answer
" Itaú Corretora de Valores S.A., Research Division
" Banco BTG Pactual S.A., Research Division
" Actinver
" JPMorgan Chase & Co, Research Division
Good day, ladies and gentlemen. Thank you for joining Genomma Lab's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this meeting is being recorded and will be available for replay from the Investor Relations section of Genomma's website following the call.
I'll now turn the call over to Christianne Ibáñez, Genomma's Head of Investor Relations. Please go ahead.
Thank you, Daniel, and welcome, everyone. On today's call are Marco Sparvieri, Chief Executive Officer; and Antonio Zamora, Chief Financial Officer.
Before we get started, I'd like to remind you that the remarks today will include forward-looking statements such as the company's financial guidance and expectations, including long-term objectives and forecasts as well as expectations regarding Genomma's business, assets, products, strategies, demand and markets. These statements are subject to risks and uncertainties that could cause actual results to differ materially. They are also based on assumptions as of today, and the company undertakes no obligation to update them as a result of new information or future events.
Let me now turn the call over to Mr. Marco Sparvieri.
Good morning, everyone, and thank you, Chris.
I would like to begin today by addressing a clear reality. The company is going through a challenging period, and the results I will present today are not the ones I wish to report nor the ones we are used to delivering as a company. However, I hope that by the end of today's presentation, I can convey the same confidence and reassurance I personally have that our plan to reignite growth is solid, well-structured and entirely focused on rebuilding our top line. My expectation is that after reviewing the next slides, you will share the same confidence that I have.
Let me begin with a message of strength. Over the past few years, Genomma Lab has achieved remarkable progress. Sales have grown nearly 70%. EBITDA has more than doubled. Free cash flow has surged 152% and EPS is up 46%. I don't mention this growth only to highlight results, but to demonstrate that we have successfully transformed the company from a deep restructuring phase into high growth, more profitable and more capable organization. We are better than ever positioned to emerge stronger from the current slowdown.
This performance is underpinned by 6 strategic assets that we have built over time. Assets that every few -- very few companies possess and which would take any new entrant, decades and hundreds of millions of dollars to replicate. The first is our powerful brand portfolio of over 40 brands, many of which were built during a period when television played a dominant role in influencing consumer purchasing decisions. Today, these brands enjoy exceptionally high awareness and strong positioning in consumers' mind. Brands such as Cicatricure with its medical heritage, Asepxia with its strong dermatological credentials, Goicoechea in leg treatments and OTC leaders like Next, XL-3 and Tukol in Mexico as well as Tafirol in Argentina, where we hold a 40% market share. All these brands form part of this invaluable portfolio.
Equally important is our team. Building this leadership structure has taken time and effort of years. Having spent over 20 years at P&G, I can confidently say that our executive and managerial team match and in many cases, exceed those of our multinational competitors. We have also developed an extraordinary distribution network in the highly resilient traditional channel and all the channels across, reaching over 890,000 points of sale across Mexico and Latin America every week. This is a core capability that would take any pharma or personal care competitor decades and a massive capital to replicate. We can launch a product and have it distributed to all the channels and nearly 890,000 points of sales across Latin America simultaneously. This is not only a true competitive advantage, but also a clear growth avenue for the company.
In addition, our decision to integrate our own manufacturing facility has proven highly strategic. Despite the complexity of regulatory and operational integration, it now provides us with stronger cost control and greater product quality assurance while allowing for further productivity in the company.
Our company culture rooted in speed and agility is also a major asset. While many of our competitors operate with more bureaucracy and slower decision-making, we have a structure that allow us to move faster and respond quicker to consumer needs. Finally, we have established a solid foothold in two key markets with profitable operation, the U.S. Hispanic segment and Brazil. Although current results in the U.S. market warrant review, our presence there represents a valuable long-term asset. Today, our products reach more than 50 million Hispanic households with distribution in major retailers such as Walmart, Walgreens and Amazon, generating close to $100 million in annual sales. Establishing this level of penetration and relationships from scratch would take any company years and significant investment and the same holds true for our footprint in Brazil.
All-in-all, this company has penetrated high barriers of entry and is positioned to continue consolidating its position to increase market share in a $3 trillion size industry, the largest in the world, $13 trillion.
Let me now turn to the current environment and our plan to return the company to growth. We are operating in a complex consumption environment and navigating a difficult situation, particularly in Mexico, driven by two consecutive failed seasons. A weaker winter season due to unfavorable weather conditions and a summer season that practically did not materialize. These dynamics have affected roughly 50% of our Mexican portfolio, primarily our OTC products during the past winter season and roughly 20% of our portfolio with Suerox during the summer season.
Despite these top line headwinds, our EBITDA margin remains resilient with stability around 24%, underscoring the strength of our cost discipline and efficiency programs. I am fully confident that this EBITDA margin level is both solid and sustainable going forward.
So what we're doing to offset this slowdown? At a certain point, we were facing two possible path, either we sacrifice margin to invest more aggressively in the business and accelerate the top line or we preserve margins and identify additional resources to fund our growth strategies without compromising profitability. We initially set a productivity target of MXN 1.8 billion in savings by 2027. Given the current top line environment, we challenge ourselves to find additional resources to invest in growth without compromising margins. As a result, we have identified and already secured an additional MXN 1.1 billion in efficiencies, bringing our total accumulated savings to MXN 3 billion by 2026. These resources have been secured and are reinvesting MXN 1.1 billion directly into the business to drive top line growth.
Our 2026 investment plan focuses on three pillars: product innovation, go-to-market and distribution and emerging channels. Altogether, we estimate these initiatives could generate up to MXN 5 billion in incremental sales opportunities between 2026 and 2027. While some cannibalization is expected, these projects represent our North Star, a clear road map to reignite growth starting in the first half of 2026. With these actions, I am confident we can restore top line growth to prior levels while maintaining a healthier margin and cash flow structure than ever.
Now moving to the third quarter results. On a like-for-like basis, sales declined 2.9%, which is translated to a 12.8% decrease in reported Mexican pesos. Approximately 80% of the impact stems from accumulated noncash hyperinflationary accounting effects in Argentina, following a 53% depreciation of the Argentine peso during the quarter.
Our real operating indicator like-for-like performance reflects a 2.9% decline, while EBITDA margins remained strong at 23.7%, consistent with our 24% average target. Adjusted net income, excluding noncash hyperinflation effects declined 3% to MXN 632 million. Free cash flow reached nearly MXN 1.6 billion, down 35%, mainly due to lower net income and three days increase in the cash conversion cycle also related to hyperinflationary accounting effects.
As mentioned, we have accelerated our productivity program, delivering the initial MXN 1.8 billion savings by 2025 and adding another MXN 1.1 billion for 2026. These resources are already identified and in execution, not a plan, but a reality. We have already secured resources for our investment projects.
We will reinvest MXN 1.1 billion across five strategic areas: product innovation, go-to-market and distribution, communication, e-commerce and pricing. These initiatives represent approximately MXN 5 billion in growth opportunities for 2026 and 2027. While some may overlap and cannibalization is expected, a significant portion will translate into incremental sales and long-term top line expansion.
Let me provide a few examples. In innovation, we have a robust pipeline across all key categories. In skin care, we are reformulating and relaunching products with cleaner formulations and more accessible price points. For example, a consumer who today pays MXN 350 in Mexico for a premium hyaluronic acid serum will soon be able to purchase the same product from Teatrical for around MXN 90.
In hair care, we are fully relaunching Tio Nacho, strengthening its treatment positioning with second and third routine steps while revitalizing the entire product line with clean formulas, improved packaging, and competitive pricing. In beverages, Suerox will devote a renewed image and expand into new consumption occasions. In OTC, we expect 25 new pharma registration approvals to be launched between 2026 and 2027, allowing us to enter new segments.
All of this innovation will be supported by a renewed communication strategy. We are shifting from functional frequency-driven advertising to more emotional storytelling that resonates and engage consumers emotionally. Let me show you an example.
[Presentation]
The company is entering a completely new communication strategy. We are investing in mass micro influencers, partnerships and brand ambassadors on TikTok and Instagram while driving traffic to e-commerce and direct conversion. Let me show you some user-generated content examples for our Asepxia relaunch.
[Presentation]
We are also leveraging artificial intelligence to produce high-quality, cost-efficient content. Let me show you an example of advertising spots produced by one person with no actors, no cameras for as little as USD 500 investment.
[Presentation]
This slide illustrates the depth of our product innovation pipeline, entering new categories, introducing new packaging sizes and formulations, all with clear and ambitious relaunch time lines.
On the distribution front, we currently have nearly 3 billion sales operations in the traditional channel, where we plan to expand our coverage from 730,000 to over 1 million points of sales, targeting almost MXN 2 billion in incremental sales over the next two years.
Our e-commerce business is set to reach MXN 1.2 billion in sales by 2025. We plan to add MXN 500 million in 2026 and another MXN 500 million in 2027, bringing the channel to MXN 2 billion by 2027, supported by strong communication investments to drive traffic and conversion.
In hard discounters and convenience stores, two of the fastest-growing channels in Mexico and Latin America, our MXN 420 million operation is set to coverage from 35,000 to 57,000 points of sales and reaching roughly MXN 1 billion in annual sales by 2027.
In summary, Genomma Lab is facing a challenging environment, particularly in Mexico, driven by two consecutive weak consumption seasons. Nevertheless, our EBITDA margin remains resilient. Our resources are secured and our growth plan is clear and fully actionable. We are confident that after weathering the next quarters and by executing this plan, the company will return to growth by the first half of 2026, reaching and potentially exceeding its historical growth rates supported by a stronger, more efficient and more profitable structure.
Before turning the call over to Tonio, I would like to thank our investors for their continued trust and the entire Genomma Lab team for their unwavering commitment to driving the company towards its next stage of growth.
Tonio, please go ahead.
Thank you, Marco, and thank you, everyone, for joining us today.
As Marco mentioned, third quarter net sales decreased 12.8%. Results were mainly impacted by ForEx headwinds from a stronger Mexican peso as well as hyperinflationary accounting effects following the Argentine peso depreciation during the quarter.
On a like-for-like basis, sales declined only 2.9%, primarily due to the impact of a cooler and rainer summer season in Central Mexico and a softer consumption environment in our country. These effects were partially offset by strong sales growth in Brazil, Chile, Central America and the Andean cluster.
Genomma's third quarter EBITDA margin closed at 23.7%, representing a 2 basis point increase year-over-year and reflecting the ongoing benefits from manufacturing cost efficiencies as we deliver our targeted EBITDA margin of around 24%. Pro forma net income for the quarter, excluding noncash FX-related effects decreased 3%, reflecting the strong EBITDA margin performance and lower net interest expenses during the period.
Moving on to our regional results, third quarter net sales in Mexico declined 6.4%, mainly due to a weaker summer season that impacted sales performance. This decline was partially offset by strong OTC performance, driven by market share gains in the cough and cold and infant nutrition categories. As you can see in this chart, there is a high correlation between climate and beverage sales in Mexico. Besides this headwind, competition significantly lowered their prices during the quarter, adding more pressure to this particular category.
On the right side are the growth initiatives that Marco described earlier. We'll increase our geographical presence to other areas of the country next year, and this effort is expected to drive renewed momentum in 2026.
EBITDA margin for Mexico improved by nearly 300 basis points, reaching 27% despite the consumption headwinds and deleveraging pressures previously mentioned. This strong performance reflects the accelerated impact of our company-wide productivity initiatives.
Moving on to the U.S. business, the U.S. dollar declined 1.6% versus the Mexican peso compared to the same quarter last year. U.S. sell-in net sales decreased 24% in U.S. dollar terms, reflecting ongoing disruption in the U.S. Hispanic retail market, which continues to weight on sell-in performance. However, sell-out declined only 8%, showing early signs of recovery led by Suerox and Haircare, both of them gaining market share despite the challenging environment. The difference in this quarter between sell-in and sell-out comes from customer returns of some cough and cold products due to the past weak winter season of 2024, 2025, as Marco described earlier. EBITDA margin for the region was 13.6%, down 150 basis points, mainly to the operational deleverage and higher advertising investments during the quarter.
Going to Latin America, net sales, excluding Argentina, increased 10.6% for the quarter, driven by strong performance in Brazil, Chile, Central America and the Andean cluster. EBITDA margin, including Argentina, was 21.7%, down approximately 360 basis points, mainly reflecting the impact of hyperinflationary accounting adjustments. However, if we exclude Argentina, EBITDA margin increased by 90 basis points during the quarter.
Net sales for Argentina, obviously because of all the hyperinflationary accounting effects, declined 49% in Mexican peso terms, and this is a reflection of a 53% depreciation in the Argentine pesos. However, and this is very important for everybody to know that in local currency terms, sales grew 35% during the quarter in Argentina. This is in line with inflation, actually above inflation and driven by strong unit sales share gains in some of our key brands like IBU 400, Treg, Suerox and among other brands.
Just as a reminder of what happened with hyperinflationary accounting, the depreciation of the Argentine peso versus the Mexican peso needs to be taken into account when we report figures in our reporting currency, which is the Mexican peso. Likewise, we also take into account inflation. And while inflation in Argentina has been declining, hyperinflationary accounting is mandatory when cumulative inflation exceeds 100% in the previous 36 months. So we'll have to deal with it for a while.
So just to help us understand a little bit better of these IFRS rules, the company's performance in the region has to be reevaluated every quarter. When the difference between accumulated inflation and FX depreciation is negative, this will result in a noncash decrease in accordance with hyperinflationary accounting rules. Last year, however, the effect was a positive 13% difference. But this quarter, we had to cope with a 47% negative delta. Thus, a huge 60% impact on our Argentine results for the quarter and Q1 and Q2. That is what explains, again, what we are reporting. The good news for the future is that historically, high levels of --of inflation tends to follow significant currency devaluations. So we expect this positive effect in the short-term future.
Turning back to our financials, cash conversion cycle reached 120 days. And Mexico DSO has been in line with historic averages despite the tough consumer environment that we are facing in 2025.
Genomma ended the quarter with a leverage ratio of 1.2x net debt to EBITDA, which is in line with the same quarter last year, and this is notably a historical low in financial leverage, not only for Genomma, but for most companies in the industries where we participate. Free cash flow totaled approximately MXN 1.8 billion over the trailing 12 months, representing a 31% decline, mainly due to lower net income and higher capital expenditures related to our growth projects.
It's worth mentioning that during the quarter, we converted 9% of our net sales into free cash flow. Capital allocation during the quarter included our 13th consecutive quarterly dividend payment of MXN 200 million, which is $0.20 per share, and we also repurchased --1.4 million shares.
In closing, this quarter highlighted both the challenges and the resilience within Genomma's portfolio as well as our company's strong fundamentals. Over many years, Genomma has been built on a foundation of sustainable growth, and we continue to advance with a long-term perspective. We remain encouraged by the solid fundamentals across our core markets and the traction of our strategic projects that Marco described, and we look forward to capitalizing on opportunities once these challenging conditions ease.
With that, let's now turn on to Q&A.
Thank you Marco, Antonio. We will now begin the question and answer session. [Operator Instructions] Our first question comes from Alejandro Fuchs from Itaú. Alejandro please turn on your microphone and proceed with the question.
Thank you operator. I have 2 very quick ones. First for Marco. I want to see, Marco, if you can maybe walk us through your expectations for next year, right? Maybe a little bit better consumption in Mexico, but we also have some headwinds in terms of now it seems that we have more color on potential taxes for beverage companies. So maybe if you can tell us what do you see and expect for next year in Mexico, that would be very helpful.
And then the second one is for Tonio very quickly. In terms of working capital, I saw a big decrease in accounts of days payables -- in days payables this quarter and then an increase in receivables in Mexico. I wanted to see maybe, Tonio, if you can walk us through if there is something unusual that is occurring this quarter, we should expect this to normalize? Or is this just business as usual? Thank you.
Thank you, Alejandro. On Mexico, I would say that my expectation, although I don't have the crystal ball, but I do expect a few more quarters -- difficult few more quarters in a very difficult environment from a consumption point of view.
But as I said, regarding of the overall context in the market, categories and competitors, I am very, very confident that the plans that we are currently putting in place, I am presenting the whole plan today, but we have started working and implementing many of these strategies several months ago.
So I am very confident that we are going to see a gradual recuperation of the top line at some point in the first half of 2026. And I am very confident that with the investments that we are making in the business, the additional resources that we have secured, the MXN 1.1 billion that I just mentioned, reinvesting that money thoroughly and intentionally in the business to reignite the top line growth. I am very confident that we are going to put this company to grow again at least at the same levels that we have been growing over the past 6, 7, 8 years.
You asked also about the EPS. Look, the EPS right now, the way it stands based on all the public information that you all have access to, it's impacting both our competitors, okay, and ourselves. And when I say competitors, I mean all the competitors, isotonic beverages and electrolyte beverages in the same category, okay?
But we have an advantage right now because we don't sell our product Suerox with sugar. So the current situation as it stands today based on the public information that we know is that the EPS that will be applicable to Suerox is half of what will be applicable to our competitors in isotonics and electrolytes. So that put us in an advantage.
There's two scenarios here that we have fully accounted in the plans for next year is -- one is if our competitors increase prices and do not absorb the EPS, we will follow and the EPS will have no impact in our margins. But if our competitors do not increase prices, we will have to absorb and that impact, it's already in the financials and the plans for 2026.
Thank you very much Marco.
Alejandro, this is Antonio. Thank you for your question regarding working capital. So in terms of days payables, the 93 days that we presented for the Q3 are pretty much in line with the 96 for Q2 or the 94 for Q4 2024. As we all know, when you transition from third-party contracting, the [indiscernible] to our own facilities, the kind of suppliers that we have are different. We are now buying raw materials directly. And so it's a new game.
And I would say that this range of around 90-something days for payables at this moment, that's going to be the new normal. Obviously, we are working with suppliers. We're negotiating as they get to know us better and as we can get to better negotiations, we hope that in the future, this is going to improve. But that's part of the reason why in the past, when we were buying finished products, we have better terms. But those products were costlier. I mean that's why the COGS was higher, significantly higher. So I think it's a lot better to have productivity, the kind of productivity in terms of COGS, while we have to work -- we still have to work on payables. But this is going to be around the new normal. And if you see Q4, Q2, Q3, you will see that the numbers are pretty much around mid-90s in terms of DPO.
In terms of DSO in Mexico, that's why I presented a chart with the historical DSOs. Yes, in 2024, we were improving our DSO. Obviously, last year, it was a different year. Everything was more optimistic. This year has been more challenging. So there's two reason. One is, obviously, the market is a little bit slower for everybody, and you can see this in most companies in the consumer landscape in Mexico. But also, it's a little bit tricky because it's part of the accounting formula of DSO because you divide the ending balance of receivables by a denominator, which is the past sales from a certain period, whether it's 90 days or 360 days.
So if sales have been declining, lately, unfortunately, in the case of Mexico. From a mathematical point of view, that increases artificially the number of days in DSO. If sales start growing faster, it's going to be the opposite. So you will see that effect. So what I can tell you in terms of DSO, I think that considering the very tough consumer environment that we are facing, we are pretty much in line with average and what we should expect this year. Obviously, if for 2026, as you very well pointed out, the expectations for the consumer market is a little bit better. We obviously are going to work to improve that ratio.
I don't know if I was able to answer your question, Alex.
Thank you very much.
Our next question will now be from Álvaro García with BTG Pactual.
One question we've gotten quite a bit is how is it that your EBITDA margin is so stable considering pretty significant sales decline we saw this quarter. So I was wondering if you could kick it off with that one.
Yes. Thank you, Alvaro. This is Marco. It's really the -- a huge amount of efficiencies and productivity that we are generating behind the plan we put in place a few years ago. Most of the impact of the efficiencies we are seeing today of the plans that we implemented like 2 years ago with CapEx, like integrating our packaging, manufacturing and so on. So -- but short answer is its basically that.
Great. And two more. One, bigger picture, just I can't remember a time with so many sort of relaunches sort of renewed images across all your different brands. So I was curious, Marco, how your clients are taking this, especially maybe the larger retailers? How are they sort of digesting all of this? And sort of what's the prospect or what's the outlook for the uplift in sales you'd expect from all of these relaunches?
No, clients, they are like fascinated. I mean they like innovation, and that's what the categories where we compete actually need, not just to drive our growth, but to drive the total category growth. So like the Walmart skin care buyer is really fascinated with all the things that we are doing.
And -- so -- and also, you have to remember that this is not just for one distribution channel. When you see like this, all the new sizes and all that, it doesn't necessarily impact just one channel all at the same time. Many of the things that we are doing are some for the traditional channels, some from the modern retail channel, clubs, hard discounters, e-commerce. So it's not that one single customer is going to have to absorb 50 different changes. I don't know if that makes sense.
Yes. That's helpful. And the last one, maybe for Tonio on CapEx. I have seen the uptick sort of year-to-date. I was wondering if you can maybe provide guidance for maybe this year and next year on what that is and what we should expect going forward in the context of free cash flow. Thank you.
Yes. I'm going to take that one, Tonio. I have the numbers pressure. The -- so we have this quarter, the quarter 3, quarter 4 and quarter 1 with some heavy CapEx investments there. We are paying for the new distribution center, which is spectacular. We are taking our levels from $7 million to $10 million and the distribution center is going to bring us savings of around $12 million per year. We are still paying for the second line of Suerox and several other CapEx investments in the plastic plant, okay?
So I expect the next 2 quarters to be a little bit heavy on CapEx. But 2026, like overall, based on the current forecast that we have, both in terms of CapEx and operational cash flow, we expect that we are going to return to the levels of free cash flow that we have been reporting in the past few quarters, which is in the round of MXN 2.7 billion, MXN 3 billion per year annually.
Our next question will be from Axel Giesecke from Actinver.
Just a quick one regarding the resilience of OTC in Mexico. I just want to know what share gains are you achieving in these categories? And how sustainable are they as we move into 2026 and looking forward?
Thank you, Axel. So first, I mean, OTC in general is very resilient, okay, a lot more resilient than personal care or even beverages, okay? And that is true for not only for Mexico, but also for all the markets. And basically, all the categories or subcategories within OTC. What we are seeing is that, first, from a total sell-out standpoint, regardless of the very difficult environment that we are seeing in general in Mexico from a consumption point of view, we were able to navigate in these categories with a lot more strength, okay?
And just to provide a little bit of color in terms of numbers, we are -- recently, it's very early to say, but I think it's important that you guys know that the early signs that we have from the -- both execution and incidents of the cold and flu season for 2025 and 2026, the early signs that we are seeing are very encouraging. We are growing double digits in several of the brands that have to do with cough and cold. And so it remains to be seen what happens. But normally, when a season starts strong, it remains strong, hopefully. But yes.
Our next question will now be from Froylan Mendes from JPMorgan.
Thank you for taking my question. I was hoping you could illustrate on where are the MXN 1.1 billion productivity measures the incremental ones coming from? I'm just curious, I mean, if the weakness in the market is clearly a top-down and even weather-driven, why do you feel the need to invest more in growth levers today if the market is supposed to stabilize at some point? Or am I missing something in any of your markets that will require an extra boost of growth beyond this -- to offset this macro slowdown, maybe some change in competitive dynamics? That's my first question.
And secondly, I wanted to understand better the performance in the U.S., the decline of almost 24%. You mentioned something about some returns from -- I guess, from the different channels. But what do you expect these productivity gains being invested in growth to translate into the United States? Should the U.S. react before other countries? Where does the U.S. stand in the recovery path that you foresee?
Yes. Thank you, Froylan. Let me address one by one. Productivity is mainly coming from four key interventions. Number one is a very strong implementation of artificial intelligence across different functions and processes that before required a lot of headcount and now it doesn't. So that's one piece.
Second is the strengthening of our COGS reduction original plan. So we had a plan -- a very aggressive plan to reduce COGS, and we strengthened that plan even further. So we stretched all the interventions that we are making even further to get more productivity there. So we expect the COGS to continue to go down.
Third, we are eliminating a massive amount of administrative cost that was previously in the P&L. So we are cutting administrative costs by around 30%. And fourth, the fourth pillar is go-to-market spending. And with that, I mean, unproductive spending, okay? So like we made a very thorough analysis of all the money that we were spending in pricing and promotions, point-of-sale execution. We are closing distribution routes that are not profitable. So we made like a very thorough analysis of every spending that we have in that bucket, and we are cutting a huge amount of spending that was unproductive. All that adds up to $1.1 billion.
The second question is why investing in the business? And the answer is, well, first, I don't know what's going to happen with the consumption market or environment or context in 2026, and I don't want to wait until the context saves us and we start growing the top line again. So we are deciding to invest a massive amount of money to reignite growth regardless of what's happening out there. And second, we want to be aggressive because we have a very strong portfolio of brands with very strong positioning. We have a very strong pipeline of innovation. And importantly, we have a very strong capabilities to execute, okay? So -- and we have the resources.
So we have the pipeline, we have the capabilities, we have the resources, and we want to put this company back to growth. So that's basically the reason. And in terms of the U.S. decline, it's fairly simple. I mean, we -- we -- the sell-out is declining 8%. It's not great, but it's not a massive crisis. We have brands that are relatively healthy in the U.S. like Suerox and Tio Nacho and some of our OTC brands.
But unfortunately, we had a very bad winter season across the U.S. as well as in Mexico last year. And what we are seeing now is that we loaded a huge amount of inventory of our winter season brands because we want to play big in the seasons. And the same we did in Mexico with Suerox this year, we loaded big time because who wins is the one with more inventory out there in the stores, and we want to play big and we play big in the U.S.
And now after a season that didn't go so well, we are receiving customer returns in those brands that is impacting the top line in sell-in, but the sell-out is not declining as much as the sell-in. I don't know if that provides perspective on the question you asked.
Yes, Mark. Do you think that the channels are, let's say, more balanced today in terms of inventory so that the next season will be, let's say, more correlated to the actual demand? Or how do you see the inventory levels?
It's like moving pieces all the time because it's -- we play a lot in seasons. We play in the winter seasons with OTC and then we play big time in summer with beverages and some of our OTC categories for the summer. So the strategy we follow and has worked really well in the past is that we play very aggressive in terms of both point of sale execution, communication, innovation and also huge inventory at the stores, okay? So we -- it's a bet all the time, it's a bet, okay? And that's how it works.
So you load big time upfront and then you expect for the best. And if it works, it's fantastic. And if it doesn't work, then you have to deal with the inventories and the product that you put out there.
So for example, you are seeing a strong decline in Suerox this quarter in Mexico, in particular, in sell-in, that doesn't align with the sell-out numbers for the quarter because we had big inventories for the summer season. The summer season didn't work. Now we are not selling a lot of Suerox because customers still have inventory.
But at the same time, we are we are playing a big bet for the winter season. And this quarter, we loaded a massive amount of OTC here in Mexico. And we're seeing early signs that this is working and that we are growing market share in some of these categories. And if it works well, we're going to have a great next quarters in OTC behind a good season, and we're all going to be happy. If it doesn't work, we're going to see the same dynamic that we are seeing today in the U.S. and in Mexico with beverages.
Marco, lastly, and thank you for the several questions. When you say that you expect growth to recover into the second half of 2026, do you expect beverage Mexico to come first, then cough and cold U.S. second? What's the timing on the different regions and products that you expect this reignited growth to come?
That's a difficult one. Let me think. I think OTC, we are going to see a better performance in OTC first, beverages second, hopefully, because if we -- if we have a better season in terms of weather next year, which we should because this year, we didn't have a summer, then we're going to sell a lot of Suerox, okay? So with a good winter season that we are starting to see for OTC, that's going to come first, second, Suerox. And third, most of the initiatives that I just presented for skin care and personal care are hitting the market in the second half of 2026. So third will come personal care. That's, I think, the order.
[Operator Instructions] This will conclude our third quarter results conference call. Thank you for your attention.
Genomma Lab Internacional-b — Q3 2025 Earnings Call
Q3 2025: Sales hit by weak seasons and Argentina accounting, but EBITDA margin, low leverage and secured savings fund a clear plan to reignite growth.
📊 Quarter at a Glance
- Like‑for‑like sales: -2.9% (operational decline versus prior year)
- Reported sales: -12.8% in MXN (mainly FX and hyperinflation accounting in Argentina)
- EBITDA margin: 23.7% (stable; management target ~24%)
- Adj. net income: MXN 632m (-3% excluding noncash FX effects)
- Free cash flow: ~MXN 1.6bn for the quarter (trailing 12m ~MXN1.8bn; down ~30–35%)
🎯 What Management Says
- Productivity: Secured MXN 3.0bn cumulative savings by 2026 (MXN1.8bn delivered; MXN1.1bn incremental) to protect margins while funding growth.
- Reinvestment: Reinvesting MXN1.1bn into product innovation, go‑to‑market/distribution, communication, e‑commerce and pricing to pursue ~MXN5bn incremental sales opportunity (2026–27).
- Confidence: Management expects top‑line recovery beginning H1 2026 while keeping a healthier margin and cash profile.
🔭 Outlook & Guidance
- Recovery: Growth expected to resume in H1 2026 driven by OTC seasonality, beverage rebound if weather normalizes, and relaunches in personal care.
- Targets: E‑commerce to reach MXN2bn by 2027; traditional coverage to >1m points; free cash flow aimed to revert toward MXN2.7–3.0bn annualized in 2026.
- Risks: Weather/seasonality, Argentine hyperinflationary accounting and FX volatility, plus potential beverage tax (EPS) uncertainty could weigh on revenue and timing.
❓ Analyst Q&A
- Mexico outlook: CEO sees a few more tough quarters but will use secured savings to invest; Suerox less exposed to proposed beverage tax.
- Working capital: Days payable now ~90s as insourcing changes supplier terms; days sales outstanding elevated partly because lower sales inflate the ratio.
- U.S. performance: Sell‑in fell ~24% (sell‑out -8%) due to returns and high channel inventory after a weak season; management expects sell‑out recovery to precede normalized sell‑in.
⚡ Bottom Line
- Bottom Line: Q3 highlights a temporary top‑line slowdown from weather and Argentina accounting, but stable ~24% EBITDA margin, low leverage (1.2x) and a funded MXN3bn productivity program support a credible path to growth in H1 2026; key execution and macro/tax risks remain.
Financial data from Genomma Lab Internacional-b
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 17,046 17,046 |
10%
10%
100%
|
|
| - Direct Costs | 6,264 6,264 |
9%
9%
37%
|
|
| Gross Profit | 10,782 10,782 |
10%
10%
63%
|
|
| - Selling and Administrative Expenses | 7,269 7,269 |
8%
8%
43%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 3,891 3,891 |
13%
13%
23%
|
|
| - Depreciation and Amortization | 371 371 |
7%
7%
2%
|
|
| EBIT (Operating Income) EBIT | 3,520 3,520 |
14%
14%
21%
|
|
| Net Profit | 1,629 1,629 |
21%
21%
10%
|
|
In millions MXN.
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Genomma Lab Internacional-b Stock News
Company Profile
Genomma Lab Internacional SAB de CV engages in the development, manufacturing and marketing of pharmaceutical, beauty and personal care products. The firm is engaged in the development, distribution and marketing of a range of products within different brands, for such treatments as anti-acne, varicose vein, hair loss, sexual stimulation and influenza; as well as analgesics and antifungals. The Company’s product portfolio includes such brands as Asepxia, Cicatricure, Goicoechea, Bengue, Diabet TX, Genoprazol, Goicotabs, Shot B, SilkaMedic, Siluet 40, Nikzon, X Ray, Next, Touch Me, Lomecan V and QG5, among others. The firm is a parent of a number of controlled entities, which have operations established in Mexico, the United States, Peru, Chile, Ecuador and Honduras, among others. In June 2014, the Company acquired 50% stake in Grupo Comercial e Industrial Marzam SA de CV.
StocksGuide Premium
| Head office | Mexico |
| CEO | Mr. Sparvieri |
| Employees | 1,643 |
| Website | www.genommalab.com |


