SYNLAB AG (SYNLAB, FSE: SYAB) is experiencing a reduced level of COVID-19 testing volume and dropping COVID-19 PCR prices in some of its key markets in January 2023. This leads SYNLAB to update its FY 2023 guidance despite anticipated continued growing underlying business and the focus to recover pre-pandemic productivity.
For 2023, SYNLAB now expects revenues to be around €2.7 billion (previously around €3.0 billion).
Furthermore, SYNLAB expects the adjusted EBITDA margin to be in a range of 16-18% (previously: at 18-20%). The adjusted EBITDA margin ranges-in the following factors: 1) the reduction of the COVID-19 testing volume and price, 2) the dilutive impact on the margin of setting up Direct to Consumer (D2C) activities, 3) general inflation risks, 4) a doubling of benefits from the SALIX programme in 2023 compared to prior years from productivity initiatives, and 5) lower M&A contribution.
SYNLAB will implement a temporary reduction of M&A spent in 2023 to around €100 million (as compared to the previous expectation of €200 million) to focus the business on reaching the same productivity level as before the pandemic outbreak.
SYNLAB continues to expect an underlying organic growth (excluding COVID-19 testing) at ~4%, driven by development of volumes and price increases within the core business.
For FY 2022, revenue is expected to be around €3.25 billion, above the previously guided amount of €3.2 billion with an adjusted EBITDA margin expected to be around 23% impacted by Q4 2022 one-off costs primarily from COVID-19 business.