Avantor® Reports Second Quarter 2021 Results

RADNOR, Pa., July 29, 2021 /PRNewswire/ -- Avantor, Inc. (NYSE: AVTR), a leading global provider of mission-critical products and services to customers in the life sciences, advanced technologies and applied materials industries, today reported financial results for the quarter ended June 30, 2021.

"Our exceptional second quarter performance reflects the strong momentum across each of our end markets, reinforces the relevance of our business model and highlights our continued track record of execution," said Michael Stubblefield, President and Chief Executive Officer of Avantor.

"Our outstanding top-line growth was accompanied by substantial growth in earnings and free cash flow. We continue to invest in our long-term growth strategy, including capacity expansions and the completion of two acquisitions, Ritter GMBH and RIM Bio, which will enhance our proprietary offerings and extend our geographic reach. We are proud to have issued our first corporate sustainability report and look forward to advancing our initiatives on culture, environment, community and governance. We are well positioned to capitalize on expanded opportunities across our end markets and have again raised our guidance for full year results," Stubblefield concluded.

Second Quarter 2021

For the three months ended June 30, 2021, net sales were $1.86 billion, an increase of 25.7% compared to the second quarter of 2020. Foreign currency translation had a favorable impact of approximately 5.2% resulting in organic sales growth of 20.5%. Net income increased 162.1% to $157.8 million from $60.2 million in the comparable prior period. Adjusted EBITDA increased 34.2% to $366.6 million and margin expanded approximately 125 basis points. The Ritter and RIM Bio acquisitions did not have a material impact on our quarterly results. 

Diluted GAAP earnings per share were $0.24 as compared to $0.08 for the comparable prior period, while adjusted EPS were $0.35 as compared to $0.19 for the comparable prior period.

Operating cash flow in the quarter was $263.8 million, while free cash flow in the quarter was $265.0 million.

As of June 30, 2021, adjusted net leverage was 3.8x, up from 3.5x as of March 31, 2021 reflecting an increase from the Ritter and RIM Bio acquisitions, offset by ongoing deleveraging.

Second Quarter 2021 – Segment Results

Management uses Adjusted EBITDA to measure and evaluate the internal operating performance of the Company's business segments. Adjusted EBITDA is also our segment reporting profitability measure under generally accepted accounting principles.

Americas

Net sales were $1,069.8 million, a reported increase of 24.8%, as compared to $857.5 million in the second quarter of 2020. On an organic basis, sales increased 23.6%.

Adjusted EBITDA margin increased 50 basis points to 23.5%, as compared to 23.0% in the comparable prior period.

Europe

Net sales were $666.0 million, a reported increase of 27.8%, as compared to $521.0 million in the second quarter of 2020. On an organic basis, sales increased 16.5%.

Adjusted EBITDA margin increased 165 basis points to 18.6%, as compared to 16.9% in the comparable prior period.

AMEA

Net sales were $122.8 million, a reported increase of 22.6%, as compared to $100.2 million in the second quarter of 2020. On an organic basis, sales increased 16.4%.

Adjusted EBITDA margin increased 65 basis points to 23.2%, as compared to 22.5% in the comparable prior period.

Conference Call

Avantor will host a conference call to discuss its results tomorrow, July 30, at 7:30 a.m. Eastern Daylight Time. A live webcast can be accessed on the investors section of our website. Or you may listen to the call by dialing (866) 211-4132 (domestic) or (647) 689-6615 (international) and use the conference code 1885843. Prior to the webcast, a presentation relating to the earnings call will be available on the Company's website.

Following the live webcast, a replay of the webcast and the slide presentation will be available at https://ir.avantorsciences.com/investors/news-and-events/events/.

About Avantor

Avantor^®, a Fortune 500 company, is a leading global provider of mission-critical products and services to customers in the biopharma, healthcare, education & government, and advanced technologies & applied materials industries. Our portfolio is used in virtually every stage of the most important research, development and production activities in the industries we serve. Our global footprint enables us to serve more than 225,000 customer locations and gives us extensive access to research laboratories and scientists in more than 180 countries. We set science in motion to create a better world. For more information, please visit www.avantorsciences.com.

Use of non-GAAP Financial Measures

To evaluate our performance, we monitor a number of key indicators. As appropriate, we supplement our results of operations determined in accordance with U.S. generally accepted accounting principles ("GAAP") with certain non-GAAP financial measurements that we believe are useful to investors, creditors and others in assessing our performance. These measures should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measures, and such measures may not be comparable to similarly titled measures reported by other companies. Rather, these measures should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements included in reports filed with the SEC in their entirety and not rely solely on any one, single financial measurement or communication.

The non-GAAP financial measures used in this press release are sales growth on an organic basis, Adjusted EBITDA, adjusted net income, adjusted EPS, adjusted net leverage and free cash flow.

• Sales growth on an organic basis eliminates from our reported net sales growth the impacts of earnings from any acquired or disposed businesses and changes in foreign currency exchange rates. We believe that this measurement is useful to investors as a way to measure and evaluate our underlying commercial operating performance consistently across our segments and the periods presented. This measurement is used by our management for the same reason.
• Adjusted EBITDA is used by investors to measure and evaluate our operating performance exclusive of interest expense, income tax expense, depreciation, amortization and certain other adjustments. We believe that this measurement is useful to investors as a way to analyze the underlying trends in our core business consistently across the periods presented. This measurement is used by our management for the same reason.
• Adjusted EPS is our diluted earnings per share adjusted to normalize the number of shares outstanding for our position immediately after our initial public offering and to exclude amortization and various other items on an after-tax basis. The normalization of shares reflects for all periods (i) the total number of shares of common stock outstanding following our initial public offering, as well as (ii) the dilutive effect of the assumed exercise or conversion of instruments following our initial public offering (including our 6.250% Series A mandatory convertible preferred stock assuming the lowest rate of conversion into common stock). We believe that this measurement is useful to investors as an additional way to analyze the underlying trends in our business consistently across the periods presented. This measurement is used by our management for the same reason.
• Adjusted net leverage is equal to our gross debt, reduced by our cash and cash equivalents, divided by our trailing 12-month Adjusted EBITDA (excluding stock-based compensation expense and including the run-rate effect of cost synergies and the incremental results of acquisitions as if those acquisitions had occurred on the first day of the trailing 12-month period expected from completed acquisitions). We believe that this measurement is useful to investors as a way to evaluate and measure the Company's capital allocation strategies and the underlying trends in the business. This measurement is used by our management for the same reason.
• Free cash flow is equal to our cash flow from operating activities, excluding acquisition-related costs paid in the period, less capital expenditures. We have amended our definition of free cash flow to exclude acquisition-related costs as they may be significant, individually or in aggregate, and may make it more difficult for investors to understand the free cash flows associated with the normal operations of our business. We believe that this measurement is useful to investors as it provides a view on the Company's ability to generate cash for use in financing or investment activities. This measurement is used by management for the same reason.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables accompanying this release.

Forward-Looking and Cautionary Statements

This press release contains forward-looking statements. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. These statements may be preceded by, followed by or include the words "aim," "anticipate," "believe," "estimate," "expect," "forecast," "intend," "likely," "outlook," "plan," "potential," "project," "projection," "seek," "can," "could," "may," "should," "would," "will," the negatives thereof and other words and terms of similar meaning.

Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance. You should not place undue reliance on these statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct. Factors that could contribute to these risks, uncertainties and assumptions include, but are not limited to, the factors described in "Risk Factors" in our most recent Annual Report on Form 10-K, our Form 10-Q for the first quarter of 2021 and our Form 10-Q for the second quarter of 2021, as such risk factors may be updated from time to time in our periodic filings with the SEC.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this press release. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.

	Three months ended June 30,								Six months ended June 30,
(in millions)	2021				2020				2021				2020
Cash flows from financing activities:
Debt Borrowings	1,134.6				—				1,134.6				—
Debt repayments	(107.5)				(3.7)				(316.1)				(67.5)
Payments of debt financing costs	(20.1)				By: PR Newswire Association LLC. - 29 Jul 2021 Back to overview Enhance your business development with Biotechgate Try for free »