IMCD NV | Europe: Off the Call

Research evidence excerpt

IMCD NV | Europe: Off the Call

UpdateMCost base. Cost structure roughly flat yoy. Have strengthened sales teams so can be

active in acquiring sales and supplier relationships, as well as made investments in

sales tools. Could see some higher costs at year end due to more bonuses if teams

hit sales targets. Current cost structure can cope with more sales than before, more

people and more digital tools.

Working capital. Don’t expect significant changes in the number of days, but mix

could change depending on growth; i.e. if revenue goes up then debtor position goes

up. Also typical seasonality means 2Q and 3Q are always highest revenues. Typically

see a drop in working capital levels, and expect the same for this year.

China competition. More remote areas like Brazil saw less competition of the semi-

specialty side. But in the latter part, more of that competition focused on Asia Pac

market.

M&A. Healthy pipeline, but discussions taking longer given dynamic market

conditions. Not in a rush to execute and are remaining disciplined.

Signet/Pharma. Pharma in general has generally normalized in terms of order

patterns, as expected, and this is also true for Signet.

Supplier wins. These have not been concentrated in one market; have strengthened

commercial excellence across the group. IMCD’s investment in sales, organization

and infrastructure during a difficult economic climate has been well received with

suppliers. Suppliers are also more critically looking at their own organizations to

determine what sales they need on a fixed cost basis, and therefore what % of their

business do they then outsource. Seeing positive conversations to convert these.

Innovation pipeline. Labs are very busy, focused on projects generating gross profit.