* For FY 2025, Antibiotice delivered a clear profitability reset versus 2024 despite broadly stable activity. Operating income declined 2% Y/Y, with turnover down 4% Y/Y to RON 645.3m, while total operating expenses increased 4% Y/Y to RON 599.7m. This compressed EBIT by 34% Y/Y to RON 71.0m and EBT by 42% Y/Y to RON 60.1m. EBITDA declined 19% Y/Y to RON 124.0m, reflecting higher operating costs, including utilities and staff expenses, as well as a weaker sales mix. Below EBITDA, higher depreciation following recent investments further weighed on EBIT, while the financial result deteriorated materially on higher FX losses, reflecting the company’s structural exposure to foreign currencies in a year marked by increased exchange-rate volatility and a larger share of export transactions. Compared with our estimate, EBT came in RON 14.9m higher, driven by stronger-than-expected domestic sales realised in Q4 2025 | NEGATIVE.
* Net turnover split highlights the core issue: a less favourable geographic and product mix rather than a contraction in demand. The domestic sales decline (-11.4% Y/Y) appears primarily driven by pricing and channel dynamics rather than a collapse in demand. The Romanian pharmaceutical market grew 10% in value in 2025 while volumes fell 1.5%; the generic Rx + non-Rx market (40.4% of total) advanced 4.5% in value but volumes declined 3.3%. Against this backdrop, ATB increased volumes sold to 24.2m boxes (+2.2%), suggesting adverse price and mix effects in retail-exposed categories such as non-Rx medicines and oral anti-infectives. Internationally, revenues increased 7.6% Y/Y as the company expanded in Western Europe and other markets, partly offsetting the decline in US sales (-33% Y/Y). However, the replacement of higher-priced US volumes with Western European sales at prices 40–50% lower created margin pressure despite top-line increase.
* Cost inflation was visible in utilities (electricity +16% Y/Y; gas +35%) and staff costs (+7%), while depreciation increased 18% Y/Y to RON 53.0m following recent investments. In FY 2025, the company invested RON 81.1m. Raw materials and consumables expenses rose 7% Y/Y broadly reflecting the production mix.
* Below EBIT, the financial line deteriorated materially, with net FX losses of RON 6.4m (vs net financial gains of RON 0.3m in FY 2024). Despite a slight decline in net interest expenses (-2% Y/Y), the net financial cost increased 2.6x Y/Y to RON 10.9m compared with RON 4.3m in FY 2024.
* FY 2026 Outlook. For FY 2026, management expects to counterbalance the weaker domestic dynamics through several commercial initiatives, including expanding sales of veterinary products and developing online distribution channels for dietary supplements. On external markets, the company indicated that export revenues are expected to remain at least flat Y/Y in 2026, while management also hopes to gradually recover part of the volumes lost in the US market. Overall, we do not expect major fluctuations in financial performance in 2026. Given the stabilisation of exports and the initiatives aimed at supporting domestic sales, we see turnover, EBITDA and EBT advancing only modestly, likely in the low single-digit range. EBITDA margin declined to 19.2% in 2025 from 22.6% a year earlier. While the margin may recover slightly in 2026 as the sales mix gradually stabilises and cost pressures ease, the modest revenue growth and the ongoing shift towards lower-priced export markets (outside US) suggest it is likely to remain below 20% in 2026.
At first look, we estimate FY 2026 sales of RON 662.4m (+2.7% Y/Y), with domestic sales advancing by around 1% Y/Y and international sales expanding by a further 5%. EBITDA may reach RON 129.5m (+4.4% Y/Y). Assuming D&A expenses of RON 58.6m (+11% Y/Y), EBIT may remain broadly flat Y/Y at RON 70.9m. The financial result may improve but remain negative at around RON 7m, resulting in an estimated EBT of RON 63.9m (+6.3% Y/Y). Net profit may reach RON 57.8m. That would be 43.5% below FY 2024 realised bottom line of RON 102.2m.
* Post -2030 outlook. Over the longer term, however, management guides for a more favourable post-2030 outlook. Antibiotice is developing new production capabilities partly financed with non-reimbursable funds. In 2023, the company secured funding to expand production, packaging and storage capacities for sterile products, solutions and topical medicines. The project, titled “Capacity for the production, packaging and storage of sterile products, solutions and topicals”, requires a total investment of RON 200.1m, of which RON 85m is covered through state aid, with the remainder financed from the company’s own resources and an EIB loan. The new production and logistics infrastructure is intended to support the manufacture of additional generic medicines, including sterile injectable solutions and topical products. Antibiotice completed construction of the new finished-products warehouse (including sterile products) in 2024, with the facility authorised and operational in early 2025. The sterile topical production facilities are scheduled for commissioning in 2027, while the sterile solutions capacities are expected to become operational in 2029. Management estimates that the two new production capacities could add around EUR 8m annually to revenues once fully operational, with the contribution expected to materialise roughly three years after commissioning. This lag reflects the typical timeline required for product validation, regulatory authorisations and the gradual ramp-up of commercial production in regulated pharmaceutical markets. Antibiotice also secured access to non-reimbursable funding for the Inova a+ research capacity and critical medicines production project, valued at RON 376.9m (EUR 74m, VAT excl.). The implementation period is scheduled for January 2026–December 2029. Non-reimbursable funds will cover around 50% of the total investment, with the remainder financed from the company’s own resources and bank borrowings. The critical medicines production capacity developed under this project is estimated to add around EUR 11m annually to revenues once fully operational. Similar to other pharmaceutical manufacturing projects, the contribution is expected to materialise roughly three years after commissioning, reflecting the time required for product validation, regulatory approvals and the gradual ramp-up of commercial production.
* At our FY 2026 estimates, ATB trades at around 12.8x EV/FY EBITDA, a premium to most listed generics peers, which typically trade in the 8–10x range. The current valuation may partly reflect the company’s longer-term growth profile. Based on management guidance and our assumptions, the new sterile and critical medicines capacities could add roughly EUR 20m annually to revenues starting from 2033, equivalent to around 15.5% of FY 2025 sales. Importantly, around half of the related investments are financed through non-reimbursable funds, reducing the effective capital deployed and improving the expected return profile of these projects. Management also targets an EBITDA margin of around 25% over the longer term, compared with c. 19% currently, supported by a shift towards higher value-added products such as sterile injectables and critical medicines, the expansion of international markets, and an improved geographic mix. In particular, products sold in the US typically command significantly higher prices than those realised in other export markets, meaning that a gradual recovery of US volumes could have a disproportionate positive impact on profitability. Together with the ramp-up of the new production capacities, this suggests the potential for a material increase in EBITDA over the next seven years.
*That said, after the strong re-rating of recent years, the valuation appears relatively demanding on short- and medium-term fundamentals. With sales and EBITDA expected to grow only in the single-digit range in the near term, a valuation closer to 9–10x EV/EBITDA would appear more consistent with the company’s near-term growth profile, in our opinion.
* In our latest report, we did not anticipate the slowdown in sales and margin compression recorded in 2025 and assumed that the planned investments would deliver faster and more substantial contributions to revenues and profitability. Accordingly we place the company UNDER REVIEW | NEGATIVE.
* Please find attached our First look report.
