Avantor Reports Decline in Net Sales and Profitability in Q3 2024

Avantor, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a decline in net sales and profitability compared to the previous fiscal period. For the three months ended September 30, 2024, net sales totaled $1,714.4 million, a decrease of $5.8 million or 0.3% from the same period in 2023. The decline was attributed to a 3.2% drop in organic sales within the Bioscience Production segment, which reported net sales of $542.9 million, while the Laboratory Solutions segment saw a slight increase of 1.1% to $1,171.5 million.

Net income for the third quarter was $57.8 million, down from $108.4 million in the prior year, reflecting a decrease of $50.6 million. Operating income also fell to $124.6 million, a decline of $85.6 million compared to $210.2 million in Q3 2023. Adjusted Operating Income for the quarter was $274.8 million, down $20.2 million from the previous year. The gross profit for the quarter was $564.4 million, a decrease of $14.2 million year-over-year.

For the nine months ended September 30, 2024, net sales were $5,097.0 million, a decrease of $147.4 million or 2.8% compared to the same period in 2023. Net income for this period was $211.1 million, down from $222.6 million in 2023. Adjusted EBITDA for the nine months was $891.1 million, a decrease of $115.9 million from the prior year.

The company has been undergoing a restructuring program aimed at optimizing its cost structure, which resulted in restructuring expenses of $49.4 million for the third quarter and $82.3 million for the nine months. This initiative is expected to yield approximately $300 million in cost savings by the end of 2026.

As of September 30, 2024, Avantor's total assets were $12,840.6 million, with total liabilities of $7,287.4 million, leading to stockholders' equity of $5,553.2 million. Cash and cash equivalents increased to $285.3 million from $262.9 million at the end of 2023. The company also reported a significant reduction in total gross debt to $4,950.2 million from $5,580.0 million at the end of the previous year.

In terms of strategic developments, Avantor completed the sale of its Clinical Services business on October 17, 2024, for gross proceeds of approximately $595.0 million, which is expected to generate about $500.0 million in cash after taxes and transaction costs. The company has also implemented a new operating model effective January 1, 2024, consolidating its reporting segments from three to two: Laboratory Solutions and Bioscience Production.