Statutory NPAT fell 20.8% while underlying EBITDA hit $585m guidance

What changed

Revenue fell 7.0% to NZD 12,266.9m and statutory EBITDA declined 8.3% to NZD 555.6m. Operating profit dropped 14.3% to NZD 408.7m, PBT was down 21.1% to NZD 302.2m and NPAT fell 20.8% to NZD 215.1m. The effective tax rate was essentially unchanged at 28.6% (FY24: 28.7%), so the NPAT decline mirrors the PBT decline rather than reflecting a tax distortion. By contrast, management's underlying EBITDA was disclosed at about NZD 585m, up 7.5%, and underlying NPAT from continuing operations was NZD 257.5m, down 15.1%. Operating cash flow rose 20.2% to NZD 418.5m, gross borrowings were paid down by NZD 133.3m to NZD 1,102.5m, and net debt eased to NZD 918.3m from NZD 1,018.9m. The final dividend was held flat at NZ 61.5c per share. By segment, Healthcare revenue fell to NZD 11,593.5m (94.5% of group), while Animal Care grew to NZD 673.4m and now contributes 5.5% of revenue at a materially higher implied EBITDA margin (~18.2% vs Healthcare's ~4.1%).

What matters

• The gap between a 7.0% statutory revenue decline and 12.0% underlying revenue growth is the single most important read in this release: the statutory line reflects the loss of a large, low-margin wholesale relationship, while underlying earnings still grew and landed inside the NZD 575-600m guidance range. The quality of that underlying figure depends on a reconciliation that was not extracted.
• Cash quality moved the right way. OCF/EBITDA stepped up to 75.3% from 57.5%, and management's underlying free cash flow of NZD 302m equates to 140.3% of statutory NPAT. That funded both a NZD 133.3m debt reduction and an unchanged dividend.
• Returns and payout tension is widening. ROE dropped to 7.9% from 11.2% and the statutory payout ratio rose to 56.1% from 43.5% on an unchanged DPS. The dividend remains comfortably covered by underlying FCF (~40% payout), but the statutory cover has thinned.

Expectations

EBOS supplied a numeric guidance range, and FY25 underlying EBITDA of ~NZD 585m sits in the upper half of the NZD 575-600m corridor — i.e. on plan, not above it. There is no extracted forward-year EBITDA target or order book, so the release does not support a view on FY26 trajectory beyond noting that the wholesale revenue base has reset lower. Half-year shape was broadly balanced (HY25 was 48.8% of full-year revenue and 49.6% of full-year EBITDA), so the exit run-rate looks consistent with reported full-year underlying earnings rather than implying material second-half acceleration or deceleration.

Quality of result

The mechanical components are reasonably clean: tax rate is stable, NPAT-vs-PBT divergence is negligible (a 0.3pp gap), and the small NPAT/profit-for-the-year difference of NZD 0.6m is non-controlling interests, not a one-off. Cash generation is the strongest part of the result — the NZD 70.3m lift in OCF outpaced the EBITDA decline, despite inventory days expanding to 40.0 from 33.5 and receivable days drifting up to 40.7 from 38.8. Capex stepped up to NZD 125.1m (1.0% of revenue, vs 0.7%), reflecting capital-work-in-progress, so the underlying FCF figure carries some investment drag. The principal quality caveat is that the headline narrative leans on "underlying" measures whose reconciliation bridge was not in the extracted disclosures — the gap between statutory EBITDA of NZD 555.6m and underlying EBITDA of ~NZD 585m (~NZD 29m of adjustments) is not itemised here.

Unresolved

• What specifically bridges statutory EBITDA of NZD 555.6m to underlying EBITDA of ~NZD 585m, and how much is recurring versus transaction or restructuring related?
• How much of the 12.0% underlying revenue growth is the new pharmacy wholesale customer wins flagged at HY25 (~NZD 450m+ run-rate), and what is the steady-state margin on that replacement volume relative to the lost contract?
• What is the FY26 trajectory for Healthcare margins now that the revenue base has reset, and does Animal Care's higher-margin growth scale enough to shift group margin meaningfully?
• How does the NZD 302m underlying FCF reconcile to statutory OCF less capex (~NZD 293m), and what proportion of the inventory build (+NZD 134.8m) reverses in FY26?

This briefing cannot assess the durability of the underlying earnings adjustments or the competitive positioning of the post-contract-loss revenue base, because neither the underlying-to-statutory reconciliation nor segment-level forward commentary was included in the extracted material.

Key metrics

Segment breakdown

Analytical metrics

This analysis was generated using Annolyse, an AI-powered tool that analyses NZX company announcements. The analysis is based on available company filings and standard Annolyse calculations. This is general information only and does not constitute financial advice. The analysis may contain errors. Always read the original company filings and consult a licensed financial adviser before making investment decisions.