Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining Uniphar Interim Results 2022 Conference Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by question and answer session. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Seamus Egan. Please go ahead.
Good morning and welcome to Uniphar plc's interim financial results presentation, which covers the period from the first of January 2022 to the thirtieth of June 2022. I'm Seamus Egan, Head of Corporate Development at Uniphar plc. Presenting our results today is Ger Rabbette, our CEO, and Tim Dolphin, our CFO. Before we begin, I would like to remind everybody that you can access the presentation either on our website www.uniphar.ie under Latest Results and Presentations, or via the link sent to you when you registered for the conference call. The results presentation will last approximately 20 minutes and will be followed by Q&A. Please note the full year results presentation may contain certain forward-looking statements, beliefs or opinions which are based on current expectations and projections about future events. Actual results may differ materially from those expressed or implied in such forward-looking statements.
I would now like to hand you over to our CEO, Ger Rabbette.
Thanks, Seamus. With slide four, which provides an overview of the group. We operate across three divisions, serving over 200 of the world's leading pharma and medtech manufacturers. We serve over 150 countries worldwide and have operations across Ireland, the U.K., Europe, the U.S., and have now entered the APAC region. We've had a strong H1 with gross profit growth of 9%. Last month, we celebrated our third anniversary as a public company, and during these three years, we've reported double-digit compound growth across gross profits, EBITDA and adjusted earnings per share. If you move to slide five, we discuss our financial highlights. We're delighted to report that the diversity and robustness of our business model has fueled continued strong growth across each of our three divisions, with an outperformance in our Supply Chain & Retail division.
At a group level, EPS increased by 20%, with EBITDA growing to EUR 45 million. Return on capital employed was again ahead of our range at 16.6%. Normalized free cash flow conversion was 70%, and we finished the period with modest leverage of less than 1. Post-period end, we successfully completed a planned refinance, which provides us with significant financial flexibility going forward. We've also continued to build on our excellent M&A track record, announcing our entry into the strategically important APAC region with the acquisition of Orspec Pharma. As you can see, our Supply Chain & Retail division has outperforming in this period, following on from a stellar 9-year track record, growing share from 24% to 53%.
As we look forward, we believe that we can continue this strong momentum, and this is why we are investing EUR 60 million in a new world-class distribution facility that more than doubles our capacity, reduces peak costs by one-third, and delivers return on capital employed of 50% within 4 years, continue to grow strongly beyond that. This project will take approximately 4 years to commission, and it will future-proof our business for 15+ years, creating a serious competitive moat for this highly cash generative business. On slide 6, we outline the continued progress we're making with our sustainability initiatives. It has always been at the very core of who we are. As a business, we are rooted in the communities that we serve, and our sustainability policy is centered around our core principles.
Our people represent our first pillar, and we're proud to have launched a number of initiatives to promote equity, diversity, and inclusion right across the group, including the Women's Alliance and the Rainbow Alliance. We continue to make strong progress completing our first Scope 3 carbon footprint exercise, and we remain committed to reducing our Scope 1 and Scope 2 emissions by 50% by 2030. From a governance perspective, the group adopted the U.K. Corporate Governance Code early in 2022. Moving on, I'll now bring you through a review of each division's financial and strategic progress during the year. On slide 8, we highlight our divisional objectives. In Commercial and Clinical, we are focused on continuing to build out our Pan-European platform.
In Product Access, we're focused on providing patient-centric solutions with the ambition of becoming a global leader in the delivery of unlicensed medicines. In Supply Chain and Retail, we will continue to grow our market leadership position through continued investment in our infrastructure and our digital and business solutions. Turning to slide 9, Commercial and Clinical. This division, as you know, provides sales, marketing and distribution solutions to both pharma and medtech manufacturers. The business is specialty-focused. In pharma, we're insights driven, and we leverage our fully integrated omni-channel model for our clients. In medtech, we deliver an integrated agency model managing the entire sales, marketing, and distribution value chain on behalf of our partners.
Europe is a very fragmented marketplace and poses considerable challenges for specialty manufacturers who want to enter, but we remain committed to building out our Pan-European platform to offer our clients a one-stop shop for Europe. This strategy has been very well received by our partners. We now represent 75 clients across two or more geographies, an increase of 15 in the period. Our bespoke service offering in the US continues to build scale, and we continue to evaluate capital deployment opportunities in this lucrative market. In the US, we want to invest in high-value service providers that fast tracks our strategic initiatives. On slide 10, you will note that this division grew strongly with revenue for the period coming in at EUR 162 million, with growth, gross profit increasing by 10% to EUR 59 million.
This is a very strong performance given the challenging comp where in H1 2021 we grew organically by over 20%. On slide 11, Product Access. We're building a global capability to source and supply medicines which are licensed or in short supply, and to manage the release of specialty medicines to specific patients on behalf of manufacturers. We've worked on more than 70 exclusive patient access programs to date, and we deliver medicines to over 160 countries across the globe. This year we signed our first EAP in the U.S.., and this has been a key focus for the group and marks a significant milestone. This success greatly aided by our continuous investment in the U.S. and post period into entering the APAC region with the acquisition of Orspec Pharma. Turn to slide 12.
Revenue for the period was EUR 75 million with a 9% increase in gross profit. This division has performed very strongly since IPO, delivering compound organic growth of over 20%. We continue to see this as a significant growth opportunity because of the growth in specialty pharma and the challenges governments face in funding these high price treatments. While this division continued to deliver growth during H1, business development interruptions because of COVID, combined with a long sales cycle for EAPs, has caused a temporary slowdown in the level of growth during the period. When we look forward, we expect this division to continue to deliver organic growth for the full year and to return to double-digit growth in the medium term. On slide 14, we talk about the great market position we have in Supply Chain & Retail.
We are the market leader in a two-player market, servicing over 2,000 hospital and retail accounts. This strong market position is supported by a network of over 381 owned and franchised pharmacies. The division has once again outperformed with the medium term guidance, with revenue for H1 at EUR 775 million, with gross profit coming in at EUR 66 million, delivering reported gross profit growth of 8% as we continue to grow share and outperform the market. The gross profit margin in this division is now close to 9%, up from 5.5% at the time of IPO. I'll now hand over to Tim to provide you with some more color on our financial performance.
Thanks, Ger. I would now like to take you through the financial highlights for H1 2022. I am pleased to say that the group has delivered a strong performance during the period with gross profit growth across all three divisions. At an overall group level, we generated gross profit of EUR 146.1 million, up 8.8% from H1 2021. The group delivered strong organic gross profit growth of 4.9%. Our gross margin percentage has increased from 13.9% to 14.7%, reflecting our continued growth into higher margin opportunities. EBITDA has increased by 9.2% to EUR 44.9 million, despite the challenging inflationary environment. This has resulted in a very strong return on capital employed of 16.6%, outperforming its guidance of 12%-16%.
Adjusted earnings per share increased by 20% versus H1 2021 on a like for like basis to EUR 0.084, driven by strong operating profits. Gross profit and gross margin percentage are the key financial metrics we use to track profitability at a divisional level. Commercial & Clinical delivered an excellent return in H1 2022, following on from a very strong outperformance in H1 2021, where the division grew by more than 20% on an organic basis. Its strong cash conversion ability and long-term relationships provides the financial profile to enable the company to confidently continue to reinvest in this high margin division. Our organic gross profit growth of 4.2% is within its mid-single digit growth guidance, reflecting the strength of our business and the deep expertise of our teams and the diversity across our service offerings.
This division contributed 40% of the group's gross profit for the period. Its gross profit margin increased during the period from 33.9% to 36.1%. Product Access has delivered reported growth of 8.8% and organic growth of 5.7%. While under its divisional guidance for H1 2022, this division has performed exceptionally well since IPO, with organic compound gross profit growth above 20%. Our investments in Durbin, InnoVenn, RRD, and Devonshire, as well as our Commercial & Clinical investments in the U.S., are developing a unique high value proposition for our clients, and we are confident we will deliver double-digit organic growth in this division into the medium term. Product Access represents 15% of group gross profit. Its gross profit margin increased during the period from 23.3% to 29.3%.
Supply Chain & Retail once again outperformed its divisional guidance with reported growth of 8.2% and organic growth of 5.2%. This division also has strong recurring revenues, plus a stable and robust gross profit profile. In terms of volume, we once again outperformed the market. This division represented 45% of the group's gross profit for the period. Its gross profit margin increased during the period from 8.4% to 8.7%. Moving on to have a look at net debt.
At a high level, we finished the period with a net bank debt position of EUR 73.8 million, driven by opening net debt of EUR 48.3 million. Strong EBITDA of EUR 44.9 million, offset by working capital investment of EUR 19.3 million, CapEx of EUR 4.3 million, strategic CapEx of EUR 7.1 million, acquisition and deferred consideration payments of EUR 16.8 million, and other items of EUR 22.9 million, which included exceptional costs, interest, lease payments, tax, finance costs, and dividends. We generated EUR 31.5 million of free cash flow on a normalized basis, which equates to a 70.2% free cash flow conversion ratio. Just having a look at net free cash flow. Our medium-term guidance for free cash flow conversion is 60%-70%.
We define free cash flow as EBITDA less investment in working capital, less maintenance CapEx. Normalized free cash flow conversion for the period was just ahead of our guided range at 70.2%. After adjusting for the partial reversal of previously discussed net timing adjustments of circa EUR 10.2 million. Efficient working capital management continues to be a focus of the group, and reported free cash flow was 47.5%. Just moving on to the next slide to have a look at liquidity. From a liquidity perspective, the group is in an excellent position, finishing the period with at less than 1x leverage. The group has a strong capital structure in place with a significant cash resource available.
At the end of June 2022, it had a net bank debt position of EUR 73.8 million, made up of EUR 68.3 million of cash and cash equivalents and EUR 142.1 million of bank debt. Shortly after the period end, the group completed a previously planned refinancing agreement. This five-year agreement effectively doubles our current facilities, brings in additional international banking partners, and provides the group with the firepower required to continue on our growth journey. Our leverage covenant has also been increased. Our capital structure is well-positioned to support the execution of our strategy of doubling our 2018 pro forma EBITDA of EUR 46 million within five years from the date of IPO. Now I'll hand you back to Ger.
Thanks, Tim. For slide 22. Capital allocation has and remains a key focus for the group as we adopt a very disciplined and balanced investment approach. As we've always said, we will invest in organic and inorganic opportunities across each of our three divisions, which supports our strategic objectives and delivers a return on capital employed at or above our hurdle rate of 12%-15%. We have a strong capital structure with leverage below one. Our new banking facility and larger banking clubs gives us the financial flexibility and support we need to continue to invest across all our platforms. If you move to slide 23, we're delighted to announce our plans regarding a strategic CapEx investment in a new state-of-the-art distribution facility in Dublin.
This organic investment supports our continued strong growth in supply chain and retail, where we have grown market share from 24% to 53% over a 9-year period. The investment is underpinned by a very strong economy and a positive market demographics, including growing and aging population. The investment enhances our market-leading service offering, differentiating us from our competitors, and future-proofs our business by more than doubling our capacity. It also significantly increases our levels of automation, reduces pick costs by a third, drives efficiencies, and protects us from future inflationary headwinds. Importantly, it also supports our sustainability initiatives. The investment of EUR 60 million will be phased in over four years and will deliver a return on capital employed of 50% within four years of go live and continue to grow strongly thereafter. On slide 24, we discuss M&A.
At post period end, we completed the acquisition of Orspec Pharma, making our entry into the strategically important APAC market. APAC is a significant market for all licensed medicines, and the highly experienced Orspec team have in a short period of time built a strong track record of sourcing and providing life-saving medicines into the APAC region from their homes in Australia, New Zealand, and Singapore. Additionally, they have supported the rollout of expanded access programs, and they will be a key enabler for Uniphar growing our service offering in the region. The integration of our four acquisitions completed in 2021 is progressing in line with plan. Our investments in the U.S., including BESTMSLs continues to build scale. The integration of C.O.R.Rect Medical is well advanced, and we've launched a number of products in Europe's largest med tech market.
E4H has allowed us to offer a more complete omnichannel offering, and the D-HR has now been fully integrated and continue to provide a strong service offering to their long-standing media customer base. Finally, we continue to assist the Competition Authority with its review of the Navi Group acquisition, and we expect the acquisition to close later on this year. As we look forward, we are confident that the successful track record of value-accretive M&A will continue into the future. Over the past 10 years, we've developed the ability to identify assets with strong cultural and strategic fit that will deliver a return on capital employed above our hurdle rate. We work hard on M&A and continue to manage an active pipeline of acquisitions in order to add further scale and breadth to our existing platforms.
If you move to slide 25, our business is on a strong growth trajectory, and we will continue to invest to execute on the significant opportunities we see for ourselves. We're mindful of the challenging macro environment we currently operate in. However, we will continue to mitigate these significant challenges by leveraging our scale and our ability to innovate and deliver value for our partners.
Our medium-term guidance remains unchanged. Double-digit organic growth, profit growth for Product Access, mid-single-digit for Commercial & Clinical, and low single-digit for Supply Chain. We will remain confident that we will deliver in excess of 60% free cash flow in the medium term, keep return on capital employed between 12% and 15% or above, and adopt a very disciplined approach to capital deployment. On slide 26, the outsider investor case. As we see it, we are a well-diversified quality healthcare services business positioned to win in growth markets. There's no doubt that we have a compelling market opportunity driven by the increased demand across the globe for specialty products and the growing trends by pharma and medtech manufacturers to outsource to specialist providers with well-invested and proven infrastructure.
In response to this, we've designed and built an integrated model providing end-to-end solutions across the value chain and throughout the project cycle. The platform for growth is in place. We believe we have distinct competitive edge to our high-tech distribution facilities, our deep relationship with global manufacturers, our scalable tech, our highly skilled people, and a strong M&A track record. We have a strong balance sheet, a great ability to generate cash, and a highly experienced industry team. In summary, we are confident that we have the strategy, the market opportunity, the platform, the competitive edge, and the team in place to deliver on our strong growth plans and to deliver the commitments we've made at IPO just over three years ago. Thanks for listening.
Ladies and gentlemen, at this time, we will begin the question-and-answer session. To register for a question, please find the dial-in numbers to the meeting materials on the webcast. Anyone who wishes to ask a question may press star followed by one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. No telephone questions so far. As a reminder, to register for a question, please find the dial-in numbers to the meeting materials on the webcast. There are no more questions. I hand back to Brian for the webcast questions.
Thanks, Operator. We have some questions from some analysts that have been sent in to us through the online portal. We'll start with Allan Smylie from Davy. Question one, you referenced inflationary pressures in the release this morning, which are clearly managed well given continued strong organic growth. Can you talk through the areas of the business most exposed to inflation and perhaps quantify the expected impact from the inflationary pressures this year? 2.
Allan, yeah, inflation is something that we've been experiencing for the last 18 months, and we've been able to manage to meet our targets and our expectations, even taking that into account. If you were to look at the on a full year basis, the impact on the inflation will be somewhere between EUR 4 million-EUR 5 million on our cost base.
Our challenge then is actually to make sure that we pass that through to our customers in a managed way. There was obviously going to be a lag between price pressures coming through and our ability to pass that through to the customer base. We've been able to cover that by using our scale and the breadth of our offerings to make sure that we can be able to grow our gross profit path to make sure that we can actually still meet our targets. We're confident that we'll be able to do that for the rest of the year and as we look forward into next year. Now on a particular area, Supply Chain & Retail is probably the area where you have the biggest cost base impact, particularly energy and fuel costs.
In MedTech, you probably have a big drive from manufacturers trying to pass through their pricing pressures through to us. In Product Access, there wouldn't be any pressure at all. Overall, if we hadn't had inflation, we probably would have exceeded our expectation figures for the last 18 months. The impact in the H1 results to date would probably be in the region of EUR 2-2.5 million. As I said, on a full year basis, you're looking between somewhere between EUR 4-5 million off it in impact on our cost base.
What we're doing, Allan, is managing that in a manner that we can pass it through to our customer base in a managed way so that we don't get any negative impact. We've been successful in doing that. Part of the increase in our gross profit to date has been that exact thing, where we've actually been able to pass some price changes through. In the main, the majority of the gross profit increase has been us using our scale and growing the business.
Thanks, Tim. Next question from Allan. In Supply Chain & Retail, how should we think about the phasing of returns on your EUR 60 million investment in the new distribution capabilities?
Allan, obviously, this investment is because of the outperformance of the Supply Chain & Retail business over the last number of years to a nine-year track record now of market share growth. Tim, you might give some color on the phase of the returns.
Yeah, Allan, it's obviously a big project that we're undertaking here. It's gonna take 3-4 years to commission. Then it'll take between 3 to 4 to 5 years to actually meet our hurdle rate. After 4 years, we'll be at 15% return on capital employed. By year 7, we'll be at 20% return. It's quite a strong investment return. Part of the return, Allan, is gonna come from operational efficiencies, where we'll be able to reduce our pick costs by a third. That's going to give us a substantial increase. Then the balance of the return that we'll get will be from market growth and a powerful increase in our customer base as well.
Final question from Allan. In Product Access, the market has principally focused on the opportunities in Expanded Access Programs. The acquisitions of Devonshire and now Orspec also expand your global capability in unlicensed medicines. How should we think about your growth ambitions in this market?
Yeah, I think, good question, Allan. We've built a very significant on-demand business over the last number of years. We see continued significant opportunity for us to grow this business. The platforms we have in place today allow us to expand our existing platforms in the U.K. and Ireland into Europe and now with APAC and the U.S. Brian, do you wanna add anything?
Yeah, I suppose just to add to that, Allan. Our ambitions are to be global leader across both early access and global access. The capabilities required for both of these divisions are the same, and then we can also leverage that capability for the trading business of the unlicensed on-demand business. The long-term vision is to be able to retain our clients across the life cycle from commercial markets and non-commercial markets. Specifically, Devonshire expands our reach into strategic hospitals and accounts into Middle East and Orspec now expands our capabilities within the important APAC region.
The next questions in are from Charles Weston in RBC.
First question, in light of the strong recovery in elective procedures, will Commercial & Clinical medtech acquisitions be more difficult or expensive to make?
I think what we're seeing, Charles, I think that all over, all healthcare assets today are expensive to acquire. That's been the case now for three or four years. So, we have seen buy-side pay multiples significantly higher than we would be comfortable at. But what we'll be good at is sourcing opportunities off market through our connections and paying multiples that we're comfortable with. It will deliver our return on capital employed. You can see again, this year, Charles, that we've outperformed our guidance between 12% to 15% return on capital employed.
Basically, I think we have the skill set to keep playing with that going forward, despite the macro environment of the year, so where people are paying very significant multiples for healthcare assets.
Thanks, Charles. Question number two in from Charles is, within Commercial & Clinical, what do you anticipate the mix of med tech versus pharma organic growth rates on a go-forward basis to average the mid-single-digit guidance?
I think we look at this as one division. It's a strong growth division for us. We guide mid-single digits across both pharma and med tech. That is our expectation. Now we obviously have, med tech today is stronger, is bigger of the two divisions. Ultimately, we want to grow each of these platforms mid-single digits.
Thanks, Charles Weston. Next question from Charles Weston. Given the EAP wins over the last year or two, what visibility does management have now on recovery to double-digit growth in 2023?
Okay. As I said, our growth, we've delivered 20% compound growth since IPO in this division. We're comfortable getting back there in the medium term. The business development opportunity has been delayed because of COVID, delayed decision-making, but ultimately within the medium term, we'll get back to double digits. Brian, do you wanna add any more color?
Just to add to the point around Charles made, that we have delivered significant compound growth since IPO. This is the first reported cycle where we would've been below the double-digit organic gross profit growth, which we would've flagged early last year around the impact COVID will have on the sales cycle and then other macroeconomic factors around biotech funding. But ultimately, we remain confident on our ability to double-digit organic gross profit growth into the medium term. Final question from Charles. What are the terms of the new debt facility, and why is it so large given that reasonable leverage levels would apply to substantially lower debt?
Could you read anything into the timing of the new facility in terms of deals in the pipeline?
What I'd say is basically we are a high-growth business. We wanna grow our business. We've invested very heavily in our people, in our technology, in our facilities. I would say that we have a structure in place to more than double the business going forward, provided the proper opportunity to come along. For me, it's just good business to ensure that we have the facilities in place if an opportunity comes along for us to really drive out with our business. Each of our three divisions, we see significant growth opportunity for ourselves. M&A, you know, takes a long time. We put a lot of effort into it.
It's been a long conversation, and we just wanna make sure that if the opportunity come along, we're in a position to grab hold of them. What we would restate is that we wanna keep leverage between 1 and 2. We don't really wanna go beyond 2.5 times leverage, but we will on the basis we can get down very quickly. Basically for me, it's just about making sure that we have the facilities in place to deliver on our growth paths of the business. If opportunities come along the way, we're in a position to grab hold of those opportunities. Tim.
Yeah, Charles, on the terms, a part of your question, all the terms are exactly the same as the previous arrangements we had in place. Interest grid, et cetera, all exactly the same. There is only one change which would have been on the covenant side. Our covenant has increased from 3.2 to 3.5. All other terms are exactly the same, except the pricing and the covenant. Right. I think there's one more question Charles has just put on. In Orspec, is Orspec more focused on demand for EAPs? It's both Charles.
I suppose as we said at the analyst margin questions, the capabilities across this division cut across both early access and global access, which includes the on-demand or trading side of the business. Orspec has capabilities across I suppose those three buckets of revenue opportunities, which is why it was an important strategic acquisition for us. Their capabilities that they possess I suppose they've recruited people from some of our competitors in that region. With the owner being a man who can play a key role in driving the growth of Asia Pac for one of our competitors. It's an acquisition we're very excited about. Next set of questions are in from Adam Barker of Goodbody Stockbrokers.
Question one, previous results, you have mentioned the possibility of replicating the Supply Chain & Retail business in another market with similar characteristics to Ireland. Is this still a potential option?
Absolutely, Adam. We've built a very unique business model. You can see we've grown our growth margin from 5%-9% in short order. We have a very unique business model in Ireland in our Supply Chain & Retail business, and the numbers reflect that. We see our peer group as Galenica. We'd love to replicate this model in more markets. When we're investing in our IT and our facilities and our people, we always invest for scale. Can we scale this platform into other markets? Today, we believe we can if the right opportunity comes along.
Okay. The next question from Adam. The press release mentions that you are focused on maintaining margins through the current inflationary cycle. Are there any inflation forecasts in the market where you think this would not be possible? Or would you forego delay investments to maintain margin in that scenario?
I think we're very comfortable that, as Tim said earlier on, that we can manage our current forecast inflation challenges. The issue is that there's always a time lag between suffering and passing it on, I mean, and that's the issue. We're very comfortable at the current stance and our view of the markets that we can mitigate the significant inflation pressures that we see for each of our three divisions.
The next question from Adam. What are the key factors in winning the first U.S. EAP? Is it just persistence and gradually growing brand equity, and your ability to deliver, or has there been a change in approach?
Why don't you take this?
Adam, this goes back to our acquisition of RRD International in November 2019. Which we called out as a key strategic acquisition in terms of giving us the clinical credibility to operate EAPs in the USA. We've been working hard with RRD in terms of creating the value proposition that would be required to deliver an early access program in the U.S., which has much higher regulatory hurdles to meet. This is, I suppose, a strong example of the benefit that we called out of the RRD acquisition. We're very pleased to have won these two EAPs and hope to deliver more and grow those accounts. Final question from Adam. Is the acquisition of Orspec in line with your usual M&A return targets?
Tim.
Obviously, Adam, our target is that after a three-year period, we will get to a 50% return on capital employed, and Orspec is in line with that. As Ger and Brian has said previously, Orspec is a strategic acquisition for us. It gives us the platform to expand into the APAC region. All our criteria for acquisitions will have been met from a strategic, cultural and financial perspective.
Thanks, Adam. Next questions are from Max Herrmann in Stifel. First question, why put in place such a large facility, EUR 400 million + EUR 150 million accordion?
Max, as I said previously, we see this as good business, that basically we're a business that's positioned to grow. We've invested in our technology, our people, and our infrastructure. We want to be in a position to grab hold of any opportunities that come across each of our three divisions. However, we've always said we want to keep leverage between 1 and 2 and then not go above 2.5.
We're just mindful of that. There is significant opportunity for us right across each of our three divisions. We wanna be positioned to avail that if the opportunity comes along.
Thanks, Ger. Next question. What is the outlook for Product Access? When will it return to double-digit growth?
Probably you're better answering that too.
I think we covered that off with Charles. We called out the reasons why we felt that the medium-term guidance would be under pressure as a result of COVID and then some macroeconomic factors around funding of biotechs. We don't see this as a long-term impact. It was just basically. There's a very long sales cycle for the early access programs, which again we would've always called out, which not being able to travel and engage and the delay in decision making has had an impact on. We are standing by our medium-term guidance of double digit organic growth, profit growth.
Yeah. Next question from Max.
I would also like to know what contingents were paid out in the period, please.
As part of our cash payments during the period, we paid just under EUR 17 million for our acquisitions, which included some deferred consideration and included some upfront consideration. Of that, EUR 3.5 million related to deferred consideration linked to EPS, M3, RRD, and OUTiCO, and some ICPs. I hope that covers the detail for you.
We'll give a moment for any more questions. We have a question from Tomas Martin. Thank you for the presentation. Is the cash conversion below 60%-70% range due to the stock build of same dynamic in H2?
Tom, thanks for the question. No. Our cash conversion ratio, when you normalize it, comes in just over 70%, which is just ahead of our target range. If you would have remember from previous presentations that we have done for previous periods, we would've adjusted an excessively large cash conversion ratio down for timing differences. All that you're seeing here in this period is a partial reversal of those timing differences. There was circa EUR 10.2 million of timing differences that reversed in this period. Which gave us an artificially low free cash flow of 47.5%.
When you normalize that by taking those partial reversals into account, it brings it back to 17.2%, which is ahead of our target range. We're confident that our target range will be achieved going forward. Just to clarify for you, we define free cash flow as EBITDA less investment in working capital, less investment in maintenance CapEx.
Thanks, Tom. We have another question in from Tom. What about the integration of Navi Group? It was supposed to be mid-2022 in December 2021 at the time of the acquisition. Then it was postponed during Q1. Now it would be at the end of 2022. The acquisition of Navi Group is subject to approval by the Competition and Consumer Protection Commission and is expected to close later this year. What is going on with the CCPC?
I think it's like all state services today it's under pressure because of people resources. Basically we believe there's nothing more to that. It is a pretty significant acquisition. We believe we'll still get through in quarter four. Ultimately, like every private and public sector, people pressures are everywhere. That's. We see that as a main reason.
Thanks, Ger. Give a moment for any more questions. Question in from Brian White. Does the difficult financing environment for mid-sized pharma companies in the U.S., in particular, provide an opportunity for Commercial & Clinical as these companies struggle to finance commercial efforts?
Brian, you may take that too.
It's a great question, Brian. We do see our value proposition having the ability to accelerate value collection for these emerging biotechs by accelerating their ability to commercialize in markets outside of the USA. A common theme we hear is that if sales for a pharma or biotech is gonna be less than EUR 200 million across the Middle East and Europe, it does create a struggle in terms of finding a commercial partner.
This is part of the value proposition that we're building across our Commercial & Clinical and Product Access businesses, to be able to give them a one-stop trusted partner that can bring them all the way through from pre-access into commercializing into their commercial markets, but then also being able to manage their non-commercial markets, maximizing the access to their products, and maximizing, I suppose, the returns and the speed that they get to their peak sales. We do see, I suppose, our value proposition being an enabler to creating additional revenue streams, when there is a challenge for them on the funding front. Okay. There are no more questions online. Off to Ger for closing remarks.
Thanks for listening to this quarter, guys. We've had a great H1. We're confident with our guidance for the full year. Our business continued to grow strongly right across our three divisions. As we look forward, we see loads of opportunity for us. As I said, we've a very strong investment case. We appreciate your continued support and your investment in Uniphar. I think we will be early next year hopefully refocusing the group and giving some more guidance on where the next stage of our journey is. As you know, we're on track to double our earnings per share by the end of the year.
Ultimately, we see ourselves as a quality healthcare asset positioned to grow in growth markets, with lots of opportunity. Thanks for listening. We'll hopefully see you all soon.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.