Good morning, everyone, and welcome to Uniphar Plc's full-year results presentation, which covers the period from the 1st of January 2024 to the 31st of December 2024. I'm Allan Smylie, and I look after IR here at Uniphar Plc. Presenting our results today is Ger Rabbette, our CEO, and Tim Dolphin, our CFO. We're also joined on the call today by Brian O'Shaughnessy, our Chief Commercial Officer, and Dermot Ryan, our Chief Operating Officer. Before we begin, I'd like to remind everyone that you can access the presentation either on our website 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 of future events.
Actual results may differ materially from those expressed or implied in such forward-looking statements. I'd now like to hand you over to our CEO, Ger Rabbette.
Thanks, Allan. Good morning, everyone. Thanks for joining us. Just for the benefit of those who don't know us that well, I just want to start by introducing Uniphar on slide five. Uniphar is a healthcare services company, and what we mean by that is we solve problems for healthcare companies and healthcare professionals. If you are a pharma, MedTech, or biotech manufacturer, the good news is that the development of new specialty products is creating big opportunities. But the challenge is that their increased complexity is making it harder to unlock these big opportunities. And that's where we come in. We sit in the middle between the manufacturer and their stakeholders. We help them both to overcome the problems of this new, more complicated healthcare environment. We've built long-term relationships with manufacturers and a deep understanding of the challenges of getting new specialty products to market.
We've been talking for years about building platforms, and this is what we mean by it. We're building our capabilities and our relationships to allow us to solve the problems that healthcare is facing. And as we see it, our strong financial performance last year clearly shows that the investments that we've made in our platforms are now delivering a good return. If you move to slide six, you can see that as a business, we've come on a journey. We've evolved from a low-margin business to a higher-margin business, from 4% to 15%. We've gone from local to global. We now have a global presence and serve 160+ countries worldwide. We've gone from a focus on mass market to a focus on specialty across all our divisions. And this shows in our results. We've increased our return almost tenfold in as many years.
Basically, as we see it, we're in the right place at the right time with the right service offering. In an industry where complexity is overwhelming, where to get a proper return for your investment in developing a high-tech gene therapy or a med device, you need to go beyond the big markets like the U.S. and the E.U., for Uniphar is here to help as your trusted partner. We've built the platforms that allow us to solve the push problems of manufacturers who are seeking to push their new products into the global marketplace. At the same time, the pull problems of healthcare professionals as they seek to pull these new medicines into the local marketplace for their patients. On slide seven, we show what the strategy is now doing for us in financial terms.
Last year, the group generated revenue of EUR 2.8 million, gross profit of EUR 428 million, and EBITDA of EUR 123 million. And what is most pleasing for us was a strong organic gross profit growth of 8% or EUR 32 million. This was delivered by strong performance by each division, with Supply Chain & Retail delivering EUR 5 million, MedTech EUR 9 million, and Pharma EUR 18 million. A huge result for us thanks to our amazing teams. On slide eight, we show the group's financial highlights, and you can see we're making great progress towards our medium-term EUR 200 million EBITDA target. Last year, we delivered organic gross profit growth of 8%, return on capital employed of 15%, earnings per share grew by 12%, free cash flow conversion landed at 106%, with year-end leverage of 1.5x , all ahead of target.
In addition, we have today launched a 35 million share buyback scheme, which is approximately 5% of our market cap. This reflects the recycling of the proceeds from the recent sale of Inspired Health, and our view that our share price at its current levels is materially undervalued. On slide nine, you can see that we continue to make great progress in sustainability, maintaining or improving our score with independent rating agencies. If you move to slide eleven, we take a closer look at the progress of each division. Supply chain retail is our legacy business, serving Retail and Hospital pharmacy in Ireland. It's a vertically integrated infrastructure play and represents 46% of our gross profits. Our Pharma division is high growth. It's a global business. It's focused on specialty products and now represents 28% of the group's gross profits. MedTech is also high growth.
It is also specialty-focused but has a European footprint and now represents 26% of the group's gross profits. If you move to slide 12, we outline how we win in supply chain retail. This business is an integral part of Ireland's healthcare infrastructure. We've grown market share every year since IPO. We are vertically integrated, linking the manufacturer to the healthcare professional with world-class service offering. The business has a strong competitive moat, huge barriers to entry, and we have clear blue water between ourselves and our competition in terms of infrastructure and future readiness. Working with both Retail and Hospital pharmacy, our market share today is 54%, and we're moving up the value chain into our own brand consumer partnerships and in licensing. We own directly or have franchised 28% of the retail channel currently, and that's the largest network in the country with 445 stores.
On slide 13, we outline the division's financials. Supply Chain & Retail delivered 5.5% growth in gross profit to EUR 187 million on a revenue base of EUR 1.844 billion, with 56% of gross profit coming from retail. This division again outperformed market. The market growth is 5%, and we continue to gain share. Wholesale grew across both Rx and consumer, and was helped by the addition of 16 new pharmacies into our network. In retail, we successfully integrated the 2023 McCauley Pharmacy Group acquisition. But what we're most proud about is the fact that all four of our pharmacy brands sit in the top 12 consumer brands in Ireland. From our perspective, our Supply Chain & Retail business is a strong cash generative business, which provides infrastructure, resources, and skills to other parts of our business, and we believe we will continue to grow low single digits in the years ahead.
On slide 14, we outline how our Pharma business wins. And as we see it, we've built a global platform, leveraging our capabilities across our Irish Pharma business to deliver high-value solutions to manufacturers and hospitals. Working on the push side with Pharma and Biotech manufacturers, we focus on providing an integrated range of services for specialty medicines, both pre and post-approval. And on the pull side, our key relationships are with our global hospital channel. Helping healthcare professionals to access or source the treatments they need for their patients across early access to specialty, unlicensed medicines, and medicine shortages. On slide 15, we outline the Pharma division's strong financial performance, with gross profit growing by 18% to EUR 122 million on a revenue base of EUR 659 million. The division delivered double-digit organic growth across both on-demand and pharma services with a 60/40 split.
In On-Demand, our market-leading global sourcing platform had a very busy year, servicing a strong demand for unlicensed medicines, clinical trial supplies, and medicine shortages. In Pharma Services, we delivered a record number of 70 new exclusive access programs, cementing our position as a clear market leader in Cell and Gene therapy. At the same time, the build-out of our European commercialization platform is progressing to plan, and we're making really good progress in the U.S. So we remain confident that this business will continue to grow double digits in the years ahead. To go to slide six, we outline how MedTech wins. This division has had another great year. This is a high-margin, high-growth business with very sticky relationships. We provide a full-service commercialization model to seven of the top 10 MedTech manufacturers, and just like in Pharma, we focus on specialty.
We focus on high-value specialties like diagnostic imaging, orthopedics, and interventional. We've built out this business from an Ireland and U.K. base into continental Europe. We have very strong relationships throughout the European hospital channel with hospital consultants who are increasingly the buy decision-makers for these ever-complex med devices coming to the market. On slide 17, we outline MedTech's strong financial performance, with gross profit increasing by 9% last year, which is all organic, to EUR 109 million on a revenue base of EUR 268 million. We saw growth across all specialties, and during the year, we entered the fifth market organically. We continue to see great opportunity for ourselves to leverage our strong manufacturer relationships to enter new geographies with existing partners, leveraging our existing platforms, and proof of this is that we now work with over 74 manufacturers in two or more geographies.
MedTech is now 26% of the group's gross profit, and we're confident that MedTech will continue to grow high single digits in the years ahead. If you go to slide 19, we give an update on our investments, as well as our flagship investments in Supply Chain & Retail in Ireland. We've invested in our Pharma and MedTech platforms in the Netherlands, where we've built a world-class distribution hub to help us scale this business in Europe. At the same time, we've invested in a world-class facility in North Carolina to help us grow our Pharma Services specialty offering in the U.S. And we plan to operationalize a similar facility in the U.K. next year. What these facilities do is it gives us the capacity to grow, and we need this to hit our 2028 target of EUR 200 million EBITDA, with 80% of that target being delivered organically.
On slide 20 and 21, we give more detail on our flagship distribution facility in Ireland, which we call Greenogue 2 . As we see it, this significant investment future-proofs our strong market position in Ireland. It transforms our customers and enables the pharmacy of the future. The project is on track to deliver 50% return on capital employed within five years, growing strongly from there as we utilize the significant additional capacity that it delivers. This is a huge project for us. We have 40 of our best people on it, which is a serious drain on our management resources. However, we remain confident of a successful go-live date in July of next year. I'll now hand over to Tim to talk you through the financials.
Thanks, Ger. I would now like to take you through the financial highlights for 2024. I'm 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 a gross profit of EUR 427.6 million, up 9.6% from 2023. The group delivered strong organic gross profit growth of 8.2%. EBITDA has increased by 6.4% to EUR 123.5 million, demonstrating the underlying strength of the business. Adjusted EPS is up from EUR 0.183 to EUR 0.205, representing an increase of 12%. This has resulted in a return on capital employed of 15.2% at the top end of our medium-term guidance of 12%-15%. Leverage for the period was just at 1.5x . Moving on then to look at gross profit.
Gross profit and gross margin percentage are the key financial metrics we use to track profitability at a divisional level. Uniphar Supply Chain & Retail performed in line with this divisional guidance, with reported growth of 5.5% and organic growth of 2.7%. This division 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 46% of group gross profit for the period. Its gross margin was broadly stable compared to prior years at 10.7%. Uniphar MedTech delivered a strong outcome for FY 2024. The division delivered reported gross profit growth of 9.1%, all of which was organic. This was at the top end of our high single-digit growth guidance range over the medium- term. This performance reflects the strength of our business, the deep expertise of our teams, and the diversity across our service offerings.
This division contributed 26% of the group's gross profit for the period, and its gross profit margin increased during the period from 40.1% to 40.6%. Uniphar delivered reported gross profit growth of 17.8% and organic growth of 17.6%. This reflected a very strong performance across both our on-demand and our Pharma Services business. The divisional gross profit margin increased from 17.4% to 18.5%, reflecting our continued move into higher margin activities. Then just moving on to slide 25 to have a look at net bank debt. At a high level, we finished the period with a net bank debt position of EUR 147.7 million, driven by opening net debt of EUR 149.9 million, strong EBITDA of EUR 123.5 million, a working capital inflow of EUR 49.5 million, driven by prepayments in Uniphar.
CapEx included strategic CapEx of EUR 68.1 million, acquisition and deferred consideration payments of EUR 17.9 million, and other items of EUR 38.9 million, which includes the purchase of our Citywest premises for EUR 23.8 million and asset disposals during the period. Our strategic CapEx reflects the significant multi-year investments we are making in our new distribution center, Greenogue 2 and our new SAP platform. Our reported free cash flow for the period was EUR 130.3 million, and I'll take you through the details of that on the next slide. Here we outline our free cash flow generation and free cash flow conversion for the year. We have updated our definition of free cash flow and now define it as EBITDA less investment in working capital, less maintenance CapEx, less lease payments.
We have also updated our guidance for free cash flow conversion and expect to achieve 60%-70% by 2028 at EUR 200 million EBITDA. For 2024, this translates into free cash flow conversion of 105.5%, helped by the inflow of working capital I referred to earlier. Moving now to slide 28. Capital allocation has and remains a key focus for the group as we adopt a very disciplined and balanced investment approach to creating shareholder value. As we have always said, we will invest in organic and inorganic opportunities across each of our three divisions, which support our strategic objectives and deliver a return on capital implied at or above our hurdle rate of 12%-15%. We maintain a prudent approach to leverage and aim to keep our net bank debt to EBITDA below 2.5x over the medium term.
In addition to our progressive dividend policy, we will also look at share buybacks subject to market conditions. Just moving on then to slide 29, having looked at our priorities for M&A. We have a strong track record on completing M&A, with 17 acquisitions completed in the last six years across all three divisions. We tend to work with people before we engage in any M&A discussions and now have a reputation for being a responsible owner in the market. So we avoid competitive auction processes. We can buy off market and get good value. Our pipeline is mainly focused on Pharma. We are looking for acquisitions across areas like market access, as well as commercialization platforms and specialist distributors. With respect to previous M&A, we had a number of moving parts in our deferred considerations last year.
BModesto in our on-demand segment is performing materially ahead of expectations, and this is reflected in an upward revision. Some of our U.S. pharma assets, in particular our early-stage research and consulting business, are still recovering from the impact of weaker biotech funding in the U.S., which has pushed our profit expectations for these businesses to the right. During the period, we also divested of Inspired Health, a great business and management team, but by mutual agreement, we felt they were better owners for the business. We generated a return on capital implied in excess of our 12%-15% target on the transaction. The disposal will have no impact on group growth expectations for 2025. I'll now hand you back to Ger to finish off on our investment case.
Thanks, Tim. If you move to slide 30, we outline our ambitious target to deliver EUR 200 million EBITDA by 2028. We will achieve this target through robust organic growth across all three divisions, made possible by our investments in technology and infrastructure, complemented with strategic M&A. Our expected organic/inorganic split is now 80/20, and we leverage our platforms, and we remain confident that we will deliver. Slide 21 shows our strong track record as a listed company. We've more than doubled our gross profit and EBITDA. We've increased our margins, and we've delivered a very substantial growth in earnings per share. Finally, slide 32, we'll outline our investment case. We're going into this next stage of development of growth, armed with a much greater number of capabilities than we had at IPO. We have demonstrated a strong track record of delivery.
We know this industry well, and we will follow the money. There is a compelling market opportunity for ourselves, a very favorable market backdrop, and plenty of scope for growth in each of our three divisions. Each division has an attractive competitive moat, and we have a concrete plan in place to grow and deliver on our ambitions. Thanks for listening. I will now hand back to the operator for Q&A.
Thank you. As a reminder , if you would like to ask a question on today's call, please press star followed by one on your telephone keypad now to execute. When prepared to ask a question, please ensure you are unmuted locally, and our first question comes from Colin Grant from Davy. Colin, please go ahead. You're live now.
Yeah, good morning. Thanks for doing the call. I have a couple of questions. Just firstly, to do with your organic growth, which is really strong in 2024, and again, a strong outlook for growth going forward. I'm just wondering, in particular, with the Pharma and MedTech divisions, are there any parts of the business or geographies where you feel you're winning market share given the scale of growth you're seeing there? And if so, what's kind of driving those market share gains? That's kind of the first question. And secondly, you mentioned on the call there the stickiness of some of your customer relationships and the recurring nature of some of your revenues. And just the lower cyclicality that you have in the earnings compared to many other businesses in other sectors is quite notable.
I'm just wondering if you could give a bit more color on the share of recurring revenues and earnings that you have and how that shapes your ability to hold a kind of a level of debt that might be different to more cyclical businesses? Thanks very much.
Colin, I'll grab that. So this is, I think, when you look at the results, we're very fortunate to have three strong divisions that both perform really well. I think the answer to us is all about why we're growing and why we're gaining share is all about the quality of our people and the investments that we've made in our infrastructure and in our technology. And that's core right across our three divisions. It's all about the quality of our people and the investments we're making. I think, basically, when we look forward, we do believe there's opportunity for us across each of our three divisions, and we're very comfortable with the guidance we've given. The market with regards to the gross profit growth across the three. Obviously, Pharma Services is, we see, is our biggest opportunity. Obviously, we're talking about labor about that.
From a recurring income stream perspective, I think we're very fortunate to have 90-plus of our income coming being of a recurring nature. You can see we've gone through a financial crisis. We've gone through COVID, and the business has managed to continue to grow and perform well throughout that, so that means that we see the quality of earnings being of a much higher level than other industries and other companies, and that's why we're very comfortable with leverage in around the 2.5x because of the strength of our recurring income. It's all about the compelling market opportunity we have for ourselves and the structural demographics and the new innovations coming through in healthcare today and the fact that we're very well placed to harvest those opportunities.
Great. Thanks, Ger.
The next question comes from Charles Weston at RBC. Charles, your line is open. Please go ahead.
Thanks for taking the questions. And good morning. Three, please. First of all, given that this year and next year, you'll start to see a lot more of your free cash flow dropping to the bottom line, can you provide a bit more color on how you'll think about buybacks versus M&A in the future and perhaps what your target leverage is rather than your sort of maximum leverage? I'll pause there for a second.
But Charles , we were very well articulated in the M&A strategy, and that really hasn't changed. With all of us strategically doing good acquisitions to enhance our service offering for specialty customers and growing our skill set within the business, and that really hasn't changed. And we still see a very active pipeline and a lot of opportunity for ourselves in M&A. We rarely, as you know, get involved in big processes. We like to do it largely most of our deals are off-market, rather we get to know the guys well, and we've been very successful in doing good M&A. I think when you look at the share buyback issue for us, we fundamentally believe that our shares are materially undervalued. It's opportunistic. We hope at some point, Charles, that the market corrects itself and that opportunity goes away.
But as we stand today, that is a very compelling market and a very compelling opportunity for Uniphar and our shareholders.
I see. Okay. Thank you. And then my second question is on the organic growth contribution. You've said it's going to be at least 80% of your doubling of your EBITDA from 2022 to 2028. And that means you have to average 10% effectively organic growth over the six years. You did a bit less in 2023. You got to 8% in 2024, but that means you still have to leverage, sorry, you have to deliver kind of low double, very low double digits over the next four or five years. So that's a bit of an acceleration again. Can you just help us understand what gives you the confidence here and how you expect the sort of cadence of growth to look over the next few years? Thank you.
Thank you. Good question, Charles So you see the guys that have given the gross profit making really good progress there. Not really seeing the investments we're making in our infrastructure, in our technology platforms. I think, basically, as they wind and they start to give us a return on the investments, that's when you see the EBITDA kick in. And I think it'll start to come through post Greenogue 2 next year. You start to see an uptick in our EBITDA performance as we go through over the next number of years.
Okay. So somewhat back-end loaded sort of 2026 to 2028 because of the CapEx that you put in and delivering. Is that a summary?
I think so, Charles. That means we hope to outperform that, but being conservative, I think that's a fair comment.
Great. Thank you. And just last question, please. You've won a lot of new EAPs in 2024, and I remember you hired some Clinigen people a couple of years ago. So can you just give us a bit of color on the competitive landscape in that segment and your visibility over the next couple of years? Thanks.
Brian, you might take that, would you?
Yeah. Thanks, Ger. So I suppose it continues to be a competitive landscape, Charles, with some of our competitors being in the market a lot longer than us. But we believe we have best-in-class service that we've been investing in over the last five years, both organically and inorganically. A good example of the strength of the service is the increased number of programs, being 17, won this year. If you go back five years, that would have been 10, and it's been growing every year. And some of these programs are being won with clients that have historically worked with our competitor. And specifically on the EAP area, we have an extreme Cell and Gene being the only provider that delivered a global expanded access Cell and Gene therapies with an increased Cell and Gene therapies working with Uniphar.
So we've got a strong pipeline, incredible team, best-in-class service, and we're seeing the benefit of that combined strength of our capability, which gives us confidence in the positive outlook for the business.
Okay. Thanks very much, everyone.
Thanks, Charles.
The next question comes from Paul Cuddon from Deutsche Bank. Paul, your line is open. Please go ahead.
Okay. Good morning, all. Just one question, please. Just on Pharma Services, obviously, H124 was a kind of breakout kind of period for Pharma. H2 has delivered strong growth as well. If you could just elaborate on any potential sort of one-offs in there, things that we should be aware of that were exceptional contributors in 2024 that may not recur in 2025? Or is it another picture where actually a lot of the work you've done is just getting started within Cell and Gene therapy programs, etc., that you can continue to support into 2025 and beyond?
Brian, you might take this, please.
Thanks, Paul, so I suppose parts of the Pharma Services are multi-year contracts such as expanded access, clinical development, or bespoke distribution, but the nature of some of the services are one-off, but the opportunity for us is to build on these relationships and work with these clients for more services within that segment, or a big focus is offering, expanding on the client relationships into new services, so there'll be no need to call out, Paul, it's beyond the nature of the business, but it makes a recurring, but also, the big opportunity is to build on the relationships into other services.
Super. Thank you. Maybe just one other question. I mean, so we've talked a lot about organic growth, profit growth, and acquisitions as being the bridge to the 200 million of EBITDA. But perhaps you can talk about any potential cost savings through your investments on that journey as well, please.
I think, Paul, we really focus on cost savings as a reason to do an acquisition as we go forward. Now, there is exceptions. There are probably Greenogue 2 being our biggest exception. So I think as we seek towards the 200 million EBITDA target, Greenogue 2 and the cost savings will be material as we move on. Dermot, want to comment?
Yeah. I think it's coming from, obviously, with Greenogue 2, with the investment in the automation and the robotics, we're moving from a business today that's 48% automated to 80% automated. And that obviously drives a lot of savings. I think we said previously that we will reduce our per pick cost by 50% through that investment, and that still holds today.
Super. Thank you.
Thanks, Paul.
The next question comes from Christian Glennie from Stifel. Christian, your line is open. Please go ahead.
Yep. Thanks, guys. Three questions then. I guess starting with MedTech, just be interesting to hear a little bit more about expanding into new markets. You've called out Switzerland and Austria. How does that happen? Are you taking, is it sort of one product for one customer into the markets, or is it on a sort of multiple basis? And then related to that, just the phasing of growth in 2025. Obviously, you had a big swing to strong second-half growth last year. What should we think about the balance of growth in 2025 for MedTech? Thanks. And I'll follow up.
Brian.
Yeah. So thanks a lot, Christian. So we've always spoke around the growth opportunities for MedTech is to take existing relationships into new geographies, and that's exactly what we're seeing. So the idea for us is that we take existing portfolios and not just individual products. And that's what we're seeing in the growth opportunities that we have called out. And we've got a very strong pipeline and continued effort in terms of the focus on expanding those supply relationships into the geographies. So in terms of its phasing for the MedTech business, I don't think it's anything specific to call out, but obviously, the nature of winning new business for new clients, new opportunities, that tends to have a ramp-up. So the more successful we are in landing new business, we would hope to have a stronger second half. But not specifically to call out in terms of the phasing.
Yeah. It'd be similar to that [audio distortion] .
Okay. Thank you. That's helpful. And then on Pharma, I guess a couple here. So just maybe some background or talks since you'd sold Inspired Health, just maybe how that process came about. I mean, maybe slightly surprising on one hand to be selling an asset you've acquired, but maybe obviously it ticks some boxes elsewhere. And does it mean that you might consider other business disposals, or is this pretty much a one-off?
I would say it's a one-off, Christian. So we're very happy with where we are today, but it's a one-off. Brian, do you want to give it more color?
Yeah. Well, we highlight and are consistent around our discipline around acquisitions in terms of strategic fit, culture fit, Return on Capital Employed. But that's not just a pre-acquisition process. We're also disciplined in performing post-investment reviews to ensure the acquisition is delivering against, I suppose, the purpose in which it was originally acquired. So the Inspired disposal was by mutual agreement with the founders as we both felt it was a better owner for the business. And it's important to highlight, Christian, that we did deliver, I suppose, on the target Return on Capital Employed. Actually, it was in excess of 12%-15%. But as Ger said, it's a one-off, but it's just reinforcing that discipline over how we actually go about our acquisitions.
Thanks. Makes sense. And then on the EAP, sorry if I missed it, was the 2017 new wins a sort of record year? Does that set maybe you talked about a good pipeline. You're typically looking at sort of 10-15, I guess, historically 10, 15 wins in any given year. Are you trending a little bit ahead of that? And maybe, if I can, on just that, maybe some context for sort of how you see your market share in terms of EAP, either on a new win basis or on an overall contract win contracts you're working on?
Christian, it was a record year, so Brian, you might just give it a bit more color.
Yeah. I suppose it's just a reflection of the investment we've made there, Christian, over the last five years. So we've got the best-in-class team, we take best-in-industry team on expanded access, best-in-class service. And that's been reflected in that number of wins. As mentioned earlier on, I suppose what's reinforcing the fact that we believe it's best-in-class services is that some of those wins are coming from clients that have traditionally worked with our competitors. Cell and Gene, we are the only provider to have delivered an outsourced global expanded access Cell and Gene. so i suppose we've invested and focused in the right areas, which is now delivering returns for us. And we're very positive about the outlook for that business, very strong pipeline that we can continue to convert.
Thanks. Maybe one more if I can on supply chain. I mean, just for context, the potential doubling capacity as you step through delivering that starts to come on stream 2026 and then fully up and running 2027. What are your sort of ambitions, I guess, ultimately in terms of how we should think about market share gains and/or potential, actually, maybe a nudge ahead of your low single-digit growth that you've typically guided for that business based on that capacity and significant capacity increase?
Dermott?
I think when we look at supply chain, we've obviously outperformed the market again. As Ger mentioned earlier, we've outperformed the market every year since we've IPO'd. That gives us a huge amount of momentum going into the Greenogue 2 project. I think the investment really supports that momentum. We're looking to enhance and transform our market offering. I think this will really transform the customer experience, not just in terms of our pick efficiency, but also in terms of our digital core that we're building. That whole customer experience will be much, much better for both our manufacturers and our retail pharmacy customers. That gives us a really good position and foundation to continue to build on the market share gains. There's an efficiency piece in terms of reducing our per pick costs in half from where they are today.
So when you look at all that coming together over the next sort of two years, I think it leaves us really well positioned to continue to deliver in supply chain.
Okay. Thanks, guys.
The next question comes from Brian White from Shore Capital. Brian, your line is open. Please go ahead.
Yeah. Morning. Thanks for taking a couple of questions. Thanks. On Pharma, just a commentary regarding, I guess, everyone knows about the more difficult or challenging financing environment for biotechs and the impact that that's had on some of your businesses. Given that circumstance, does it make sense perhaps to double down here and to invest as an opportunity to take share whereas some of your competition may retrench? And then also, and apologies for asking another EAP question, but just trying to think a little bit more about this leadership position you Cell and Gene therapy, have you been able to dig a little bit deeper? Is there anything you're offering different there in comparison to your competition that you can capitalize on and can be transferred into, or just more broadly in your product offering? Thanks.
Yeah. So I might just so healthcare for us is long-term. So we're making long-term investments. Start with Greenogue 2. It's been four years in applying and four years in implementation. It's a pure long-term investment. Same with the Expanded Access Programs. We started this business pre-IPO, and it's now we're harvesting the return on our investment. So these are all very long-term investments, the long-term investment cycle. So that's the beauty of it. It builds strong competitive moats around your business as you go forward. Brian, do you want to comment?
Yeah. I'd like to talk the Cell and Gene piece. Fundamentally, again, it just comes back to how we set our strategies, looking at the macro trends within the environments we Cell and Gene was a clear one for us that we focused on in terms of targeting from a business development perspective. Where that has led now is we are the only provider that's global Cell and Gene expanded access program, which has the benefit, I suppose, a Cell and Gene expanded access program is being launched, we almost have to be engaged. There are certain capabilities and complexities non-Cell and Gene expanded access programs that Uniphar has the experience of delivering can give confidence to our clients. In terms of what we're doing there around expanding on that expertise, it's what it services.
It's the same as the entire pharma division, which is trying to leverage our existing relationships and expertise and transfer that into other opportunities. So we've officially Cell and Gene business unit within access, and that's not just an expanded access offering. That's a launch offering. So where we're talking to our clients around how we can support them in their ex-U.S. launch, be it through discrete services or through some form of exclusive relationships. So early, but a big focus and looking at some positive potential wins that we're close to signing.
Okay. Thanks.
Next question comes from Sam England from Berenberg. Sam, your line is open. Please go ahead.
Hi, guys. Thanks for taking the questions. The first one's just on pharma and another one on EAP, so I was wondering if you'd give us a sense for how much the recent wins contributed to your 2024 growth and I suppose where are we in the ramp-up of the recent contracts that you've won and maybe if you could give some comments on the typical sort of timelines around wins sort of hitting maturity in EAPs and then second one on MedTech, can you just talk a bit about the breakdown of growth and I suppose how much of the growth is being driven by deepening existing relationships with partners you're already working with in other areas or product categories versus adding new partners that you weren't working with previously?
You might take those two, please. Yeah.
Yeah, so I suppose in terms of this contribution of the new programs for this year, it'd be a smaller portion of the overall delivery of growth, so it provides really strong momentum for us in terms of the growth for 2025 as well as converting our strong pipeline, so they typically tend to be three- to five-year programs, with year one being the smallest year, obviously, depending when it actually ramps up. From a MedTech perspective, we've all talked about leveraging our existing relationships into new geographies, and that's exactly what we're doing, and I think, Sam, you're calling out just between new relationships or going into new modalities, so they're both big opportunities. Today, we probably focus more on our existing portfolios into new geographies rather than expanding the relationship we have with existing clients into new product portfolios.
So in some ways, the latter is an untapped opportunity, which is a focus for us, but it just goes short of the spread of the opportunities within that division.
Great. Thanks very much.
As a reminder, that's star followed by one. And the next question comes from Zoe Karamanoli from Goodbody. Zoe, your line is open. Please go ahead.
Thanks for taking the question. First of all, on the theme of EAPs again, can you provide an example on how an on-demand client or an EAP program has transitioned successfully into the Pharma Service engagement and what that might imply in terms of long-term margin or revenue expansion? That's the first question. I'll pose here.
Perfect.
Thanks, Zoe. I suppose the first thing to highlight is the crossover in infrastructure between the two businesses, on-demand and EAP. So fundamentally, the EAP business depends on the infrastructure built within the on-demand business in terms of its supply chain capability, quality, IT, even finance support. But probably the most important piece is the regulatory support and the understanding of being able to bring unlicensed medicines into different markets around the world. So in terms of then the connectivity from a relationship perspective, it's a big focus of us in terms of building out an integrated platform. The biggest benefit we get from that is leveraging relationships for new opportunities. And the most tangible example is when we look at the opportunities within our launch and medical team, 60% of that, their pipeline is coming from EAP opportunities.
So it's a big focus to make sure that our key management have visibility over pipelines, and we're making sure that we're maximizing the opportunity within pipeline of clients, but also managing existing clients from a key account perspective. So in terms of what this means for long-term, it's a very positive outlook. We're delivering on what we said, the benefit of the integrated platform. So we'd be very positive around this business.
Great. Thank you. Just on the current investment and the uptake on margin, do you still anticipate a significant uptake in EBITDA margin post 2026? Is it possible to provide a range of what might that look like?
As you say, our big change in 2026 will be the efficiencies coming G2 rollout. So it's hard to predict exactly what the range will be, but we're expecting substantial margin uplift in the EBITDA margin at that point in time, given the synergies that will come through both from a gross margin perspective and from a cost synergy perspective.
Okay. All right. Thank you.
The next question comes from Cornelis from Alliance. Cornelis, your line is open. Please go ahead.
Hi. Thank you for taking my question. I was just wondering if you could provide some clarity about the working capital development. I think you indicated there was temporary. I was just wondering when that was going to reverse. Thank you.
Hopefully, Cornelis, it'll be something that will be there for a long time. As you know, and as you all said to you guys, our focus here is to really make sure that from a working capital perspective, we're as optimal as possible. So in our Pharma Division, we've been able to get that an element of the prepaid. That'll be there for at least this year, we hope, and hopefully into next year. And as we roll out new agreements, we would hope to continue with that type of structure.
Thank you. The next question comes from Charles Weston at RBC. Charles, your line is open. Please go ahead.
Hi. Two follow-ups, please. First of all, on MedTech, are you currently seeing a tailwind in the market from waiting list reduction efforts by healthcare systems? And secondly, in terms of the write-ups and write-downs this year and last year, what have you learned from the various deals you've done since the IPO in terms of what has worked and what has not worked, and also in terms of the deal structures that you can apply?
I'll take the second question, Charles, first, and the deal structure, so we have learned a lot, and as we grow, the bigger deals have been easier for us to integrate because they're plugged into our existing platforms. If you look at the retail pharmacy acquisition at BModesto, they're plugged into two very big platforms as we move on. Smaller acquisitions are on earn-out. You have to take your time before you can fully integrate them onto your platforms, but by and large, what we've been very good at is delivering on our financial targets, and ultimately, as we go forward, we try to lift deals with earn-out so that we can integrate them into our existing platforms going forward, so we absolutely learn. You learn every day, Charles, and you keep moving on, but we're broadly happy with where we are from an M&A perspective. Brian, MedTech?
Sorry, Charles. I just missed the couple of words after that.
From waiting list reduction efforts or extra investment by healthcare systems?
I think that's settled down. I suppose post-COVID, we would have seen that. But it certainly demands within hospitals in every market that we service. But I think a lot of some of the growth coming from organic, but also just our ability to win market share. So I think the stress on the hospital systems continue. I don't think we've seen a material investment in any of the markets we're in that'd be worth calling out as contributing to our growth.
Thanks, guys.
Nothing further in the queue. So there's a final couple of questions at the star one. We have no further questions, so I'll hand the call back to the management team for closing remarks.
Thanks for listening to us this morning, guys. Another strong sales numbers, and we look forward to meeting you in the interim stage. But the business is in good shape, and we look forward to delivering another strong sales numbers in the current year.
This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.