Hello, everyone. This is Ahmed Moataz from EFG Hermes, and welcome to IDH's 2025 results conference call. I'm pleased to be joined with Dr. Hend El Sherbini, Chief Executive Officer, Sherif El Zeiny, VP and Group CFO, and Tarek Yehia, Director of Investor Relations. As usual, the company will start with a brief presentation, and then we'll open the floor for Q&A. IDH's management, please go ahead.
Good afternoon, ladies and gentlemen, and thank you for joining us for the full year results. My name is Tarek Yehia, I'm Head of Investor Relations. Joining me today, Dr. Hend El Sherbini, our CEO, and Mr. Sherif El Zeiny, our CFO. Dr. Hend will begin the call with a summary of the main highlights from the year. After that, I will discuss in more details the main macro and geopolitical trends seen across our markets. After my presentation, Mr. Sherif will offer a deep analysis of our financial performance. We will then open for Q&A. With that, I will hand it over to Dr. Hend for her introduction. Please, Dr. Hend.
Thank you, Tarek, and good afternoon, everyone. I'm Dr. Hend El Sherbini, CEO of IDH. I'm pleased to report that 2025 was another very strong year for the group, with robust operational and financial performance across our core markets and continued progress on our strategic priorities. The results we are presenting today reflect not only improving market conditions in key geographies, but also the tangible impact of the strategic initiatives we have been implementing over the past two years, particularly around network expansion, service diversification, digitalization, and operational optimization. Throughout the year, we continued to strengthen our leadership in Egypt and Jordan while making very encouraging progress in Nigeria and Saudi Arabia. We are also very pleased with the sustained improvements in profitability across the income statement, which continue to validate the scalability of our model and our ability to translate growth into stronger returns.
More broadly, we are encouraged by the increased resilience of our platform, which today combines scale, a richer service mix, and improving efficiency across markets. Turning to our performance in more detail, during 2025, we continued to build on the strong momentum established over the prior year, delivering 37% revenue growth year on year, supported by growth across both volume and value metrics. Test volumes increased by 11% during the year, with all operating geographies contributing to this expansion, supported by stronger patient engagement, deeper penetration in both walk-in and corporate channels, and improving referral flows. At the same time, our average revenue per test rose 24%, reflecting a richer test mix, broader uptake of radiology and specialized diagnostics, and of the pricing actions introduced earlier in the year.
These trends also helped us further strengthen our average test per patient metric, which reached 4.6 tests per encounter, demonstrating the continued depth of patient relationship and our success in expanding cross-service utilization across our platform. In Egypt, momentum remained very strong throughout the year, supported by solid growth in both volume and value, alongside strong brand equity and a more supportive macroeconomic backdrop. Test volumes in Egypt continued to expand steadily, while average revenue per test saw a strong uplift driven by favorable mix dynamics, including higher-value radiology, radiotherapy, specialized diagnostics, and corporate channels. Egypt remained the core engine of the group performance, contributing 84.6% of total revenue in 2025 and continuing to demonstrate strong scalability, resilience, and operating efficiency. The continued expansion of our physical network in Egypt remained a key growth driver during the year.
Over the past 12 months, we added 137 new branches in Egypt, bringing the total to 724 locations nationally at year-end. These new sites have helped deepen our presence, not only in Greater Cairo, but also in underserved and fast-growing regional cities, allowing us to better serve both contract and walk-in patients. Our house call service remains a strategic differentiator, sustaining its strong contribution of around 20% of Egypt's revenues, continues to demonstrate the effectiveness of our post-pandemic strategy, and reinforces our position as an early mover in home-based diagnostics in the region. Al Borg Scan continued to demonstrate strong momentum as a key component of our long-term strategy to build a more integrated diagnostics platform. During 2025, we took an important strategic step with the acquisition and integration of CAIRO RAY for Radiotherapy, which broadened our capabilities in radiotherapy and strengthened our position in oncology diagnostics.
This transaction enhances our ability to participate more meaningfully in higher-value specialized diagnostics and supports our ambition to build a more comprehensive offering for patients and referring physicians. We expect radiology and radiotherapy to play an increasingly prominent role in our growth mix over the coming period, supported by expanding service capability, greater patient awareness, and growing demand for specialized imaging and treatment support service. Over the past two years, a key strategic priority for IDH has been the successful launch and upscale of our Saudi operation.
I'm pleased to share that our presence in the kingdom continued to progress very encouragingly during 2025, with strong momentum supported by growing demand, deeper market visibility, and sustained improvement in both volume and value metrics. During the year, Biolab KSA generated SAR 5 million in revenue, representing 252% year-on-year growth as test volumes and patient throughput increased sharply, and the business benefited from the expansion of the network to three branches. This growth continues to highlight the effectiveness of our ramp-up strategy in the market, which is designed to accelerate revenue growth and establish Biolab KSA as a recognized provider in the large but highly fragmented Saudi diagnostics market. At the same time, we continue to advance our growth approach, which includes targeted marketing campaigns to build brand recognition, selective promotional initiatives to drive patient acquisition, and ongoing efforts to strengthen physician and patient engagement.
While still in the early stages of development, Biolab KSA is demonstrating strong operational traction and reaffirming our belief in the long-term potential of Saudi Arabia as a key pillar in the group's regional growth strategy. As always, profitability remained a core focus for us, and we are very pleased to see sustained improvement across all levels of the income statement. We continue to benefit from strong operating leverage, tighter cost controls, and better resource allocation across our subsidiaries, including Nigeria, where Echo-Lab delivered a full year of positive EBITDA, marking a key milestone in its turnaround and confirming the potential of this high-growth market. Overall, both COGS and SG&A as a share of revenue continued to decline, supported by disciplined cost management and our growing digitalization efforts. COGS to revenue fell to 57.3%, while SG&A declined to 15% from 16.9% last year, underscoring the success of our optimization initiatives.
Consequently, our EBITDA margin expanded to 34.9% from 29.7% last year, while gross profit margin rose to 42.7%, compared with 38.1% in 2024. These efforts, combined with strong top-line growth and improved pricing and mix, have translated into meaningful margin expansion and greater earnings quality, with adjusted net profit increasing 79% year-over-year. I'm also very pleased to share that the board of directors has declared a dividend of $0.0085 per share for the year ended December 2025, presenting a total distribution of $4.9 million. This reflects our commitment to delivering sustainable shareholder value while preserving the flexibility to fund attractive growth opportunities. In parallel, we remain prudent in our capital allocation approach and will continue to reassess distribution in line with evolving market conditions and investment needs.
Before handing the call back to Tarek, I would like to briefly touch on how we view the business as we move into 2026. We enter the year with a stronger platform, broader geographic footprint, and improved profitability profile, which we believe positions us well to continue expanding access to high-price diagnostics while driving sustainable growth. Our focus remains on deepening our leadership in Egypt, accelerating the ramp-up in Saudi Arabia, building on the turnaround achieved in Nigeria, and continuing to improve operating efficiency across the group. At the same time, we remain mindful of evolving regional developments, including the escalation of the U.S.-Israel conflict with Iran in early 2026, which may introduce heightened uncertainty across the region, particularly in markets such as Jordan and Saudi Arabia.
With that, I'll hand the call back over to Tarek and Sherif, who will take you through key trends across our markets and a more detailed breakdown of our financial performance of the year. Thank you very much.
Thank you, Dr. Hend. So far this year, we have continued to operate in a relatively stable condition with supportive macro trends and constructive territory across all our key markets. In Egypt, we saw inflation continue to ease materially compared to prior periods, helping support a more constructive operating environment for both business and consumers. Improved forex liquidity and a stronger investment confidence contributed to a more stable backdrop for the Egyptian pound during much of the year, which in turn supported planning visibility and reduced pressure on imported inputs. More recently, however, management has been closely monitoring evolving regional developments, including escalation of U.S. conflict with Iran in early 2026. Similar to Egypt, Nigeria also saw gradual improvement during 2025, with reforms and relative currency stabilization helping support a recovery in patient activity and more predictive operating conditions.
Over in Jordan and Saudi, the healthcare demand backdrop remained broadly supportive through 2025. Both markets continued to be exposed to wider regional geopolitical developments. Jordan continued to benefit from a stable healthcare system, supporting consistent demand for diagnostic, while Saudi continued to benefit from structural reforms momentum under Vision 2030. Recent geopolitical developments in the region have increased uncertainty and continue to monitor the potential implications for economic activity and patient volumes. Turning quickly to our latest full-year results, Egypt continued to deliver strong growth with revenue rising 41% year-over-year, supported by both volume expansion and significant increase in average revenue per test, particularly driven by radiology, radiotherapy, and higher value diagnostic. Meanwhile, Jordan continued its solid performance, reporting revenue growth in both EGP and local currency terms. Test volumes increased by 21% year-over-year, supported by Biolab ongoing promotional, digital outreach, and loyalty initiatives.
In a market where volume-led growth remains critical for long-term sustainability, we are pleased to see Biolab's strategy continue to support strong demand and patient retention. In Nigeria, Echo-Lab achieved a full year of positive EBITDA, supported by successful implementation of turnaround strategy and improving operational conditions. We are increasingly confident in the long-term potential of our Nigeria subsidiary to expand its service offering and capture significant upside offered by this growing market. In Saudi, the ramp-up continues very encouraging, with revenues increasing, supported by stronger brand visibility, network expansion, and patient growth. With the third branch now operating and the group aiming to launch three additional branches over the coming months, we expect further growth in revenue and scale in the kingdom. Finally, in Sudan, operations remain significantly constrained by the ongoing conflict, with only one branch partially operating and no material change to the report at this stage.
I will now hand the call over to Mr. Sherif, who will provide a more detailed overview of our cost, profitability and balance sheet position for the year.
Good afternoon, ladies and gentlemen, and thank you for your time today. As Tarek mentioned during my presentation, I will focus on costs, margins, profitability, and our working capital and liquidity position before we open the floor to your questions. In line with the priorities we set out at the start of the year, profitability for fiscal year 2025 improved materially, supported by our groupwide efforts to enhance operational efficiency and maintain tight control over spending. A major focus area over the past two years has been digitalization, where we have continued integrating data tools and analytics into our internal platform, procurement systems, and financial planning process to improve decision making and cost discipline. These efforts, combined with stronger operating leverage and better resource allocation, helped drive meaningful improvements in efficiency with both COGS and SG&A as a share of revenue declining versus last year.
More specifically, our COGS to revenue ratio improved to 57.3% in 2025, down from 61.9% in 2024, supported by disciplined inventory management and stronger purchasing processes. The most notable improvements came within raw materials, which decreased to 19.3% of revenue from 22% last year, reflecting our scale advantages and smarter procurement practices. At the same time, total wages and salaries as a share of revenue remained well controlled, underscoring our balance between supporting our staff with appropriate salary adjustments and continuing to optimize headcount and productivity. As you can see in bottom right chart, these efficiency gains translated directly into stronger profitability with gross profit margin expanding to 42.7% from 38.1% last year, and adjusted EBITDA margin rising to 34% from 29.7% in 2024. On the SG&A front, spending remained well contained, with SG&A as a share of revenue declining to 15% despite continued investment in strategic growth initiatives.
The main increases within SG&A were in wages and salaries, as well as advertising and marketing expenses, reflecting annual salary adjustments, selective additions to support growth, and continued marketing investments in Saudi Arabia alongside targeted campaigns in Egypt and Jordan. Even with these investments, the group continued to capture operating leverage, highlighting the scalability of the business and the impact of tighter cost discipline across functions. Moving to our bottom line, we reported net profit of EGP 1.3 billion in 2025, up 29% year-over-year. As highlighted earlier, fiscal year 2024 included elevated Forex gain, which creates a high comparative base and distorts direct comparisons. When controlling for Forex effects in fiscal year 2024 and non-recurring items in fiscal year 2025, adjusted net profit increased 79% year-over-year to EGP 1.26 billion, with an associated margin of 16.1%.
As always, we maintain a disciplined approach to working capital management while supporting growth and preserving strong liquidity. Similarly, we saw our cash conversion cycle improve further to reach 104 days in December 2025, versus 155 days at the end of 2024. It is also important to mention that, as expected, we saw a decline in days inventory outstanding, stronger sales momentum, and more efficient inventory turnover during the second and third quarter of the year, following the seasonal Ramadan slowdown in March. Finally, as of December 31, 2025, our total cash reserves stood at EGP 2.1 billion, compared with EGP 1.7 billion in 2024, with a net cash balance of EGP 472 million versus EGP 226 million last year. This strong liquidity position supported the board's decision to declare dividends of $4.9 million while preserving flexibility to fund attractive growth opportunities. Thank you for your attention.
We now welcome any questions you may have. Thank you.
Thank you very much. To all participants on the call, if you wish to ask questions, please either send them through the chat or you can use the raise hand function. We've actually received a couple of questions in the chat. I'll take them one by one so that you're not confused. Within the volume growth that you've seen in Egypt, would you say that it has been driven by both existing and recently opened branches, or it's entirely driven by recently opened ones and the like-for-like within the mature ones are either flat to decline?
Actually, it is both the new branches that we opened during the year and all the existing ones, both were contributing to the sales.
Understood. Thank you. The second question is on your plan for Saudi in terms of branch openings. Do you have a set in place number of branches you intend to open in 2026 and beyond? That's one. The second, would you be able also to provide us on when you expect EBITDA break even for the operations in Saudi and maybe also revenue contribution, not just right now, but maybe a longer-term revenue contribution?
Saudi during 2025, we have existing three branches, and we are planning for next year six branches. In 2026, another six branches to reach by end of 2026, nine branches across all Saudi as much as we can, and EBITDA is turning positive by 2028.
All right. The following question is on Sudan update, but you've already mentioned that till now there is no update. You only have one branch opened. Another question is on guidance for 2026. If you can provide on that and also if you can also disclose the magnitude of price increases that you've already done in January of 2026.
For 2026, we are expecting an increase of 25% on sales, a 10% increase in prices, and 15% from volume, thus keeping EBITDA same range of EBITDA of around 33%-34%.
Understood. The last part is with the recent weakness in the Egyptian pounds and also the geopolitical issues that are somewhat reflecting in higher either freight costs or importation costs, maybe also raw material costs. How do you see this impacting the business? How much coverage of inventory do you already have that is secured into the business that would act as a safe haven before you start to see that impact on your P&L?
Business till now is not affected in Egypt. We are securing inventory in order to keep the operation up and running. We secured the inventory till August.
Understood. Jaina has three questions. You've answered the first one. I'll just say it out loud so that it's covered by everyone. Please provide revenue, EBITDA, and net income guidance for 2026. You've already answered this, but maybe if you have guidance for net income. You've mentioned revenue and EBITDA. The second is. You've answered most of the second question. The only thing is that hasn't been answered, what's the percentage of total test kits that are imported? And another follow-up is how many months of test kit stocks do you have? I'm not sure if when you answered and said till August, this covers the test kits or your entire raw materials.
We import all our kits, so nothing is produced in Egypt. Almost nothing. Yeah, we have a coverage till August.
All right. For the entire business, what is the annual target for number of branch openings going forward?
Around 200 across Egypt, Saudi, and Jordan.
This is for 2026 or this is an annual target in general?
This is for 2026, but it includes clinics and hospitals, so they're not just the regular branches.
Okay, understood. Andria is asking, or actually, first, congrats on the results. Can you please provide any details and guidance on the share of radiology revenue as percentage of total, as it has stayed flat at 4.7% despite the CAIRO RAY acquisition?
It's still 5% of revenue.
You mean the target, in general, is 5%, right?
The actual is 5%, and it will be increased over years once the business is picking up more and more.
Okay. Danesh is asking, with almost $40 million of cash on your books, are you looking to do a buyback?
We actually have an approval for a buyback. However, we haven't decided to do that. It is an idea that we're discussing.
Understood. Someone is asking a follow-up on a prior question, which is, do you have any revenue targets for Saudi Arabia in 2026?
Yeah, the target is SAR 18 million.
Right. Zuhair is asking, your branch openings target in 2026 for Saudi was six. Why has this now been pushed out?
No, it is the same six. We have three existing in 2025, and we're increasing by another six in 2026. Total will be by end of 2026 is nine.
All right. Another follow-up from Zuhair is, why decide such a low dividend payout when the CapEx in Egypt ahead is low, given the clinic and hospital model that you have?
As we are balancing between investing and distributing dividends, we declared this dividend, and we are seeking more investments in order to grow. We will revisit if needed, but still we keep it as it is now.
Understood. Anup is asking, house call service percentage of revenue has been stable at around 20%. Is this the level of saturation for the service, or is there further potential to increase house call service contribution to total revenues?
We're continuously expanding house call service, expanding the team and the service and the value creation for our patients. Right now, it's 20% of revenue. However, the revenue itself is increasing. The revenue coming from house call is also increasing. I think we still have a big room for growth in house call.
Understood. Zuhair is asking if you can provide CapEx forecast or budget for 2026, and if you can break that down by geography, so Egypt, Jordan, and Saudi.
CapEx is around 5.9% of total sales, versus last year of 4.8%. The main CapEx will be for Egypt. Some will go for the new branches, some goes for IT, warehouse, then followed by Saudi, then followed by KSA.
Understood. A final reminder, please, to everyone, because we haven't received any further questions. If you have any final questions, please either send them or use the Raise Hand function. All right. The final question we've received for the time being is, how much of your Egypt expansion do you expect will come from hospitals and clinics?
It's around 9% coming from this new business we are going in house and clinics. Hospital and clinics.
All right. We haven't received any further questions, so I'll pass it back to you in the case you have any concluding remarks. Otherwise, I can conclude the call now.
Thank you.
Thank you very much, everyone.
Right. Thank you very much to IDH management and to everyone who participated today. Have a good rest of the day, everyone.
Thank you very much. Bye-bye.