Phibro Animal Health Corporation Q4 FY2025 earnings call

Management Statement and Operational Highlights

• Strong Q4 and FY2025 performance with Animal Health leading growth, driven by MFA integration, strong demand in Nutritional Specialties and Vaccines.
• Diversified portfolio showed strength across geographies and species.
• Phibro Forward strategy is expected to drive future growth, with benefits including additional EBITDA and margin growth.
• Generated $43 million of free cash flow, $80 million of operating cash flow, and invested $38 million in capital expenditures during FY2025.

Segment Performance

• Animal Health:
  • Fourth quarter: Net sales $292.5 million, up 53% y-o-y. MFA and other grew 77%, Nutritional Specialties up 11%, Vaccines up 21%. Adjusted EBITDA $60.6 million, up 47%.
  • Full year: Net sales $962.8 million, up 36% y-o-y. MFA and other grew 54%, Nutritional Specialties up 9%, Vaccines up 13%. Adjusted EBITDA $222.3 million, up 53%.
• Mineral Nutrition:
  • Fourth quarter: Net sales $64.2 million, up 3% y-o-y.
  • Full year: Net sales $253.2 million, up 4% y-o-y.
• Performance Products:
  • Fourth quarter: Net sales $22.1 million, up 13% y-o-y.
  • Full year: Net sales $80.2 million, up 19% y-o-y.

Guidance

• Fiscal Year 2026:
  • Net sales projected between $1.425 billion and $1.475 billion (10%-14% growth).
  • Adjusted EBITDA projected between $225 million and $235 million (22%-28% growth).
  • Adjusted net income projected between $103 million and $110 million (21%-29% growth).
  • Guidance includes full 12 months of Zoetis Medicated Feed Additive portfolio and benefits from Phibro Forward strategy.

Risks

• Factors causing actual results to differ from projections, as outlined in forward-looking statements.
• Tariff impacts not fully embedded in guidance, with significant changes in pharmaceutical tariffs not accounted for.

Question and Answer

Q: What does guidance now assume in terms of the underlying organic growth? And can you speak to some of those key headwinds and tailwinds embedded in your guidance assumptions for 2026?

A: Daniel M. Bendheim noted underlying organic growth drivers include full 12 months of Zoetis, flat to low single-digit growth for MFA, and continued strong growth in Vaccines and Nutritional Specialties, though vaccine growth expected to stabilize slightly.

Q: On Phibro Forward, can you quantify anything for us in terms of your expectations there and what's ultimately kind of dropping through in terms of cost saves and what some of the key low-hanging fruit areas are for you there? And then also kind of on the cost side, some of the strategic investments that you're making.

A: Jack Bendheim said Phibro Forward contributed to FY2025 earnings growth and is expected to continue, with guidance implying $40M-$50M incremental EBITDA growth, part from Zoetis portfolio annualization and part from Phibro Forward. Donny Bendheim discussed Phibro Forward involving customer-related focus, global procurement organization setup, and R&D focus across business.

Q: Where are we in terms of the integration process for the Zoetis Medicated Feed Additive business? And is there anything kind of that you guys are still working through anything kind of left for you to do? And on tariffs.

A: Daniel M. Bendheim said Zoetis integration is going well, major system implementations complete, with transition to full independence expected by calendar Q4 2025. Larry Miller discussed geographic and market segment expansion opportunities. On tariffs, guidance includes current tariffs, with significant changes not fully embedded.

Q: On the Legacy MFA business and tariffs.

A: Jack Bendheim said Legacy MFA market expected to grow flat to low single digits, and no significant pull forward of sales ahead of tariffs in the quarter.