PHIBRO ANIMAL HEALTH CORP Q3 FY2025 earnings call

• Solid quarter with total sales up 32% y-o-y, adjusted EBITDA up 85%, and adjusted diluted EPS more than doubled.
• Integration of Zoetis MFA portfolio supported performance. Phibro Forward initiative focused on unlocking revenue growth and cost savings.
• Mitigation actions for tariffs include building inventory, switching suppliers, renegotiating with suppliers, and implementing price increases.

The Animal Health segment had net sales of $258.4 million for the quarter, a 42% increase. Legacy MFA and other net sales declined 3%, while the new MFA business contributed $77 million, driving total MFA and other growth to 68%. Vaccine net sales grew 1% due to timing of orders. Nutritional Specialties had 8% revenue growth. Mineral Nutrition had 4% net sales growth. Performance Products had 28% net sales growth.

• Revised full-year 2025 guidance: net sales $1.26 billion to $1.29 billion, adjusted EBITDA $177 million to $183 million, adjusted EPS $1.96 to $2.09.
• Anticipate limited tariff impact on 2025 results and manageable impact on 2026, with growth from legacy business, Phibro Forward initiatives, and full-year contribution from Zoetis MFA portfolio.

• Tariffs on certain inputs, with some exposure from manufacturing and potential impact on costs. Timing of customer orders affecting sales in some segments.

Q: Elaborate on tariffs exposure, manufacturing impact, and mitigation via price. Also, discuss medicated feed additive business performance.

A: Majority manufacturing is in US, Brazil, Israel; mitigated tariffs via inventory building, supplier switching, renegotiation, and price increases. Slower MFA growth in Q3 due to timing of orders to large customers, but year-to-date growth 7%.

Q: Lobbying for animal health exception from pharma tariffs and FX impact.

A: Involved in lobbying for exceptions; initial reactions positive. Limited FX impact in quarter as transactions are in US dollars, with limited cost favorability year-over-year.