Sonic Healthcare has delivered solid FY 2025 results, meeting EBITDA guidance with 5% organic revenue growth and setting the stage for up to 19% EPS growth in FY 2026, driven by strategic acquisitions and operational synergies.
- FY 2025 EBITDA of A$1.7 billion meets guidance
- 5% organic revenue growth with margin expansion
- Key acquisitions, LADR in Germany and Cairo Diagnostics in the USA
- FY 2026 EPS growth guidance up to ~19%
- Sustainability initiatives and climate reporting preparations underway
Robust FY 2025 Performance
Sonic Healthcare has reported a strong finish to its fiscal year ending June 30, 2025, with EBITDA reaching A$1.7 billion on a constant currency basis, comfortably achieving its guidance. The company posted 5% organic revenue growth, supported by cost efficiency programs that expanded its normalized EBITDA margin by 40 basis points. Net profit rose 7% to A$514 million, while cash generated from operations surged 21%, reflecting improved tax timing compared to the prior year.
Regional Highlights and Operational Advances
Geographically, Sonic’s performance was mixed but encouraging. Switzerland and the UK led with strong organic growth of 4% and 14% respectively, buoyed by successful contract wins and integration of recent acquisitions. Germany posted 4% organic growth despite regulatory fee schedule changes, with the acquisition of LADR Laboratory Group marking a significant milestone, adding over A$650 million in annual revenue and promising substantial synergies.
In the USA, Sonic faced headwinds including the loss of a payor contract and cyber disruptions, resulting in a slight organic revenue decline of 1%. However, early signs of recovery emerged with a 2.5% organic growth in July 2025 and the recent acquisition of Cairo Diagnostics, a high-margin specialist lab, which is expected to enhance national service offerings.
Strategic Growth and Future Outlook
Looking ahead, Sonic Healthcare projects robust earnings growth for FY 2026, with EBITDA expected to rise by up to 13% on a constant currency basis, translating to approximately 17% growth using current exchange rates. This outlook is underpinned by organic growth, synergy capture from acquisitions, and ongoing initiatives in the US market. The company anticipates earnings per share growth of up to 19%, signaling confidence in its strategic direction.
Dividend payments remain steady, with a slight increase in the interim dividend and a final dividend franked to 35%, reflecting Sonic’s commitment to a progressive dividend policy supported by future earnings growth.
Sustainability and Capital Management
Sonic Healthcare continues to advance its sustainability agenda, preparing for mandatory climate reporting in FY 2026 across Australia and the USA. The company aims to reduce emissions and improve external sustainability ratings, aligning with broader industry trends and investor expectations.
Capital management remains disciplined, with a healthy debt cover ratio close to pre-pandemic levels and available headroom of approximately A$1.4 billion before dividend payments. Despite increased interest expenses due to acquisitions, Sonic maintains investment-grade credit metrics, positioning it well for future growth.
Bottom Line?
Sonic Healthcare’s solid FY 2025 foundation and strategic acquisitions set the stage for accelerated earnings growth and sustained market leadership in FY 2026.
Questions in the middle?
- How will regulatory changes in the US, including potential PAMA fee reductions, impact Sonic’s future earnings?
- What are the detailed synergy targets and timelines for the LADR and Cairo Diagnostics acquisitions?
- How will Sonic balance ongoing capital expenditure with its progressive dividend strategy amid rising interest costs?