Sigma Healthcare’s $9.6bn Surge: What’s Next After Merger Boost?
Sigma Healthcare reports a robust FY25 performance post-merger with Chemist Warehouse Group, delivering strong revenue growth and upgraded synergy targets. The company signals continued expansion and efficiency gains heading into FY26.
- Pro-forma revenue jumps 44% to $9.6 billion
- Normalised EBIT rises 41.4% to $834.5 million
- Chemist Warehouse network expands to 674 stores globally
- Synergy target increased to $100 million per annum by year four
- Conservative net debt to EBITDA ratio maintained at 0.85x
Strong Merger Momentum
Sigma Healthcare’s FY25 results mark a significant milestone following its February 2025 merger with Chemist Warehouse Group (CWG). The combined entity reported a pro-forma revenue of $9.6 billion, a 44% increase compared to the previous year, underscoring the immediate scale benefits of the merger. Normalised earnings before interest and tax (EBIT) surged by 41.4% to $834.5 million, reflecting both organic growth and operational efficiencies.
The merger has effectively created a more integrated healthcare business with enhanced market reach and capability. Sigma’s CEO, Vikesh Ramsunder, highlighted the company’s strengthened position, emphasizing the long-term growth runway supported by a scalable, capital-light business model.
Retail Network Expansion and Product Strategy
The Chemist Warehouse retail network grew to 674 stores globally, maintaining over 20 years of consecutive growth. Australian franchise stores posted an impressive 11.3% like-for-like sales increase, while international markets such as New Zealand, Ireland, and the UAE contributed to network expansion with 16 net new store openings in the past year.
Product mix improvements also played a vital role, with own and exclusive label products achieving over 20% sales growth. The launch of more than 260 Wagner generic medicines in late 2024 exemplifies Sigma’s commitment to margin enhancement and category diversification.
Operational Efficiencies and Financial Discipline
Sigma upgraded its synergy target to $100 million per annum by year four, up from an initial $60 million, driven largely by supply chain, logistics, and corporate efficiencies. Distribution centre volumes increased 29%, while logistics costs per unit fell by 11%, demonstrating effective cost control amid rapid growth.
Financially, Sigma secured a $1.5 billion debt facility extending to 2028, maintaining a conservative net debt to EBITDA ratio of 0.85x. Operating cash flow remained strong at $599 million, with high cash conversion rates supporting both growth initiatives and shareholder returns. The company declared a final dividend of 1.3 cents per share, signaling confidence in ongoing profitability.
Looking Ahead to FY26
Sigma’s outlook for FY26 is optimistic, with plans to continue rolling out Chemist Warehouse franchise stores domestically and internationally at a steady pace. The company expects consistent growth in own and exclusive label products and progressive extraction of synergy benefits, including consolidation of support offices and closure of select distribution centres.
Early indications for FY26 show double-digit like-for-like sales growth in the Chemist Warehouse retail network, reinforcing the strength of the company’s value proposition across markets. CFO Mark Davis expressed confidence in Sigma’s ability to execute its strategy with excellence, leveraging its integrated model and operational scale.
Bottom Line?
Sigma’s FY25 results set a strong foundation, but the real test will be sustaining growth and synergy delivery amid evolving market dynamics.
Questions in the middle?
- How quickly can Sigma fully realise the upgraded $100 million synergy target?
- What impact will international expansion have on margins and profitability?
- How will Sigma balance growth investments with maintaining conservative leverage?
