It has been some time since we last looked at Salus Group, and with the release of the half-year 2025 results, we now have a good opportunity to revisit the company. The results came in solid across all key lines, and in this update, we will comment on revenues, profitability, and the balance sheet, while also touching on acquisitions, regulation, and the recent capital increase aimed at improving share liquidity.
Salus Group is the leading pharmaceutical wholesaler and distributor in Slovenia, and over the years, it has built itself into a regional healthcare player across Central and Eastern Europe. Its business model covers the entire chain required for a medicinal product or medical device to reach the market. Beyond wholesale, it provides logistics, promotion, active sales, and value-added services. Customers range from pharmacies and hospitals to health centres, nursing homes, and veterinary institutions. Salus also operates Sanolabor, a network of specialised retail stores, and Carso pharm, a representation platform for international pharmaceutical companies. With subsidiaries across Croatia, Bosnia and Herzegovina, Serbia, North Macedonia, Albania, Montenegro, and Lithuania, and with partnerships extending to Poland, Czechia, Slovakia, Hungary, Bulgaria, Kosovo, and Romania, the Group secures one of the broadest healthcare distribution footprints in the region. The Group has been listed on the Ljubljana Stock Exchange for nearly three decades.
The financial results for H1 2025 confirm stability with an improvement in profitability. Operating revenues grew 4.9% YoY to EUR 336.9m. EBITDA rose 9.8% YoY to EUR 13.9m, operating profit (EBIT) increased 14.4% YoY to EUR 10.0m, and net profit surged 21.3% YoY to EUR 8.2m. Margins have improved across the board: EBITDA margin expanded from 3.9% in H1 2024 to 4.1% in H1 2025, EBIT margin rose from 2.7% to 3.0%, and net margin from 2.1% to 2.4%. These incremental gains are significant in such a tightly regulated sector.
Salus key financials (H1 2025 vs. H1 2024, EURm)
Source: Salus, InterCapital Research
On the balance sheet, assets grew 11% YoY, reflecting business expansion. Net debt jumped sharply by 496% YoY, adding up to EUR 16.5m as the company doubled its borrowing and reduced its cash position. Even so, leverage remains low with net debt to EBITDA moving from just 0.22x in June 2024 to 1.18x in June 2025, still a very conservative level. Cash reserves declined, but receivables increased strongly, a reflection of delayed payments from hospitals. Merchandise inventories also rose in line with higher activity. Importantly, debt repayments are proceeding smoothly, showing that the company is managing its liabilities despite the higher borrowing.
Meanwhile, the product mix is shifting toward more expensive medications. The value of goods sold is rising faster than the volume of units distributed, as biologics and innovative therapies take a larger share. Salus is gaining market share and expanding regionally, but in such a heavily capped industry, organic growth is limited. The focus, therefore, has to be on high-value segments and consolidation through acquisitions.
With that in mind, growth has also been supported by acquisitions and consolidation. Over the past years, Salus has strengthened its retail presence, streamlined some of its regional subsidiaries, and expanded its role in medical equipment and specialised services. One transaction that continues to attract attention is the case of Farmadent. After a failed attempt in 2023 and 2024, when shareholders rejected the deal, Salus returned with a new binding offer on April 18, 2025, to acquire all of its shares. The general meeting will once again decide on the transaction, which, if approved, would further consolidate the Slovenian wholesale market and reinforce Salus’ leading position.
Salus margins (H1 2025 vs. H1 2024, %)
Source: Salus, InterCapital Research
At the same time, the company continues to highlight regulatory headwinds. Wholesale margins on prescription medicines have been fixed for more than a decade, while operational demands for compliance, logistics, digitalisation, and quality control are steadily increasing. This structural squeeze means that costs rise while regulated markups remain flat, putting pressure on profitability. Salus has openly pointed out that this imbalance forces distributors to absorb cost increases and, in some cases, distribute certain products at negative margins simply to maintain access for patients. Combined with the chronic issue of hospital payment delays, this remains the key constraint on earnings and profitability growth.
Slovenia has also introduced its own pharmacy procurement rules, which oblige purchases from at least three wholesalers and cap the annual turnover share of a single wholesaler at 70%. The European Commission has launched infringement proceedings, arguing that these rules breach EU directives on public procurement. This uncertainty, combined with frozen margins, forces Salus to operate under permanent profitability pressure.
April also brought an important corporate milestone. On April 17, shareholders approved a share capital increase from reserves and a 1:78 share split, raising the nominal capital to EUR 8.3m and expanding the number of shares from just over 105,000 to 8.3 million. This move greatly improved liquidity and visibility of the stock on the Ljubljana Stock Exchange. In parallel, Salus signed a market-making agreement to ensure continuous trading activity and make the share more attractive for investors.
All in all, Salus continues to deliver positive results in an essential and highly regulated market, with steady growth, improving margins, and a clear strategy for further expansion. The H1 2025 results show stable growth, stronger margins, and a balance sheet that is still conservative despite higher leverage. The capital increase and share split highlight management’s intent to broaden the investor base, increase liquidity, and support the visibility of the stock. Overall, Salus stands out as a stable and reliable company, and in our view, these results provide fresh momentum for the share price