“Don’t judge each day by the harvest you reap but by the seeds that you plant.” - Robert Louis Stevenson
Those glued to the excitement occurring in other parts of the market will not find it in Logista’s Q3’26 release. So many of the same trends captured in Q1 and Q2 continued. For the first nine months of the company’s year, revenues increased by a mere 2.3%. Economic sales up by only 1.1%. Adjusted EBIT slightly more impressive, increasing by 3% off of 39 bps of margin expansion. By all accounts, these headline figures are outright bland.
As is so often the case, drilling in a bit deeper uncovers far more interesting movements. Transport revenues in the first nine months were down by 0.9%, reflecting both overall softness and the continued restructuring efforts. At the same time, transport economic sales increased by a commendable 1.6%. More interesting is the Q3 performance, which shows transport delays from earlier in the year captured, with revenues and economic sales increasing by 6.3% and 9.1%, respectively.
Pharma distribution has continued to impress to an even greater degree, with a meaningful acceleration through the year so far. In the first nine months, associated revenues were up by 6.1%, while economic sales rose by 12.2%. Q3, driven by expanded scope and a growing client list, was even more remarkable. Q3 pharma revenues climbed by 6.7%, and economic sales increased by a notable 20%. While still a small piece of the overall pie, the critical, entrenched nature, considerable green and white space to expand, and opportunities for bolt-ons point to a favorable window ahead.
Logista’s core business, tobacco and related product distribution, has not only held up but has once again produced incrementally stronger results. This is despite France remaining the thorn, with little expected change in structural dynamics. In Iberia, manufacturers’ price increases averaging 0.25€/pack drove profit on inventory of €24 million for the first nine months vs €34 million for the same period last year. Similarly, in Italy, excise increases prompted responses from manufacturers, leading Logista to recognize a €9m POI vs €8m last year. Although no significant actions of the kind occurred in France, the group recognized a €5m POI vs the tame €4m in the prior period.
Fortunately, France remains dwarfed by Italy, and the latter continues to grow well, partly from a more agreeable combustibles market, but even more because of the rising popularity of next-gen products, namely heat-not-burn. Once again, this relative pacing has translated directly into the financials, with TRP economic sales up by more than 6% in the first nine months, and Italy’s adj. EBIT up by 7.7%.
Another Seed
Since Logista’s reporting has remained rather straightforward this year, it is only fair we shift gears and put the spotlight on a newer piece of business that is assuredly underappreciated. Tucked into the core distribution business rests a compelling, clever use of the group’s vast network. Small in size (far smaller than pharma still), its mechanics showcase the group’s ability to continually become further entrenched in the markets it serves, and, in this case, spending very little to achieve such.