Swedencare AB (publ) INTERIM REPORT January 1st – March 31st 2023
Double-digit organic growth and half a billion in revenue
Summary of the period
Numbers in parentheses refers to outcomes during the corresponding period of the previous year.
First quarter: January 1st - March 31st, 2023
Net revenue amounted to 523.2 MSEK (377.7 MSEK), corresponding to an increase of 39% (184%)
Organic, currency-adjusted growth amounted to 10% (7%)
Operational EBITDA amounted to 107.4 MSEK (94.7 MSEK), corresponding to an increase of 13%, and an EBITDA-margin of 20.5% (25.1%). The adjustments refer to an accounting adjustment of acquired inventory of 0.5 MSEK (4.4 MSEK) and acquisition costs of 0.1 MSEK (11.2 MSEK)
Operational EBITA amounted to 89.4 MSEK (82.1 MSEK), corresponding to an increase of 9% and an EBITA-marginof 17.1% (21.7%)
Operational EBIT amounted to 87.5 MSEK (81.7 MSEK), corresponding to an increase of 7% and an EBIT-marginof 16.7% (21.6%)
Profit after tax amounted to 17.2 MSEK (14.7 MSEK)
Earnings per share calculated on 158,731,900 shares (146,475,502 shares) 0.11 SEK (0.10 SEK)
Cash flow from operating activities amounted to 99.8 MSEK (46.0 MSEK)
As of March 31st, 2023, cash amounted to 232.2 MSEK (277.3 MSEK)
Significant events during the first quarter
Patterson Veterinary has acquired the exclusive rights to market and sell the Animal Pharmaceuticals® brand in the US.
Significant events after the first quarter
There are no significant events after the end of the first quarter to comment on.
Words from the CEO
Over half a billion in sales for the first time and organic growth returns
The first quarter's net sales of 523.2 MSEK represented an increase of 39% compared to Q1 2022 and is our strongest quarter ever, while our operational EBITDA increased by 13% to 107.4 MSEK, corresponding to a margin of 20.5%. Our cash flow from operating activities also improved this quarter witha positive change in working capital.
Our organic growth (10%) is better than the market and this is how it should be when our synergy and business development projects show results. The inventory trimming that heavily affected us in 2022 are starting to fade away. For a few group companies, Q1 is still affected, but I expect Q2 to be the last quarter where our sales are affected by previous inventory levels. Our gross margin and EBITDA were somewhat lower than where we should be due to revenue mix, large sales campaigns, some postponement of this year's price increases to Q2 and marketing activities.I expect an improvement in margins already during the current quarter.
Market development for pets has been strong in our main markets. We see a trend that consumers continue to migrate to online and we see sales increases of over 30% in this channel on our major markets. It is gratifying to see export markets picking up again and not only in Asia, but a lot is also happening in South America and more countries will open up during the year.
In March, we announced the exclusive collaboration with Patterson for our Animal Pharmaceuticals® brand. It is an integrated collaboration between the parties, which will fundamentally change the marketing of veterinary clinics in the US, and we also have ongoing discussions about more geographies where Patterson operates. The first order under the new agreement will be delivered in Q2 and both organizations are working intensively for the new launch in May. We have a clear strategy for our different veterinary brands, and you can expect other similar collaborations to take advantage of larger sales forces for some of our other brands.
Product and concept launches are the theme of the year and to name one, NaturVet's new product line "Scoopables" in the North American market is important. The line was launched at Global Pet Expo in March and during the current quarter we have started delivering to distributors. The large chains and online retailers will launch the line during the quarter. Demand has been high, and we look forward to feed back from our end customers during the year.
ProDen PlaqueOff® continues its strong development and grew by 58% during the quarter compared to the corresponding period last year. I expect good growth in the future as well as parts of the range now will be launched at the three largest pet retailers in the US, where we previously did not exist, and that the export markets have come back to life.
As I said before, we have a unique organization with fantastically driven and competent employees. I am proud and grateful to be able to lead the group and hope that all shareholders appreciate our work to create a leading global animal health group.
Håkan Lagerberg, CEO
Malmö April 28th, 2023
The complete interim report is attached to this press release and is available at www.swedencare.com
Swedencare invites shareholders and analysts to a presentation of the Q1 report where CEO Håkan Lagerberg and CFO Jenny Graflind will comment on the report. The presentation will be held today at 2:00-2:30pm CEST and can be followed via live webinar.
Please use this link to join the webinar: https://zoom.us/j/96612162260