Improved profitability with continued growth
Summary of the period
Numbers in parentheses refer to outcomes during the corresponding period of the previous year.
First quarter: January 1st - March 31st 2024
Net revenue amounted to 597.4 MSEK (523.2 MSEK), corresponding to an increase of 14% (39%)
Organic, currency-adjusted growth amounted to 12% (10%)
Operational EBITDA amounted to 138.8 MSEK (105.7 MSEK), corresponding to an increase of 31%, and an EBITDA-margin of 23.2% (20.2%). The operational adjustments amount to 8.3 MSEK and include M&A costs, a post-revision adjustment from 2022, and non-cash flow-impacted revaluation of acquisition stock to fair value
Operational EBITA amounted to 119.2 MSEK (87.7 MSEK), corresponding to an increase of 36% and an EBITA-margin of 20.0% (16.8%)
Operational EBIT amounted to 118.8 MSEK (87.5 MSEK), corresponding to an increase of 36% and an EBIT-margin of 19.9% (16.7%)
Exchange gains amounted to 4.5 MSEK (-1.9 MSEK)
Profit after tax amounted to 30.1 MSEK (17.2 MSEK)
Earnings per share calculated on 158,731,900 shares (158,731,900 shares) amounted to 0.19 SEK (0.11 SEK)
Cash flow from operating activities amounted to 70.6 MSEK (99.8 MSEK)
25.0 MSEK has been amortized on the debts to credit institutions
As of March 31st, 2024, cash amounted to 224.3 MSEK (232.2 MSEK)
Significant event during the first quarter
Pet MD Brands, Inc., one of Swedencare AB:s North American subsidiaries has acquired the American company which includes the brand Riley's® Organics. Riley's sells and markets organic premium treats for dogs. The acquisition was completed in two steps; 30% of the company was acquired on October 2nd, 2023, and the remaining 70% on January 2nd, 2024.
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
Intensive quarter kicks off the year
The first quarter's net sales of 597 MSEK represented a 14% increase compared to Q1 2023, while our operational EBITDA amounted to 139 MSEK, corresponding to a margin of 23.2%. This represents an increase of 31% compared to Q1 2023 and a record EBITDA for us. In addition, the margin is the highest since 2022. It's gratifying to see how our margin has already improved, despite not all price increases having taken full effect yet and our active participation in trade shows and product launch efforts. During the quarter, we also acquired the remaining 70% of Riley's from our own cash flow and continued to reduce our net debt.
Our organic growth, 12%, is double-digit but slightly lower than what I expect for the full year but can be easily explained. The organic growth was influenced by several factors: our transition to self-controlled Amazon sales in the UK, which was fully implemented at the beginning of April, several product launches during the spring where we produced internally for future external sales, and some large orders were delivered in early April instead of March due to component shortages. Despite double-digit growth in the Production segment, it has been negatively affected by the relocation and expansion of our Soft Chew production in Europe. We expect to have increased capacity by early May and that it will gradually increase throughout the year. Several of our group companies have had a very strong start to the year, and particularly noteworthy are Innovet, Pet MD, Garmon/NaturVet, and Vetio UK.
Business development in focus
I have participated in numerous meetings within the group during the quarter and can conclude that our choice of a soft integration strategy is beginning to show results. Over the past year, the organization has taken many steps toward leveraging the entire group's expertise and opportunities. Several major product expansions between group companies have been implemented, where we see strong market interest with immediate sales successes. We have also worked on structuring our various brands more clearly within different market segments and regions. It is especially important to have a clear plan now as we are launching NaturVet® in Europe and several other brands around the world during the year.
Organization
We continue to change and partly expand our organization with expertise, and we find it easy to attract highly qualified employees. Our investment in an Ecom-team in Malmö has been successful, and I look forward to reporting on the progress later this year. Major changes are also happening in our largest group company, Garmon/NaturVet, where we have been working intensively on a new strategy to capitalize on all the opportunities we have with the NaturVet® brand. CEO Geoff Granger summarizes the strategy and business opportunities associated with it on the next page and will also participate in our webinar presentation at 10:30 today.
Market, new acquisitions, and outlook for 2024
The pet industry (5%-7%) continues to grow in all major markets, and in our segments no major impact has been seen despite global conditions and personal financial strains. Swedencare stands strong and grows faster than the market, which I expect us to continue with. We started the year with an interesting addition in the form of Riley's, a product brand in organic treats, one of the fastest growing categories in the pet sector. Sales are strong, and we have also managed to present the line at GlobalPet, the largest pet trade show in the USA.
The climate for M&A has improved, and we have ongoing discussions with interesting companies that want to become part of our group. We also receive more approaches for projects where we do not have a previous relationship, which is both a sign that activity has picked up again in the industry and that our reputation as an attractive acquirer continues to spread.
Finally, I want to thank the entire organization for a good start to the year, and now we look forward to participating for the first time with a joint booth for several of our brands at InterZoo, the world's largest trade show held every other year!
Håkan Lagerberg
Malmö April 25th, 2024
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. Geoff Granger NaturVet's CEO, will also participate on the webinar to summarizes the strategy and business opportunities associated with attached to NaturVet/Garmon. The presentation will be held at 10:30-11:00am CEST and can be followed via live webinar.
Please use this link to join the webinar: https://us06web.zoom.us/j/84500296502
For more information, please contact:
Håkan Lagerberg, CEO Swedencare
Phone: +46 (0)73 517 01 70
Email: hakan.lagerberg@swedencare.se
Jenny Graflind, CFO Swedencare
Phone: +46 (0)73 944 85 54
Email: jenny.graflind@swedencare.se
FNCA is the Certified Adviser of the Company
Please visit the Company homepage www.swedencare.com
About Swedencare
Swedencare, a listed company on NASDAQ First North Growth Market, develops, produces and sells premium products in the global and fast-growing market for healthcare products for cats, dogs and horses. The company has an extensive product portfolio with strong brands such as NaturVet®, Innovet, Pet MD®, Rx Vitamins®, nutravet®, and ProDen PlaqueOff®, the original for good oral health. Swedencare's headquarter is in Malmö, Sweden and the company's products are currently sold in approximately sixty-five countries to veterinarians, pet stores, and online through a distribution network, including subsidiaries in nine countries and an international network of retailers. Swedencare's sales have increased significantly over several years with maintained high profitability.
This information is information that Swedencare is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2024-04-25 07:30 CEST.
