The second quarter saw continued robust revenue growth and improved profit. Organic growth remains burdened by challenging comparables from 2023 driven by very strong sales in pharmaceuticals and rental of equipment for clinical trials, but with organic order intake well back in positive territory with several large new orders, we are optimistic about the second half of the year.
April - June 2024
Net revenue for the period was SEK 412.3 million (344.4), an increase of 19.7%
On an organic basis, net revenue declined by 20.6%
Orders received for the period was SEK 534.0 million (319.3), an increase of 67.2%
On an organic basis, orders received increased by 13.1%
EBITDA for the period was SEK 102.3 million (121.6)
Profit/loss for the period was SEK 29.8 million (3.2)
Basic earnings per share for the period amounted to SEK 0.15 (0.02)
Cash flow from Operations for the period was SEK 31.0 million (102.2)
January - June 2024
Net revenue for the period was SEK 825.6 million (654.9), an increase of 26.1%
On an organic basis, net revenue declined by 15.4%
Orders received for the period was SEK 940.0 million (659.6), an increase of 42.5%
On an organic basis, orders received declined by 4.0%
EBITDA for the period was SEK 201.4 million (205.8)
Profit/loss for the period was SEK 72.8 million (38.8)
Basic earnings per share for the period amounted to SEK 0.37 (0.21)
Cash flow from Operations for the period was SEK 86.3 million (225.5)
CEO's comment
A stable quarter with strong order intake
The second quarter saw a continuation of many of the trends seen in the first quarter. Revenue grew by 20% to SEK 412 million (344). Despite positive momentum in several product areas, net revenue declined on an organic basis by 21%, driven by challenging comparables within both pharmaceuticals and clinical trials. Excluding these product categories, organic growth was 13% in the quarter. We expect a return to organic growth for the Group in the fourth quarter of 2024.
Order intake grew by 67%, of which 13% organically, driven by robust market activity in the Nordics and continued strong demand for our cleanrooms offering - positive trends we anticipate will persist. In the US, demand for capital goods remains soft, with customers continuing to defer major purchases, but towards the end of the quarter we began to see some signs of sentiment improving.
The Group continues to deliver robust profitability on an EBITDA level, albeit below last year's exceptional levels. The EBITDA margin was 25% (35%). A normalisation of depreciation combined with our efforts to optimise finance cost and tax drive an improved conversion from operating earnings to the bottom line. Profit for the comparable quarter was also affected by non-recurring costs from the refinansing of the Group's SEK bond. Profit was SEK 30 million (3) and earnings per share improved to SEK 0.15 (0.02). The return on capital employed was 15%.
Cash flow was not satisfactory in the quarter, and was burdened by an increase in working capital and tax payments. We have allowed some of our faster-growing businesses to make necessary investments into both equipment and working capital so as not to hamstring their momentum. This affected Cash flow from Operations, which amounted to SEK 31 million (102), corresponding to a cash conversion of 30% (84%). We will intensify our efforts to optimise the balance sheet in order to improve cash flow in the Group.
Our liquidity position remains strong. Cash and cash equivalents exceeded SEK 400 million at the end of the quarter, meaning we have the ability - and the ambition - to pursue acquisitions during the second half of the year. However, in doing so we will be selective and pay close attention to our leverage ratio, which at the end of the quarter was at the upper end of our long-term target range.
As part of the continued development of ADDvise, the company will apply for listing on Nasdaq Stockholm main market. The preparations for changing listing venue is in full swing, with the aim of completing the process in the first quarter of 2025. The changing of listing venue is a quality assurance and will provide a broader capital allocation toolkit.
In my 55th and final report, I will afford myself a minute of retrospection. When I took over as CEO in late 2010, ADDvise was a small supplier of laboratory equipment operating exclusively in Sweden. The company had a net revenue of SEK 20 million without making a profit. Today, we are an international, highly diversified group of life science companies with strong market positions, SEK 1.5 billion in net revenue and an EBITDA exceeding SEK 400 million. This would not have been possible without our employees, board members, shareholders and other stakeholders who have believed in ADDvise over the years. I want to thank you all. My continuing commitment to ADDvise will persist, as a board member and shareholder, and I now hand over the reins to a company which is in a better position than ever to fulfil its mission to help extend, improve, and save people's lives.
Rikard Akhtarzand, CEO
For further information, please contact:
Rikard Akhtarzand, CEO
+46(0)76-525 90 71
rikard.akhtarzand@addvisegroup.se
Important information:
This information is information that ADDvise Group AB is required to disclose under the EU Market Abuse Regulation. The information was submitted for publication on July 18, 2024 at 07:45 CEST.
ADDvise's financial reports are available on ADDvise's website, https://www.addvisegroup.com/investor-relations/financial-and-annual-reports/
The interim report is published in Swedish and English. The Swedish version represents the original.
About ADDvise
ADDvise is an international life science group. Operating a decentralised ownership model, we develop and acquire high quality companies within the business areas Lab and Healthcare. The Group comprises more than 20 companies and generates annual revenues of close to SEK 2 billion. ADDvise is listed on Nasdaq First North Premier Growth Market. Mangold Fondkommission AB, +46 8 503 015 50, CA@mangold.se, is the Company's Certified Adviser. Additional information is available at www.addvisegroup.com.
