ADDvise Group AB (publ)

thank you and once again welcome to advice group q4 2024 earnings call as usual we will take you through a business update and then financial performance and a q a session Q4 was a solid quarter. Our net sales came in at 442 million SEK, which takes us to a year on year growth of 11%. However, we continue to see challenging pharma and clinical trials comparables following 2023's stellar performance. But we saw a clear trend shift in the quarter. That took us to a negative organic growth isolated in the quarter of minus 3%, compared to last quarter, where we came in at minus 25. EBTA came in at 89 million sec, which takes us to a 20% EBTA margin. To give you some color on the underlying business, and if we strip out pharma and clinical trials, we saw an organic growth of 7% for the year 2024. EBITDA came in at 76 million SEK versus 103, a decrease of 26, mainly due to normalized level of earnouts re-evaluation. Looking at the cash flow from operation, it came in at 64 million SEK, mainly affected by growth related capex investments in production capacity in our south american business cash on hand approximately 356 million sec and on the m&a side we we cautiously monitor net leverage and have that in mind on every deal that we evaluate Coming into the commercial and operational highlights of the quarter, we saw good business momentum in both healthcare and lab during the quarter. Our acquired businesses late 23 and early 24 are performing according to plan or slightly above. We still saw some effects from the exceptional performance from the pharma and clinical trial business during Q4. But coming into Q1, we see a normalized level. In terms of geography, approximately 45% of our sales in the quarter isolated came from North America. And our second largest market is Europe, excluding Sweden, and the third One is South America. Looking at our sales by product category, the top three for the year are medical consumables, followed by laboratory equipment, and then medical equipment. As you can see in this pie chart, pharma is now stabilizing around 7% of our sales for the year. compared to last year when pharma was approximately around 20-25%. We see a stable demand in the US during the quarter. Our sales have been growing over the last three years. As you can see now, we are close to 1.7 billion second sales. And if you look at the quarter isolated, we came in at 442 million SEC, an organic drop by 3%, a significant lower level compared to previous quarter, as we see the comparables effects from pharma and clinical trials Europe fading away. We measure our revenues also in owned products, products that we develop and manufacture and products that we distribute. For last year, owned products came in at 54% of our sales, and that is a level we are satisfied with going forward. Splitting Advice Group into healthcare and lab, And looking at healthcare, our sales came in at 275 million SEK in the quarter, an organic drop of minus 1%. The lab segment reported sales of 167 million SEK for the quarter, and organic sales came in at minus 10%. Margin-wise, healthcare came in at 14% EBTA margin and Lab at 30% in the quarter, isolated. Healthcare came in on the lower side, mostly affected by the product mix. We are not satisfied at all and we are pushing hard for increasing the margins. On the other hand, Lab delivered margin on the high end due to strong performance in clinical trials US and clean routes. looking at the net sales by geography for the healthcare segment north america is the key market with approximately 60 percent of sales and we continue and be that for a long time having said that south america is a very fast growing market compared to the other markets that are slightly more mature and our operations in that region is performing according to plan During the quarter we saw some headwinds when it comes to FX, SEK versus the Brazilian Real. The lab segment is very well diversified when it comes to sales by region. The largest market is now Europe excluding Sweden. With updated long-term financial goals, we are now taking the next step in the company's development, continuing focus on profitable growth, stable returns, and well-balanced debt levels, all based on a continued delivery on our M&A strategy. Strong focus on EBITDA growth and return on capital employed. Compared to earlier targets that was focused on high top line growth coupled with equity raisings, we are now focused on a continuing our M&A agenda driven by own generated cash flow and debt. EBITDA growth will be driven by organic and M&A related growth. This implies that our target is to double our EBITDA every fifth year. Debt level remains at max three times and dividend is part of our framework, but it will be coming to play when the debt level and profitability is on a satisfying level. As announced in the beginning of February, we are strengthening our capital structure. a rights issue of 457 million SEK combined with a warrant structure that additionally can give us up to 172 million SEK next year. Of the 457 million, 326 is committed by existing shareholders, board members and management. The transaction is scheduled to close in beginning of April. In short, we will open for shareholders to take a larger share of the cash flow by lowering the financial cost. Clear target will be to replace some of the outstanding debt with bank debt over time. I'm now handing over to Johan Irved to take you through the group's financial performance.

Thank you Staffan and good afternoon all. I'm pleased to be here today and take you through the figures for the fourth quarter of 2024. EBITDA in the quarter amounted to 89 million SEK, which corresponds to a margin of 20%. This is lower than the same period last year and is primarily driven by a change in product mix. As Staffan pointed out, we have throughout the year met exceptional comparable figures from the product segments from pharmaceuticals and equipment to clinical trials, which has brought down profitability compared with last year, 2023. After this quarter, we are now back to normalised levels of sales and profitability. Full year 2024 EBITDA amounted to 379 million SEK, which equals a margin of 23%. Moving on to cash flow and capital efficiency. Here, as a reminder, when we talk about cash flow from operations, we look at the underlying cash flow generated by our businesses with deductions from changes in working capital, as well as investments in our asset base, including lease payments and acquisition related and non-recurring items. In the fourth quarter, we saw a moderate working capital build of 5 million SEK, mainly driven by increased customer receivables at the end of the year. Investments include 7 million in payments related to leases and 11 million in new fixed assets investments. If you look at the net between depreciation on existing assets and investments in new assets, it's mainly related to production capacity increase in our facilities in South America. The positive net effect of 4.8 million SEK from acquisition related and non-recurring items derive mainly from non-recurring items from the reorganization at Advice headquarters that was announced at the end of October last year. Total cash flow from operations summed up to 64 million SEK. It means a cash conversion of 72% when comparing to EBITDA. Return on capital employed, which measures profitability and how efficient we use our capital. was 12% for the full year 2024. From 2025, this metric is now one of our long-term financial targets, where we aim at pushing towards 15% return on capital employed. Moving on to the balance sheet, our financial position is currently above the long-term target of three times net debt over EBITDA. Net leverage at the end of 2024 stands at 3.8 times EBITDA. To optimize our capital structure, the company plans for a rights issue of new shares as Staffan walked us through earlier. This will strengthen the balance sheet, reduce finance costs and build a solid foundation to continue our growth journey on. And for reference, the Q4 net leverage adjusted for the 457 million SEK from the planned rights issue would have reduced net leverage at the end of 2024 from 3.8 to 2.6. And even though net leverage is higher than we would like it to be, we have a good liquidity position of 356 million SEC, including cash and short-term investments, plus an undrawn credit facility. The $60 million bond issued earlier in 2024 reduces our FX exposure to USD by matching it to the asset base. The second bond matures in May of 2026 and the USD bond has the maturity date in April 2027. That was all from me. I will now hand over to Staffan for some closing remarks.

Thank you, Johan. I will summarize and give you our takeaways from the Q4 before we open up for questions. Sales growth at 11 in total, profitability on a normalized level, cash flow affected from investment in growth, good liquidity and too high leverage. Right issue will be a positive thing when it comes to capital structure and leverage. On the M&A side, we are working on a couple of interesting deals. No stress. It must be right. High quality to a reasonable price tag. Good. With that summarized, I will open up for questions.