ADDvise Group AB (publ)

Advice Group Q1 2025 Report Presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to CEO Staffan Thorstensen and Acting CFO Johan Erwa. Please go ahead.

Thank you and good afternoon, everyone. Our first quarter performance met expectations across revenue, earnings and cash flow. We saw continued strong momentum in our diabetics business while the lab segment faced a challenging comparison due to large orders in Q1 last year. Our team executed well. driving efficiencies through disciplined use of internal processes. The macro environment has become increasingly uncertain, influenced by rising geopolitical and trade tensions. That said, we are navigating this landscape from a position of strength. supported by our talented team and our presence in resilient, non-discretionary end markets with strong secular growth drivers. We also expect the recent strengthening of the Swedish krona to impact our top line and earnings, primarily through translation effects. At the same time, we are taking proactive steps To protect our financial position, including structural cost initiatives, our focus remains clear. Continue our active M&A agenda, delivering for customers, supporting our teams, and creating long-term shareholder value. We have successfully managed through uncertainty before and are confident in our ability to do so again. With that said, let's take a closer look at our Q1 performance. Our net sales came in at 424 million SEK, which took us to a year-on-year growth of 3%. The healthcare segment reported a strong organic growth, mainly due to strong performance of our diabetics operations. The lab segment reported negative growth due to tough comparison with a couple of big orders in Q1 2024. EBIT A came in at 75 million sec, which take us to an 18% margin. looking at the cash flow from operation it came in at 37 million compared to 33 million last year in april we finalized the rights issue and received 457 million gross cash on hand 277 million sec excluding the rights issue And we had to perform a leverage of 2.5. Coming into commercial and operational highlights of Q1, we saw a good business momentum in both healthcare and lab during the quarter. We continue to focus on efficiency initiatives to make sure that we are maximizing our potential to create shareholder value. Managing working capital is one of our top priorities. During the quarter, we saw cash flow increase of about 10% year on year, mainly driven by working capital improvements. In terms of geography, approximately 42% 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 quarter are laboratory equipment, followed by medical consumables and medical equipment. As you can see from this pie chart, pharma is now stabilizing around 8% of our sales for the quarter. We see stable demand in the US during the quarter. Our topic of tariffs the impact at level one referring to products produced outside the u.s and imported for sale in the u.s is relatively limited representing approximately 30 40 million sec Nearly all of our US-based companies manufacture and sell their products within the US market. That said, we do see that certain components used in our US production are sourced from outside the country. It's still too early to determine the exact extent to which these parts can be replaced or at what cost. The positive aspect is that our products are essential, that we are designed to extend, improve or save people lives, which provides a certain level of resilience, regardless of trade dynamics. Our sales have been growing over the last three years. As you can see now, we are close to 1.7 billion SEC in sales. And if you look at the quarter isolated, we came in at 424 million SEC and the growth of 3%. We measure our revenues also in our own products, products that we develop and manufacture and products that we distribute. For the quarter, we came in at 55% of sales and that's, I mean, it's a stable level as we see going forward as well. Splitting our group into healthcare and lab and looking at healthcare, our sales came in at 271 million SEK in the quarter, an organic growth of 10%. The lab segment reported sales of 155 million SEK for the quarter. organic sales minus 9%. As I said before, it's mainly due to a couple of big clean rooms orders last year. Margin wise, healthcare came in at 18% EBITDA margin and lab at 22 in the quarter isolated. Both lab and healthcare came in on stable levels. Looking at net sales by geography for the healthcare segment, North America is a key market with approximately 50% of sales. And it will continue to be that for a long time. Having said that, Europe has a good development. In the lab segment, Europe is the largest market followed by US. With our updated long-term financial targets, we are taking the next step in the company's development, maintaining a clear focus on profitable growth, stable return and well-balanced debt levels, all supported by continued execution of our M&A strategy. We are placing strong emphasis on EBITDA growth and return on capital employed. Compared to our previous targets, which centered on top-line growth, supported by equity raisings, we are now prioritizing a more disciplined approach, continuing our M&A agenda financed by internally generated cash flow and debt. EBITDA growth will be driven by a combination of organic expansion and strategic acquisitions. Our ambition is to double EBITDA every fifth year. We remain committed to maintaining a maximum net debt to EBITDA ratio of three. A dividend remains part of our long-term financial framework, but distributions will be considered once all other long-term financial goals are at satisfactory levels. I'm now handing over to Johan to take you through the group's financial performance.

Thank you, Stefan, and good afternoon all. I'm pleased to be here today and take you through the numbers for the first quarter of 2025. From this year 2025 EBITDA has replaced EBITDA as advice main key profit metric. And EBITDA is defined as operating profit before amortization, impairments, expenses and revaluations related to acquisitions, as well as non-recurring items. The purpose is to give a fair picture of how the business is performing. And the EBITDA figures in this graph have been historically adjusted for a new definition. EBITDA in a quarter amounted to 75 million SEK. which corresponds to a margin of 18%. As we have pointed out in the earlier reports, 2024 faced tougher comparables from 2023. From previous quarter Q4 2024, we are now back to normalised levels of sales and profitability on a rolling 12-month basis. And on a rolling club basis, EBITDA amounted to 268 million SEK, which corresponds to a margin of 16%. Moving on to cash flow and capital efficiency. Here, when we talk about cash generation, we look at the underlying cash flow generated by our businesses with deductions from changes in working capital. as well as depreciation and investments in our asset base, including lease payments. And in the first quarter, we see a working capital improvement of 0.5 million SEK. Working capital efficiency and optimization is and will always be a key focus area for us and our group companies. Depreciation include depreciation on fixed assets, as well as right of use assets related to leases. And if you look at the net between depreciation, lease and investments, it's 0.9 million SEK, indicating higher new investments than depreciation on existing assets of just shy of 1 million SEK. Total cash generation from operations in the quarter was just below 75 million SEK and in line with EBITDA. Over to return on capital employed, which measures profitability and how efficient we use our capital. We came in at 12% in the quarter and from 2025, this metric is one of Alvise's long-term financial targets. Moving over to our financial position. Our long-term net leverage target is three times net debt over EVTA. And net leverage at the end of Q1 2025 was 2.5, including the proceeds from the rights issue that was finalized in April. And the right issue included also a warrant that could potentially add an additional 172 million SEK in the first quarter of next year, if fully exercised. The right issue was made to strengthen the balance sheet, reduce our finance costs, improve our cash flow and to build a solid foundation from where we will continue acquiring profitable and successful companies within the life science space. Available liquidity is good. Cash at the end of the quarter was 277 million SEK and this is before the right issue liquidity. Including this means a liquidity of around 730 million SEK. And this was all for me. I will now hand over to Staffan for some closing remarks.