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.

Thank you, Johan. I will summarize and give you our takeaways from Q1 before we open the floor for questions. Sales grow by 3% in total. Profitability on a normalized level. Cash flow strong for the quarter, mainly working capital related. Good liquidity. Rights issue done. The performer net leverage below 3%. On the M&A side, we are working on a couple of interesting opportunities. No stress. It must be, as I've said before, right when it comes to type of company and also the price tag, of course. High quality to a reasonable price tag. With that said, let's open up for question.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Philip Eckengren from ABGSC. Please go ahead.

Hello, Philip.

Good afternoon all and hi Staffan and Johan. I would like to start by asking if you can say anything about the order intake in April. Hi Staffan, can you hear me?

Yeah, I can hear you. I can hear you.

Can you hear me?

Yeah, yeah, yeah. Order intake. Can you hear me? Yes, I can hear you.

Hello? Okay, perfect.

Can you hear me now? Okay, it was regarding a question regarding the order intake.

I can hear you. The line seems to be a bit shaky.

Okay. It's clear.

My question was regarding Yes, if you can say anything about the order intake in April.

The order intake in April. Given the nature of our businesses that we have several of our companies that are actually delivering uh immediately more or less so the order intake is less important having said that looking into my feeling for April is that it's a stable month when it comes to orders and the development. So we haven't seen any volatility for April.

Sounds great, thank you. And on margins, would you say that, so if we look at the new EBIT A in both segments, would you say that these levels on both healthcare and lab, are these normalized levels or what can we expect for the coming three quarters? Could you comment on that please?

I would say, of course, we are pushing for as high margin as possible. But looking into where we are now, I would say clearly on stable levels. But I also see that there is potential for more. But I mean, that also comes when, I mean, depending on lab volatility for bigger orders.

So I guess from quarter to quarter, it could be different.

Sure, it makes sense. And the impairment on goodwill in labs that you take and recognize in this quarter, should we kind of extrapolate any change of expectations in the segment in general, or is it in a specific area?

Could you comment anything on that, please? The impairment of goodwill in the quarter in the lab segment, is related to an earn-out write-down that we did so that the impairment of goodwill and earn-out adjustment was kind of matched, so to say. You could say that when we write down an earn-out liability means that the purchase price of an acquisition is lower and we want to match that with a matching Google amount.

Perfect. Thanks for that clarification. That was all from me.

The next question comes from Christian Lee from Pareto Securities. Please go ahead.

Good afternoon. I hope you can hear me. Yes.

Hello?

We can hear you.

Yeah, thank you for taking my questions. I have some follow up questions regarding normalized EBITDA margins. You had 22% in the lab segment, which seems to be in line. Yeah. 22% EBITDA margin in lab seems to be in line with what you had in the previous year, while the margin of 18% in the healthcare segment is much lower than what you had in Q1 in the last year. So how should we think about the margin level in healthcare? Is 18% a normalized level, or should we expect some improvements going forward?

We always fighting for improvements. However, you could see given the product mix that we deliver in the quarter, it's clearly on a normalized level. Having said that, as I said before, we are always pushing for higher margins.

Oh, okay. Another question regarding your OPEX. Since you have a clear focus on cost control and operational efficiency, how should we think about OPEX going forward? Is this what you had in Q1? Is that the level we should expect going forward?

Yeah, I guess it's on a normalized level. And I guess that goes also the same for when we resonate when it comes to the margin. Of course, we are pushing for optimizing for OPEX as well throughout the group. you should be clear that there is not much flesh just lying around in the group. It's clearly targeted to be efficient throughout the group and our teams are clearly chasing efficiency within their operations.

I take it as that the OPEX will be maintained at a similar level going forward.

So what will be the main driver of growing EBITDA by 15% per year? Is it growth on top line? And how much should we expect to be driven by organic growth then?

Nothing has changed, I mean, how we view growth. It's clearly that we should be at least growing in the same pace as the market, I would say roughly around 5%, and the remaining 10% should be driven by M&As.

Okay, one last question. Of the remaining contingent purchase consideration of 255 million, how much of it do you plan to pay this year?

Sorry, can you say that again? I would say around

Half of it.

Okay, perfect. Thank you very much. That's all for me.

The next question comes from Jonas Astrum from Private Investor. Please go ahead.

Hi, good afternoon. I have a couple of questions regarding the rights issue. Have you disclosed what the right issue cost was? And connected to that, when you do the net depth EBTA according to the bond term sheet, you actually account for cash from rights issues as gross and not as net. Could you explain this, please?

Cost for rights issue was about 7 million. So the net figure would be roughly 450. And when it comes to... Can you repeat the second question there? What was it?

I think that in your calculations on Note 8, you have $457.3 million as cash from the rights issue when you calculate the net debt in relation to the EBITDA. So that should actually be $7 million less than.

Yes, after transaction cost, it will be... Once paid, it will be about SEK 7 million less.

And to be clear... Okay, thank you for confirming that.

There's a delay here, so please continue. I'm sorry I interrupted you.

To be clear, the cost when I say 7 million, that's cash out related cost. Then I have to remind you that we also paid underwriting fees, but that was paid in new issued shares.

Correct, thank you. So next topic, could you provide some more insight in where you see the pharma business going forward? You had a very, very amazing growth initially when I guess they were building up the stock supply in the distributed chains. Are you expecting this has buttoned up now and it's going to start growing from here? Or what are your expectations on the pharma?

The pharma has, as probably everyone that's on this call can remember that we had an extraordinary performance 2023. We are back on normalized levels and the segment is performing good. And I would say volatility, at least my expectation is that volatility is on the upside.

okay thank you that was everything for me the next question comes from peter try to ski from private investor please go ahead hello hey peter here hey I have a question regarding and your cat cash position and How to prioritize? As I can see that you have the possibility to repay part of your bonds fairly shortly, look more attractive to lower down your interest rate cost. How do you look at that versus keeping ammunition for M&A going ahead?

I think we would like, or at least the plan is to attack it from both sides, meaning that make sure that we have a sustainable and efficient capital structure hand in hand with continuing target to deliver on our M&A strategy.

Okay, thank you. Now, could you then, I have to say, do you dare to say anything how much capital you could allocate to M&A coming 12 months?

No, I guess that would be, it all depends on what kind of opportunities that we have in terms of M&A, I would say. So it would be wrong for me to put the figure here.

Full understanding of that. Maybe then I go over to my second question. In November last year, you jumped out of press release saying that you are looking into divesting Yerma. Do you have, you know, is it still up for sale? I understand you have had a lot of internal focus now getting in the cash, but

Is it still for sale? The reason for that we put out that for sale was that, if you recall in the press release, is that the Lion part of that operations is actually selling towards the defense industries. and we were then having a process and we received indicative bids and i would say we were not happy with the price tags that we saw at that moment all in i would say in perspective of the demand that we see in that business and It's clear that the buyers is not willing to pay based on the results that we expect in the coming period. So I guess it's It's strategically still for sale, but I would say the gap between the seller and buyer is hard to fill at the moment.

Okay. Thank you. That's it for me.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you all. And a big excuse of the delay that we have had here during the Q&A session. And hope you all have a continuing good Friday. Thank you. 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 and 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 US and imported for sale in the US 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 the return on work on 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, Print24 faced tougher comparables from 2023. From previous quarter Q4, 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. return on capital employed. Moving over to our financial position, our long-term net leverage target is three times net debt over ETA. 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.

Thank you, Johan. I will summarize and give you our takeaways from Q1 before we open the floor for questions. Sales grow by 3% in total. Profitability on a normalized level. Cash flow strong for the quarter, mainly working capital related. Good liquidity. Rights issue done. The performer net leverage below 3%. On the M&A side, we are working on a couple of interesting opportunities. No stress. It must be, as I've said before, right when it comes to type of company and also the price tag, of course. High quality to a reasonable price tag. With that said, let's open up for question.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Philip Eckengren from ABGSC. Please go ahead.

Good afternoon all and hi Staffan and Johan. I would like to start by

asking if you can say anything about the the order intake in april uh the order intake in april um given the nature of our businesses that we have several of our companies that are actually delivering um uh immediately more or less so the order intake is less important having said that looking into my feeling for April is that it's a stable month when it comes to orders and the development. So we haven't seen any volatility for April.

Sounds great. Thank you. And on margins, Would you say that, so if we look at the new EBIT A in both segments, would you say that these levels on both healthcare and lab, are these normalized levels or what can we expect for the coming three quarters? Could you comment on that please?

I would say, of course, we are pushing for as high margin as possible. But looking into where we are now, I would say clearly on stable levels. But I also see that there is potential for more. i mean that's also comes when it i mean depending on lab volatility for for bigger orders uh so i guess from great and if the sure sure make sense and the impairment on goodwill in love that you take and recognize in this quarter uh should we kind of uh extrapolate any

Any change of expectations in the segment in general or is it in a specific area?

Could you comment anything on that, please? The impairment of goodwill in the quarter in the lab segment is related to an earn-out breakdown that we did so that the impairment of goodwill and earn-out adjustment was kind of matched, so to say. You could say that when we write down an EARNOT liability means that the purchase price of an acquisition is lower and we want to match that with a matching Google amount.

Perfect. Thanks for that clarification. That was all from me.

The next question comes from Christian Lee from Pareto Securities. Please go ahead.

Thank you for taking my questions. I have some follow-up questions regarding normalized EBITDA margins. You had 22% in the lab segment, which seems to be in line. 22% EBITDA margin in lab seems to be in line with what you had in the previous year, while the margin of 18% in the healthcare segment is much lower than what you had in Q1 in the last year. So how should we think about the margin level in healthcare? Is 18% a normalized level, or should we expect some improvement going forward?

We're always fighting for improvements. However, you could see given the product mix that we deliver in the quarter, it's clearly on a normalized level. Having said that, as I said before, we are always pushing for higher margins.

Oh, OK. Another question regarding your OPEX. Since you have a clear focus on cost control and operational efficiency, how should we think about OPEX going forward? Is this what you had in Q1? Is that the level we should expect going forward?

yeah i i guess it's uh it's on uh on a normalized level uh and i guess that goes also the same for when we uh i mean resonate when it comes to the margin of course we are uh pushing for optimizing uh for opex as well throughout the group but you should be clear that I mean, we are there is not much flesh just lying around in the group. So I mean, we are we are it's clearly target to be efficient throughout the group. And our teams are are clearly chasing efficiency from within their operations.

I take it that the OPEX will be maintained at a similar level going forward.

So what will be the main driver of growing EBITDA by 15% per year? Is it growth on top line? And how much should we expect to be driven by organic growth then?

Nothing has changed. I mean, how we view growth. It's clearly that we should be at least growing in the same pace as the market. I would say roughly around 5%. And the remaining 10 should be driven by M&A.

Okay, one last question please. Of the remaining contingent purchase consideration of $265 million, how much of it do you plan to pay this year?

I would say around half of it.

Okay, perfect. Thank you very much. That's all from me.

The next question comes from Jonas Astrum from Private Investor. Please go ahead.

Hi, good afternoon. I have a couple of questions regarding the rights issue. Have you disclosed what the right issue cost was? And connected to that, when you do the net depth EBTA according to the bond term sheet, you actually account for cash from rights issues as gross and not as net. Could you explain this, please?

cost for rights issue uh was about seven million so the net figure would be roughly 450. and when it comes to uh i i can you repeat the second question there what was it i i just thank you

In your calculations on Note 8, you have $457.3 million as cash from the rights issue when you calculate the net debt in relation to the EBITDA. So that should actually be $7 million less than.

After transaction cost, it will be about 7 million less.

To be clear, the cost when I say 7 million, that's cash out related cost. Then I have to remind you that we also paid underwriting fees, but that was paid in new issued shares.

Correct. Thank you. So next topic, could you provide some more insight in where you see the pharma business going forward? You had a very, very amazing growth initially when I guess they were building up the stock. supply in the distributed chains? Are you expecting this has buttoned up now and it's going to start growing from here? Or what are your expectations on the pharma?

The pharma has, as probably everyone that's on this call can remember that we had an extraordinary performance 2023. We are back on normalized levels and the segment is performing good. And I would say volatility, at least my expectation is that volatility is on the upside.

Okay, thank you. That was everything for me. The next question comes from Peter Trigorski from Private Investor. Please go ahead.

Hello, Peter here. I have a question regarding your cash position. How do you prioritize? As I can see, you have the possibility to repay part of your bonds fairly quickly, look more attractive to lower down your interest rate costs. How do you look at that versus keeping ammunition for M&As going ahead?

I think we would like or at least the plan is to attack it from both sides, meaning that make sure that we have a sustainable and efficient capital structure hand in hand with continuing target to deliver on our M&A strategy.

Do you dare to say anything, how much capital you could allocate to M&A coming 12 months?

No, I guess that would be, it all depends on what kind of opportunities that we have in terms of M&A, I would say. So it would be wrong for me to put a figure here.

Full understanding of that. Maybe then I go over to my second question. In November last year, you jumped out of press release saying that you are looking into divesting Germa. Do you have, you know, is it still up for sale or, like I understand you have had a lot of internal focus now getting in the cash, but

Is it still for sale? The reason for that we put out that for sale was that, if you recall in the press release, is that the Lion part of that operations is actually selling towards the defense industries. and we were then having a process and we received indicative bids and i would say we were not happy with the price tags that we saw at that moment all in i would say in perspective of the demand that we see in that business and it's clear that the buyers is not willing to pay based on the results that we expect in the coming period so i guess it's it's uh It's strategically still for sale, but I would say the gap between the seller and buyer is hard to fill at the moment.

Okay, thank you. That's it for me.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Thank you all. And a big excuse of the delay that we have had here during the Q&A session. And hope you all have a continuing good Friday. Thank you.