ADDvise Group AB (publ)

compared to the same quarter last year. In terms of geography, approximately 42% of our sales in the quarter came from Europe, and second largest market is North America, and the third is South America. Looking at our sales by product category, the top three for the year are laboratory equipment, 41%, followed by medical consumables of 33% and medical equipment of 21%. High activity in laboratory equipment and also in clinical trials US. On the topic of tariffs, the direct impact at level one, referring to products manufactured outside US and imported for sales into US is relatively limited. We have stated before, and it's the same at this stage, it's 30 to 40 million SEK. Most of our US-based companies both manufacture and sell their products domestically within the US market. That said, we do rely on certain components sourced internationally for our US production. The positive aspect is that our products are essential in nature, designed to extend, improve or even save lives. which provides a certain degree of resilience regardless of the broader trade dynamics or geographical tensions splitting advice group into healthcare and lab and looking at healthcare our sales came in at 235 million sec in the quarter An organic growth of 1% effect adjusted and minus 8% non-adjusted. Looking at the first six months, we saw an organic growth of 1% and 6% effect adjusted. The lab segment reported sales of 161 million SEK for the quarter. Organic sales came in at 3% and 8% effect adjusted. Looking at profit margins, healthcare came in at 15% EBITDA margin and lab came in at 21%. Lab delivered a strong margin, and I would say healthcare came in at a stable level. Looking at net sales by geographic, for the healthcare segment, North America continued to be the key market with roughly 51% of sales. And we don't see any big changes going forward. Having said that, Europe has a good development. In the lab segment, Europe is the largest market, followed by the US. We remain focused on profitable growth, stable returns and maintaining well-balanced debt level, all underpinned by the execution of our acquisition strategy. A strong emphasis is placed on EBITDA growth and return on capital employed as our key financial performance indicators. EBITDA growth will be driven by a combination of organic expansions and strategic acquisitions. Our long-term target is to double EBITDA every five years. A dividend remains part of our long term financial framework, but distribution will be considered once all other long term financial goals are at satisfactory levels. We are committed to maintain a maximum of net debt level to EBITDA, a ratio of three times. While a dividend remains part I mean the dividend will come into play when all the others of our long-term financial goals are met at the sustainable and appropriate level. I'm now handing over to Johan to take you through the group's financial performance.

Thank you Staffan and good afternoon all. I'm happy to be here today and take you through the numbers for the second quarter of 2025. EBITDA, which is Edvise's main key metric for measuring profit, gives a fair view of the financial performance of our companies. EBITDA is defined as operating profit before amortization, impairment expenses and revaluation related to acquisitions as well as non-recurring items. EBITDA is our key metric from this year and figures in this graph have been historically adjusted for the new definition. EBITDA in the second quarter amounted to 61 million, which corresponds to a margin of 16% or 15.5. Both EBITDA and EBITDA margin are in line with the same quarter last year. As we have pointed out in earlier quarterly reports, 2024 faced tough comparables from 2023. However, the individual quarters of 2024 should be considered normal level of profits, which means that from Q4, we are now on a normalized level of sales and profitability on a rolling 12-month basis, which is confirmed by this quarter as well. And for the last 12 months, EBITDA amounts to 267 million, which corresponds to a margin of 16%. Moving on to cash flow and capital efficiency. On this slide, when we talk about cash generation, we look at the underlying cash flow generated by our companies with deductions from changes in working capital, as well as depreciation and investments in our asset base, including lease payments. And in the second quarter, we see a moderate working capital build of 4.8 million. And working capital efficiency and optimization is and will always be a key focus area for us and our companies. Depreciations include depreciation on fixed assets, as well as depreciation on right of use assets related to leases. And the net between depreciation, leases and investments is 2 million, indicating higher new investments than depreciations on existing assets, mainly driven by production efficiency investments in our South American business. Total cash generation from operations in the quarter was 54 million. Relative to an EBITDA of 61 million, we consider this a solid level of cash generation in the quarter. Return on capital employed, which measures profitability and how efficient we use our capital, was 12% in the quarter. And from this year, this metric is one of advice long-term financial targets where the long-term goal is 15% return on capital employed. Moving over to financial position. Here our long-term net leverage target is three times net debt over EBITDA. And in the quarter net leverage was 3.0 EBITDA. And the right issue was finalized in April and added 457 million before transaction cost to the company. It also included a warrant that could potentially add an additional 172 million in Q1 2026 if fully exercised. As Safa mentioned earlier, the new capital structure with bank financing and bonds at better terms will reduce our yearly interest expenses by around 56 million SEK compared to the old financing structure. Available liquidity is good. Cash at the end of the quarter was 140 million with an additional 111 million available in unused credit facilities. And 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 Q2 before we open up for questions. Organic sales, minus 4% and plus 4% if we adjust for FX for the quarter. EBITDA on a stable level despite FX headwind. production and operational expenses in the same currency as revenue so so this has a good effect for us cash flow solid cash generation new financing is done bond refinancing at better terms and bank facility all in all better flexibility and lower financial costs On the acquisition side, we continue to work on a couple of interesting opportunities. As said before, it has to be right. We are not stressed, meaning that we look for very good quality to a reasonable price tag. With that said, we open up for questions.

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.

Thank you, Alfredo, and good afternoon, guys. So first of all, just a quick clarification. The direct impact from tariffs, I know it's limited, but you said 30 to 40 million. Is that an annual number? Is that correct? Yes. Yep. Perfect. Good. Okay.

So let's start. Make sure that this is, I mean, that's level one, right? And I also stress that there is another level. Yeah. Okay. Good.

Sure, good. Now let's look at the sales growth because both segments seem to deliver organic growth and kind of in line with expectations if we look past the currency effects. But could you please give some color on that? Are there any particular companies or sub-segments that are performing well or worse if that's the case?

No, but as I said, I mean, laboratory equipment did very well. Clinical trials, US, was also performing very well during the quarter. And I would say that the remaining is delivering on a stable level. So, I mean, there is no really surprise on the downside.

That's good to hear. What would you describe the visibility as? Could we expect continued growth, or should we see... I mean, you talk about some larger CapEx projects being a bit suspended, or at least they're more hesitant, but could you say anything about the visibility, please?

I mean, it's of course very difficult to look into the future, but I mean, looking at our orders and if we if we then adjust for FX and also adjust for our I mean, the big clean room orders that we had last year, I mean, we are more or less flat to a bit positive. So, I mean, that's a good indication that we are still growing and we are still set for growing.

Sounds reasonable. The lab margin surprised me somewhat. I know it can be volatile, but what can you say about, because you say kind of that lab also surprised you a bit. I got that impression at least, but what can you say here? What do you think about the margins for the rest of the year in terms of volatility and a kind of normalized level? What do you think is reasonable here?

From quarter to quarter, of course, it's difficult to... And it can be volatile, but I will say that Lab is performing where they should perform. But having said that, I mean, we are pushing for even higher margins. But as you also know, that there is a bit of project related business in Lab, which can disturb the picture a bit.

Sure. And then finally, I was reading the prospectus from the 11th of July now, from the bond prospectus, and it states, and I'll quote here, that you're involved in a dispute regarding an earn-out claim amounting to approximately 6 million euros. Could you give any color on that at its current state? What is that about, and what should we think? about going forward?

It relates to also if you recall we had this big clinical trials Europe which had one order that got term a contract that was terminated It was supposed to run for three years and it got terminated year one due to the client was not able to recruit a sufficient number of patients. So what happened there is that we received all sales on that contract in one year. And that, of course, affected the performance of that company. So I guess that's relating to that. And we are in talks with them But we have a clearly other view in terms of how we should deal with that when it comes to earn-out calculation.

Okay. Thanks for the clarification. That's all from me for now. Thanks.

Thank you.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Christian Lee from Pareto Securities. Please go ahead.

Thank you and good afternoon. Thank you for taking my questions. My first question is regarding the market hesitation regarding larger CapEx investments. Do you see this affecting both healthcare and lab?

I would say it's mostly lab, and that's maybe a bit contradictory because lab was performing good, I mean, in terms of laboratory equipment. So I'm not saying that it takes longer time. That is my feeling.

Okay, thank you. And the EBITDA margin on rolling 12 months was 16%, which aligns with the level of 2024. Is this the normalized level we should expect going forward, or do you see any headroom for improvements, given your comment about the lab being at the health level and the healthcare being at a stable margin level?

Christian, we are always pushing for higher margins. So, I mean, we are not satisfied at all, but we see that there is, of course, as you can from quarter to quarter, one or two percentage. But it's extremely difficult to... uh to line out if it's a stable level or where this but i mean it's clear that the companies now are operating well and we can continue to do them even better which then will result in in even higher margins i mean we have a clear more target that we would lift the margins about 20.

All right, thank you. Given that EBITDA for the first half of the year is down 3% year-over-year, do you still expect to reach your new target of increasing EBITDA with 15% this year?

But that will, I mean, we need to do, Proforma need to do an acquisition. I mean, standalone where we are now, it will be tough. And as we have said before, I mean, the 15% growth will be, I mean, will be, must be helped by acquisitions.

Right. And you also commented that you saw good acquisition opportunities at attractive valuations. But given that your net debt leverage is at three times as of Q2, do you expect to continue your consolidation strategy this year, or will you focus on decreasing the debt ratio first?

I mean, hopefully we will succeed to do both, even though that's a tough thing. But we will continue and we're looking into acquisitions. You never know when you can actually close the acquisitions. So we are working with a couple of opportunities as we speak. So, we have clear ambitions to do so, to do acquisitions. Having said that, of course, we need to have a healthy debt level going forward.

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

Thank you. are no more questions at this time so i hand the conference back to the speakers for any closing comments thank you all and have a continuous good day and and a good summer thank you