Asker Healthcare Group AB

Thank you very much and welcome to the Q2 report from Asker Healthcare Group. This is our second report in the listed environment. For me it's the 13th year so it's more of the same and no drama and a steady performance this first 12 year makes me proud of what we do. If we have a look at the second quarter isolated, we see a solid performance from the 50 plus companies across 17 markets. However, we had a little bit of a headwind from translation effects of FX. So they're actually growing adjusted EBITDA with 15%, but with a 3% of FX effect makes it down to 12%. Good, solid performance. However, North had a little bit of a drawback from project sales. We're going to come back to that later on. So they were meeting very strong quarters last year. But underlying business are in good shape. So all in all, good. Adjusted EBITDA, which is our most important KPI, increased 12% after the 3% effect impact. Good to see that organically we were growing 7% and acquisitions added another 8%. Net sales were up 9% to 4 billion, also impacted with negative 4% from FX. Our EBITDA margin were up to 9.5 and so we see it steadily is growing towards our targets of 10% in the mid-term. This quarter has been I can say back to normal or we see an increasing inflow of potential targets in acquisitions. In my 13 years here we've never seen such a good pipeline and I think it partly being a listed company. We're the market leader in Europe and companies and entrepreneurs are turning to us to be part of the ASCO story and improve the healthcare system. To me, this is the most important message that we have a fantastic market to act on regardless of the financial climate and uncertainty. Medical supplies, device and equipment are needed. and we are providing that across Europe which is a fantastic feeling to see our entrepreneurs help the healthcare sector. And I think that is also the reason why companies come to us and want to be part of the group which is also from creating shareholder value the most important aspect that we can be a larger group and improve healthcare and also at the same time create value. It feels really, really good. We have a net debt over EBITDA that is continuing to be low. So it gives us firepower to continue to buy companies. And we describe our business model, as you know, as the twin engine. Organic growth priority number one, but adding new companies to the group is as important. So both of these engines are performing well during this time. looking at this business of course it can goes you know a few percent up or down each quarter but over time and then both backwards and forwards we see the performance that we are here to deliver so 20% adjusted EBITDA growth for the past 12 months we're keeping our RRRK EBITDA over networking capital at 65% which is very good to see Capital Life Business and see improvement in earnings, helping us to keep that level. Our margins slowly going up towards the 10% in the mid-term future. So last 12 months, 9.2, a little bit stronger in this quarter, which is usually a stronger quarter as well, but it's going in the right direction, which is good. And then the low leverage giving us a good firepower for the future. So looking at the acquisition then, I mean, as you all can imagine, and the process going from private environment to listed environment takes some energy from me and my fantastic team and also the managers out there so now we are being back on track and as I mentioned the best pipeline so far in my 13 years here we see so we are now in the fantastic situation that we can pick and choose the best ones we usually by 50% of the companies we evaluate, but now I think we're down to lower. So our limitation is now the financial targets that we have set up and picking the best companies that perform the best and welcome them to the group. So during this quarter we bought four companies and actually added one more up until today after the quarter period has ended. So five companies. and six in total the first half year. Give me confidence for the coming months and years to come that we will add new company to the group. We're not possible to go through all the companies in every meeting but we'll highlight one or two of them every quarter. This time we have chosen to highlight ScanModule, a company that are based in the Netherlands but act in 10 different markets across Europe. They have a long history of being expert in making sure that you store the medical supplies, device and equipment in the best possible way in different hospitals and healthcare units. And this is to me a little bit of the last mile of giving access to these important critical products and services. So ScanModule have a long history of customer relationship and knowledge about how to make sure that the products are at the right point at the right time and storing them and keeping the track of dates and all of these possible things that you imagine you need to perform good healthcare. So this is what we call, it's not a platform as such, but it's a little bit of a new type of company that could give us continuous growth going forward. We have as you know a strategy to buy 10 to 20 new companies a year using our free cash flow to buy companies but once in a while we tend to buy a little bit larger companies which is ScanModule is a little bit larger and a little bit of a strategic acquisition for us. It's very good to see and hopefully you can create good growth going forward. With that, I'll leave the word to Tom.

Great. Thank you, Johan. We can dive a little bit more into some of the financials. So if I start with the group overview here on page six, what you see is very much in line with what Johan described, solid revenue and EBITDA growth and a slightly stronger margin coming through in Q2. So the net sales for the group in Q2 was up by 9% with that FX headwind included that Johan mentioned. The growth driven by strong performances in West and Central and a slightly slower performance in Region North. I'm going to come back to the regions individually in a second just to put a little bit more colour around that. But NetNet delivering an EBITDA growth up 12% in the quarter, again with the FX headwind pushing us back a little bit by 3% within that. The EBITDA margin up marginally in the quarter as well, which is good to see lots of activities going on around the group in terms of mixed improvement, the new M&As coming in, enriching the margin and ongoing operational and synergy efforts within the existing operations. Worth noting, though, that also Q2 tends to be a seasonally strong quarter four margin. If I look over to the right hand side of this picture, just to quickly summarize H1 as a whole, we see organic growth up 6% on EBITDA, we see acquired growth delivering 10%, that FX headwind that we've mentioned, but a total adjusted EBITDA growth for H1 of 14%, very much a good solid start to the year. If I dive a little bit now into the regions to try and give you a bit more detail, starting with business area north, I think the first and most important thing to say is that the underlying core operations in north, that day-to-day activity servicing the regions, the municipalities, all of those healthcare settings, performing extremely, extremely solidly, extremely well across all of the companies in all of the countries in region north. We do, though, see an EBITDA decline in the quarter, and that's due to the irregular project-based sales activities that we talked a little bit about in Q1 and is continuing to challenge the figures a bit in Q2, particularly in that defence and preparedness area where we had very strong performance in the same period last year. we also have made good progress with the development of our larger new distribution center in Gothenburg that has had its first large capex expenditures which which come into the cash flow which I'll talk a little bit more about a bit later but overall if you look at H1 as a whole on the right hand side here adjusted EBITDA growth is actually down 7% net sales down 2% in the first half of the year for those years and those reasons that I talked about related to the to the irregular project based activities. If I turn to Region West, we see a very nice development, strong organic growth and improved margins in Region West. A large part of that organic growth is driven by increased patient numbers. We also mentioned this earlier on in the year as a result of some larger customer databases that we took over during the second half of 2024. And those increased patient numbers are still flowing through nicely into the figures. We also get a good uplift from the acquisitions that we've done in the region. The large HSL acquisition we did in February this year also coming nicely into the numbers and performing well in line with expectations. The EBITDA margin is also strengthened a little in the region. Again, a mix of different activities contributing to that, both the organic synergy benefits we see from increased cooperation between our companies, especially within the home care hub that we're seeing developing very nicely in Region West, but also activities across the group with looking at product mix and how we enrich that across our companies. So H1 as a whole, 31% adjusted EBITDA growth, sales growth of 17% in the same period. And then the third of our regions, Business Area Central, also some good growth figures to present here. primarily driven by the high pace of acquisition activity that we see in central. So sales up 25% in the quarter, EBITDA up 61% in the quarter. And as I say, M&A, a big part of that driver. We also see improved EBITDA margins moving up towards the margins that we see in the other regions. And that comes again from a variety of activities. The new M&As coming in, enriching the mix. But we've also had quite a focus on our organic business and the margin within our organic business in the central region as well. And that's meant that we have been prepared to sacrifice a little bit of revenue growth to get margins up in the region. So overall, H1 EBITDA growth, adjusted EBITDA growth of 68%, net sales growth of 31%. If I turn briefly now here on page 10 to the RO over RK, this is, as we've talked a lot about in the past, our key internal performance metric, really making sure that we're focusing on efficient working capital utilization. And again, we're pleased to see that that remains well above our ASCA target of 15%. And it's also, of course, an area that we continue to put a lot of effort into with our new companies, our M&As coming into the group. A word or two on the cash flow as well. We see slightly lower operating cash flow versus the high levels that we saw in Q2 2024. And actually 2024, the comparable period we did have relatively low levels of working capital and very high levels of cash inflow. Again, relating in large part due to these project-based sales in North that I talked about before, we got paid for a lot of the activity that we'd done all the way through H1. A lot of that money came in during Q2 2024. So the slightly lower level that you see in Q2 2025 is more about the comparables than anything to do with Q2 2025 on a standalone basis. CapEx at just over 200 million. I mentioned earlier, we have had the first of the larger investments in the Gothenburg Distribution Center. We also pay to take over some distribution rights, some interesting new products coming into the portfolio within the Baltic region that we look forward to delivering strongly in the future. That is also booked as CapEx in the quarter. Acquisitions, the minus 160 million that you see there, The acquisition of MS Labor was completed in the period. So that was the paid acquisition. The other large chunk of that minus 160 million comes from the earnouts, the contingent considerations that we've paid for previous acquisitions that we've done. And then you see the financing is a large positive 730 million that you see there. That is actually us drawing down cash from our revolving credit facility to pay for the acquisitions that came in early July, primarily scan module. So actually that money has already been spent in the early weeks of July to complete the acquisition of scan module. And then a final page from me before I hand it back to Johan. The leverage levels remaining at a relatively low level, 1.8x. What you see since the comparable period is obviously the net debt has risen a little. We've obviously done more M&As than that through that period, but we brought in capital through the equity issue at the time of the IPO. But at the same time, obviously, the group has grown strongly and the EBITDA has risen through that period. So the net effect of those two is that the net debt to EBITDA ratio is at 1.8. as of the end of June. And as Johan mentioned earlier, the attractive pipeline is good because we have a little bit of headroom now within the leverage to take advantage of that attractive pipeline. All right, I think I'll leave it there, Johan, and pass it back to you.

Thank you, Tom. Okay, to summarize this before we go into Q&A. So we see this as a steady performance in the quarter with some headwinds from TranslationFS and FX, but our operational performance is where it should be. and we're picking up speed in the M&A second engine of ours so that is it's been a good quarter for us as I see it we are well on track on the acquisition in total but even from that position we're picking up speed so Looking back to 12 last month, we have done 16 acquisitions even during this IPO period. So we have added 2.5 billion SEC. So that to me is where we should be, maybe a little bit better. So overall, a strong balance sheet giving us good confidence that we'll continue to run these twin engines in a good way going forward. So I think we'll leave it there and open up the floor for questions.