Asker Healthcare Group AB

Hi everyone, this is Johan Falk and welcome to the Q1 report. As we said on the headline here, strong start of the year. That's how we feel. So we have a good Q1 behind us now. The growth of the adjusted EBITDA was 21% and we all know that 4% headwind could have taken us to 25% in total. if it wasn't for the FX effect, but 21% we're proud of as well, of course. Of that, 8% was organic, very importantly. If we look at the margin, 9.8% coming closer to the 10% short to medium targets, a 70 basis points increase. So that's also a signal of having good efficiency and purchasing power in the group that we're using in the right way. If we just look on the highlight side here, we have a net sales of 4.5 billion this quarter, up with 13% out of 5% organic top line growth, which is faster than the market. Adjusted EBITDA of 442 million, up with 21%, as I mentioned, and 8% organic. So a bit faster bottom line growth than top line growth, which we like. showing the efficiency and scale that we now can see of the groups. We have an adjusted EBITDA margin strengthened with 70 basis points up to 9.8. You might remember that we had 10% in Q4, but that is our strongest quarter of the year. So we have a steady uptick towards the 10%, which we're on the journey Robust cash flow this quarter, thanks to the strong earnings growth and also from the new acquisitions. Two acquisitions signed during the quarter, so that's also good to see that we are continuing our high pace of M&As with our own cash flow. But staying steady with a leverage below 2.5 as we have communicated before. Looking on the rolling 12-month basis, one year back from now, we have delivered on our most important financial targets. I promised you to deliver adjusted EBITDA over 15% per year, which we had for many years, and now it's 18% for the last 12 months. Our overall K, EBITDA, our networking capital, very important efficiency measure for our operations. So 68%, something we're proud of keeping on the high level. I mentioned the adjusted EBITDA margin 9.7 on the rolling 12 month basis. Hopefully we'll break through the ceiling of 10% on the yearly basis as well in not too long of a future. 2.15 is the net debt over EBITDA, the leveraged May ratio. Tom will come back to that a little bit later in the report. But the overall message is that we're keeping that steady as we now are welcoming and acquiring companies on our cash flow. The board has proposed a dividend payout of 39 öre per share, which is in line with the 30% target of our and Net Profit Offer Tax. I've been here many years, as many of you know, 14, I think it is. And we have been fortunate to deliver quarter by quarter growth, organic as well as M&A. And this is another quarter which we add to the series. The yellow line here is representing the 15% growth. And I'm happy to stay above that, which we have no reason to believe we can't do going forward. Now into some details with Tom.

Great. Thanks, Johan. I will add some numbers just to support the messages that Johan has given there. Overall, the group financial performance, very solid in the quarter and pleasing for us to see good organic growth across the group. And I think one of the things that is most satisfying is that this growth is genuinely broad-based across the regions, across the companies, across the countries, coming both from well-established businesses within the group, but also the recent M&As driving both growth and margin improvement. We look at some of the numbers. Johan mentioned them already. Net sales in Q1 up 13%. 5% of that organic, with the FX headwind that we have been struggling a bit with in recent quarters. Adjusted EBITDA up 21% in Q1, 8% of that organic, and also with the FX headwind affecting the EBITDA side of things as well. But margin up to 9.8%, as Johan mentioned, continuing to move in the right direction. If we go one level further down and look in a little bit more detail at the business areas, starting with business area north, Performing well, good organic growth across the region. Important to note that the large defence and preparedness sales that we have talked about during 2025 are now out of the comps. So it's good to see a clean quarter that shows how this region is doing without those comps confusing the picture. And we see adjusted EBITDA growth of 5%, 4% of that organic and net sales growth of 7%, organic growth also at 7%. in the quarter. A brief mention of the new distribution center that we've talked about also in the past down in the southwest of Sweden. Progressing nicely, we're starting to do some tests in the facility which have delivered good results. And as a reminder, we will be ramping up that activity through the course of this year. There will be some additional double manning costs and some additional inventory coming in towards the end of 2026 and 2027. We will be fully operational in the early part of 27 and the full P&L benefits coming through in the second half of 2027. Business Area West, strong growth in the region and pleasing to see that we are really getting some benefits from some of the scale effects in the region. So we see adjusted EBITDA growing 32%, of which 15% of that was organic. and we see net sales growing 12% with organic growth contributing 5% to the net sales. Quite a large negative FX effect in region West. And the margin, as I mentioned before, moving nicely in the right direction up to 9.5% in the quarter. and in a way to repeat the message that we have for the group as a whole and all of the other regions, good organic growth, both from the established businesses and the acquired units as well. With a particular note in Region West that we see some really strong performance from our home care operations there that continue to find additional growth opportunities, but actually really starting to see some nice scale benefits from those operations, which is good to see. Turning to the third business area, central, also strong sales and EBITDA growth across the region, net sales up 26%, 13% organic and adjusted EBITDA up 47% in the quarter, organic growth contributing on the net sales side 3%. And again, I feel I repeat the message, but really a broad based contribution to the growth across the companies, across the countries within the region. And as we've talked about before, we continue to focus on margin enhancing activities in the region just to look at the range, look at the portfolio, take out some of the less attractive products and segments from the range here. Turning now briefly to R over RK, EBITDA over Networking Capital. We talked about this many times. I always talk about it. It's a key internal metric for us making sure that we're really focusing hard on our capital efficiency and capital utilization. And as we've also talked about many times before, important source of the cash that we use to fund the M&A engine. So good to see that that's still performing well across the group in the quarter. Going further through the financial statements, a few words about cash and a little bit more detail than perhaps we've provided in the past. The overall picture, really good, solid, robust cash flows. We have very good visibility because of that stability about future outflows and hence that feeds into good visibility around our M&A planning as well. I'll say a few more words about that in a second. Cash flow from operating activities, 419 million sec in the quarter. naturally driven by the strong top and bottom line that I've talked about on the previous pages, but also the continued work we do around around working capital efficiency and squeezing cash out there. I perhaps should just note that the 109 million that we saw in Q1 2025 was an abnormally low figure. We had lots of costs, if you remember, associated with the IPO and whatever. So although cash flow is good and it's solid and we're happy with 419, perhaps the growth is a little bit flattered by the low figure we had in the comparable period. CapEx, a brief mention, I mentioned the distribution center in Yorkshire a few pages ago. We have approximately 100 million sec remaining to be paid out for that business over the next nine to 12 months. But as we've said, the business is, the development of that DC is progressing nicely. to look a bit to the cash flows coming in the future particularly in Q2 we've had a few questions around this I've discussed this with analysts and investors so just to be super transparent on this we do have a relatively large earn out cash outflow coming in Q2 450 million sec approximately so those as a reminder are for deals that were done M&A deals that were done back in 2022 to some extent 2023 those businesses have developed well they have reached the end of their earn out period at the end of 2025 and then we pay the earn outs after we've got the annual reports signed off and audited for those businesses which is why we have the big cash outflow in Q2 450 million as I say We have the dividend, 149 million, our first dividend, which will flow out during May. I think the thing that I want to emphasize is that these regular, or non, excuse me, non-regular cash outflows that we see coming up in Q2 are well modeled, they're well understood, they're fully built into our thinking, our leverage planning, our debt planning, and of course, that then leads into our capacity to do M&As. And perhaps I also add a further note, when you look forward to the earnouts in 2027, i.e. for deals that we did in 2023 and to some extent 2024, whose earnout period comes to an end at the end of 2026, we expect that cash out amount to be around 130 million SEC. I think it's interesting just to contrast that with the relatively larger amount that we're going to be paying out now in Q2 2026. And I think that's an indication, not that those businesses have performed less well, but more that we have evolved our earn-out model as we have gone forward through the development of our second engine, our M&A engine. And then one final page for me, just taking the cash flow and the leverage discussion one step further, we have a stable leverage well below our target of 2.5, giving us good capacity for those continued acquisitions, that key fundamental second engine that's a part of our business. A few numbers on this page, so I tried to take them steadily so we don't get confused. The net debt to EBITDA according to our current definition and our current 2.5x target comes in at 2.15 during the quarter. but for the two deals that we've completed in the Court of Van Heer and GHC, actually we haven't yet fully paid out all of the cash for those acquisitions. The reason for that is we're actually waiting for the final annual reports, the audited annual reports. We like to receive that before we complete all of the cash outflow. But clearly those are part of those deals. Those are cash amounts that are associated with completed deals. So to be completely open and transparent and clear, we've added those back. And when that amount is added back, you see that actually 2.25 is the leverage in the quarter. And I think that's the more relevant figure to look at. And you can see on the right-hand side of this picture, the chart, our leverage is extremely stable. We manage it in a good way and we're conscious to keep it at that stable level. I had one further footnote, again, simply because I've discussed this so much with analysts and investors. There is an alternative way of looking at the leverage ratio. And actually this way is equivalent to our bank leverage definition, covenant definition. And that would be to include all of the earn outs and outstanding payments for the next 12 months in the debt side of the calculation. but at the same time to also include the 12 month pro forma EBITDA from acquisitions that we've done, which I also think is very reasonable. You know, these are businesses that are part of the ASCA group now that generating that cash generating capacity is part of the group. So it's only reasonable to include that as well. And if you were to use this alternative leverage calculation, you would come to a figure of 2.36. Just to reinforce again, that is not our current definition, but it's another way of looking at it. And I think what it does when you see that is it just reinforces the point that the strong and stable cash flows that this business generate enable us to manage leverage, have good insight and deliver on our M&A agenda going forwards. With that, I pass back to you all.

Thank you, Tom. And good bridge to M&A. We use our strong cash flow to welcome new companies to the group. As I mentioned many times before, we're improving the pipeline and being a market leader in Europe now in medical supplies, device and equipment across 19 countries, we're seen as the natural leader. we see that family businesses, entrepreneurial led businesses want to join the group because they see that they will perform even better and they are among friends and helping the healthcare improve in Europe. So if anything, every quarter that I've presented this, we have a stronger and stronger pipeline and we can cherry pick the best ones out of it. Last year it was around 15 deals we've done and we had a pipeline of close to 90 with deals we could have done. So that gives an indication of how we work with this. And this quarter is no exception. We have welcomed GHC MPF and also Banhek Medical adding some 650 million in annual sales. We also done the acquisition of RMS Medicals that was signed in Q1 and was completed in 1st of April. I think all of these deals now and going forward will contribute positively to our EBITDA margin. So if anything, we are cherry picking the ones that are above 10% EBITDA margin to start with. We have also on top of the scale and positive synergy effect, we also have a positive mix effect helping us to improve the margin. If we do a deep dive, as I usually do, into one of the acquisitions to give you a flavor of how we help the healthcare nurses, doctors and patients across Europe, we have GHC-MPF, which is two interlinked medical supplies companies within the home care segment where we are strong, and this time it was in Germany. So we're helping them within continence and urology products. strong and attractive niche. They're adding roughly 300 million in revenue and they are a team of 140 employees with expertise in these fields which really supports the home care patient in Germany and that's also had a positive EBITDA margin effect. All right, coming in to summarize this quarter, as you can hear, we're happy and proud of having a good start of 26. Being on this fantastic journey of consolidating the MedTech market in Europe, helping the healthcare system to improve. We have seen that we are continuing growing faster than the market. This quarter was 5% top line. We're getting the scale effects out of our operations. So 8% adjusted EBITDA growth on bottom line. And acquisitions are coming in and will hopefully do so during the following year and the year after with a strong cash flow, good pipeline and a very good team centrally as well as locally helping us find the best entrepreneur. So I think that will pretty much summarize the quarter and our visibility is good as you know, medical supplies, device and equipment, regardless of the tough times around the world, we are in constant need of these products. Even if the financial climate is tough and the war is going on, we need these to take care of our loved ones. And that's what we see. Also the type of customer relationship we have with long customer contracts, we have good visibility. And for that reason, we feel that we have a good progress today, but also good visibility for the rest of the year, both in M&A and organic growth. Thank you very much. I think we go from here to Q&A.