Vimian Group AB (publ)

Welcome to Vimeon's third quarter earnings call. I'm Fredrik Ullmann, CEO, and with me today is our CFO, Karl-Johan Zetterberg. We also have Magnus Kjellberg here with us, the CEO of our specialty pharma segment, Nextmune. And after the Q3 presentation, he will give you a brief update on Nextmune and its development since our IPO. Please move to the next slide. So in the third quarter, we report strong organic growth of 12%. which is well ahead of the animal health market. We continued our efforts to improve cash flow and delivered 11.6 million in cash from operating activities in the quarter. Our net profit increased to 7.6 million euros. The adjusted EBITDA margin of 22.9% primarily reflects our sales pattern in medtech and a mixed impact from our US specialized nutrition growing faster than expected. Carl Johan will go into further detail on this later on the presentation. Going forward, we focus on sustaining a solid organic growth while continuing our efforts to drive margin expansion. Our market in companion animal health remains resilient with continued growth, and we see pet owners prioritizing health care for pets despite a very challenging macroeconomic situation. Now I'd like to hand over to Carl Johan for further deep dive into the numbers.

Thank you very much, Frederik, and good morning, everyone. We can turn to the next slide. As Frederik highlighted, we continued our solid development with 13% revenue growth, achieving 79.9 million euro in revenue. Organic growth was 12% with good development in all segments, especially specialty pharma with 18% organic growth, and veterinary services with 14% organic growth. Acquisitions contributed 7% to growth in the quarter, and currency movements had a negative impact of 6%. For the first nine months, revenue increased to 249.3 million, with an overall growth of 21%. Organic revenue growth year-to-date was 13%, with good growth in all segments, especially in specialty pharma. The adjusted EBITDA EBITDA increased by 6% to 18.3 million at a margin of 22.9%. Next slide, please. As commented on previous slide, adjusted EBITDA margin was 22.9% in the third quarter. And here you can see the building blocks for the year-over-year margin development. Margin reflects the sales pattern in MedTech where the extended annual ordering program shifted high margin sales to the first quarter in combination with mixed effect from the continued very strong growth in US specialized nutrition and strategic investments in special departments. Overall, we continue to see a stable or improving gross margin in a high inflationary environment. Excluding impact from fast-growing US specialized nutrition, gross margin was stable in the quarter. Although our MedTech sales pattern and mixed effect from US specialized nutrition have impacted our margins negatively, we are not satisfied with the current levels and are initiating further measures to ensure we focus on driving margin expansion in the coming quarters. Next slide. We have a diversified geographical footprint with Europe and North America each accounting for approximately 45% of revenue. With the acquisitions of BOA of Australia and Vetter early in the year, we have strengthened our business in Australia in specialty pharma and veterinary services. And with the growth in APAC and our successful growth of the annual order program in MedTech, as well as strong performance of specialized nutrition in the US, Europe has, despite good growth, a slightly smaller share of total revenue in the last 12 months. Next slide, please. The strong development recorded in the last couple of quarters continues. And as of the third quarter, our performer revenue was 333 million euro. Since 2020, we have more than tripled the business through organic growth and continuous strategic acquisitions. Revenue have also supported strong profit increase. We have grown our profit ahead of revenue, almost quadrupling adjusted EBITDA to 86 million euro. We continue to actively focus on organic growth and initiatives and synergies within and between our segments to support continued strong revenue and profit development. Now handing over to Magnus, who will give some details to the quarter for specialty pharma, and then Fredrik will continue with more details on the other segments.

Thank you, Karyawan, and next slide, please. We deliver very strong organic growth of 18% with double-digit growth in three out of four therapeutic areas, especially pharmaceuticals, dermatology, and specialized nutrition, as we capture the benefits of previous years' innovation and leverage our strong market positions. We see double-digit growth in allergy in Europe, where our new Alley test has been well received by the market, while the US Alley business is temporarily held back by slower uptake in transfer to our new Alley test. We have launched several commercial initiatives to regain momentum in the US Alley business, including additional education initiatives, and we see sales picking up now. and expected to normalize over the first half of 2024. The adjusted EBITDA margin primarily reflects the mixed effect from strong growth in U.S. patient concentration, explaining almost 70% of the margin decline, combined with our strategic investments and the impact of temporarily lower sales in U.S. allergy. Besides working hard to regain momentum in U.S. energy, we're also initiating further initiatives to drive efficiency across European operations. Our pipeline for new products remains strong, and we launched more than 20 new products during the quarter, taking the total for the year so far to 65. We continue to build strong market positions, attending 15 veterinary congresses in the quarter. At two major congresses, the European Veterinary Dermatology Specialist Congress with 750 veterinarians, and UK's largest equine congress with 800 veterinarians, we were also the main sponsor. Overall, our positive growth momentum in specialty pharma continues, and we have eyes on profitability for the coming months.