Vimian Group AB (publ)

Good morning, and thank you very much for joining us today. Welcome to Vimeo's Q4 and year-end earnings call. I'm Patrick Erickson, and I joined Vimeo as the CEO in January. With me here today is our CFO, Carl Johan Satterberg, who will present the quarterly results, and Guy Sperry, our CEO of Movora, who will give you an update on our MedTech segment. I've been with Vivian now for a few weeks, spending most of my time getting to know the business thoroughly, visiting our different sites and our customers, the veterinary clinics. I've met a committed and highly dedicated team. I think we have a strong product portfolio of well-known brands with attractive exposure to high growth market niches and strong relationships with the veterinary community, including several key opinion leaders. I've spent the past 20 years of my career leading global med tech businesses with up to one and a half billion dollars in revenue. For almost a decade, I worked for Danaher, a New York stock listed company, which has very many similarities with Vimeo as a decentralized, fast growing group of life sciences businesses. I'm very excited to join Vimeo and take part of this journey, which I believe can create tremendous value for animals, our people and our shareholders. I will hand over to Carl Johan to present the fourth quarter results and to Guy to give a deep dive on our MedTech segment. At the end of the presentation, I will give some initial reflections from my side. Now over to you, Carl Johan.

Thank you very much, Patrick. We deliver a solid fourth quarter with continued good growth and improved profitability as focus on efficiency and improving processes deliver results. Our efforts also support further improvement in cash flow from operating activities and reduce networking capital. We continue to pay down debt by another 18.5 million euros, reducing leverage to 2.9 times at the end of the quarter. Let us take a deeper look into the numbers. Organic growth was 7% in the quarter with a revenue of 82.5 million euros. This is driven by continued double-digit growth in specialty pharma and strong 22% growth in veterinary services. Diagnostics had a tough quarter with lower levels of disease outbreaks and testing. The quarter was also slower in medtech, held back by the U.S. market. Full-year growth at 10% better reflects the development of our medtech business given its seasonality. Acquisitions contributed 5% to revenue growth partly offset by 3% negative FX impact. The strongly adjusted EBITDA margin of 27.5% includes the fuller impact of 2 million euro higher R&D capitalization in specialty pharma, as we work to improve and streamline financial processes in acquired entities. On a life-for-life basis, excluding the capitalization effect, the Q4 margin is 25.0%, an improvement compared both to Q3 of this year and Q4 2022. For 2023, despite the challenging macroeconomic environment, we are pleased to deliver 11% organic growth ahead of the animal health market and 26.3% adjusted to beta margin, an improvement compared to the previous year. Let us take a short deep dive on our four different segments and start with Specialty Pharma. In Specialty Pharma, we reported 10% organic growth in the quarter with double-digit growth in specialized nutrition, dermatology, and our European allergy business. We delivered 46% growth in adjusted EBITDA and margin increase to 35.5%. This includes the full year impact of higher levels of R&D capitalization of 2 million euros. On a life-for-life basis, excluding the capitalization effect, the Q4 margin is 29.8%, which is an improvement sequentially compared to the third quarter and year-over-year compared to the fourth quarter of 2022. We completed one bolt-on acquisition, acquiring a dermatology portfolio to strengthen and complement our US offerings. Overall, the positive momentum in specialty pharma continues, with double-digit growth and improving profitability as efficiency measures start to deliver. For the full year, organic growth was 14% and margin 28.6%. In MedTech, we deliver higher absolute sales and adjusted EBITDA compared to the third quarter of this year. But the year-over-year growth is impacted by slightly softer trading in the U.S. In Europe, we see continued high single-digit organic growth and strong acceleration in APAC with double-digit growth in the quarter. Full-year growth, organic growth of 10% ahead of the veterinary orthopedics market. eliminates the seasonality effects of the annual ordering program and better reflects underlying performance in the segment. The fourth quarter margin recovers from the third quarter low, but it's below last year's level due to lower sales and investments in organization. Margin for the full year was stable at 30.3%. Following co-CEO Colleen Fleischer's departure in December, we have successfully merged the European APAC and US organizations under the lead of one Movora CEO, Guy Sperry. In veterinary services, the strong performance continued in the quarter with 22% organic growth and significant uplift in profitability. This is driven by a high growth in new members and conversion to higher membership tiers. as well as attractive partner agreements and the broad service offering. Our co-owned clinics delivers a strong quarter with 8% revenue growth, ahead of the market and margin improvement. For the full year, veterinary services delivered a revenue growth of 47% and adjusted the beta growth of 76%, improving the margin with 4.3 percentage points. Diagnostics had a tough quarter with lower levels of disease outbreaks in key regions, primarily DACH. As previously communicated, the overall livestock market remains under pressure going into 2024, but we remain confident in a long-term structural growth drivers in diagnostics. Looking at the full year, excluding impact of COVID phase out, diagnostics delivered 9% organic growth. The margin declined slightly in the fourth quarter as lower sales offset the benefit of the cost program. Despite this, margin is relatively robust compared to livestock peers who report mid to high single digit margins. The recently launched Ovasight platform, the AI powered parasitology platform, is developing as per plan with good ramp up in installations and usage in the equine and large animal segment during the quarter. We're quite excited about this launch and received lots of positive feedback from the veterinary community. Now in 2024, we plan to launch the companion animal solution. We continued to progress on our ESG agenda and in the fourth quarter completed a double materiality analysis as part of ensuring readiness for the new EU directive CSRD. We are strengthening supply control and have now centralized access to all supply data for improved control, trained all employees in purchasing positions, and established processes to screen our most material suppliers. And back to the numbers for the fourth quarter, giving you some further details. We report EBIT, of 2.7 million euro, which is down from 11.4 million last year. The reported EBIT is impacted by an 8 million euro reduction in the valuation of the non-current receivable related to the US patent litigation, as we have agreed with our auditors to take a conservative accounting approach. Adjusted for this, reported EBIT is 10.7 million euro, EBIT includes items affecting comparability of 14.3 million. This is mainly in MedTech with costs related to the US litigation, including the valuation adjustment and other non-recurring costs relating to M&A in specialty pharma and the group CEO change. Net financial items of 9.1 million consists of three parts. Financing costs of minus 6.5 million with an average interest rate for the quarter of 6.7%. On continuing considerations, we have a net impact of minus 0.6 million. And finally, a negative FX impact of minus 2.2 million. Positive tax for the quarter of 0.1 million reflects the reversal of previously accrued taxes and the utilization of group contribution rights between Swedish entities. Net debt amounted to 285.6 million with leverage at 2.9, which is down from 3.0 times at the end of the third quarter. Cash flow from operating activities sees sequential improvements reaching 17.2 million in the quarter. Our efforts to improve working capital have started to deliver results with networking capital at the end of the year of 71.1 million euros. This is driven by lower inventory in MedTech and accounts receivable as annual ordering program customers pay their final installments. We're happy to see improving trends through the year and continue our efforts to drive cash flow and reduce networking capital going forward. To conclude, we closed 2023 with 18% revenue growth, reaching €331.7 million and 19% growth in adjusted EBITDA to €87.3 million. In an uncertain and challenging year, we stayed close to our customers and delivered strong organic growth of 11% ahead of the animal health market. The adjusted beta margin improves as we progress efficiency measures and improve processes across the group. Excluding the litigation payment, cash flow from operating activities reached 37.1 million. On current trading, we see high single-digit growth for the group in January. Continued strong growth in specialty pharma and veterinary services. Remember that we ran an extended annual ordering program last year. This year we will return to normal program, smaller than last year. This will balance the growth and margin profile for the year, but as a consequence, we expect no year over year growth in the first quarter for Medtech. Trends seen in diagnostics in the fourth quarter has continued into 2024. and we will continue our positive focus on efficiency measures and cash conversion. Now, I would like to hand over to Guy for an update on Medtech.

Thank you, Karl-Johan. Before starting the presentation, I would like to introduce Movoro's mission as it describes in a quick way our purpose and what we do every day. Our mission is to support our customers, the veterinary community, with industry-leading solutions education, and best-in-class service so that they can deliver the best outcomes for their patients. So over the past three years, Movora has built a global market leader in veterinary orthopedics through both organic initiatives and strategic M&A. More to that on the next slide. Since the IPO in 2021, we have outperformed the veterinary orthopedic market on a number of dimensions. and established a new brand, Movora, with strong reputation in the market. We doubled the size of our business and delivered 15% organic growth CAGR ahead of the market. We have strengthened the product portfolio through strategic acquisitions and entered organically into new categories like imaging with the VetClarity brand. We are convinced that our direct approach in core markets is key as it gives us the direct connection to our customers without distributors in the middle. To achieve this, we have acquired distributors in core markets and entered new growth markets organically, such as Japan, where we today have a strong sales team serving our customers locally. We have put a lot of focus on integrating our acquisitions by building the One Movura organization with clear roles and responsibilities for our 230 employees to achieve strategic alignment and scale effect. We have rolled out the full portfolio in all key geographies and leveraged education facilities across all brands. In addition, we have consolidated in the US four warehouses into one central warehouse and in Europe from two to one warehouse. Today, we are one of top two global orthopedic players with a strong brand recognition going forward and our ambition is to be the clear number one player in all key markets we maintain an entrepreneurial mindset and a customer-centric approach that allows for local decision making movora has the broadest orthopedic product range in the veterinary industry, including more than 20,000 SKUs. Our offering covers all key orthopedic areas from knee or stifle solutions, which accounts for 39% of the business, to a full portfolio to handle all type of fractures and several total joint replacement solutions, as for example, total hip replacement, which are the most advanced orthopedic implants you can find in the market today, as well as with the best track record for patient outcomes. In addition, we are offering several key surgical products like instrumentation, power tools, imaging devices, sutures and pins to simplify the life of an orthopedic surgeon. Today, Movora owns more than 65 patents, of which half were developed in the last six years. We have a strong innovation pipeline, including a 3D printing manufacturing facility using the latest techniques to produce tailor-made implants for individual patients. Movora has a global reach with a strong focus on our local presence in key markets. We serve roughly 4,000 customers in more than 50 countries with 14 offices to ensure local language, fast delivery, and a high level of customer support. We go direct wherever it's possible, and we sell our products to veterinary clinics, universities, and large hospitals. We have four Moora education centers where we offer customers post-university education. And over 60% of our business is in the US and Canada, 22% in EMEA, and 15% in APEC. We see significant potential to continue deliver above market growth. There's three key drivers. There's a growing willingness to pay driven by the humanization of pets and increase in pet insurance levels. We pet owners are increasingly aware of treatment options. And there is an increased knowledge among veterinarians through post university education. And most importantly, There is significant unmet medical need in our space. For example, cruciate ligament disease or the anterior cruciate ligament in human knees is one of the most common diseases among dogs. It is underdiagnosed, undertreated, and only one in three dogs in need of a cruciate ligament surgery get one. Only one in 100 dogs in need of a total hip replacement get one. Today, patients which are diagnosed are mainly treated with painkillers as a short-term solution. Dogs will continue to limp, whereas a total hip replacement will take the dog back to normal walking, running, jumping, and they can enjoy their life. Total elbow and total knee replacement are barely available in the market, and there are even more untreated pets suffering. So overall, we see a significant upside potential in current treatment rates. Training and education is key to drive total market growth, to improve quality of care, and to generate sales. The best products are only as good and effective at the hands of the surgeon who puts them in. Today, there is a shortage of veterinary surgeons. By providing specialist education, we can teach more veterinarians to outperform the more advanced surgeries and unlock the wide space. Our training sessions are also an instrumental part of the sales process. We host more than 100 in-person workshops every year, which range from simple fracture repair to complex joint replacement. We have four fully equipped training facilities and collaborate with several education institutions globally. In addition to the in-person trainings, we offer a full range of digital training modules, on our Movora online learning platform. And in total, we train roughly between 1500 to 2000 veterinarians every year. Our Movora growth strategy is centered around four pillars. The first three pillars focus on our current orthopedic business. Firstly, we want to provide products and services that meet or exceed the highest industry standards in terms of quality, sustainability, and technology. We strive to be the leading innovator of new products and services to push the standard of care forward. Secondly, we drive education to untapped white space, as elaborated before. And thirdly, we strive for local presence to support our customers where they are. We are service-minded, we go the extra mile, and we are easy to deal with. And the fourth pillar is all about our next chapter. We are actively exploring to enter new areas of med tech organically or through M&A. Like for example, imaging that we started to build up in 2021. We have identified several other areas of interest where we see unmet medical needs, where we are convinced that we can replicate our success model from orthopedics. So to round up, we have closed a solid year delivering above market growth and capturing market share globally. Looking ahead, our journey just started. We remain very focused on reaching full potential in orthopedics whilst in parallel looking into other areas of medtech to over time become the global leader in veterinary medtech. Thank you and over to you, Patrick.