Vimian Group AB (publ)

Thank you very much and good morning, everybody. It's not ordinary that a chairman takes the start of the meeting, but as I'm sure you are aware, we had a press release last night where we announced that there has been a decision by the board to make some changes to the leadership of the VIMEN group. So Patrick Ericsson, who has served for the last one and a half year as CEO, is leaving his role. And as you heard in the announcement, we have announced that Karl-Johan Zetterberg will take over as interim CEO. So I wanted to introduce this and set the scene for before I hand over to Karl-Johan to more go through the actual numbers of our performance in the second quarter. What it comes down to is not anything wrong specifically or one thing that has done. Patrick has not done anything incorrect or there is nothing strange going on. But as you are all aware, the most important task for a board is to ensure that it has the right leadership in place and have the confidence in the CEO to be the right person to drive the strategic movement of a company for the coming years. And in an overarching total picture, we have decided that this was the right thing to do for the company. every ceo has a combination of factors and com competences and patrick came in and did a lot of good things in terms of professionalizing the company in follow-up and various key performance indicators etc and have implemented a number of positive things so first and foremost i really want to thank him for his contribution during this period. Patrick is also a very likeable person and has been appreciated by his colleagues in the team and by us on the board. And I personally wish him all the best going forward. That being said, we were convinced that we needed a leadership that could balance that strong cultural, entrepreneurial and purpose driven animal health focused entities we have within the Vinnian group. with the more structured professionalization of the backend and the synergies you can create in a greater group that has a long standing ambitions to growth both organically within the four segments we have today and add strong M&A driven growth into the company. We are convinced in the board that the strategy is the right strategy. And we are also convinced that we have a very strong interim solution in place for the changes going on. We also announced last night that Guy Sperry, who has done an excellent job in driving the first few years of Movora's business as part of the health medtech segment so our orthopedics part of medtech has been driven by gooseberry for the last six years he has informed the company that he is intending to lead by the end of the year In order to best manage the whole medtech, which now also encompasses our dental sub-segment, we are happy to announce that we have chosen Ali Takbash, who is our current head of segment Veterinary Services, to also lead at Interim the medtech segment. Olli has done an excellent job in creating a strong leadership team within the veterinary services and that team will step up and of course support him ensuring that we continue to drive the strong momentum we still have and will continue to have in veterinary services. And it will allow also Ali then to work together with the team in Medtech to drive improvements that we want to see, especially within our orthopedics area. As I said, the strategy is the right strategy. It is a combination of profitable organic growth and a strong acquisition driven path of entering those niches where we see the market for animal health have unmet needs and opportunity to grow. We're also confident as a board about the company's ability to both deliver on this year's plan and the 2030 financial targets. With that being said, I think it's time to hand over to Carl Johan to go through a bit more about what has happened in Q2, and then I will return for the closing part.

Thank you very much, Magnus, and good morning, everyone. And as Magnus said, let us jump straight into the interim report for the second quarter, and then that will be followed by some concluding remarks in the Q&A session. In the second quarter, we saw continued positive momentum in our largest segment, specialty pharma, as well as in veterinary services and diagnostics. Our medtech segment came in below our expectations, driven by underperformance in our orthopedics business. Although the market conditions with US orthopedics have continued to be challenging, We are not satisfied with the performance and, as Magnus stated, Alireza Taibaj will, in addition to his current role as head of veterinary services, assume interim operational responsibility for Vimeo's medtech segment. In June, we also announced the acquisition of Alacen to strengthen and expand our dental offerings. Despite the headwinds in orthopedics, we remain confident in our ability to deliver on our plans for 2025 and beyond. Our overall Q2 performance was impacted by the challenges in medtech and specifically then in our orthopedics, therapeutical area of our medtech segment. In total, we delivered 15% total revenue growth in the second quarter, which led us to revenues of 104.3 million euros. Organic growth was 5%, negatively impacted by a 4% decline in medtech driven by the weak performance in our orthopaedics business. uh acquisitions contributed with 12 to growth and we had a three percent negative impact from currency movements in the quarter adjusted ebit a in the quarter grew three percent year over year to 25.4 million euros where the slower adjusted ebitda growth is impacted by the weakness in medtech orthopedics margins was 24.3 percent And as I said, impacted by lower sales in medtech orthopedics, but also the consolidation of the dental business IM3 that has a different financial profile with a lower EBITDA margin than the group average. The other three segments, especially pharma, veterinary services and diagnostics, all delivered a margin improvement compared to the same period last year. So let us go into the specific performance per segment in the quarter. And starting with Specialty Pharma. In Specialty Pharma, we delivered all-time high revenues and adjusted EBITDA for an individual quarter, achieving 45.3 million and 13.6 million respectively. Momentum remains positive with 6% organic growth in the quarter with growth across all four therapeutic areas. FX impacted reported growth negatively with 2% in the quarter. The strongest growth contribution in the quarter came from the therapeutic areas, dermatology and allergy, while growth was somewhat held back by the specialty pharmaceuticals business that faced tough comparatives as they grew 24% organically in the second quarter of last year. The segment's cross-sales initiatives and product launches continue to proceed as planned, and they played an important role for the segment's growth also in this quarter. In the quarter, a total of 80 new products were launched. Adjusted EBITDA grew by 5%, as the adjusted EBITDA of last year was positively impacted by the strong growth in our high-margin specialty pharmaceuticals business. The adjusted EBITDA margin increased from 29.7% to 30.0%, which is supported by operating leverage. Our working capital turns and sort of focus on cash flow improvement in the quarter, we have maintained a similar level around 6.5x in working capital turns in the quarter for our specialty pharma segments. where we have some impact from inventory buildup as a consequence of the tariff situation that we're making sure that we ride through in a very good way. Our MedTech segment overall, we delivered 32% total revenue growth, but the 4% organic decline in a continued week US surgery market. where our customers are working through existing inventories for the high-cost elective procedures and applying tighter budgets. As I mentioned also, as Magnus stated, we are not satisfied with the performance in our medtech orthopaedics and we have appointed Ali as interim head of medtech in addition to his position as head of veterinary services. We have also decided to strengthen the commercial focus in our US orthopaedics business and recruited a new head of North America for Medtech Orthopaedics who will join us towards the mid and end of August. We have a clear focus on implementing the actions necessary to return to growth in Medtech Orthopaedics. The business maintain high customer satisfaction and low churn, and we continue to invest in veterinary education to capture wide space and unlock market growth. Our dental business continued to develop well in the quarter with double digit growth and two acquisitions to further strengthen our offering in this area. For the dental area, I would also like to highlight the fact that despite the strong growth, efforts in reducing working capital uh have yielded very good results and they have approximately reduced working capital with 15 since the beginning of the year and improving working capital turns with 5.5 0.5 terms as i mentioned we did two tuck-in acquisitions in the quarter for dental one of them being a little bit larger, is a fantastic company called, named Alacem, which we, on the 13th of June, was completed, an important Bolton acquisition for the California-based Alacem. Alacem is a leading provider of scientifically proven and well-known dental sealants that sold to veterinary clinics across the US. The company has revenues of around 9 million US and grows double digits at a very high margin profile. The acquisition builds on our strategy to increase the share of high margin consumables in our dental portfolio and continue to build on our leading dental position in the animal health market. Over time, as we scale production capacity, We can leverage IM3's global distribution platform to further accelerate sales outside the US for LS7. We are very pleased to welcome this business to Vimion and convinced it would play an important role in building a strong global position in veterinary dentistry. Veterinary services continue to perform well with 12% organic growth. driven by new member growth and increased penetration of services across the member base. The total number of member clinics reached 9,700 at the end of the quarter. And adjusted EBITDA for the second quarter grew 60%, and the margin improved from 27.6% to 28.7%, driven by the continued good revenue growth and positive geographical mix. In our diagnostic segment, we delivered another strong quarter with an organic growth of 18% driven by the livestock diagnostics offering. If we look ahead a little bit for the diagnostic segment, the underlying momentum is solid and it's a third quarter of continued double-digit organic growth. But Q3 is a slightly slower quarter with less disease outbreaks if we look from a historical and seasonal pattern. With that segment review, let me give you a walkthrough of the financials for the second quarter. Adjusted EBITDA in the quarter was 25.4 million euro, which is an increase of 3%. This represents a margin of 24.3%. The lower margin compared to the same period last year is a consequence of the lower sales in mentic orthopedics and the consolidation of IM3 from 1st of October last year with the lower margin profile. We report an operating profit of 14.5 million euro, an increase of 9% from last year's result of 13.2 million. Items affecting comparability total 5.3 million euro. The majority relates to Medtech, with a total of 3.2 million, of which 2.1 million is legal costs related to the US litigation, where we expect a judgment in the coming months, and 0.6 million of acquisition-related costs. primarily then to the acquisition of LSM. In group functions, we also took a provision of 1.8 million for compensating key employees that experienced a financial loss for the LTI 2022 program. This compensation will be paid out in the second quarter of 2026 if certain conditions are met. Net financial items of minus 1.6 million euro consist of three main components. Finance expense of minus 2.3 million with an average interest rate of 4.6% during the quarter offset by 0.5 million interest income. The quarterly discount and impact of minus 1.2 million and an impact of minus 0.2 million euro from probability adjustments on our continuing considerations. And lastly, a positive impact of 1.6 million from exchange rate effects on revaluation of debt. The income tax expense for the quarter amounted to 4.2 million euro. And in total, this results in a profit for the period of 8.6 million euro with an earnings per share of 0.02 euro cents for the quarter. The Q2 cash flow, where cash flow from operating activities reached 22.2 million in the second quarter, an improved cash generation compared to the same period last year with a cash conversion of 95%. And that is defined as operating cash flow in relation to the DPA. Networking capital amounted to 99.5 million euro at the end of the quarter, equal to 25% of revenue. which is a slight increase from 94.3 million at the end of March, which equals 23% of revenue. The majority of the increased working capital in the quarter is mainly a consequence of lower trade payables. Cash flow from investing activities of minus 77.6 million primarily reflects the acquisition of LSM and earn-out payments of 22.7 million euros. Cash flow from financing activities totaled 65.4 million euros in the quarter. During the quarter we have also completed our refinancing and successfully issued a bond of 150 million euros. So we continue to be well capitalized with a healthy financial position to pursue our strategy and our financial targets. At the end of the period, net debt amounted to 260.6 million euro, which is up from 212.2 million at the end of the first quarter as a result of the LSM acquisition. This also increased external lending with roughly 70 million euros to 277.3 million. Also a result mainly of the LSM acquisition and as mentioned the earn-out payments of 22.7 million euros in the quarter. In total this resulted in a leverage in the quarter equaling 2.1 times compared to 1.8 times at the end of the previous quarter. That will conclude the review of the second quarter where we delivered a solid performance in three out of four segments, complete the strategic relevant bolt-on acquisition in dental space and delivered a good cash generation. Looking ahead, our number one priority for the coming months is to turn around our medtech orthopedics business. While this specific pocket of the US market with high cost selective procedures is weak, we see that the overall companion animal health sector remains resilient, where the increase in pet ownership, the humanization of pets and an aging pet population continue to drive demand for more and better health care across the globe. And we are confident in our ability to deliver on our plans for 2025 and beyond. So with that second quarter review I will hand over to Magnus for some concluding remarks before we move into Q&A.

Thank you Karl-Johan and as you heard also the board are happy with the solid performance in the second quarter in line with what our targets are. Also very happy with how the team is continuing to build on the platform acquisition within dental with very strong bolt on acquisitions, creating a strong new segment within the group inside the MedTech operations. The leadership changes we have announced are right for the company and are aligned in meeting those strategic goals that we're setting. I want to thank Patrick for his contribution while he's been the CEO. And although Guy will be around for a few more months, ensuring that the Medtech Orthopaedics is getting all the support and help it can. support ollie in his at interim task i also also want to take the opportunity to thank him for all his strong efforts in driving the medtech orthopedics movora business for more than six years We have the right strategy. We have a team in the executive team that will drive the work to reach the ambitious goals that we have. And we are confident as a board that we will be delivering to our long-term targets. And with that, I open up for Q&A.