ADDvise Group (ADDV) Q2 2024 earnings summary

Executive summary

• Net sales reached SEK 412.3 million in Q2 2024, up 20% year-over-year, with strong order intake up 67% to SEK 434–534 million, despite negative organic growth of -21% due to tough comparables in pharma and clinical trials.

• Excluding two exceptional businesses, organic growth would have been 13% for the quarter, indicating underlying strength in the remaining portfolio.

• EBITDA was SEK 102.3 million with a 25% margin; net profit improved to SEK 29.8 million from SEK 3.2 million last year; EPS SEK 0.15.

• Cash flow was below expectations at SEK 31 million due to working capital build-up and tax payments, but liquidity remains strong with SEK 315–430 million in cash and equivalents and an undrawn credit facility.

• CEO transition: Staffan Torstensson to become CEO in September 2024, with plans to list on Nasdaq Stockholm main market in Q1 2025.

Financial highlights

• Net sales: SEK 412.3 million in Q2 2024, up 20% year-over-year; H1 2024 net revenue: SEK 825.6 million, up 26.1% year-over-year.

• EBITDA: SEK 102.3 million, 25% margin; rolling 12-month EBITDA at SEK 420 million.

• Net profit: SEK 29.8 million, up from SEK 3.2 million last year; EPS SEK 0.15.

• Order intake: SEK 434–534 million, 67% total growth, 13% organic.

• Own products accounted for 60% of sales; distribution 30–35%; service revenues the remainder.

Outlook and guidance

• Organic growth expected to return by mid to late Q4 2024 as exceptional comparables roll out.

• Gross margins expected to remain stable or slightly improve in Q3, with gradual improvement from pricing initiatives.

• Strong order backlog provides good sales visibility for upcoming quarters.

• Acquisition activity planned for H2 2024, with focus on deleveraging and possible deals before year-end.

• Listing on Nasdaq Stockholm main market targeted for Q1 2025.