ADDvise Group (ADDV) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales reached 404 million SEK, up 26% year-on-year, with order intake rising 17% despite challenging comparables in pharma and clinical trials.

• Organic growth was negative at -25% for the quarter, but excluding pharma and clinical trials, organic growth for Jan–Sep was 6%.

• Acquisitions in 2023 contributed significantly, with laboratory equipment and medical consumables now main revenue drivers.

• Cash position remains strong at over 400 million SEK, with ongoing focus on working capital and net debt ratio.

• New CEO Staffan Torstensson appointed in Q3 2024, alongside other key management changes.

Financial highlights

• Q3 EBITDA was 88 million SEK, margin 22%, down from last year due to product mix; rolling 12-month EBITDA is 416 million SEK, margin 26%.

• Q3 net income declined to 12 million SEK, mainly due to higher interest expenses and lower currency gains.

• Cash flow from operations in Q3 was 32 million SEK, impacted by CapEx and clinical trials expansion.

• Net debt to EBITDA stands at 3.3x, above the long-term target.

• Equity ratio is 23.2%, and return on capital employed is 13%.

Outlook and guidance

• Effects from last year's exceptional pharma and clinical trials performance will persist in Q4 but are expected to fade by next year.

• Positive indicators for US capital goods demand and continued investments in clinical trials equipment, especially in the US.

• Management expects a strong end to 2024 and is pursuing a long-term strategy of sustainable value creation.

• Process initiated to change listing venue to Nasdaq Stockholm, expected completion in Q1 2025.

• Working capital efficiency is expected to remain stable or improve.