Swedencare (SECARE) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered 7% revenue growth (5% organic), with operational EBITDA margin at 19.4% and strong cash flow, though EBITDA was down 10% year-over-year.

• Major strategic moves included the acquisition of Summit Vet in the UK, Pack Approved®, and early takeover of NaturVet's Amazon sales account, all expected to drive future growth and operational synergies.

• Employee engagement improved, with eNPS rising from 41 to 44 and participation rate exceeding 80%.

• Launched NaturVet's new brand design and expanded retail placements, including Walmart and PetSmart.

• Tariffs and currency fluctuations had minimal impact due to local production and balanced exposure.

Financial highlights

• Q1 revenue reached 641 million (7% growth, 5% organic, 2% currency), with operational gross margin stable at 58.1%.

• EBITDA was 124.5 million, margin 19.4%, down from prior year.

• Cash conversion improved to 78%, with operating cash flow at 96.7 million.

• Net debt/EBITDA improved to 2.0, expected to rise to 2.5 post-Summit acquisition.

• CAPEX remained below 2% of sales.

Outlook and guidance

• Double-digit organic growth targeted for full year 2025, with margin improvements expected as extraordinary costs subside.

• Summit Vet and NaturVet's Amazon account expected to boost revenue and profitability from Q2.

• Focus on geographic expansion, operational efficiencies, and strengthening online/D2C sales.

• Board proposes a dividend of 0.25 SEK per share for 2024.