Swedencare (SECARE) Q2 2024 earnings summary

Executive summary

• Achieved 10% organic net revenue growth in Q2 2024, with record sales and all segments contributing except Rest of World; strong online and pet retail channel growth, and record quarters for FlavorPal and ProDen PlaqueOff.

• Completed two small brand acquisitions (HSP and Vet Worthy) and signed an agreement to acquire MedVant in Canada, expanding North American presence.

• NaturVet reorganization and innovation pipeline underway, with strategic review of Amazon sales and new launches expected to impact sales from 2025.

• Participation in Interzoo expo and launch of new e-commerce website in Europe, enhancing group collaboration and digital presence.

• Sustainability initiatives include packaging improvements, double materiality assessment, and hiring a sustainability controller.

Financial highlights

• Q2 2024 net revenue reached 630.5 MSEK, up 10% year-over-year; operational EBITDA was 140.9 MSEK (up 19%), with a 22.3% margin.

• Operational gross margin improved to 57.9% (from 54.7% last year); operating cash flow was 81.2 MSEK; cash at quarter-end was 170.0 MSEK.

• H1 2024 net revenue totaled 1,228 MSEK (+12%, 11% organic), operational EBITDA 279.7 MSEK (+25% YoY), margin up to 22.8%.

• Net debt/EBITDA improved to 2.37, down 30% YoY, despite acquisitions and dividend payments.

• Dental segment (ProDen PlaqueOff) grew 35%, with key products exceeding 40% growth.

Outlook and guidance

• Expecting improved profitability in H2, with gross margin to remain at or above current levels and double-digit growth anticipated for the remainder of 2024.

• NaturVet and CDMO activities expected to drive more substantial growth in 2025–2026; expansion into big box retailers planned.

• Focus remains on growth, profitability, lowering debt, and strategic priorities including product launches, partnerships, and M&A.

• Management targets 4 billion SEK in revenue and EBITDA margin above 30% by 2026, primarily through organic growth.

• Expecting growth in Europe from Amazon transition and new product launches in H2.