Swedencare (SECARE) Q3 2024 earnings summary

Executive summary

• Achieved 9% organic growth in Q3 2024, with strong performance in Europe and online/veterinary channels, while NaturVet experienced negative growth; rest of the group delivered 30% growth.

• Pet health market remains robust globally, with strong growth in major markets and increased M&A activity, especially in North America.

• Veterinary and online channels showed strong growth, while pet retail growth was slower.

• Sustainability initiatives advanced, including increased recycled plastic content and hiring a sustainability controller; measurable goals to be presented in Q1 2025.

• Acquisition of MedVant, a Canadian veterinary distributor, completed and integrated, expanding North American presence.

Financial highlights

• Q3 2024 net revenue reached 641.0 MSEK, up 6% year-over-year, with 9% organic growth; operational EBITDA was 135.7 MSEK, margin at 21.2%.

• Operational gross margin rose to 57.5% (from 53.7% YoY); EBITDA margin at 21.2%; net income margin for Q3 was 3.8%.

• Net debt/EBITDA improved to 2.22 from 2.89 year-over-year; cash at quarter-end was 193.1 MSEK.

• Cash flow from operations was 125.6 MSEK in Q3; cash conversion at 93%.

• Dividend of 0.23 SEK per share paid for 2023.

Outlook and guidance

• Expect higher operating margins in Q4 as marketing spend is optimized and Amazon sales improve.

• NaturVet sales expected to improve in Q4, with significant growth potential from new big box retail partnerships in 2025.

• Financial objective remains 4 billion SEK in revenue by 2026 with EBITDA margin above 30%, primarily through organic growth.

• 2025 expected to deliver strong growth, especially as new retail channels and online initiatives ramp up.

• No margin dilution anticipated from big box retail; focus remains on growth, profitability, and debt reduction.