Release Date: February 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vimian Group AB (VIMGF, Financial) reported an all-time high revenue for Q4 2024, with strong organic growth of 15%, outperforming the animal health market.
- The company achieved a cash conversion ratio of 115% in Q4, indicating strong cash flow from operations.
- The acquisition and integration of the animal dental business iM3 contributed positively to Vimian's performance.
- Specialty Pharma unit showed exceptional organic growth of 22% in Q4, driven by successful sales campaigns in the US.
- The Diagnostics business returned to double-digit growth, with a 12% increase, supported by new product launches and innovations.
Negative Points
- Vimian Group AB (VIMGF) experienced a margin decline in its MedTech business due to investments in the US orthopedic market and the integration of iM3, which has a lower margin profile.
- The company faced a one-time write-off of a customer receivable in Specialty Pharma, impacting margins by 90 basis points.
- Legal costs related to US patent litigation remain high, affecting items of comparability with EUR6.2 million in costs.
- The US high-end surgical market continues to present challenges, with only 4% organic growth reported in Q4.
- The livestock market remains unpredictable, posing a risk to the Diagnostics business despite recent growth.
Q & A Highlights
Q: Can you provide background on the accounts receivable write-off in Specialty Pharma?
A: The write-off relates to a specific customer where our delivery and sales documentation were not up to standard, preventing us from fulfilling obligations and getting paid. As a result, we took a cautious approach and wrote down the total receivable. - Carl-Johan Boudrie, CFO
Q: What are the expectations for MedTech growth in 2025, considering the AOP adjustments?
A: We expect a slight decline in organic growth for MedTech in Q1 due to the last AOP adjustment. However, we anticipate recovery and growth for the full year, returning to market-plus rates in subsequent quarters. - Patrik Eriksson, CEO
Q: Can you elaborate on the investments to increase market share in the orthopedics business?
A: We increased investments in marketing, training, and education to decouple our growth from market growth. This included training 1,600 people in Q4 and enhancing our presence at trade shows, which impacted margins but is expected to improve in Q1. - Patrik Eriksson, CEO
Q: What is the status of the legal settlement with the main hearing happening in February?
A: We expect a verdict from the court proceedings, which could conclude the matter. While timing is uncertain, we hope for a resolution before the end of the year. We remain confident in our strong case. - Patrik Eriksson, CEO
Q: Are there any signals of improvement in the US MedTech market heading into Q1?
A: While there was a positive signal from a data source in December, it's too early to conclude market improvement. We believe the market has bottomed out but need more data to confirm any positive trends. - Patrik Eriksson, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
