Release Date: May 09, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ADDvise Group AB (FRA:Q3I, Financial) reported a year-on-year revenue growth of 3% for Q1 2025, with net sales reaching 424 million SEK.
- The healthcare segment showed strong organic growth, driven primarily by the performance of the diabetic operations.
- The company successfully completed a rights issue in April, raising 457 million SEK gross, which strengthens their financial position.
- Cash flow from operations improved by 10% year-on-year, mainly due to working capital improvements.
- The company maintains a strong liquidity position, with cash on hand of 277 million SEK before the rights issue, and a leverage ratio of 2.5.
Negative Points
- The lab segment experienced negative growth due to tough comparisons with large orders from Q1 2024.
- The macroeconomic environment is increasingly uncertain, influenced by geopolitical and trade tensions.
- The strengthening of the SEK is expected to impact top line and earnings negatively through translation effects.
- The healthcare segment's EIA margin of 18% is lower compared to previous periods, indicating potential margin pressure.
- There is uncertainty regarding the replacement and cost of certain components sourced from outside the US for US production.
Q & A Highlights
Q: Can you provide insights on the order intake for April?
A: CEO Stephen Thorstensen mentioned that due to the nature of their business, where many companies deliver immediately, order intake is less critical. However, April was a stable month in terms of orders and development.
Q: Are the current EITA margins in healthcare and lab segments considered normalized levels?
A: CEO Stephen Thorstensen stated that while they aim for higher margins, the current levels are stable. There is potential for improvement, but it depends on factors like order volatility.
Q: Regarding the impairment on goodwill in the lab segment, should we expect any changes in expectations for the segment?
A: Acting CFO Johan Erwa explained that the impairment was related to an earnout breakdown, matching the goodwill impairment with a reduced purchase price of an acquisition.
Q: How should we view the operating expenses (OECs) going forward?
A: CEO Stephen Thorstensen indicated that OECs are at a normalized level, with a focus on efficiency. The company aims to optimize OECs across the group, but there is limited excess to cut.
Q: What are the expectations for the pharma business segment moving forward?
A: CEO Stephen Thorstensen noted that after an extraordinary performance in 2023, the pharma segment is back to normalized levels. The expectation is for volatility to be on the upside.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
