Release Date: July 18, 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 a 15% total revenue growth in Q2, reaching EUR104.3 million.
- Specialty Pharma segment achieved all-time high revenues and adjusted EBITA for an individual quarter, with 6% organic growth.
- The Veterinary Services segment showed strong performance with 12% organic growth and a 60% increase in adjusted EBITA.
- The Diagnostics segment delivered an 18% organic growth, driven by the livestock diagnostics offering.
- The company completed the strategic acquisition of AllAccem to strengthen its dental offering, which is expected to contribute positively to the high-margin consumables in the dental portfolio.
Negative Points
- The Medtech segment underperformed, particularly in the Orthopedics business, leading to a 4% organic decline.
- The US Orthopedics market remains challenging, with customers working through existing inventories and applying tighter budgets.
- Adjusted EBITA growth was slower at 3% year-over-year, impacted by the weakness in Medtech Orthopedics.
- The company faced a 3% negative impact from currency movements in the quarter.
- Leadership changes, including the departure of the CEO and the head of the Medtech segment, indicate potential instability and a period of transition.
Q & A Highlights
Q: Could you provide more context around the timing and rationale for the CEO transition? Was it part of a long-term succession plan or a more reactive decision? Also, what's your view on the M&A pipeline or appetite?
A: The timing of the CEO transition was not part of a planned succession but rather a decision made in the best interest of all stakeholders. The Board felt it was necessary to act when confidence in the CEO's long-term fit was in question. Regarding M&A, the pipeline is strong, with many opportunities in animal health. We have the financial resources and team to pursue exciting acquisitions.
Q: Could you elaborate on how the Medtech segment progressed throughout the quarter and what your expectations are for the second half?
A: The Medtech segment, particularly Orthopedics, underperformed due to a challenging US market. We saw a tougher May and June than expected, with customers working through inventories and applying tight budgets. We are taking actions to improve performance, including appointing a new Head of North America for Medtech Orthopedics. However, we do not foresee immediate market improvements.
Q: How do you view the rest of the year shaping up in terms of organic growth overall, and what levers are you focusing on to protect margins?
A: We expect continued momentum in our business, with strong growth in Veterinary Services, Diagnostics, and Specialty Pharma. We aim to return to growth in Medtech Orthopedics. To protect margins, we will focus on capturing opportunities across segments and improving like-for-like margins, despite challenges in Medtech Orthopedics.
Q: Your long-term guidance implies over 20% annual growth in group adjusted EBITA from 2024 to 2030. Do you feel like this level is doable in 2025? Also, why have you adjusted out the cost of long-term incentive plans?
A: We remain confident in achieving our long-term financial targets, including solid growth in 2025. The adjustment for the long-term incentive plan was due to participants experiencing a financial loss, and the Board decided to compensate them if certain targets are met by next year.
Q: Could you confirm that there was no disagreement on the strategic direction between the Board and the CEO? Also, what profile are you looking for in a new CEO?
A: There was no disagreement on the strategic direction; both the Board and the CEO agreed on the strategy. We are looking for a CEO with strong operational competence and the ability to foster a purpose-driven, entrepreneurial culture. The ideal candidate will balance operational excellence with inspiring leadership.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
