Arjo (ARJO) investor relations material

Strategic direction and priorities

• New strategy centers on leveraging core strengths, customer-centricity, and building a future-ready platform, with a focus on winning in core markets (long-term care, acute care), selective expansion into new care settings, and simplifying the portfolio for efficiency.

• Operating model reorganized into five empowered regions to increase customer proximity, commercial relevance, and accountability, supported by lean group functions.

• Emphasis on building a performance-driven, purpose-driven culture, empowering leaders, fostering cross-border collaboration, and enabling faster decision-making.

• Portfolio optimization, rationalization, and supply chain improvements are prioritized to accelerate profitable growth, value generation, and capital efficiency.

• Digital and AI capabilities will be integrated to deliver measurable outcomes and efficiency.

Market outlook and growth opportunities

• North America represents nearly 40% of sales, with acute care as the largest segment and long-term care identified as a major growth opportunity, especially in the U.S. and Canada.

• Acute Care and Long-Term Care are key growth drivers in the US and Canada, with scalable opportunities in reprocessing and home care.

• Market megatrends such as aging populations, workforce shortages, and digitalization present clear opportunities for growth.

• Both markets leverage direct sales, service, and clinical approaches to deepen customer relationships and drive solution-based selling.

• Canada has achieved 22 consecutive quarters of growth, with 65% of revenue from long-term care and a focus on expanding acute care and home care penetration.

Financial guidance and execution

• Committed to an EBIT improvement of approximately 350 MSEK versus 2025, to be delivered by mid-2029, with most gains expected in the next 24 months and no sales growth assumed.

• One-time restructuring investment of about 370 MSEK, mainly P&L impact, to be incurred mostly by 2027–2028, supporting operational and organizational changes.

• Portfolio simplification, procurement initiatives, and pricing discipline expected to enhance cash flow, capital efficiency, and profitability, with further details on financial targets to be presented in Q1 2027.

• Price pressure, especially in VTE prevention, has stabilized at lower levels; focus is on efficiency and value-based selling to offset margin pressures.

• Historical targets included 3-5% annual organic sales growth and an adjusted EBITDA margin of ~23%.