ADDvise Group (ADDV) Q3 2024 earnings summary

Executive summary

• Net sales reached SEK 404 million in Q3 2024, up 26% year-over-year, driven by M&A and strong order intake despite challenging comparables in pharma and clinical trials.

• Order intake grew 17% year-over-year, with a notable large order in the Nordics and improving US momentum, though organic order intake declined 25%.

• Organic growth was negative at -25% for the quarter, but excluding pharma and clinical trials, organic growth for Jan–Sep was 6%.

• Recently acquired businesses are performing at or above plan and are now main revenue drivers, expected to contribute more to organic growth in Q4.

• Cash position remains strong at over SEK 400 million, with ongoing focus on optimizing working capital and net debt ratio.

Financial highlights

• Q3 EBITDA was SEK 88 million with a 22% margin, down from 29% last year due to product mix changes.

• Net income declined to SEK 12 million, mainly due to higher interest expenses and lower currency gains.

• Cash flow from operations was SEK 32 million in Q3, impacted by growth-related CapEx and clinical trials expansion.

• Net leverage stands at 3.3x EBITDA pro forma, above the long-term target of below 3x.

• EPS for Q3 was SEK 0.06, down from SEK 0.18 year-over-year.

Outlook and guidance

• Effects from last year's exceptional pharma and clinical trials performance will persist in Q4 but are expected to fade by next year.

• Positive indicators for US capital goods demand and robust Nordic demand may impact sales in the remainder of the year.

• Management expects a strong end to 2024 and continues to pursue a long-term strategy of sustainable value creation.

• Investments in clinical trials equipment are expected to continue, especially in the US.

• Process initiated to change listing venue to Nasdaq Stockholm, expected completion in Q1 2025.