ADDvise Group (ADDV) Q4 2024 earnings summary

Executive summary

• Q4 2024 net sales reached SEK 442 million, up 11% year-on-year, with a trend shift in pharma and clinical trials leading to a smaller organic decline of -3% compared to -25% in the previous quarter.

• Net revenue for 2024 increased by 21.7% to SEK 1,670.7 million, mainly driven by acquisitions, while organic net revenue declined by 14.3%. December saw a return to positive organic growth at 4.8%.

• EBITDA for Q4 was SEK 89 million (20% margin), and full-year EBITA was SEK 379 million (23% margin), both impacted by product mix and normalization after exceptional 2023 results.

• Acquisitions from late 2023 and early 2024 are performing at or above expectations, and business momentum remains strong in healthcare and lab segments.

• The Board proposes no dividend for 2024 and has resolved on a SEK 457 million rights issue to strengthen the balance sheet and reduce debt.

Financial highlights

• Q4 EBITDA was SEK 89 million (20% margin), down from SEK 126.1 million (31.8%) in the prior year.

• EBITA for Q4 was SEK 76 million, compared to SEK 103 million in Q4 2023.

• Cash flow from operations was SEK 64 million in Q4, and SEK 182.5 million for the year, affected by CapEx investments and lower cash conversion.

• Net debt increased to SEK 1,434.6 million, with net leverage at 3.8x EBITDA, above the long-term target of 3x.

• Cash on hand at year-end was SEK 356 million.

Outlook and guidance

• New long-term financial targets: average annual EBITA growth of 15%, ROCE of 15%, net debt/EBITDA not exceeding 3.0, and up to 25% of previous year's profit as dividend.

• Expectation for organic sales pickup in healthcare in Q1 2025 as pharma comparables fade.

• Rights issue and associated warrants aim to reduce debt and support continued acquisition-driven growth.

• Management remains optimistic about normalized levels in pharmaceuticals and clinical trials, and expects to benefit from demographic trends.