FOURTH QUARTER OCTOBER-DECEMBER                         

• The Group's net sales amounted to SEK 474.2 (456.6) million, an increase of 4 percent.
• The Group's EBITA was SEK 70.7 (91.9) million, a decline of 23 percent. EBITA adjusted for items affecting comparability amounted to SEK 67.4 million, a decline of 27 percent.
• The EBITA margin was 14.9 (20.1) percent. Adjusted for items affecting comparability, the margin was 14.2 percent.
• Profit after tax amounted to SEK 42.8 (62.5) million.
• Earnings per share amounted to SEK 2.8 (4.2).
• Cash flow from operating activities was SEK 126.5 (74.7) million.

TWELVE MONTHS JANUARY-DECEMBER

• The Group's net sales amounted to SEK 1,806.7 (1,587.4) million, an increase of 14 percent.
• The Group's EBITA was SEK 329.5 (275.8) million, an increase of 19 percent. EBITA adjusted for items affecting comparability amounted to 306.4 (291.2) million, an increase of 5 percent.
• The EBITA margin was 18.2 (17.4) percent. Adjusted for items affecting comparability, the EBITA margin was 17.0 (18.3) percent.
• Profit after tax amounted to SEK 209.2 (172.2) million.
• Earnings per share amounted to SEK 14.0 (11.6).
• Cash flow from operating activities was SEK 360.0 (228.0) million.

Fourth quarter

In the fourth quarter of the year, the Assistive Tech and MedTech business areas delivered good sales but overall unsatisfactory earnings. As expected, Specialty Pharma had a significantly weaker quarter. The year ended with a strong cash flow.

Sales increased by 4 percent, which included organic growth of -2 percent. Organic growth was 4 percent excluding the Specialty Pharma business area, which had high comparative figures for the previous year and into the first quarter of 2024. While demand is expected to remain generally good for the Group's companies, we did not see the same strong December as in the previous year.

Overall, the Group delivered a fourth quarter that fell short of our targets. EBITA showed a decline of 23 percent. Adjusted for acquisition-related items affecting comparability, the decline for the quarter was 27 percent. Good cash flow resulted in a strengthened net cash position of SEK 277 million.

Royalties for Melatonin to the UK decreased by SEK 10.7 million compared with the previous year and non-recurring costs amounted to approximately SEK 10 million. Taking these effects into account would make the result 5 percent lower than in Q4 of the previous year. This is attributable to a weaker December, an unfavourable mix and slightly higher costs related to initiatives for continued growth.

The Assistive Tech business area continues to grow and ended the year with a stable quarter in terms of sales, although with a weaker December. Margins for the quarter are slightly worse, affected by the change in product mix and non-recurring costs. Although acquisitions, integrations and initiatives affect margins, the full year margin is considered to be more representative for the existing business than the isolated fourth quarter.

The MedTech business area delivered a good quarter with three out of four companies experiencing good demand. Growth was 4 percent, although this was lower than in previous quarters of the year. MedTech's margin was negatively affected by non-recurring costs, and again we consider that the full year margin is more representative for the business area. The final part of the potential contingent consideration was reversed during the quarter, resulting in one-off income. As we noted earlier, this is a consequence of criteria in the agreement between MedCap and the seller of the company; in other words, the company is performing well and according to MedCap's plan but without triggering the contingent consideration payment.

As expected, Specialty Pharma had another quarter that was weaker than in the strong previous year. The effect is in line with what we reported for the second and third quarters. Royalties from sales in the UK amounted to SEK 0.5 million in the fourth quarter. The UK royalties amounted to SEK 5.9 million in the first quarter of 2024, after which the contribution virtually disappeared. The quarter was also burdened by delays, an unfavourable product mix in production and inventory write-downs.

Unimedic's strategy and focus is to broaden its portfolio through more licensing, partnerships and acquisitions. A new licence agreement was signed in the quarter and further opportunities are currently being evaluated and negotiated. These advances in business development are gradually providing new revenue streams, although in the short term they involve increased costs for regulatory work and preparation for launches.

Acquisitions

MedCap and the Group's business areas continuously evaluate potential add-on acquisitions and new "platform acquisitions" and, based on the number of dialogues conducted during the quarter, the conditions for making acquisitions are considered good. Advisory costs of SEK 2.6 million, which were related to an ongoing acquisition process not yet finalised, were incurred during the quarter. All three business areas have identified potential acquisitions and are engaged in ongoing dialogue.

In summary

Despite an unsatisfactory Q4 result, with lower earnings for Specialty Pharma and several non-recurring costs in the business areas, it was a good year for the Group, with income for the full year growing by 14 percent (6 percent organic) to SEK 1,807 million. The adjusted EBITA margin for the year was 17 percent and operating cash flow, which amounted to SEK 360 million, contributed to a stronger net cash position. Specialty Pharma has suffered a significant drop against the previous year's strong comparative figures and the business area's profit has declined by more than 50 percent. This has been partly offset by very strong performances for Assistive Tech and MedTech, which increased their full-year earnings by 35 percent and 19 percent respectively.

For the full year 2024, EBITA growth was 5 percent following a previous year with 55 percent growth. Our financial objective is to deliver >15 percent annual EBITA growth over time, and over the last five years the compounded average growth rate is 23 percent. We considered the Group to be well positioned to deliver on its objectives over time, based on our organic ambitions combined with a large financial capacity for acquisitions. There are challenges for Specialty Pharma but overall, the Group's market conditions are unchanged.

Anders Dahlberg, CEO

Stockholm

31 January 2025