Swedencare AB (publ) HALF YEAR REPORT April 1st – June 30th 2025
Expanded partnership with Amazon
Summary of the period
Numbers in parentheses refer to outcome of the corresponding period of the previous year.
Second quarter: April 1st - June 30th, 2025
- Net revenue amounted to 646.7 MSEK (630.5 MSEK), corresponding to an increase of 3% (10%)
- Organic, currency-adjusted growth amounted to 7% (10%)
- Operational EBITDA amounted to 122.9 MSEK (140.9 MSEK), corresponding to a decrease of ‑13%, and an EBITDA-margin of 19.0% (22.3%). The operational adjustments totaling 32.6 MSEK include M&A costs, costs for the implementation of an ERP system and non-cash flow-impacted evaluation of acquisition stock to fair value
- Operational EBITA amounted to 106.1 MSEK (119.9 MSEK), corresponding to a decrease of ‑12% and an EBITA-margin of 16.4% (19.0%)
- Profit after tax amounted to ‑6.9 MSEK (20.9 MSEK)
- Earnings per share calculated on 159,840,958 shares (158,731,900 shares) amounted to ‑0.04 SEK ( 0.13 SEK)
- Cash flow from operating activities amounted to 32.8 MSEK (81.2 MSEK)
- As of June 30th, 2025, cash amounted to 124.0 MSEK (170.0 MSEK)
First half year: January 1st - June 30th, 2025
- Net revenue amounted to 1,287.8 MSEK (1,228.0 MSEK), corresponding to an increase of 5% (12%)
- Organic, currency-adjusted growth amounted to 6% (11%)
- Operational EBITDA amounted to 247.4 MSEK (279.7 MSEK), corresponding to a decrease of ‑12%, and an EBITDA-margin of 19.2% (22.8%). The operational adjustments totaling 32.8 MSEK include M&A costs, costs for the implementation of an ERP system and non-cash flow-impacted evaluation of acquisition stock to fair value
- Operational EBITA amounted to 209.6 MSEK (239.1 MSEK), corresponding to a decrease of ‑12% and an EBITA-margin of 16.3% (19.5%)
- Profit after tax amounted to 16.9 MSEK (51.0 MSEK)
- Earnings per share calculated on 159,354,600 shares (158,731,900 shares) amounted to 0.11 SEK ( 0.32 SEK)
- Cash flow from operating activities amounted to 129.6 MSEK (151.8 MSEK)
Significant events during the second quarter
Swedencare AB (publ) has completed the acquisition of av Summit Veterinary Pharmaceuticals Limited and carries out an issue of shares to the seller as a part of purchase price.
Significant events after the second quarter
There are no significant events after the end of the second quarter to comment on.
Words from the CEO
The second quarter’s net sales of 647 MSEK represented an increase of 3% compared to Q2 2024. Our operational EBITDA margin was 19%, amounting to 123 MSEK. Our organic growth was 7% for the quarter, an improvement compared to the previous quarter but lower than our target of double-digit organic growth.
If the “Big Box retail order” to Walmart, which we previously communicated, had gone through in Q2 as planned, we would have achieved double-digit organic growth; however, it was postponed to early July due to reasons beyond our control. Despite the delay in our order, the actual in-store launch remains on schedule and by the end of July, we will be present in nearly 1,400 stores! During the quarter, we took control of NaturVet’s Amazon account, which was previously scheduled for a year-end change. During the quarter we sold our partners remaining inventory which is the main reason for our soft profitability for the quarter. The remaining product inventory is expected to be sold during Q3 and will have some impact on the EBITDA margin, although to a smaller extent than Q2. When summarizing 2025, we expect to achieve double-digit organic growth for the full year and higher profitability compared to 2024.
External environment
Tariff threats, currency fluctuations, and war naturally create uncertainty in the market, and we continue to see some caution among our larger customers in their orders and inventory buildup. Tariffs, as previously described, have a minimal impact on us since our strategy is to maintain local production and supply chains.
With the group’s most significant operations in the USA, we experienced a currency impact during the quarter of –8%, which negatively affects our sales; however, the effect on our profit is marginal as we have a natural hedging with majority of costs and revenues in local currency.
The pet industry is stable and resilient, which is why most market experts expect the industry’s growth to remain around 5%. We feel confident about a continued stronger market for us, as Online (where we are closest to the end customer) is the channel where we have the strongest growth.
Laszlo Varga, our CCO Europe and Ecom lead, describes below some of our Online activities during the quarter and will also speak about our sustainability strategy at our quarterly presentation.
Segments
Geographically, Europe continues to lead our growth, especially in the Nordics and the UK. The Online and the veterinary channel remain the strongest in the UK, and Online and Pet Retail for the Nordics.
Trading conditions between the UK and the EU improved significantly when the UK removed the requirement for veterinary certificates for products with animal content. This will have a positive impact both on administration and cost structure, especially between Ireland and the UK where we have a large flow. Southern Europe is somewhat weaker, but Italy has reversed the negative trend from Q1 to single-digit growth.
Our new management for the US Vet Channel has implemented a number of organizational changes resulting in both improved collaboration internally between our various brands and increased customer interactions. The latter has already resulted in a significant multi-year customer agreement covering a broad range of newly developed dermatology products for the veterinary channel, which is expected to generate revenue already in the second half of the year and for many years to come.
Pet Retail has been somewhat weaker due to Naturvet's rebranding and inventory optimization at our larger customers and distributors. All of them want to launch the new design as soon as possible but at the same time need to sell out the products with the old design from their inventory first. When the current quarter is over, all our larger customers will have launched and with CVS and Walmart as new customers and expansion with Petsmart, Q3 and beyond is expected to show strong sales development.
Online remains our fastest-growing channel, and that growth is expected to continue even stronger as we have moved NaturVet’s Amazon sales in-house during the quarter. We are currently working to implement our proven sales strategies and processes, and we are already seeing an increase in NaturVet sales on Amazon.
In our manufacturing segment, all companies reported growth, except within Pharma, which postponed its largest production project to the second half of the year due to the client’s rapidly changing launch plan. We still anticipate strong growth in the Pharma segment moving forward, with both existing and newly signed customers. We have also expanded our product range and can now produce “sterile eye fluids,” a niche yet in-demand product group with interest from multiple veterinarycompanies. For the other manufacturing companies, growth is single-digit in North America and double-digit in Europe, where “soft chew” demand remains robust.
M&A and outlooks
Our latest acquisition, Summit, has performed well, with solid growth, although slightly lower profitability due to accounting adjustments related to its integration into our group. We have already begun developing soft chews incorporating some of Summit’s active ingredients, and we hope to have these approved for launch early next year.
Our focus going forward regarding acquisition discussions will be more focused on new geographies as we see Asia as a very interesting market going forward where both China and India have good prospects for strong growth.
The second half of the year has started strongly across all segments and from now on we will deliver double-digit growth, along with improved margins. I look forward to our upcoming report and thank you for your interest.
I want to conclude by thanking the entire organization, partners, and our shareholders, and I wish you all a pleasant summer.
Håkan Lagerberg
Malmö July 23rd, 2025
The complete interim report is attached to this press release and is available at www.swedencare.com.
Swedencare invites shareholders and analysts to a presentation of the half year report where CEO Håkan Lagerberg and CFO Jenny Graflind will comment on the report. Laszlo Varga, CCO Europe, will also participate on the webinar. The presentation will be held at 10:30-11:30am CEST and can be followed via live webinar.
Please use this link to join the webinar: https://us06web.zoom.us/j/88038903674
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