Swedencare AB (publ)

Revenue was SEK 670 million in Q2, up 4% reported and 7% organically, with a 3% negative currency impact. Reported gross margin was 61%, up from prior periods and described as the strongest since 2020; operational EBITDA was SEK 129.4 million, up 5% year over year, with a 19.3% margin. Operating cash flow was SEK 78 million and cash conversion was 60%. Year-to-date organic growth was 9%. On leverage, net debt to EBITDA increased to 3.1, reflecting the Summit Vet earn-out now due within 12 months and the SEK 44 million dividend. For the full year, management said it expects gross margin around 58%-59% and profitability to improve in the second half versus the first half; they also expect North America, Europe, and manufacturing to deliver stronger growth in H2, with Europe and North America both still expected to grow at double-digit or high-single-digit/double-digit rates depending on the segment.

Håkan Lagerberg framed the quarter as solid overall, emphasizing resilient growth, strong cash generation, and progress on strategy despite a volatile market. He highlighted Europe and Production as clear strengths, called North America disappointing but temporary, and said the channel work in the U.S. is in place for a better second half. He also pointed to China reopening opportunities, ProDen PlaqueOff momentum, and new product launches and market expansion as strategic drivers.

Jenny Graflind focused on the numbers and the drivers behind them: SEK 670 million revenue, 7% organic growth, 61% gross margin, SEK 129 million operational EBITA, and SEK 78 million operating cash flow. She said the gross margin benefited from stronger European mix, Summit Vet’s record quarter, and some inventory buildup, while higher external costs came from Amazon growth and marketing tied to Prime Day and product launches. She also noted SEK 3 million of severance costs, CapEx at 4% of sales in the quarter and 3% year to date, SEK 5 million of loan repayments in Q2 and SEK 55 million year to date, and reiterated a 58%-59% gross margin expectation going forward/full year.

Analysts focused on whether the delayed big-box order pushed Q2 organic growth lower than it otherwise would have been, and management said growth would have been double digit without it. Questions also centered on whether more delays could hit Q3/Q4; management said there is no similarly large order at risk in Q3 and that the delayed order was already produced and will ship in July. On margins, management said H2 should improve as Amazon-related costs normalize, European operations stabilize, and dermatology softness eases, while gross margin is expected around 58%-59% going forward.