Interim report 2021, January 1 – September 30

27-10-2021   Regulatory press release

July - September 2021

Net revenue for the period was SEK 105.6 million (76.2), an increase of 38.6 %. Organic growth was 12.1 %.

Adjusted EBITDA for the period was SEK 14.5 million (5.3)

EBITDA for the period was SEK 13.3 million (9.4)

Adjusted profit/loss for the period was SEK 3.0 million (-1.2)

Basic earnings per share for the period amounted to SEK -0.01 (0.02)

Orders received for the period totaled SEK 93.7 million (68.0)

Cash flow for the period was SEK 23.7 million (-2.9)

January - September 2021

Net revenue for the period was SEK 310.9 million (261.7), an increase of 18.8 %. Organic growth was 1.8 %.

Adjusted EBITDA for the period was SEK 38.0 million (20.7)

EBITDA for the period was SEK 37.9 million (29.9)

Adjusted profit/loss for the period was SEK 8.9 million (-0.5)

Basic earnings per share for the period amounted to SEK 0.01 (0.07)

Orders received for the period totaled SEK 311.2 million (306.3)

Cash flow for the period was SEK 98.9 million (7.8)

CEO’s comments

Strong growth in the third quarter. Revenue growth of 39 percent, of which 12 percent was organically driven. Pro forma including signed letters of intent, the annual net sales of ADDvise Group is SEK 664 million with an EBITDA of SEK 111 million.

Net sales in the third quarter amounted to SEK 105.6 million, an increase of 38.6 percent compared to the third quarter of 2020 when net sales amounted to SEK 76.2 million. Organically, net sales increased by 12.1 percent. Sales normalized in the third quarter. Rolling 12 months, net sales amounted to SEK 407.8 million compared to SEK 358.5 million for the full year 2020.

Net sales pro forma rolling 12 months, with all companies in the Group consolidated from the beginning of the 12-month period, amounted to SEK 491.7 million. The corresponding pro forma EBITDA amounted to SEK 78.9 million. Our goal is to reach pro forma net sales of SEK 1 billion and an EBITDA of SEK 150 million by the end of 2022.

During the third quarter, we consolidate our two most recent acquisitions, GraMedica and MediSuite. With GraMedica and MediSuite in the Group, ADDvise is growing its product portfolio on the US market. In September, we carried out a directed share issue of SEK 125 million. A number of Swedish and international institutional investors participated in the directed share issue, which was multiple times oversubscribed. The directed share issue enables us to continue along our path of strong growth.

As a result of the increased acquisition rate, we have updated two of our long-term financial targets. The long-term financial profitability target was raised from 15 percent in EBITDA margin to 20 percent in EBITDA margin. The long-term financial growth target was raised from 20 percent to 25 percent in revenue growth.

In the third quarter of 2021, we again saw an increase in gross margin. This is due to a return to a product mix with a higher share of proprietary products but also of high gross margins in newly acquired subsidiaries. The gross margin in the quarter was 51.5 percent (36.4). Organically, order intake increased by 6.0 percent in the third quarter of 2021 compared to the third quarter of 2020. Total order intake amounted to SEK 93.7 million (68.0).

EBITDA for the third quarter amounted to SEK 13.3 million (9.4). Profit/loss after tax for the period amounted to SEK -1.6 million, compared to SEK 2.8 million in the third quarter of 2020. Acquisition costs had a negative impact on EBITDA in the third quarter of 2021 of SEK 1.6 million, and profit/loss after tax for the period of SEK 4.9 million. Adjusted EBITDA for the third quarter amounted to SEK 14.5 million (5.3), and adjusted profit/loss for the period amounted to SEK 3.0 million (-1.2).

Cash flow from operating activities during the first nine months of 2021 amounted to SEK -16.9 million. Cash flow has been negatively impacted by increased purchases to inventories to build a safety margin given supply chain disruptions during Covid-19. In addition, cash flow has been negatively affected by payment of SEK 11.5 million of the liability for deferrals of taxes and fees due to Covid-19 and by costs for financial and legal advice in connection with acquisitions of SEK 10.0 million.

Lab business unit

Net revenue within the Lab business unit totaled SEK 49.9 million, which is an increase of 52.8 percent compared to the third quarter of 2020 when it was SEK 32.7 million. There are positive signs from our laboratory customers still moving away from low margin consumables and into equipment and laboratory projects like clean rooms and laboratory interiors which carry better margins.

EBITDA for the Lab business unit was SEK 6.5 million, an increase compared to the third quarter of 2020 when it was SEK 3.4 million.

Healthcare business unit

Net revenue within the Healthcare business unit totaled SEK 55.6 million, an increase of 27.9 percent compared to the third quarter of 2020 when it was SEK 43.5 million. The near-term US economic outlook picked up somewhat as we entered the second half of the year, and we expect several elective procedures which had been postponed, to be back on the table during the remainder of the year.

EBITDA for the Healthcare business unit was SEK 5.1 million, an increase compared to the third quarter of 2020 when it was SEK 4.8 million.

Acquisitions

We continue to work proactively to expand our product portfolio through new and interesting acquisitions in both our business areas.

On August 30, 2021, ADDvise signed a letter of intent to acquire Southern Life Systems (SLS), which we plan to consolidate in the Group during the fourth quarter of 2021. SLS is an American medtech company that is the market leader in equipment and software for monitoring patients in long-term care. The company has developed the products Rosie 4, Rosebud and the RCS software that together streamline monitoring vital parameters in patients in long-term care and in nursing homes.

On October 21, 2021, ADDvise signed a letter of intent to acquire Poly Pharmaceuticals (Poly Pharma), which we plan to consolidate in the Group during the first quarter of 2022. Poly Pharma is an American pharmaceutical company specializing in developing, manufacturing and marketing over-the-counter generic drugs for the treatment of cough, cold, allergy, sinusitis, urological health and pain relief. The sales are mainly made to pharmacies and general practitioners. The company markets and sells 20 proprietary pharmaceuticals on the US market.

Pro forma with completed acquisitions and signed letters of intent, the annual EBITDA of ADDvise Group is close to SEK 111 million with net sales of approximately SEK 664 million.

Outlook

Our assessment is that demand in our product segment will remain high, despite the ongoing pandemic, and we will benefit from our versatile product portfolio.

ADDvise’s long-term revenue growth is mainly driven by a growing and aging population, increased incidence of chronic diseases and greater investment in healthcare, as well as research and development. The global population is expected to grow by two billion over the next 30 years. By 2050, as many as one in six people could be over the age of 65. This will lead to major challenges in healthcare systems and we want to be part of the solution.

Rikard Akhtarzand, CEO, ADDvise Group AB (publ)

For further information, please contact:

Rikard Akhtarzand, CEO

+46 8-128 766 08

rikard.akhtarzand@addvisegroup.se

Aaron Wong, CFO

+46 8-128 766 03

aaron.wong@addvisegroup.se

ADDvise Group AB (publ), Grev Turegatan 3, SE-114 46 Stockholm, Sweden

Important information:

This information is information that ADDvise Group AB is required to disclose under the EU Market Abuse Regulation and pursuant to the Swedish Securities Market Act. The information was submitted for publication on October 27, 2021 at 08:45 CEST.

ADDvise’s financial reports are available on ADDvise’s website,

https://www.addvisegroup.com/investor-relations/financial-and-annual-reports/

The interim report is published in Swedish and English. The Swedish version represents the original.

About ADDvise Group

ADDvise Group AB (publ) is a leading supplier of equipment to healthcare and research facilities. The Group consists of two business areas, Lab and Healthcare. Sales are global. The Group has a clear acquisition strategy with the aim of raising shareholder value and expanding the business – both geographically and product-wise. ADDvise Group’s shares are listed on Nasdaq First North Growth Market and Mangold Fondkommission AB, +46 8 503 015 50, CA@mangold.se, is the Company's Certified Adviser. Additional information is available at www.addvisegroup.com.

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