Interim report 2021, January 1 – June 30

23-07-2021   Regulatory press release

April - June 2021

Net revenue for the period was SEK 117.6 million (101.8)

EBITDA for the period was SEK 15.8 million (15.1)

EBITA for the period was SEK 13.3 million (13.1)

Profit/loss for the period was SEK 0.1 million (8.3)

Basic earnings per share for the period amounted to SEK 0.00 (0.07)

Orders received for the period totaled SEK 125.8 million (101.0)

Operating cash flow for the period was SEK -6.9 million (20.5)

January - June 2021

Net revenue for the period was SEK 205.4 million (185.5)

EBITDA for the period was SEK 24.6 million (20.5)

EBITA for the period was SEK 20.2 million (16.5)

Profit/loss for the period was SEK 2.6 million (5.8)

Basic earnings per share for the period amounted to SEK 0.02 (0.05)

Orders received for the period totaled SEK 217.4 million (238.3)

Operating cash flow for the period was SEK -8.2 million (29.2)

CEO’s comments

During the second quarter we saw a strong order intake and a normalized product mix with significantly improved margins.

Net revenue in the second quarter was SEK 117.6 million, an increase of 15.6% compared with the second quarter of 2020 when the net revenue was SEK 101.8 million. Organically, revenue fell 8.5% due to the effect of strong Covid-19 related sales in the second quarter of 2020. For the rolling 12 months, net revenue was SEK 378.4 million, compared with SEK 358.5 million for the full year 2020. During the second quarter of 2021, we saw an improved gross margin for the Group at 44.5% (38.1), due to a return to a normalized product mix with a higher share of proprietary products. Order intake increased organically in the second quarter versus the second quarter in 2020 by 3.5%. Total order intake was SEK 125.8 million (101.0).

EBITDA for the second quarter was SEK 15.8 million (15.1). Profit for the period was SEK 0.1 million compared to SEK 8.3 million in the second quarter of 2020. Profit for the second quarter of 2021 was impacted by the one time effect of the Bond refinancing and the acquisition costs relating to MRC of approximately SEK 7.5 million. Profit for the period during the second quarter of 2020 was supported by government contributions of approximately SEK 3.4 million. Without the one time effects, the profit for the second quarter of 2021 was SEK 7.6 million (4.9). EBITDA for the rolling 12 months was SEK 50.3 million compared with SEK 46.2 million for the full year 2020.

The second quarter of 2021 marked a shift in momentum, as ADDvise completed two significant milestones in its strategy acquisition. The first being the acquisition of MRC, which was consolidated in full during the second quarter of 2021. MRC marks a significant contribution to both ADDvise’s geographical footprint, product offering and size. The second significant event was the refinancing of the publicly traded Bond. The Bond issue saw strong demand and was significantly oversubscribed. The refinancing will enable ADDvise to continue along its path of growth.

Lab business unit

Net revenue within the Lab business unit totaled SEK 66.1 million, which includes MRC and represents an increase of 32% compared to the second quarter for 2020 when it was SEK 49.9 million. There are positive signs from our laboratory customers 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 7.5 million, a decrease compared to the first quarter of 2020 when it was SEK 8.3 million.

Healthcare business unit

Net revenue within the Healthcare business unit totaled SEK 51.6 million, a decrease of 0.6% compared to the second quarter of 2020 when it was SEK 51.9 million. The improvement in net revenue continued from the end of the first quarter as the gap compared to last year fell. The near-term US economic outlook has picked up somewhat as we enter the second half of the year, and we expect elective procedures which had be postponed, to be back on the table during the remainder of the year.

EBITDA for the Healthcare business unit was SEK 8.3 million, an increase compared to the second quarter of 2020 when it was SEK 7.1 million, which was driven by a product mix with stronger margins.

Acquisitions

We continue to work proactively to expand our product portfolio through new and interesting acquisitions within both our business units. On May 10, 2021 ADDvise Group signed a letter of intent to acquire GraMedica, which is set to be consolidated during the second half of 2021. GraMedica is specialized in the development of orthopedic implants and stents for feet and ankle surgery. GraMedica was founded in 2003, and since, the company has developed a portfolio of several life-changing foot implants such as the bestseller, HYPROCURE®. The implants are designed to provide a solution for the correction of a patients’ feet and ankles and are being used worldwide by orthopedic doctors.

On May 24, 2021, ADDvise Group signed a second letter of intent to acquire Medisuite, which is set to be consolidated during the second half of 2021. Medisuite is an American online pharmacy that specializes in medication for men’s health. The prescription medication that is marketed by Medisuite is mainly used for treatment of cancer, incontinence, and impotence. Medisuite’s customers are mainly physicians within the urology and oncology therapeutic areas.

Proforma with finalized acquisitions and signed letters of intent, ADDvise Group is close to a full year EBITDA of approximately SEK 80.0 million and a net revenue of approximately SEK 500 million with the current indebtedness.

Outlook

Our assessment is that demand within our product segment will remain high, despite the on-going pandemic, and our diverse portfolio of products will benefit us during 2021.

ADDvise’s long-term revenue growth is driven mainly by a growing and ageing population, increased prevalence of chronic illnesses and greater investment in healthcare and in 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.

We are very proud that our balanced product portfolio continues to deliver. We are in no doubt that we will see a marked increase in the willingness to invest in medtech equipment worldwide in the medium to long term.

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 July 23, 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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