Strong first quarter – EBITA up 46 percent

FIRST QUARTER, JANUARY-MARCH           

• The Group’s net sales amounted to SEK 461.7 (380.2) million, an increase of 21 percent.
• The Group’s EBITA was SEK 88.5 (45.3) million, an increase of 95 percent. Adjusted for items affecting comparability*), the increase was 46 percent.
• The EBITA margin was 19.2 (11.9) percent. The EBITA margin adjusted for items affecting comparability*) in the comparative period was 16.0 percent.
• Profit after tax amounted to SEK 56.0 (24.8) million.
• Earnings per share amounted to SEK 3.8 (1.7).
• Cash flow from operating activities was SEK 92.4 (52.5) million.

First quarter

The Group delivered good growth and a strong increase in earnings in the first quarter of the year. Sales increased by 21 percent as a result of acquisitions and organic growth of 12 percent. Both MedTech and Assistive Tech showed strong growth, while Speciality Pharma reported a slight decline in sales. Demand and market conditions were generally favourable for the Group’s companies.

The Assistive Tech business area delivered a strong increase in sales during the quarter, driven by the Swedelift acquisition and high demand in the area of cognition.

MedTech also had good growth in the quarter, with all companies showing strong organic growth and the acquisition of Toul & Surgicube also contributing.

Speciality Pharma had a more challenging quarter as competition for Melatonin intensified in the UK market, which resulted in price pressure and lower royalty income during the quarter. This will affect short-term profitability, while profitability in the longer term is dependent on the ability to drive business development, i.e. to broaden the product portfolio and markets.

Overall, the Group delivered a strong first quarter with high sales growth and a significant increase in earnings. Adjusted EBITA for the quarter increased by as much as 46 percent, despite weaker earnings for specialty pharmaceuticals.

Acquisitions

In the first quarter, a small add-on acquisition was made for Abilia. The acquisition broadens the portfolio in welfare technology and is expected to develop well through Abilia’s market position. The Group continuously drives the process of evaluating acquisitions – both by working with management of each subsidiary to identify add-on acquisitions and by evaluating new areas of business and companies. We conduct dialogue with both large and small companies, mainly based in northern Europe. As a long-term owner and home to Life Science companies, this often means that contact with potential acquisitions takes place over a long period of time until both parties are ready to finalise a deal.

MedCap’s strong balance sheet and low net debt to EBITDA ratio provide significant financial scope for further acquisitions. The prospects of finding interesting acquisition opportunities are considered good.

In summary

We can be pleased that most of the Group’s business areas have experienced good demand and that organic growth has remained solid in the quarter.

There are always challenges and in the previous year these included lower sales for Multi-Ply and the integration of acquisitions. We can now see that these have all been successfully resolved. Now focus is on the relocation of Inpac’s operations to a new production facility and to accelerate business development within Specialty Pharma.

Together with the respective management of the Group’s companies we are focusing on both improving and developing the existing businesses, while identifying and realising new business.

Anders Dahlberg, CEO

Stockholm

3 May 2024

This disclosure contains information that MedCap AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014) and the Swedish Securities Markets Act (2007:528). The information was submitted for publication, through the agency of the contact person, on 03-05-2024 06:30 CET.

For more information, contact:

Anders Dahlberg, CEO, Mobile 46 704 269 262,  e-mail anders.dahlberg@medcap.se

About MedCap

MedCap builds successful life sciences companies to improve people's lives. MedCap unites the strengths of a larger the company with the smaller companies' entrepreneurial power, agility, and business acumen. MedCap is publicly listed on NASDAQ Stockholm OMX, with the symbol MCAP. More information is available on the company web site www.medcap.se.