Net sales increased with 195% to 100 MSEK
SUMMARY OF THE PERIOD
Fourth quarter: October 1st – December 31st, 2020
Numbers in parentheses refers to outcomes during the corresponding period of the previous year.
- Net revenue amounted to 100 640 KSEK (34 084 KSEK), an increase of 195%
- Organic, currency-adjusted growth amounted to 32%
- Operating profit before depreciation (EBITDA) amounted to 31 577 KSEK (8 246 KSEK), corresponding to an increase of 283% and an EBITDA margin of 31,3% (24,2%)
- Operating profit after depreciation (EBIT) amounted to 25 338 KSEK (6 584 KSEK), corresponding to an increase of 285% and an EBIT margin of 25,1% (19,3%)
- Profit after tax amounted to 20 448 KSEK (5 722 KSEK)
- Earnings per share calculated on 20 265 178 shares 1,01 SEK (0,36 SEK)
- As of December 31st, 2020, cash amounted to 284 081 KSEK (45 737 KSEK)
Full year 2020
Numbers in parentheses refers to outcomes during the corresponding period of the previous year.
- Net revenue amounted to 239 946 KSEK (126 769 KSEK), an increase of 89%
- Organic, currency-adjusted growth amounted to 19%
- Operating profit before depreciation (EBITDA) amounted to 70 301 KSEK (39 531 KSEK), corresponding to an increase of 78% and an EBITDA margin of 29,3% (31,2%)
- Operating profit after depreciation (EBIT) amounted to 60 366 KSEK (36 914 KSEK), corresponding to an increase of 64% and an EBIT margin of 25,1% (29,1%)
- Acquisition costs amounted to 5 254 KSEK. Adjusted for this, EBIT amounted to 65 620 KSEK, corresponding to an EBIT margin of 27,3%
- Profit after tax amounted to 48 531 KSEK (29 913 KSEK)
- Earnings per share calculated on 17 358 303 shares 2,80 SEK (1,90 SEK)
- Cash flow from operating activities amounted to 30 596 KSEK (33 128 KSEK)
- Foreign exchange losses amounted to 5 091 KSEK
- The Board of Directors proposes a dividend of 0,80 SEK per share
- The Board of Directors will propose to the Annual General Meeting to decide on a split
of the company's shares by 4:1
- Swedencare's new financial goal is to achieve a turnover of 2 BSEK in 2025 with an EBIT margin exceeding 30%
Significant events during the fourth quarter
Swedencare AB (publ) secures exclusive rights for the purchase of raw materials for dental products for the North American market.
Swedencare AB (publ) secures the most important production market through exclusive rights for the purchase of raw materials for dental products for Europe.
Swedencare AB (publ) determines the additional purchase price for the acquisition of Animal Pharmaceuticals to the maximum amount of approximately 87 MSEK (10 MUSD).
Swedencare AB (publ) signs an agreement to acquire Holden2, an American e-commerce company focusing on pet health products.
Swedencare AB (publ) carries out a directed new emission of 750 000 shares and is thus provided with 222 MSEK, which, after issue costs of 3 MSEK, provided a net contribution of approximately
219 MSEK to partially finance the acquisition of Holden2.
Swedencare AB's (publ) powder product, ProDen PlaqueOff® CAT, has been approved by VOHC.
Significant events after the fourth quarter
Canagans Dental dry food, which contains Swedencare's ProDen PlaqueOff®, has been approved
Swedencare AB (publ) has completed the acquisition of Holden2 and part of the purchase is settled with a non-cash issue.
WORDS FROM THE CEO
Both organic and acquired business deliver - first step towards our new financial targets
The revenue for the fourth quarter 2020 was 100,6 MSEK which is an increase by 195% in comparison to Q4 2019 and the EBITDA-results increased by 283% to 31,5 MSEK, equaling a margin of 31,3%. The strong momentum of the industry was maintained throughout Q4 despite the continued effects of the pandemic worldwide.
The fact that we would deliver a record report in terms of revenue and result was to be expected due to our acquisitions of Animal Pharmaceuticals and Nutravet, both which are included in the numbers from October 1st, 2020, but the fact that we also reached an organic growth exceeding 32% is a true sign of strength given the global situation. The pandemic keeps affecting us by extended production- and delivery time from most of our partners. However, we are managing fairly well, only seeing a minor effect on sales, which otherwise would have been higher.
Basically, all markets globally report a growth in the number of registered dogs and cats. On the more mature markets it is not unusual with growth figures for 2020 exceeding 10%, to be compared to numbers between 1-2% annually during the last ten years. A fast growing pet population makes a great foundation for a continually strong Pet Health Care market.
As I mentioned in our latest quarterly report, we continue with many and some larger scale marketing projects. Brand building activities alongside more sales focused projects have been implemented and will keep being launched in 2021.
The integration of our new acquisitions proceeds very well, as expected. We have been transparent in regard to what we look for in our acquisitions - growth potential, profitability and not least that we look for entrepreneurs who wants to continue growing individually as well as an important part of the Swedencare family. It is a true pleasure to be part of and get reports from all the various projects and collaborations that take place within our group. Our strategy that the ordinary operations should keep on going as before while we gradually add synergies has turned out very well. We are only just at the beginning of this journey and I look forward to being able to share more information about new collaborations among our group companies in future reports. To name some of these projects, we have streamlined our sales of ProDen PlaqueOff® via Amazon, generating a strong increase in sales as well as improved the pricing to end consumer. During Q1 2021 we are launching a ProDen PlaqueOff® Soft Chew developed by Stratford and SwedencareUSA will be launching a number of Stratford products to the Pet Specialty sector under the Swedencare brand name.
The North American market, the largest in the world, will remain being our largest market going forward. All American subsidiaries had a strong quarter and the integration of Animal Pharm
and Stratford are running according to plan. Before the end of Q1 2021 Stratford will have taken over the responsibility for finances, inventory, fulfillment which will impact the bottom line and growth favorably. SwedencareUSA has relocated to Houston, Texas, mainly for logistical advantages due to the fact that our Dental Bones are produced in Texas.
Furthermore, we have started a new subsidiary, Tillverka Inc., which will start producing ProDen PlaqueOff® in the SwedencareUSA facility. By starting inhouse production we will be able to increase our margins and secure the access of finished goods. Our goal is that at least 50 % of all the ProDen PlaqueOff® powder for the North American market will be produced in house already in 2021.
In the UK we see the same strong trend as in the US and both our subsidiaries have had a very strong growth. Needless to say, Brexit has been a cloud of uncertainty, but despite having moved our inventory to Ireland we have been able to manage the situation well and have not had any serious effects so far in Q1. Amazon keeps being an essential channel of sales of ProDen PlaqueOff® and for Nutravet the quarter has been affected positively by two new product launches. We will also shortly be introducing Nutravet on the Greek market through our subsidiary. The knowledge gained through this process will be used to build a “go to market strategy” which will be used on new markets in the future.
In Europe we also see high growth with record high quarters in both Spain and Greece as well as strong sales in France and the Nordic Region.
In the rest of the world Asia dominates with large orders to China and South Korea and the current year is predicted to continue strongly. We have just finished this year’s marketing plan for China thus, I have great expectations for China 2021. In South Korea we will launch more products and it will continue to be the external market with the widest range of Swedencare products.
Last year we not only managed to make a large number of business development projects and reach high growth numbers, but we also ended the year by signing yet another acquisition at the end of Q4 2020. With the acquisition of the American company Holden2 we secure both large online sales numbers as well as unique competence within online sales. Holden2 is another acquisition that will make a big difference for the group. Apart from online competence, they have several brands where PetMD® and Vetwell® are platforms where we effectively can launch other Swedencare products and at the same time launch PetMD® on the leading European online platforms during the year.
Holden2 has had a fantastic growth in 2020 and the start of 2021 seems to continue equally well.
Our strategy of acquisitions is based on a simple philosophy – we look for companies that are similar to ours i.e. profitable companies with high growth numbers, led by entrepreneurs sharing our goal to create a world leading group within Pet Health Care. I am very pleased that we managed to procure our large logistic center building in Ireland– we will need it - considering what we will be creating these next couple of years.
I now look forward to getting to travel again and be able to meet all my new colleagues, partners and customers.
Our new financial targets are inspiring, and I will do my utmost to reach these with good margin when it’s time to check off. It will not be an easy task, but I am convinced that together with my fantastic organization we will deliver.
Håkan Lagerberg, CEO
Malmö February 18th 2021
The complete yearend report is attached to this press release and is available at www.swedencare.se
Swedencare invites shareholders and analysts to a presentation of the Q4/yearend report where CEO Håkan Lagerberg and CFO Jenny Graflind will comment on the report. The presentation will be held today at 10:00-10:30 CET and can be followed via live webinar.
Please use this link to join the webinar:
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