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Asker Healthcare Group reported a robust second quarter for 2025, with net sales rising 9% to 4 billion SEK and an adjusted EBITDA increase of 12%. The company also improved its EBITDA margin to 9.5%. Despite these positive results, Asker Healthcare’s stock fell 5.52% to 94.90 SEK in pre-market trading, reflecting mixed investor sentiment. According to InvestingPro analysis, the company currently appears overvalued, trading at a P/E ratio of 67.15x and commanding a market capitalization of $4.02 billion.
Key Takeaways
- Net sales increased by 9% to 4 billion SEK.
- Adjusted EBITDA rose by 12%, with a margin improvement to 9.5%.
- Organic growth was 7%, while acquisitions added 8%.
- The stock price dropped by 5.52% in pre-market trading.
Company Performance
Asker Healthcare delivered a strong performance in Q2 2025, driven by solid organic growth and strategic acquisitions. The company expanded its market presence by acquiring ScanModule, enhancing its distribution capabilities in the healthcare supply chain. This growth is in line with the company’s goal of maintaining a leading position in the European healthcare supply market. InvestingPro data shows the company maintains a moderate debt level with a debt-to-equity ratio of 0.68, while analysts forecast 14% revenue growth for FY2025.
Financial Highlights
- Revenue: 4 billion SEK, up 9% year-over-year
- Adjusted EBITDA: Increased by 12%, reflecting improved operational efficiency
- EBITDA Margin: Improved to 9.5%
- Organic Growth: 7%
- Acquisitions: Contributed an additional 8% growth
Outlook & Guidance
Asker Healthcare remains confident in its medium-term prospects, targeting an EBITDA margin of 10%. The company plans to acquire 10-20 new companies annually, focusing on both organic and acquisition-driven growth. The defense sector is highlighted as a potential area for expansion. InvestingPro analysis reveals a "Good" overall financial health score of 2.82, with particularly strong marks in profitability metrics. Subscribers can access 10+ additional ProTips and comprehensive financial analysis through the Pro Research Report, offering deeper insights into Asker’s growth strategy and market position.
Executive Commentary
CEO Johan Falk expressed optimism, stating, "In my thirteen years here, we’ve never seen such a good pipeline." This reflects the company’s robust acquisition strategy and its ability to integrate high-quality companies. CFO Tomas Mas added, "We are well positioned. We have done a good job with our customers," emphasizing the company’s strong market position and customer relationships.
Risks and Challenges
- Supply Chain Issues: Potential disruptions could impact product availability and costs.
- Market Saturation: Increased competition in the healthcare supply market could pressure margins.
- Macroeconomic Pressures: Economic downturns could affect healthcare spending.
- Integration Risks: Challenges in integrating acquired companies could affect efficiency.
- Regulatory Changes: New healthcare regulations could impact operations.
Q&A
During the earnings call, analysts inquired about the company’s acquisition strategy and the potential growth in the defense sector. Executives addressed concerns about gross margin improvements and the slow but promising potential in the defense market, indicating a cautious yet optimistic outlook for future expansion.
Full transcript - Asker Healthcare Group AB (ASKER) Q2 2025:
Conference Moderator: Session. Now I will hand the conference over to CEO, Johan Falk and CFO, Tomas Mas. Please go ahead.
Johan Falk, CEO, Asker Healthcare Group: Thank you very much, and welcome to the Q2 report from Asker Healthcare Group. This is our second report in the listed environment. For me, it’s thirteenth year. So it’s more of the same and no drama. And a steady performance is first half year.
It makes me proud of what we do. If we have a look at the second quarter isolated, we see a solid performance from the 50 plus companies across 17 markets. However, we had a little bit of a headwind from translation effects of FX. So they’re actually growing adjusted EBITDA with 15%, but with a 3% of FX effect makes it down to 12%. So good solid performance.
However, North had a little bit of a drawback from project sales. We’re going to come back to that later on. So they were meeting very strong quarters last year. But underlying business are in good shape. So all in all, good.
Adjusted EBITDA, which is our most important KPI, increased 12% after the 3% FX impact. Good to see that organically, we were growing 7%, and acquisitions added another 8%. Net sales were up 9% to SEK 4,000,000,000, also impacted with negative 4% from FX. Our EBITDA margin were up to 9.5%. So we see it steadily is growing towards our targets of 10% in the midterm.
This quarter has been, I can say, back to normal or we see an increasing inflow of potential targets in acquisitions. In my thirteen years here, we’ve never seen such a good pipeline. And I think it partly being a listed company, where the market leader in Europe and companies and entrepreneurs are turning to us to to be part of the Asco story and and and improve the health care system. So to me, this is the most important that we have a fantastic market to act on regardless of the financial climate and uncertainty. Medical supplies, device and equipment are needed, and we are providing that across Europe, which is a fantastic feeling to see our entrepreneurs help the health care sector.
And I think that is also the reason why companies come to us and want to be part of the group, which is also from creating shareholder value, the most important aspect that we can be a larger group and improve health care and also, the same time, create value. So it feels really, really good. We have a net debt over EBITDA that has continued to be low. So it gives us firepower to continue to buy companies. And we describe our business model, as you know, as the twin engine.
Organic growth priority number one, but adding new companies to the group is as important. So both of these engines are performing well during this time. Looking at this business, of course, it can go 3% up or down each quarter. But over time and then both backwards and forwards, we see the performance that we are here to deliver. So 20% adjusted EBITDA growth for the past twelve months.
We’re keeping our R over RK EBITDA over net working capital at 65%, which is very good to see. Capital light business and see improvement in earnings helping us to keep that level. Our margins slowly going up towards the 10% in the near in the midterm future. So last twelve months, 9.2, a little bit stronger in this quarter, which is usually a stronger quarter as well. But it’s going in right direction, which is good.
And then the low leverage giving us a good firepower for the future. So looking at acquisition then, I mean, as you all can imagine, the process going from private environment to listed environment takes some energy from from me and my my fantastic team and also the managers out there. So now we are being back on track. And as I mentioned, the best pipeline so far in my thirteen years here, we see. So we are now in the fantastic situation that we can pick and choose the best ones.
We usually buy 50% of the companies we evaluate, but now I think we’re down to lower. So our limitation is now the financial targets that we have set up and picking the best companies that perform the best and welcome them to the group. So during this quarter, we bought four companies and actually added one more app until today after the quarter period has ended. So five companies and six in total the first half year give me confidence for for the coming month and years to come that we’ll add new company to the group. We have we’re not possible to go through all the companies in in every meeting, but we’ll highlight one or two of them every every quarter.
This time, we have chosen to highlight scan module, a a company that are based in The Netherlands, but acting in 10 different markets across Europe. They have a long history of being expert in making sure that you store the medical supplies, buying equipment in the best possible way in different hospitals and health care units. And this is, to me, a little bit of the last mile of giving access to to these important critical products and services. So scan module have a long history of customer relationship and knowledge about how to make sure that the products are at the right point at the right time and storing them and keeping the track of dates and all of these possible things that you imagine you need to to perform good health care. So this is that what we call it’s not a platform as such, but it’s an it’s a little bit of a new type of company that could give us continuous growth going forward.
We have, as you know, a strategy to buy 10 to 20 new companies a year using our free cash flow to to buy companies. But once in a while, we we we tend to buy a little bit larger companies, which is ScanModule is is a little bit larger and a little bit of a strategic acquisition for us. It’s it’s very good to see, and, it can create good growth going forward. With that, I’ll leave the word to Tom.
Tomas Mas, CFO, Asker Healthcare Group: Great. Thank you, Johan. We can dive a little bit more into some of the financials. So if I start with the group overview here on page six, what you see is very much in line with what Johan described, solid revenue and EBITDA growth and a slightly stronger margin coming through in q two. So the net sales for the group in q two was up by 9% with that FX headwind included that that Johan mentioned.
The growth, driven by strong performances in West And Central and a slightly slower performance in Region North. I’m gonna come back to the regions individually in a second just to to put a little bit more color around that. But net net, delivering an EBITDA growth up 12% in the quarter, again, with the FX headwind pushing us back a little bit by 3% within that. The EBITDA margin up marginally in the quarter as well, which is good to see lots of activities going on around the group in terms of mix improvement, the new m and a’s coming in, enriching the margin, and and ongoing operational and synergy efforts within the existing operations. Worth noting, though, that also q two tends to be a seasonally strong quarter four margin.
If we look over to the right hand side of this picture, just to to quickly summarize h one as a as a whole, we see organic growth up 6% on EBITA. We see acquired growth delivering 10%, that FX headwind that we’ve mentioned, but a total adjusted EBITA growth for h one of 14%, very much a good solid start to the year. If I dive a little bit now into the regions to try and give you a a bit more detail, starting with business area North, I think the first and most important thing to say is that the underlying core operations in North, that day to day activity servicing the regions, the municipalities, all of those health care settings performing extremely extremely solidly, extremely well across all of the companies and all of the countries in Region North. We do, though, see an EBITDA decline in the quarter, and that’s due to the irregular project based sales activities that we we talked a little bit about in q one and is continuing to to challenge the figures a bit in q two, particularly in that defense and preparedness area where we had very strong performance in the same period last year.
We also have made good progress with the development of our our larger new distribution center in Gothenburg that has had its first large CapEx expenditures, which which come into the cash flow, which I’ll talk a little bit more about a bit later. But overall, if you look at h one as a whole on the right hand side here, adjusted EBITDA growth is actually down 7%, net sales down 2% in the first half of the year for those years and those reasons that I talked about related to the to the irregular project based activities. If I turn to Region West, we see a very nice development, strong organic growth, and improved margins in Region West. A large part of that organic growth is driven by, increased patient numbers. We also mentioned this earlier on in the year as a result of some larger customer databases that we took over during the second half of twenty twenty four, and those increased patient numbers are still flowing through nicely into the figures.
We also get a good uplift from the acquisitions that we’ve done in the region. The large HSL acquisition we did in February also coming nicely into the numbers and and performing well in line with expectations. The EBITDA margin is also strengthened a little in the region. Again, a mix of of different activities contributing to that, both the organic synergy benefits we see from increased cooperation between our companies, especially within the the home care hub that we are that we’re seeing developing very nicely in Region West, but also activities across the group with with with looking at product mix and how we how we enrich that across our companies. So h one as a whole, 31% adjusted EBITDA growth, sales growth of 17% in the same period.
And then the third of our regions, business area central, also some good growth figures to present here, primarily driven by the high pace of acquisition activity that we see in Central. So sales up 25% in the quarter, EBITDA up 61% in the quarter. And as I say, m and a, a big part of that driver. We also see improved EBITA margins moving up towards the margins that we see in the other regions, and that comes again from a a variety of activities. The new m and a’s coming in, enriching the mix, But we’ve also had quite a focus on our organic business and the margin within our organic business in the Central region as well.
And that’s meant that we have been prepared to sacrifice a little bit of revenue growth to get margins up in the region. So overall, h one EBITDA growth, adjusted EBITDA growth of 68%, net sales growth of 31%. If I turn briefly now here on page 10 to the R over RK, this is, as we’ve talked a lot about in the past, our key internal performance metric, really making sure that we’re focused on focusing on efficient working capital utilization. And, we’re pleased to see that that remains well above our our ASCA target of 15%. And it’s also, of course, an area that we, that we continue to put a lot of effort into with our new companies, our m and a’s coming into the group.
A word or two on the cash flow as well. We see slightly lower operating cash flow versus the high levels that we saw in q two twenty twenty four. And, actually, 2024, the comparable period, we did have relatively low levels of working capital and very high levels of cash inflow. Again, relating in large part due to these project based sales in North that I talked about before, We got paid for a lot of the activity that we’ve done all the way through h one. A lot of that money came in during q two twenty twenty four.
So the slightly lower level that you see in q two twenty twenty five is more about the comparables than than anything to do with q two twenty twenty five on a stand alone basis. CapEx at just over 200,000,000. I mentioned earlier, we have had the first of the larger investments in the Gothenburg distribution center. We also paid to take over some distribution rights, some some interesting new products coming into the portfolio, within the Baltic region that we, that we look forward to delivering strongly in the future. That is also booked as CapEx in the quarter.
Acquisitions, the minus a 160,000,000 that you see there. The acquisition of MS Labour was completed in the period, so that was the paid acquisition. The other large chunk of that minus 160,000,000 comes from the earn outs, the contingent considerations that we’ve paid for previous acquisitions that we’ve done. And then you see the financing is a large positive 730,000,000 that you see there. That is actually us drawing down cash from our revolving credit facility to pay for the acquisitions that came in early July, primarily ScanModule.
So actually, that money has already been spent in the July to complete the acquisition of ScanModule. And then a final page for me before I hand it back to Johan. The leverage levels remaining at a relatively low level, 1.8 x. What you see since since the comparable period is obviously the net debt has risen a little. We’ve obviously done more m and a’s than that through that period, but we brought in capital through the equity issue at the at the time of the IPO.
But at the same time, obviously, the group has grown strongly and the EBITDA has risen through that period. So the net effect of those two is that the net debt to EBITDA ratio is at 1.8 as of the June. And as Johan mentioned earlier, the attractive pipeline is good because we have a little bit of headroom now within the leverage to to take advantage of that attractive pipeline. All right. I think I’ll leave it there, Johanna.
I’ll pass it back to you.
Johan Falk, CEO, Asker Healthcare Group: Thank you, Tom. Okay. To summarize this before we go into Q and A. So we see this as a steady performance in the quarter with some headwinds from translation effects and FX, but our operational performance is where it should be. And we’re picking up speed in the M and A second engine of ours.
So that is it’s been a good quarter for us as I see it. We are well on track on the acquisition in total. But even from that position, we’re picking up speed. So looking back to 12 last month, we have done 16 acquisitions even during this IPO period. So we have added SEK 2,500,000,000.0.
So that’s that that to me is where we should be maybe a little bit better. So overall, a strong balance sheet giving us good confidence that we’ll continue to run these twin engines in a good way going forward. So I think we’ll leave it there and open up the floor for questions.
Conference Moderator: Next question comes from Karl Ragnarstam from Nordea.
Karl Ragnarstam, Analyst, Nordea: It’s Karl here from Nordea. A few questions, if I may. Firstly, coming back to North, you obviously talked about the challenging comparisons from the defense volumes last year. Could you sort of try to quantify what impact it had in the quarter and sort of also help us a bit what the like for like would look like without it in the comparisons, just so we understand your you mentioned, obviously, that it’s underlying developing quite nicely, but it would be nice to get some numbers on it, if possible. And on that note as well, obviously, I mean, we have seen, I guess, not maybe not the wording is not a shortfall, but we have seen a lack of defense volumes lately.
Why do you think it’s the case? And when do you think it might return? So a couple of questions on that. Sorry.
Tomas Mas, CFO, Asker Healthcare Group: Yep. I I can, maybe start on the the number side of it, Carl. Yeah. I I it’s it’s difficult to put up an absolutely precise exact number on it because, obviously, there are a number of different contracts and different call offs going on. But but but if I was to to to give you a rough figure, would talk about probably a couple of 100,000,000 of sales sec that we are that we are missing on a kind of year on year comparison basis within the quarter.
I think in terms of your question about when it will come and what we can expect, I think as as we’ve said, we said it at q one, we said again in the report today, you know, this is clearly an area that’s very interesting going forward. There is a lot a lot of activity. There’s a lot of noise. You know, we all read the newspapers. We see what’s, what’s potentially coming.
To predict exactly when it will hit is is much more difficult for us. I think if we’re honest ourselves, we are a little bit surprised by how slow it has been in the in the first half of the year, but that doesn’t mean that our sort of medium term confidence is is any less than it than it has been. We believe that the area is interesting and and it will come. We are well positioned. We have done a good job with our customers so far, so there’s there’s no reason not to be confident over the medium term, but but, yes, a little bit difficult to predict at the moment.
Karl Ragnarstam, Analyst, Nordea: And and and do you have exclusivity on the on on those volumes, or have you seen them being delivered by by someone else, or how does it work?
Tomas Mas, CFO, Asker Healthcare Group: No. We we we we we definitely haven’t seen them being delivered by anyone else, but but that’s not to say that we have exclusivity either. But but I I think it is
Karl Ragnarstam, Analyst, Nordea: Keep your share, I guess.
Tomas Mas, CFO, Asker Healthcare Group: It’s a it’s a yeah. It it seems to be relatively slow moving in the in the ordering process, essentially.
Karl Ragnarstam, Analyst, Nordea: Sure. Okay. That’s very clear. Could you also talk a bit about the distribution rights you took over in in the Baltic? So what what product subsegment is it related to?
Could you do could you do some some kind of ask a magic as you did in the client list in West as well? Or how does it work with this one?
Tomas Mas, CFO, Asker Healthcare Group: Yeah. They they are, orthopedic products. Nothing sort of super complicated, but but, yeah, orthopedic implant products. Highly valued, highly regarded, highly respected within the within the Baltic region. Profitable products, products that fit nicely into our existing mix.
So we feel very, yeah, we feel very optimistic and happy about the the portfolio expansion and the mix expansion that they give us within our within our Baltic business.
Karl Ragnarstam, Analyst, Nordea: And the size, is it possible to give any financials?
Tomas Mas, CFO, Asker Healthcare Group: I think that’s perhaps getting a little bit too specific. You can you can read from the CapEx that that that we’ve spent approximately a 100,000,000 SEK to acquire them. So so you can perhaps draw some conclusions from that in terms of in terms of margins and revenues, but I don’t wanna go too specifically into that.
Karl Ragnarstam, Analyst, Nordea: That’s very clear. And looking at the gross margin, continue to strengthen, reaching close to 41%. Would you say that the 160 basis point delta is mainly a function of M and A? Or is it any mix effect to consider? And and also, are you comfortable at the current level to maintain it or even expand it further from here?
Or, yeah, the dynamics would be good to to hear more of.
Tomas Mas, CFO, Asker Healthcare Group: I think it there there are a number of different things going on there, but but broadly broadly speaking, yes, the m and a’s that we buy tend to come in at slightly higher gross margins than the existing sort of core of the ASCA group companies. They do also tend to come in with slightly higher operating expenses as well, slightly lower down the p and l. But net net, they are still a a positive contributor at an EBITA margin level as well. So gross margins, yes, I think we can expect some some further progress depending on the m and a’s that we do and and how they come in, but I don’t think we should expect sort of radical upwards steps from there. I think the sort of business we are, the activities that we’re involved with, the way we work, those gross margins, you know, at at at or slightly above 40% are quite healthy.
Karl Ragnarstam, Analyst, Nordea: Sure. That’s very good. That’s all for me. Thank you.
Johan Falk, CEO, Asker Healthcare Group: Thanks. Thanks.
Conference Moderator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.
Johan Falk, CEO, Asker Healthcare Group: All right. I’m happy to hear that people are want to go back to the beach and have a good time. But then thanks for calling in and listening, and I look forward to meet you next quarter. Thank you.
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