Earnings call transcript: Swedencare Q3 2025 sees 11% revenue growth

Swedencare reported its third-quarter 2025 earnings, showcasing robust financial performance with an 11% increase in net revenue to SEK 712 million, driven by significant organic growth. The company’s stock surged by 20.03%, reflecting investor optimism following the earnings announcement. According to InvestingPro data, the company maintains strong financial health with a "GOOD" overall score of 2.83, supported by solid profitability metrics. Key financial metrics highlighted stability in operating gross margin and a notable increase in operational EBITDA.

Key Takeaways

• Swedencare achieved 11% revenue growth in Q3 2025, with significant organic growth at 50%.
• The company’s stock price rose by 20.03% following the earnings release.
• Swedencare expanded its presence in major retail chains, including Walmart and CVS Pharmacy.

Company Performance

Swedencare’s Q3 performance was marked by strong organic growth, contributing to a record net revenue of SEK 712 million. The company maintained a stable operating gross margin of 58.5% and improved its operational EBITDA by 14%. These results reflect Swedencare’s strategic focus on expanding its product lines and enhancing its retail presence.

Financial Highlights

• Revenue: SEK 712 million, up 11% year-over-year
• Organic Growth: 50%
• Operating Gross Margin: 58.5%, stable from last year
• Operational EBITDA: SEK 155 million, a 14% increase
• EBITDA Margin: 21.7%, compared to 21.2% last year
• Net Debt to EBITDA: Reduced from 2.9 to 2.7

Market Reaction

Following the earnings call, Swedencare’s stock price increased by 20.03%, closing at a recent high. The surge in stock price reflects investor confidence in the company’s strong quarterly results and future growth prospects. InvestingPro analysis indicates the stock is currently trading at a premium valuation with a P/E ratio of 96.37. The stock’s performance contrasts with its 52-week low of SEK 31.7, indicating a positive market sentiment. Want deeper insights? InvestingPro offers exclusive access to detailed valuation metrics and 8 additional ProTips for Swedencare.

Outlook & Guidance

Swedencare anticipates continued double-digit growth in Q4, with a focus on profitability improvement. The company’s strong financial position is evidenced by a healthy current ratio of 2.99, indicating robust liquidity. The company plans to introduce new financial targets in December, emphasizing expansion into new geographies and enhancing operational efficiencies. Get comprehensive insights into Swedencare’s growth potential with InvestingPro’s exclusive Pro Research Report, part of our coverage of 1,400+ top stocks.

Executive Commentary

CEO Hakan Lagerberg expressed optimism, stating, "Expect us to keep on delivering double-digit growth and aiming for improved profitability in Q4 and onwards." He also highlighted the strength of Swedencare’s online channel in North America, emphasizing its potential for future growth.

Risks and Challenges

• Currency Fluctuations: A negative currency impact of 9% was noted, which could affect future earnings.
• Production Segment Decline: A 4% decline in net sales in the production segment poses challenges.
• Market Competition: Increasing competition in the pet care industry could pressure margins.

Swedencare’s Q3 earnings call highlighted its successful growth strategies and strong market position, with a positive outlook for the coming quarters. The company’s five-year revenue CAGR of 82% demonstrates its impressive growth trajectory, while maintaining a beta of 0.85, indicating lower volatility compared to the market. The company remains focused on expanding its product offerings and enhancing its retail and online presence.

Full transcript - Swedencare publ AB (SECARE) Q3 2025:

Moderator/Webinar Host, Sweden Care: Welcome to the presentation of Sweden Care’s Q3 report, led by our CEO, Hakan Lagerberg and CFO, Yeni Grafild. And we are pleased to have Production Director, John Kane joining us with the presentation during today’s webinar. And as usual, we will have a Q and A after the presentation. So please raise your hand if you have any questions. Over to you, Yeni Roccan.

Hakan Lagerberg, CEO, Sweden Care: We had record net revenue and also record operative EBITDA. So first time we were over SEK700 million despite the weak dollar and also over SEK500 million in operative EBITDA. So happy about that improving the profitability as we have been working with. Highlights, of course, what we also presented in the report two full pages about our launch in big box retailers. Happy to inform that we’re now present in 1,400 Walmart stores all over The USA, 1,100 CVS pharmacies and also a local Midwest chain called the Meyers, 140 stores there.

And launch was in Q3, all of our sites are now fully propped with products. And the Walmart order that we communicated in Q2 has been delivered just above half of that and the rest will go out in Q4. And the reason for that is just the decision by Walmart to have one pack of each product instead of two. And so that will go out in Q4. And we will also have an additional marketing campaign with Walmart in starting in early Q1 or end of Q4, but we will deliver it in Q4.

So we will actually separate displays in all of those 1,400 stores and adding 600 or 700 more Walmart stores where we’re not present in the lineup. So we will be present in plus 2,000 Walmart store end of this year or early next year. So we’re really thrilled about that. And worth noting about that separate campaign is that we are taking the cost for all the display, that will be a bit lower gross margin for that setup. And we will come back to continued launch and discussions with big box retailers.

We’ve also had an organizational overview in The UK and spurred of a retirement of our long colleague, John Leonard, that will be leaving the company for retirement end of this year. And by that we will reshape our Sweden Care UK operations into being online only focusing on UK and rest of Europe. And the rest of the let’s say retail sales apparatus will go over to our sister company NutriVet. And in Tampa, we continue to streamline our organization, primarily focused on veterinary sales and also online. So we’re utilizing more group resources for joint projects.

We made a very small minority investment in a company called Bio adding a new product group is liquids, mainly their main product is recuperation product used after surgery in cats and dogs. And we’ve seen a big potential for us to launch this product line under a couple of our brands. We will start off with NutraVet in The UK and it will launch as early as Q1 twenty twenty six. High international activity and internal collaboration. We’ve been traveling a lot around world in Asia and in Q3 also in South America.

So we have signed a couple of new distribution agreements and are looking forward to exploring untapped potential all over the world. Internal collaboration, we are working even more with, let’s say, development and also launch strategies together within the group. So that is something that’s primarily I would say U. S. Market work together and then the European market.

And then for our, let’s say bigger launches and bigger brands that are international, for example, with Prod and Plakoff, as you know, most of you, it’s steered from our team here in Malmo and that keeps on improving the collaboration all the time. Financial targets, as you know, we have financial target that is by the 2026. So we have had lots of discussions within the Board about presenting or setting new targets for a couple of years ahead. And we are very close to finalizing that after this latest discussions at the board meeting we had in Canada. So we will be presenting those in, hopefully, early December, at least in December, but my guess is that it will be early December.

Over to you, Jenny.

Moderator/Webinar Host, Sweden Care: Alright. Some financial highlights for q three. Revenue amounted to 712,000,000. For the quarter, it was the first time we were above 700, as Hakan said. This represents 11% growth, 50% was the organic growth, and we had a negative 9% impact of the currency, and then 5% acquired growth.

The acquired growth came from Summit, which we acquired in April. And then we also had one month left of MedWench, which we acquired in August. A fun fact about the revenue is actually that this quarter, we almost had the same revenue as we had for the full year 2021. For the first nine months, net revenue amounted to 2,000,000,000, that’s compared to 1,900,000,000.0 for the first nine months last year, and a growth of 9% year to date. Our operating gross margin is stable at 58.5 percent for the quarter, So also in line with our expectations.

The external costs are increasing, as we have mentioned before, with the growth of Amazon, there’s costs which are directly linked to sales. This quarter, we had nature that’s Amazon account in house for the full quarter. That’s compared to two months last quarter. So we have about 10,000,000 of additional Amazon costs for the group compared to Q2. The more variable external costs, so cost which is not related to Amazon, which is about 50% of the total external cost, which has scalability potentials.

Here we can see that we have decreased this cost as a percentage of sales. Personnel cost has decreased is lower this quarter due to reversal of bonus accruals. As a result, operational EBITDA amounted to SEK155 million for the quarter. This is an increase of 14% compared to last year, 21.7% EBITDA margin compared to 21.2% in Q3 last year. And for the full year, not the full year, but the first nine months, we have 20.1% EBITDA margin.

Our net debt to EBITDA has increased compared to a year ago, and that’s due to the acquisitions that we made in Q2 this year, however, still has decreased from 2.9 to 2.7 this quarter. During the quarter, we made cash payments for acquisitions, which we do not have additional EBITDA contribution for. So that’s, of course, impacts this ratio in a negative way. However, as I mentioned, it’s still decreased in line with our expectations. Our cash conversion, 99% for the quarter, so really strong, mainly due to decreased inventory levels in the group.

During the quarter, we made additional payments for the PAC approved acquisition. We made both the second and the last payment as well as an earn out. In addition, as Hakan mentioned, we made the minority acquisition of VEO during the quarter. We have also been able to reduce our debt with 75,000,000 on our loans, and our interest cost has decreased with the lower interest rates. So the for the first six for the first nine months, we have about 40,000,000 interest costs compared to 57,000,000 last year.

And our CapEx, that’s still below 2% of net sales, both for the quarter and for the year to date. Our rolling twelve months, as you can see, the revenue for the twelve months is increasing. However, both operating EBITDA and normal EBITDA has decreased due to the weaker profitability that we had in the first half of this year. Just as in Q2, there is a fair market adjustment of the acquired inventory for Summit, that’s SEK24 million for the quarter and SEK48 million for the year. So this is the difference between the reported gross margin and operational gross margin.

This acquired inventory is now sold, there will be no more adjustments going forward. Product and brand split. And these graphs are not adjusted for acquisitions or currencies. So despite this 9% currency impact, there’s actually quite a good growth in the majority of the products group. We have a decline in nutraceuticals.

This is mainly due to the lower contract manufacturing we have to external customers. However, we are growing with the internal. Dental has the biggest increase in value, still going strong, increase of 28% compared to q three last year. And pharma has the biggest increase in percentage. That’s due to the fact that Summit is included in in this figures this year, but we did not have that company last year.

We have the brand split to the right same here, not currency adjusted. So the strong crown has a negative impact on the growth. Summit is included in the category other. But as you can see, many brands have really good growth this year. Now over to Wakka.

Hakan Lagerberg, CEO, Sweden Care: Yes, looking at our different segments. Net sales in North America SEK421.7 million, growth of 8%. And looking at organic numbers, it’s 18%. So very nice to see that North America has bounced back. It was primarily pet retail and online that was strong.

The veterinary market is still soft both in terms of let’s say visits to veterinarians, it’s still a challenge. It was basically flat 24 compared to ’23 and that let’s say softness has continued. Pet owners visit the pets not in the same, let’s say amount as the market as itself grows. Perhaps also due to the fact that the younger generations of pet owners are definitely more educated and interested in taking good care of their pets. However, it’s also impacted by our larger, let’s say distributors and when coming to the production segment, it’s definitely also our larger veterinary customers are very cautious about inventory levels and are pressing that a lot.

That could also actually be said about the major pet retailers and big box. Its supply chain overall in the market is really good. So they are pressing down their weeks of inventory that they have on hand. NatureVet big box expansion as I mentioned, but we’re also expanding with other customers like PetSmart. We have now in October are launching six new products from the NaturVet line with PetSmart and several of our let’s say ordinary traditional pet retail customers are now fully in line with our new branded products.

So the last products we have with the old design is basically being sold out on Amazon. That’s the channel where we, let’s say, sell out all of the old label products, not sell out in forms of rebates, the actual change of the products with Amazon and online will be the last change. Looking at NatureVet, the Amazon account that’s been a huge project as you can imagine. And our PetMD team that handles it has done an excellent job, but lots of work and also collaborating together with the nature of that organization. So I’m happy to say that the acquired inventory that did affect our profitability in Q2 and also here two months in Q3 is basically completely sold out by August.

So from September and onwards, we see we will have full group margin for our sales on Amazon when it comes to NatureVet. So from Q4 forward, the margin will not be affected by this occurrence. And also worth saying is that, as many of you know, that we took back the product backlog sales on Amazon a couple of years ago. And that was also hard work getting rid of lots of rogue sellers and streamlining the sales there. So it’s been five months of really hard work for our team and that continues in Q4, but now we see improvements and expect our sales to keep on growing for a couple of quarters, many quarters going forward.

Online continues to be our strongest channel in North America. And as you saw in our perhaps saw in our report is that online is definitely the biggest channel for products. Product like OFF, as Jenny said, continued to have really strong sales and also late one of the latest acquisitions, the PAC approved line that Jenny mentioned, it’s high protein or 100% protein treats is doing really, really well online. We have launched a fairly small brand, Vet Worthy that we acquired last summer about a year ago, and now it’s bounced back. That’s our strategy for working closer to the, let’s say, brick and mortar stores, the moms and pops stores.

And we have now in Q3 launched in over 500 stores and have a nationwide distribution and also some local distribution. And also a fun fact is that we are launching in Mexico already. So it’s been well received on the international market as well. The outlook for the North American segment is that I expect the momentum to improve from the numbers that we have here in Q3. Net sales Europe SEK162.6 million, 39% growth, organic 19%.

So continues to be the strongest segment even though North America chasing Europe this quarter. It’s been basically the same story all year that UK Nordics leading the growth and there were a bit, let’s say, less sales online, especially Amazon in rest of Europe. And that’s a plan that we had because we’re making the same transitions as we did in UK one year ago that we took back the Amazon sales ourselves. And Amazon has been selling out their inventory in Q3. So we have not had any deliveries basically to Amazon in Q3 for rest of Europe.

But that we have started now and in front Q4 and onwards, will be handling Rest of Europe the same way as we handle UK. So you can expect strong growth for Rest of Europe going forward. We’re building out our local team in Amazon. So we have recruited a very skilled person for Germany in Q2 and now we’re looking for adding a Spanish colleague in Q4 and then we will build out the team as going forward. We now handle Portugal from our Spanish team and we have a new local partner for the Portuguese market and it has kicked off really well in Q3.

Let’s say rebranding of NaturVet has not happened in Europe and as some of you know is that we’ve had an exclusive agreement together with Suplaz for the European sales. For next year, we will be launching both online and also in pet retail in select markets with the new design. So from twenty twenty six Q2, we will be we will not have an exclusive collaboration with soup plus but they will continue being an important partner for us as they have been the last one point five years. Outlook for Q4 is momentum continues. I would say that the really strong momentum Europe has had will continue in Q4 and onwards.

Net sales production almost SEK129 million, a decline of 4% affected by currency of course, organic growth was 3%. It was a bit different quarter in the face that three out of four of our entities had double digit growth and our biggest in South Florida had a 13% decline. And as I explained, it’s due to the vet market, the big customer, external customers in vet market is cautious, they are cautious with their inventories. So it’s a bit seasonal and also bigger orders and productions, they can jump between a couple of quarters. So no reason for alarm here.

And we have also increased our internal demand and that will continue. So we have two big products that are transferred from external partners to internal manufacturing at our Florida site and that will happen in Q4 and Q1. In production also is a stronger demand in Europe than North America, but that’s also the fact that we are and we have been launching soft chews as many of you know, and there’s really a strong interest of that and also that the operations are smaller in Europe. So of course, it’s easier to get new assignments there. And also from a competition point of view, the EU market is not as fierce as North America.

Worth mentioning is also the really high RFP activities for our pharma development up in Canada. It’s been a very strong year for that and lots of hard work from the team up there. So we’ve been encouraging them. As we wrote in the report, we were there with the Board for Board meeting and also visit and it was very appreciated by the team that the Board took time and effort do travel there. I mentioned internal collaboration and know how transfer, there’s been lots going on and John will mention that later on.

Outlook Q4, I think the momentum will be fairly similar in Q4 and expected to pick up early in 2026 since we have signed both new customers and also received orders for ’26 from present customers. Priorities for 2025, are the same and looking at new geographies and keep on enhancing operational efficiencies that’s really has been key features for us this year. And the online strength, of course, since being our most important channel, we keep on pushing there and interesting to see there is really that different marketing campaigns that we do in for one, let’s say outlet online affects others. So it’s really that if we increase marketing in Amazon, we get more and more sales in our internal web shops and vice versa, if we do campaigns on TikTok or we see increased sales on Amazon. So it’s intertwined net of opportunities for us to market.

And also pursuing new acquisitions, as you know, we’ve been very, very acquisition driven and we have dialogues ongoing, but I don’t expect any acquisitions being made in Q4. It’s more long term discussions. And also coming back, as I said, the new financial targets will be presented before year’s end. Over to you,

John, Production Director, Sweden Care: Thank you, Hakan, and good morning, everyone. Today, I’ll talk about the story of video as we build a global contract development and manufacturing organization and then how we’re leveraging that video soft tube technology developed over ten years to sister companies and different market applications. The story of Vidyo almost ten years ago, what is now Vidyo, the first site in Jupiter, Florida, was acquired and specializing in niche topical liquids. These are grooming products, medicated wipes, other medicated dermatology products. And with a strong interest to grow outside of that niche segment.

The site in Montreal, Quebec, Canada, Tetragenyx Animal Health, which is a contract development for animal health companies, was acquired in March 2018. That’s where I am this week. And at that time, the two companies were rebranded as Vetio to showcase the commitment to the veterinary industry and global animal health. And so at that time, the first investment was made in Montreal to build solid dosage plant for pharmaceutical products, capitalizing on the development pipeline that we had in place and now still do, and as Hoeken mentioned earlier, is growing nicely. So then as you proceed along in time to mid-twenty twenty one, Vidyo was acquired by Sweden Care, and we were in the midst of another expansion in Jupiter, Florida, a second plant for nutritional supplements, leveraging the Vidyo soft chew technology outside of pharma for which it was developed into nutritional supplements for pets.

And then what the story of Video North has always been to acquire customers through other equipment and building a pipeline around development and non sterile liquid spot ons primarily were that capability was put in place in development pipeline put in place, which will eventually feed into Vidyo South as we get into, as you can see there on the right, a new plant. And then in 2024, almost three years ago, Custom Vet Products in The UK was acquired and a company, a CMO specializing in the nutritional supplements space. And that company has done quite well under David Ryder. We’ve leveraged Vidyo soft chew technology to Vidyo UK. And then following that, we’ve done the same thing, Sweden Care Ireland facility, sometime in early twenty twenty four was rebranded as Vedio.

So when you see the three segments of nutritional supplements there, we have three sites using the same technology, same products, same formulas for global customers. It’s a very valuable value proposition for global brands crossing The Atlantic. What’s exciting now is as we’ve built a lot of capabilities in the four sites, Vetio is now almost two thirty employees worldwide. We are launching really, we’re in the midst of one new investment, which is sterile fill and finish here in Montreal. And that project has started earlier in 2025.

We are halfway through the construction. Like every project at Veteo, any capital investment is always driven by an anchor client. And that’s the case here, and we have a lot of interest for this type of technology. There seems to be a gap in the industry that we aim to fill, and we feel we’re out in front with a very quick project to capitalize on that with productions commencing later next year. And at the same time, we are weeks away from finalizing a lease agreement to expand our Jupiter, Florida site once more.

This one, a larger project than what we did in 2021 because what we have in Jupiter is a campus. We have two facilities, the one the original one for liquids, about one kilometer away from our nutritional supplement plant. So in this project, which will unfold over two years, will be two different phases. One is where we relocate our liquids to the same site as the nutritional supplements and then also expand a new operation to make treats, injection molded, extruded treats, leveraging a lot of the same formulation technology as soft shoes, but having a lot of attractiveness with respect to cross selling synergies across Veteo’s customers, both internal and external. When we do that, the liquids facility will be at a higher class level where we will also be able to make larger volume non sterile liquids.

So that will be a nice synergy with the development capabilities in Montreal, where we have solid dosage forms and soon to have sterile fill and finish, somewhat more space constrained, we’ll have the opportunity to manufacture larger scale commercial products in Florida. So that project will unfold over two years. And then like everything else, what we do is we tech transfer the knowledge and the technology of things we do to other sites. Largely, The UK and Ireland will have liquids over time and then treats as you see following the implementation in Florida. So a really exciting time.

We’ve the story of Vetio is a story of growth and capabilities through investment, and we’re excited for what that brings, both internal and external clients. Talking about the market a little bit, first starting with pharma, which is addressable by Veteo North in Montreal, Canada. You can see it’s about a $14,000,000,000 companion animal market. We’ve historically only made products for companion animals or pets as opposed to livestock, large animal, production animal species. And you can see the share by category, parasiticides being the largest.

That’s obviously a unique part of animal health, what makes it different from human health. We have development projects and manufacturing across both parasiticides and therapeutics. We are not in vaccines. Having sterile fill capability will eventually give us some capability there. And as you can imagine, the vaccine market is quite large in the livestock and production animals.

So the addressable market for us increases with the investment in sterile fill, but also it allows us to get into production animal on a selective basis where it makes sense. And similarly, with the share percent share by the administration route, we currently address solid oral dosage in Montreal and then topicals and other in both Florida and in Montreal. But this will change as well with the implementation of the sterile project. This $14,000,000,000 market, when you segment it down further, is about a $3,000,000,000 addressable market at the manufacturing level. And with outsourcing still around 50% of manufacturing, both in house brands and then versus CMOs, it’s about a $1,500,000,000 addressable market.

So it’s quite a nice opportunity for Vidyo North and as we grow outside. Switching gears to more retail focused markets. These are non Rx markets. Video globally is right about fifty-fifty percent between the veterinary channel and the retail and online channel. As everyone knows, online channel is growing fast.

Supplements is one of the fast growing categories, but also as treats and where we will be in the treats category in a year or so. We have two very attractive high growth segments. And you can see to the right, the supplement segment right now is about $2,300,000,000 And we calculate the addressable portion of treats to be a similar size, maybe somewhat larger. This is because there’s all kinds of treats, some of them natural treats like jerky, freeze dries, which we will not get into. So quite a large addressable market that will have a lot of cross selling synergies, capabilities.

One of the things I want to talk about is the Vedio soft chew technology and how we’ve taken that across all of those categories, including to our sister company, Summit Vet now that’s part of the portfolio. So this technology, the SoftCho was developed over ten years ago. The actual patent was first filed in 2017. We have applied globally and have received acceptance globally. So we have a very great patent protection for this platform.

It is something that we leverage as a CMO to our clients that do not have this technology. It’s the most attractive dosage form for pets. They consider it a treat. It’s palatable. It has good aroma, texture, and it’s a great delivery form for high load APIs that applies to both pharma and nutritional supplements.

So in the pharma space, we have a very massive pipeline of therapeutics and parasiticides using the Softube platform that will commercialize over the coming years. As it is now in Montreal, we get paid for development that funds the investment in facilities and building out manufacturing, and we have numerous development contracts with manufacturing contracts at the end of those. So we are very confident in our pipeline going forward. And then with respect to nutritional supplements, as I mentioned, we have three sites using this technology adapted somewhat for nutritional supplements, which have to be at a lower price point and a higher throughput to match the demand. And that technology is used for both internal Sweeten Care customers as well as external clients around the world.

And finally, I think an exciting one, which we’ve announced recently with the acquisition of Summit Vet back in late March. We’ve worked the Video North team and other video people at different sites have helped leverage know how to the specials area, and they’ve very quickly learned how to formulate with this technology and have ordered and installed a lot of equipment that will be in use for early next year. So a little bit about Summit. Summit, as I said, was acquired late March. They are all focused on pet products I’m sorry, animal health products, both pet and large animal.

And they basically a compounding pharmacy, which we would call a 503B in The United States. It is a they’re making bulk, small batch bulk products that are sold through the vet channel in The UK, over 5,000 veterinary clinics and a very nice facility in the Oxford area in The UK. These medicines are compounded because they have a personalized nature to it, whether that be a flavor, whether that be a specific dosage form for an API or a specific dose for certain animals’ specific needs. This is a very attractive market. You can see the data that we’ve collected to show what the percent share is of The UK market.

It’s quite high for both cats and dogs. And in particular for cats, because there aren’t as many medicines available for cats, this is a more common practice. And so it’s something that we are very keen on leveraging the soft chew technology, and we’ll be first to market with that type of technology, which is very innovative. So we’re pretty excited about all the things that the production sites, each one of them has its own unique capabilities and strengths that can be leveraged to internal partners as well as our clients around the world. Some of the drivers behind this, the growth of sterile products, that’s been happening over the past several years.

Vedio North had received interest in development projects. We, of course, did not have manufacturing. So some of those, we did not take on. But with now with the manufacturing pipeline in place, we have a lot of interest from clients because this is an unmet need. What’s driving this is there’s a high desire for administration through a shot, an injectable, and that’s for accuracy and also to protect that channel sales.

The other thing I said earlier is how this opens up really some additional clients and opportunities around vaccines and in the large animal and livestock segment. Another driver that we’ve capitalized on and I just talked about is the trend towards soft shoes. What’s unique right now going on in animal health is there are the biggest generic files, the products, the blockbuster products, some of the biggest ones in the industry are coming off patent in the coming years. And we have received a lot of interest and we are working with people to capitalize on that opportunity and that will bring with it large development projects for commercial manufacturing starting as early as late next year. And in supplements, as we know full well in The United States, it’s almost the only form of supplements you buy for your pets.

It’s at least 80%, if not greater, growing nicely. And what we see, as Hoeken alluded to earlier, is the same trend converting towards soft chews in The UK and European markets. And with VEDIO UK and VEDIO Ireland serving both of those markets, we’re well positioned to capitalize on that trend. We have a large pipeline there. And then what we also are very excited about is, as I said, the launch for soft chew specials for The UK.

That project is well underway. Summit will be selling the first products in first quarter next year. We expect that to be a very sought after product versus tablets and other solid dosage forms. And then the last one, which is brand new for us as Vetio, is the popularity of pet treats capitalizing on the human animal bond. It’s another delivery form for health and wellness or specific dietary needs.

Dental treats being one of the biggest growing segments. We have our own products within Sweeten Care today. There are a lot of sister companies in the portfolio that are excited to have this capability. And this is something that we will be able to bring to the CMO external market as well. So we feel like with these investments that we’re making in Canada and in Jupiter, which will eventually Florida, which will eventually be leveraged into The U.

K. And Europe, we’ll have really a lot of capabilities. The story of growth will be not only through cross selling, but also just entering new categories where there’s new customers that we can bring into the portfolio. So very excited about the future and open for questions.

Moderator/Webinar Host, Sweden Care: Thank you, John. And by that, we are open for questions. And the first one comes from Johan. Please go ahead.

Johan, Analyst: Good morning, guys. Thanks for taking my questions. Firstly, question to you, to Hakan. Could you elaborate on the sort of Walmart rollout in late Q4 and Q1? You mentioned that it’s going to be higher marketing cost and at a lower gross margin.

Is that correct? And if so, could you sort of elaborate on the mix from that order? Are you expecting higher volumes to sort of offset that potentially?

Hakan Lagerberg, CEO, Sweden Care: Yes. No, that special, let’s say, project is a side project from the other sales that we expect to have with Walmart. So that’s a display that will be set up different point of sales in the stores and with all of our products jointly set together. That’s part of the sales to Walmart. So I don’t expect that won’t alter the sales that we have for our ordinary when being in the ordinary assortment.

So that’s just, let’s say, a marketing investment that we are doing, our displays out in the at another site in the 1,400 stores we’re already in and adding 600 more stores where we are in

Christian, Analyst: those

Johan, Analyst: displays. So sort of a marginal impact potentially on group gross margins and sort of overall in the investment in marketing?

Christian, Analyst: Yes.

Johan, Analyst: Okay, got it. And just a follow-up here on the organic growth drivers in the quarter. Of course, you mentioned several growth drivers during the call, but still 15% organic growth is pretty impressive considering that you only delivered half of the Walmart order in the quarter. Could you sort of just walk us through the top three contributors to the strong organic growth?

Hakan Lagerberg, CEO, Sweden Care: Definitely, Amazon sales both in Europe and The U. S. Then looking at Europe, I would say very strong veterinary sales in The UK. It’s a big, big part. And then in and also in the production segment for Europe.

And then looking at The U. S, was let’s say pet retail bounce back. For example, all of the nature of that setup, including their private label, were 15% up. So of course, the biggest entity in our group when they start to deliver solid growth that affects the whole group. And as I said, three out of four production units doing really well.

Yeah, but it was I mean online main driver, but most of the group companies had fairly good growth or good growth.

Johan, Analyst: Got it. Thank you so much. And are there any sort of notable mix effects year on year in terms of sales split between the segments or channel? And just to return to the Walmart order, is that a positive to group mix?

Hakan Lagerberg, CEO, Sweden Care: Do you mean positive in adding margin or?

Johan, Analyst: Yes, exactly.

Hakan Lagerberg, CEO, Sweden Care: I I would say overall, I mean, the big box channel is good margin wise, but that comes also with responsibilities to increase marketing efforts. So we did in Q3 and will continue in Q4 be very, let’s say active in announcing to the pet owners in North America that we are present in Walmart in CVS and Meijer. So with these launches, of course, it comes extra marketing activities that we’re not used to. But I mean, as you saw, we improved profitability in Q3 and my message for Q4 is that we will deliver double digit growth and increase profitability even more in Q4. That’s my expectation.

Johan, Analyst: Got it. And a final one then on the profitability. I noticed that the lower the lower or OpEx is mainly driven by personnel costs. How should we think about this going forward? Personnel was flat year on year and down significantly versus H1.

And sort of, I’m just thinking out loud here, but is the reduction in bonus provision a onetime thing in Q3? Or essentially, how should we think about the dynamics going forward?

Moderator/Webinar Host, Sweden Care: It’s difficult to say. It all depends how we’re going to perform in Q4. But yes, there was a reduction in the provision in Q3 that was basically the buildup for the first nine months. So yes, it was a bigger release in Q3.

Johan, Analyst: Okay. So if intend to continue to deliver on solid growth and margin expansion, we should expect the personnel costs to Yes.

Hakan Lagerberg, CEO, Sweden Care: Q4, yes.

Moderator/Webinar Host, Sweden Care: Your next question comes from Adrian. Okay. We will take the next question. It comes from Christian. Please go ahead, Christian.

Hakan Lagerberg, CEO, Sweden Care: Can you hear me?

Moderator/Webinar Host, Sweden Care: Yes. Okay,

Christian, Analyst: great. Thank you. Could you provide an update on your production unit in South Florida, which was a drag in the quarter? Do you expect the headwinds you have been facing to continue in Q4 and into 2026? Or do you expect the internal activities, some of which John talked about, to compensate?

John, Production Director, Sweden Care: I’ll handle that. I mean we have, as Hakan mentioned, some larger clients in our Florida facility managing down inventories. And that will be that theme will end this year, and we that can only go for so long. We expect that to pick back up. And what will drive some growth is as we’re going through our budgeting right now is a very strong development pipeline.

So lots of wins that will have a very positive impact in 2026.

Christian, Analyst: Okay, perfect. Thank you. If I jump to the Dental Product Group, these products delivered another quarter of strong growth. Do you expect this momentum to continue into 2026? And what would be the key drivers behind the growth?

Or should we be mindful of tougher comparisons ahead?

Hakan Lagerberg, CEO, Sweden Care: I expect dental to continue to grow. Have launched, I mean within that product group, it’s not only product and black off even though it’s the main driver, but there are still lots of markets where we’ve just started introducing the expansion of the product line for example, the soft jaws even though we’ve had them for a couple of years there. There are still many markets out there that are just have just launched them or just about to. And we continue to develop that product line. So we will be introducing a very interesting product for cats early next year.

So we’re just in the planning for that with all of the marketing and manufacturing. So we’re excited about that because cats and dental are a tricky issue to handle because of the finicky type of personalities that cats generally are. And also we’ve expanded with our, let’s say, taking care of the teeth more in general when it comes to toothpaste. And also, we have launched special wipes for cleaning teeth and they’re doing really, really well. So I expect the momentum to continue.

We see that the subscription rate for our dental products online is really, really high and we’re just adding new customers there. So it is more focused in the pet space. Course, we’re veterans in this space, but the dental focus just continues to grow every year. So I would say that we expect the strong momentum to continue next year as well.

Christian, Analyst: Okay, that’s perfect. Thank you very much.

Moderator/Webinar Host, Sweden Care: Let’s try again with Adrian. Please go ahead with your questions.

Adrian, Analyst: Hi, guys. Do you hear me now?

Johan, Analyst: Yes. Yes.

Hakan Lagerberg, CEO, Sweden Care: Oh, excellent. Sorry for that.

Adrian, Analyst: Had some technical issues. A couple of questions from my side, please. So firstly, it’s it’s great to see that you’re now active and and expanding into the big box retailing sector here. But I’m wondering a bit how you view the kind of incremental sales growth in this sales category going forward. Do you expect to grow by adding some more articles or just sticking striking new deals with other stores or what should we expect now for going into 2026 or even 2027?

Hakan Lagerberg, CEO, Sweden Care: I mean, it’s as I said, it’s hard work now to really informing the market that we are present and finding our products within those new sales outlets. So that will definitely continue. Expansion of product offering, I don’t expect that with the partners that we have now, I think that will stay fairly the same for let’s say, at least first half of next year because it’s long sales cycles. As we wrote in the report, we’ve been working towards the big box retailers almost two years. So it’s long sales cycles and also the resets sometimes only once a year.

As we have presented, we are present with a couple more in the online sites and our products are performing well there. So I wouldn’t be surprised if open up some more partnerships in 2026.

Adrian, Analyst: Okay, perfect. Thank you. Another question, You noted and I noted at least that the product category the other product category, Corey, saw some some 53% increase year over year. Could you comment a bit on this? What’s what’s driving that particular growth?

Moderator/Webinar Host, Sweden Care: Yeah. In the in the other category, you have Summit. So that’s we have that this year. We did not have that last year. So it’s including the acquisition of Summit Yeah.

Falls into that category.

Hakan Lagerberg, CEO, Sweden Care: And we also have a pill paste that that’s been doing really well under our a couple of our brands and that we are now expanding Europe as well. So so and and that comes into that category.

Moderator/Webinar Host, Sweden Care: So that’s that’s also The product category. Yes.

Adrian, Analyst: Alright. Alright. Excellent.

Moderator/Webinar Host, Sweden Care: So And my my answer is, so sorry, Adrian. My answer was for the brand split or for the brand split, not the price split. Yeah.

Adrian, Analyst: Okay. Thanks. It’s a bit confusing. But okay. Fair enough.

Okay. So last question here. You you mentioned Asia as well that you have signed some new distribution agreement segments distribution agreements. Right? Could you give some more details regarding these agreements?

Is there something that we could see anytime soon, you know, having a material impact on on the

Hakan Lagerberg, CEO, Sweden Care: Yeah. I would say that it it’s it’s small smaller smaller markets for example, a couple of partners in UAE and Brazil and South America for a couple of so I wouldn’t say it won’t be let’s say significant sales there. But we are expanding with both let’s say coverage in the world, predominantly that’s been it’s that we are introducing new product ranges or brands. It’s been the champion for our international sales definitely probably in Blackhawk, but we are focusing more now with the rebrand launching in nature vet out in the world and also other brands that we have on the dermatology products that we have. So I would say that we are now really starting to leveraging the best, let’s say product range and brand range that we have so that we are getting out in the world with lots more brands.

Adrian, Analyst: Okay, excellent. That was all for me. Thank you very much.

Moderator/Webinar Host, Sweden Care: Thank you. That concludes our Q and A session. Back to you guys for any closing comments.

Hakan Lagerberg, CEO, Sweden Care: Thank you for showing interest. Lots of people joining our call today and I’m really proud of the efforts from the whole organization and they’ve been doing a great job. And as I said previously, expect us to keep on delivering double digit growth and aiming for improved profitability in Q4 and onwards. That you will start seeing more results from the scale of our business definitely.

Adrian, Analyst: Yep. Thank you. Thank you. Bye. Bye.

Thank you.

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