Welcome to ADDvise Q2 Report 2023. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now, I will hand the conference over to the speaker, CEO Rikard Akhtarzand. Please go ahead. Hello, everyone, welcome to ADDvise Group Second Quarter Earnings Call. As usual, I will high level take you through the quarter, followed by a Q&A session facilitated by my colleague, Simon Törnström. Our second quarter came in well ahead of our expectations. We had robust organic growth in both the lab segment and the healthcare segment in the quarter. Group organic growth reached 10%, and the overall growth came in just shy of 50%. Group EBITDA margin was 35% in the quarter, isolated, elevated by strong performance in the lab segment. We saw laboratory equipment leads to clinical trials accelerate, improving our group margin. However, the margin in Q2 is higher than our normalized level. We will see margin fluctuations between quarters based on our product mix. Current rolling 12 margin of 28% is in line with our long-term target and where I have my expectations going forward. Finance net in the quarter was negatively affected with SEK 37 million of cost from refinancing of our bond. We had a one-off tax effect of SEK 7.6 million, since the refinancing cost is non-deductible. Net profit adjusted for one-time items would be SEK 48 million in the quarter, giving us an adjusted earnings per share of SEK 0.26. We had sequential decrease in cash conversion versus the first quarter from 150% down to 84%. 84 is a more normalized level, given the COVID balance sheet rollback effects we had in Q1. Our net leverage is now at low 1.5x EBITDA, post-refinancing of our bond. All in all, the first quarter and the second quarter, basically, the first half of this year, gives us visibility on the upcoming quarters, and we have today updated our guidance for this year. Our new target is to reach pro forma SEK 500 million in EBITDA and SEK 1.7 billion in sales by the end of this year. The healthcare segment has been the cornerstone of ADDvise Group post-COVID, with resilient growth coupled with margin ex-expansion. The second quarter was no exception. Organic growth was 11%, mainly driven by continued strong demand on the U.S. market, which now stand for more than 80% of the segment. Our revenue from pharmaceuticals is performing well. In the pharma segment, we have started to offset our dependency on our blockbuster, Folite, by launching new insurance coverage products that has already started to contribute. Diabetes products was also performing strong in the quarter, being one of the largest margin contributors in the healthcare segment in the quarter. I'm satisfied with the operating margin in the healthcare segment, despite a small sequential decline. We now have two quarters in a row with a margin above 30%. Order intake in the healthcare segment was solid and came in at SEK 240 million, an organic growth of 17%. For the first time in many years, the lab segment surpassed the healthcare segment in terms of operating profit. The second quarter came in very strong, driven by revenue streams from laboratory equipment used in clinical trials. The operating margin in the quarter was 51%, which is the highest segment margin ever in ADDvise Group. Historically, the lab segment has been tweaked towards standardized low-tech equipment on a very price competitive market. We have worked systematically the last years to elevate our value add by offering more unique solutions to customers. We have done that both through the M&A strategy and by stripping out low-margin products in existing businesses. Year to date, Sweden is still the single largest market for the segment. Both U.S. and Europe are growing fast. Organically, both sales and order intake grew 10% in the quarter. Our revenue streams from laboratory equipment show strength, as mentioned. We have had sequential revenue growth the last three quarters, driven by growth in orders from clinical research organizations. Laboratory equipment as part of solutions to clinical trials today carry one of the highest margins in ADDvise Group. We continue to see solid demand for our pharmaceuticals, especially for our blockbuster Folite, cough and cold drugs, and allergy medicine. U.S. is still, in terms of geography, U.S. is still by far our largest market in terms of geographical market. It is a very complex market with many opportunities, but also challenges. Healthcare spendings per capita in U.S. is twice as high compared to Sweden. What should be factored in is that the healthcare system in U.S. is funding innovations in a way that no other healthcare system does. That makes U.S. an excellent market to launch new products on. Europe, excluding Sweden, is growing mainly because of the Dutch acquisition we finalized in the fourth quarter. On group level, we now can mitigate sales risk on several geographical markets, lowering the overall risk in ADDvise Group. The last five years, we have had consistent margin improvements. The margin improvements slowed down in the back end of the pandemic. In 2022, post-COVID, we were able to accelerate our margin expansion once again. That was mainly done by elevated product offerings and pricing projects. Being able to acquire add-on businesses with higher margins also played an important role in accelerating the margin. On a rolling 12 basis, we are now basically on our long-term financial operating margin target of 28%, and I believe that 28% is a sustainable level, but we will see fluctuation between quarters. This chart only shows the last 5 years, which of course, has been quite a growth journey. You should remember that the growth trajectory started back in 2010. At that time, the annual sales in ADDvise Group were less than the size of the current operating profit per month. Our goal is to continue and grow organically and through our disciplined M&A agenda. Key in our growth strategy is high operating margin and strong cash flow. There is seasonality in our order intake. Normally, fourth quarters are the strongest. Large customer tend to place orders late in the year to make sure they spend their budgets to reduce the risk for the next year budget cuts. In the second quarter this year, order intake increased organically with 16% and 22% in total. The larger contribution came from the healthcare segment, where we had continued high demand on pharmaceuticals and diabetes products. Looking at the last five years in terms of operating profit or EBITDA, we can see the same trend. The average operating profit growth, or the CAGR, has been 72%. The trend continues, and looking at rolling 12 and looking at our projection for 2023, we will see the similar growth. Today, compared to five years ago, the platform is much more scalable. We have an even better playbook today for onboarding and accelerating businesses as part of ADDvise Group. The current capital structure with our new bond frame that was the old bond that was refinanced in the second quarter, gives us flexibility needed to elevate our financial targets and continue our growth trajectory. A breakdown on the operating profit year-on-year shows that we have been able to alleviate price increases from vendors and inflation with sales growth and gross margin improvements. The gross margin improvement is pushed by product mix, pricing projects, and currency tailwinds. The negative effect from depreciations amounting to SEK 26 million is mainly driven by a larger portion of customer lease contracts. Operating profit more than tripled year-on-year. Cash flow from operations have gradually improved post-pandemic. During the pandemic, networking capital spiked, putting pressure on operational cash flow. In the first quarter this year, we had the opposite effect, being able to extract assets from the balance sheet, spiking cash conversion. We are now running at a more normalized level. Cash conversion came in at 84% in the quarter, which is in the upper part of our target range. We continue to work with return on working capital as one of the key KPIs for our local management teams. When we acquire a business, this is quite often a blank spot for the seller, who prioritize P&L before balance sheet. This gives us plenty of room to improve acquired balance sheets, leading to a more asset light structure and improved cash flow post completion of the acquisition. Net leverage is now at low 1.5 times EBITA. This is the fourth consecutive quarter with deleverage. Net leverage will increase slightly in the upcoming quarters due to the completion of pending acquisitions. We have financing and cash at the bank to close the four already announced LOIs. Once they are part of Group, the deleveraging will continue. Our 3x net leverage target remains, and we will stay below that going forward. The new capital structure that we put in place in the second quarter with this SEK 2 billion bond frame, is optimized to support our financial targets. The cost for the refinancing of the bond had an adverse effect on our net result in the quarter, with SEK 37 million, and on top of that, a one-time tax effect of SEK 7.6 million. The new capital structure comes with a significantly lower interest rate, which will, over time, make the net finance be more in line with our expectations. In conjunction with the release of our report this morning, we updated our financial targets for the year. Basically, as I mentioned before, strong performance so far this year, coupled with pending acquisitions that we have good visibility on, and that will be completed and finalized in the near future, gives us better visibility for the second half of 2023. Based on that, we have set new targets for the year. The target is to reach SEK 500 million in pro forma on an EBITA level, with a sales target of SEK 1.7 billion pro forma. I will stop there and open up the floor for questions. This call is being recorded. Thank you very much, Rikard, for the presentation. We do have some questions here, starting off with one from Axel at Molcap. Can you explain more about your acquisition strategy, primarily in the U.S.? How do you see the acquisitions not going as planned after two-three years when the payout is paid and the main entrepreneur in the company leaves or loses the initiative to work as hard? Do you acquire companies with low key man risk, or companies that you could easily find a replacement for? Please elaborate on how you see this. I mean, obviously, the structure of our purchase price is 70% upfront cash and 30% in earn-out over two years. The first two years we have strong commitment from the local management and the seller. After that, we go into our group incentive program. Basically, we have strong motivation for the entrepreneur and the seller to continue and work for the business. Sometimes, the seller is very close to pension or retiring, and in that case, we work closely with the seller during the earn-out period to find the proper succession plan. I think we have a good toolbox to kind of manage both people that want to stay on board and people that want to leave. Thank you. Following up on that, we have a question from Bobby Montalvo, and he's complimenting us for an excellent quarter and asking how we look at synergies and how ADDvise Group is looking to add value through synergies. I mean, of course, we are a decentralized structure, with basically making it possible for local management to make all the decisions, the daily operational decisions, on a standalone basis. However, we add a lot of value through our corporate governance framework, and one of the biggest contributions from ADDvise Group is to add a layer of monitoring and financial reporting, and even more important, best practice. Basically, trying to duplicate things that work well in one company into other businesses. Being disciplined within a specific segment, in our case, healthcare, makes it possible for us to really find best practice in many businesses and duplicate that. I think that's one of the strongest tools we have. Thank you. One question here from John Glaved at Mangold: Have you increased prices for medical equipment during the quarter? If so, can you continue doing that for the remainder of the year? I mean, pricing is obviously a very important tool for us to have margin expansion. I mean, pricing, just to increase prices is not the only way to improve margin. I mean, we also work with the product portfolio and try to elevate the offering we have to our customers. By doing that, being in the upper scale of quality of products, making it possible for us to carry higher pricing and margins on the products. Yes, we work with pricing basically every quarter to alleviate effects from inflation and other price increases, of course. Thank you. Another question from John: Regarding the order intake in the lab business during the quarter, especially equipment for clinical studies, was it an unusual order, or is it something that we can see in the second half of the year as well? I mean, obviously, the performance of the lab segment in the quarter was extreme, and it's not a normalized level. As I mentioned, on group level, we had 35% operating or EBITDA margin. That is not a level where we can be, kind of, sustainable. I would say that the updated long-term margin target of 28% EBITDA is where we should be, and I think, I believe that we now have established a platform so that we can be, over time, consistent on that level. Thank you. From David Fremle at Case Kapitalförvaltning: You saw a rather big increase in receivables. How come, and how much of your sales was volume versus price? That seemed like several questions in one, but if you're, I mean, let me comment on the receivables. Of course, when you have high growth, the receivables will short term, increase. That's kind of an effect of the growth rates we have. Remind me, what was the other part of the question? The second part was, how much of your sales was volume versus price? We don't disclose that, so we don't have that number. We don't disclose that in the stock market. Thank you. From Tobias at SEB: Would you please elaborate on how you see your financing structure going forward? I mean, we, as mentioned, we have a very, very solid platform, since we refinanced the bond. We have a bond frame of 2 billion SEK, and we have tapped 1 billion of the 2 billion. Of course, our net leverage is down at 1.5. We have strong cash conversion and operating cash flow. My view on the capital structure is that we have plenty of room and flexibility to continue our growth, journey and growth trajectory. I'm really proud of the capital structure at the moment. Not saying that it can't be even better. Also, we have the opportunity and possibility to refinance the bond at basically 175 basis points lower interest rate compared to the old bond. We came in at 550 basis points in mid-second quarter in the refinancing, which is based on this, I mean, sentiment in the debt market, I would say it's a very strong and competitive pricing on our bond. Thank you. We have two questions here from Fredrik Nilsson at Redeye, the first one is: How significant is the impact of the orders you delivered faster than expected on sales in lab? There is impact from the fact that we were able to deliver faster to customers. I think that's, I don't have the exact number of that, and we don't disclose that, but there is some impact from that. I would say that the extraordinary margin is driven by the fact that we were able to ship and deliver faster to customers. Thank you. The second question is, you mentioned that you see lower valuations on potential acquisitions. What valuation multiples should we expect going forward? I mean, it's extremely hard to put a specific number in terms of multiples because it depends on the type of business. Is it proprietary products? Is it a distributing company? The geographical aspect also plays an important role. I would say that in general, I would say that the multiples is down half to 1 turn. That is something that you basically could or can expect going forward. Thank you. Following up on that, we have a few questions here from private investors. One is: Given that you updated financial goals for 2023 on a pro forma basis and stated that these were based on the acquisitions announced earlier, could you give us an update on these acquisitions? I mean, I can't I mean, the update I can give is that we have a time plan, and we pushed two of them into the third quarter to be completed, and it's nothing specific. I mean, it's a very lumpy process to finalize an acquisition. We are probably one of the few companies publicly traded that announce LOIs, and that puts some pressure on us to deliver according to plan. Normally, acquiring businesses don't announce LOIs, so by not doing that, you don't set the expectations. That being said, I mean, we're working as hard as we can to finalize these acquisitions, and we have never, so far at least, failed to complete an acquisitions that we have announced an LOI on. Thank you. Following up on that, can we expect additional acquisitions throughout the year? Where would you say that the future growth is in terms of M&A? First of all, I mean, yes, you could expect more acquisitions, based on our strong cash flow, but I mean, and our deleverage. We will continue and acquire businesses, in the same discipline, fashion as we have been doing before, focusing on the healthcare space. We must stay within our KPIs, to do that, and our long-term financial targets, basically being below net leverage of 3x. As long as we can do that, and we find the multiples attractive and in the benefit of our shareholders, we will continue to do that. Thank you. Here's two questions in one regarding the long-term financial goals that were updated for growth and EBITDA margin. The debt to EBITDA ratio remained. Have you considered adjusting it? I mean, yes and no. We always review our targets and try to kind of value them based on how we think that we can create most value for our shareholders. Right now, we believe that we have a strong financing situation, strong cash flow, and multiples going down. And the reason for the multiples going down on potential acquisitions is basically that less companies can finance acquisitions. We want to capitalize on that situation. And tightening up the net leverage target would make it harder for us to capitalize on the attractive multiples in the market. What you should know when you look at our net leverage target is that we are a non-cyclical, high-margin company with strong cash flow. You can't compare a net leverage target of 3x EBITDA with a cyclical company with 10% operating margin. You need to kind of look at the net leverage target from the angle of what type of business we are and our margins and our cash flow. Thank you. Following up on that, we have a question regarding the dividend target, which also remained. Are you planning on coming back to pay dividend, given the continued strong cash flow? Eventually, yes. It's a balancing act. I mean, what we want to do is have the best capital allocation that we can basically create for our shareholders. As long as we see the multiples as very attractive, it doesn't make sense to pay dividend short term. Eventually, we want to combine growth, acquisitions, high margin, strong cash flow with a small portion of dividend, yes. Thank you. An additional question from Axel at Molcap. Could you please break down the large discrepancy between operational cash flow and cash flow from operating activities in the quarter? Let me look into that slide. Once again, the delta between? Operational cash flow and cash flow from operating activities. I guess I don't have that in front of me, the details, so I need to come back to that. If you can take a note on that question, and then we will follow up on that one, so I can give you the exact details, because I don't have that in front of me. Of course, and thank you. That was all from the written Q&A, and I'll now hand over to the teleconference. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. There are no more questions at this time. I hand the conference back to Simon for any questions from the web. Thank you. I think that was it from the written questions. I'll hand the word back over to Rikard for some final words. Okay. Well, I'll just close down the call because we don't have any final remarks, and thank you all for listening in to this second quarter earnings call. Thank you.