Swedencare AB (publ) INTERIM REPORT July 1st – September 30th 2026

Swedencare posts modest growth but faces margin pressure and North American headwinds.

What the company is saying

Swedencare AB (publ) reports a 3% year-over-year increase in net revenue to 732.2 MSEK for Q3 2026, with organic, currency-adjusted growth of 2%, which management admits is below expectations. The company highlights strong momentum in Europe and its Production segment, each delivering 11% organic growth, and points to ProDen PlaqueOff® achieving over 30% growth for another quarter. CEO Håkan Lagerberg attributes the weak organic growth to an SQF inspection that disrupted production, underperformance in European veterinary brands, and supply chain issues impacting deliveries and online sales. North America remains a challenge, but the company expects gradual improvement, especially with new partnerships and product launches planned for early 2027. The Pharma unit received US FDA approval following a PAI, with manufacturing of a new pharmaceutical product scheduled to begin in 2027. The CEO also announces his intention to step down no later than Q3 2027 after leading the company from under 20 million SEK in revenue in 2014 to 2.7 billion SEK in 2025. The tone is candid, with management openly discussing both successes and operational setbacks.

What the data suggests

The disclosed figures show net revenue rising 3% year-over-year in Q3 to 732.2 MSEK and for the first nine months to 2,052.5 MSEK, while organic growth slowed to 2% for the quarter and 6% for the year-to-date. Operational EBITDA declined 3% in Q3 to 150.1 MSEK, with the EBITDA margin narrowing to 20.5%. Operational EBIT fell 8% to 122.3 MSEK, and the EBIT margin dropped to 16.7%. Profit after tax improved to 28.7 MSEK for the quarter and 70.1 MSEK for the nine months, with EPS up to 0.18 SEK (Q3) and 0.44 SEK (nine months). Cash flow from operating activities dropped sharply to 96.3 MSEK for the quarter and 239.8 MSEK for the nine months, while cash at quarter-end was 91.2 MSEK, down from 145.1 MSEK a year earlier. Net debt to R12 operational EBITDA increased to 3.0 from 2.7, reflecting higher leverage. The company’s explanation for weak organic growth is supported by the operational disruptions cited. Segment data confirms Europe and Production as growth drivers, while North America lags. The Pharma unit’s FDA approval is a positive milestone, but production and revenue from this are not expected until 2027. The CEO transition is planned but not immediate, limiting near-term impact.

Analysis

The announcement is a standard interim financial report with comprehensive disclosure of realised financial and operational metrics, including revenue, EBITDA, EBIT, profit after tax, EPS, and cash flow. The tone is measured, with management acknowledging both positive developments (e.g., strong growth in Europe and for ProDen PlaqueOff®) and ongoing challenges (e.g., North America turnaround, supply chain issues, and organic growth below expectations). Forward-looking statements are limited and clearly separated from realised results, with the only material projection being the planned start of pharmaceutical production in 2027. There is no evidence of exaggerated or promotional language; the CEO's commentary is factual and includes admissions of underperformance. No large capital outlay is paired with long-dated, uncertain returns in this release, and the step acquisition of Viyo is transparently disclosed as a non-operational adjustment. The gap between narrative and evidence is minimal, and all claims are well-supported by disclosed data.

Risk flags

• ●Margin compression is evident, with operational EBITDA and EBIT margins both declining year-over-year, indicating cost pressures or weaker pricing power despite revenue growth.
• ●Cash flow from operating activities fell significantly for both the quarter and year-to-date, and cash reserves declined to 91.2 MSEK, raising concerns about liquidity and financial flexibility if operational challenges persist.
• ●North America remains a persistent underperformer, and management’s expectation of gradual improvement is not backed by near-term milestones or quantifiable targets, making recovery timing and magnitude uncertain.
• ●The CEO transition, while planned for 2027, introduces leadership uncertainty over the medium term, especially given the outgoing CEO’s long tenure and role in the company’s growth.
• ●The new pharmaceutical manufacturing project, though FDA-approved, will not contribute revenue until at least 2027, and execution risk remains until production commences and customer uptake is confirmed.

Bottom line

Swedencare’s Q3 and nine-month results show modest revenue growth but declining margins and cash flow, with Europe and Production segments offsetting continued North American weakness. Management is transparent about operational setbacks, attributing weak organic growth to production disruptions, supply chain issues, and underperformance in key brands. The FDA approval for pharmaceutical manufacturing is a positive development, but any financial benefit is at least a year away. The planned CEO transition adds medium-term uncertainty, though it is not immediate. Investors should focus on the company’s ability to restore organic growth, improve North American performance, and stabilise margins and cash generation. The most important takeaway is that while the company remains profitable and growth continues in select areas, overall momentum is mixed and near-term upside is limited without clear evidence of operational turnaround.

Announcement summary

(LSE:0ABG) Swedencare AB (publ) reported its interim results for the third quarter and first nine months of 2026, highlighting continued strong momentum in Europe and production, with a turnaround in progress in North America. For the third quarter ended September 30, 2026, net revenue was 732.2 MSEK, up 3% from 712.9 MSEK in the prior year period, with organic, currency-adjusted growth of 2%. Operational EBITDA for the quarter was 150.1 MSEK, down 3% from 154.9 MSEK, with an EBITDA margin of 20.5%. Reported EBITDA was 152.2 MSEK, including a non-operational adjustment of 2.1 MSEK related to the step acquisition of Viyo. Operational EBIT was 122.3 MSEK, down 8% from 132.5 MSEK, with an EBIT margin of 16.7%. Profit after tax for the quarter was 28.7 MSEK, compared to 22.2 MSEK in the previous year. Earnings per share for the quarter, based on 159,840,958 shares, was 0.18 SEK, up from 0.14 SEK. Cash flow from operating activities was 96.3 MSEK, compared to 152.6 MSEK in the prior year, and cash at quarter-end was 91.2 MSEK, down from 145.1 MSEK. Net debt to R12 operational EBITDA (proforma and adjusted for IFRS16) was 3.0, compared to 2.7. For the first nine months of 2026, net revenue was 2,052.5 MSEK, up 3% from 2,000.8 MSEK, with organic, currency-adjusted growth of 6%. Operational EBITDA for the period was 407.2 MSEK, up 1% from 402.3 MSEK, with an EBITDA margin of 19.8%. Reported EBITDA was 409.2 MSEK, including a non-operational adjustment of 2.1 MSEK. Operational EBIT was 327.8 MSEK, down 4% from 340.9 MSEK, with an EBIT margin of 16.0%. Profit after tax for the nine months was 70.1 MSEK, up from 39.1 MSEK. Earnings per share for the period, based on 159,840,958 shares (159,518,501 shares in the prior year), was 0.44 SEK, up from 0.24 SEK. Cash flow from operating activities for the nine months was 239.8 MSEK, compared to 282.1 MSEK. During the quarter, Swedencare announced a planned CEO transition to occur during 2027. Summit Vet, a Swedencare subsidiary, expanded its product offering to include soft chews after collaborating with Vetio. The CEO noted strong development in Europe and production, but continued challenges in North America, with organic growth for the quarter at 2%, below expectations. The CEO attributed the deviation to an SQF inspection, weaker than expected performance for European veterinary brands, and supply chain challenges. Europe and Production segments both delivered organic growth of 11%. ProDen PlaqueOff® achieved growth above 30% for another quarter. The company’s Pharma unit was approved following a PAI (Pre-Approval Inspection) by the US FDA, enabling manufacturing of a recently approved pharmaceutical product for a customer, with production planned to start in 2027. The CEO, Håkan Lagerberg, announced his intention to leave his role no later than Q3 2027, after leading the company from just under 20 million SEK in revenue in 2014 to 2.7 billion SEK in 2025. Swedencare invited shareholders and analysts to a presentation of the interim report with CEO Håkan Lagerberg, CFO Jenny Graflind, and Production Director John Kane.

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