Good morning and welcome to Vimian's third quarter earnings call 2026. I'm Ali Tajbakhsh, Group CEO, and will, together with our CFO, Carl-Johan Zetterberg Boudrie, present our results for the third quarter.

We continue to deliver strong performance with strong revenue and earnings growth in the quarter. Organic growth remains at double digits, which is well ahead of overall animal health market.

Our cash flow improved significantly compared to the previous quarter with operational cash conversion of 71%. We also see our M&A pipeline progressing in the right direction, and after the end of the quarter, we entered soft tissue surgery through the acquisition of Norfolk Medical Products in US.

On the management side, we finalized the recruitment of our new Head of Specialty Pharma, Hans Karapinar, bringing on board another highly experienced leader to the team, and promoted long-term team member Andrea Tidholm as Head of M&A. Our business continues to outperform the overall animal health market, which reflects the strength of our strategy with focus on attractive market niches, but also strong brand portfolio and disciplined execution.

Looking at the numbers more specifically, we report 15% revenue growth and reached €120.3 million in revenues in the third quarter. Organic growth was 11% with strong momentum across all segments, 3% contributions from acquisitions, and 1% positive impact from currency movements.

Adjusted EBITA grew 14% to €29.2 million with strong growth across all four segments. Margin was 24.3%.

Moving on to Specialty Pharma. Specialty Pharma's underlying business momentum remains strong with 7% organic growth driven by double-digit growth in the therapeutic areas allergy, dermatology, and specialty pharmaceuticals.

As previously communicated, the therapeutic area specialized nutrition was impacted in the third quarter by a strong prior-year comparison. Adjusting for the impact from the sales campaign in specialized nutrition, organic growth in Specialty Pharma was 11% in the third quarter.

During the quarter, we launched an updated version of our allergy test platform, Pet Allergy Xplorer, or PAX, that covers an additional 25 allergens. PAX is the most advanced veterinary allergy test, and there are several third-party scientific studies reaffirming the test platform's ability to outperform other tests on the market.

We continue to drive strong profitability in Specialty Pharma, and adjusted EBITA grew 12% to €15.2 million, and adjusted EBITA margin improved to 30.3%. Our MedTech business achieved another quarter of double-digit growth reaching 15% in Q3.

Both the dental and the orthopedic business delivered double-digit growth in the third quarter. In the dental business, growth was driven by strong commercial execution and deeper penetration of key customer accounts in the US as well as strong growth in APAC.

In the orthopedic business, growth was led by APAC and Europe, and our North American business delivered another quarter of growth in unchanged market conditions. We continue to drive education in the quarter and trained 1,300 veterinarians in the quarter across our dental and orthopedic businesses.

Adjusted EBITA grew 20% to €10.5 million, and adjusted EBITA margin improved to 24.4% driven by strong growth and improved gross margin in our dental business. I'm pleased with the development in our MedTech business, and the new management team continues to review the business to address operational improvements.

In our Veterinary Services business, the momentum remains strong with 10% organic growth and 12,400 member clinics at the end of the quarter. During the quarter, we officially entered two new countries, which we talked about previously, Japan and Portugal, receiving positive feedback from the veterinary community.

Adjusted EBITA grew 28% to €5.9 million, and adjusted EBITA margin improved to 30.5% including positive effects in the quarter from mix in our strategic partner agreements. Our Diagnostics business delivered 13% organic growth in the quarter driven by extraction and PCR tests sales in the livestock business.

Adjusted EBITA grew to €0.5 million. The adjusted EBITA margin was 7.2% including our investment to diversify Companion Animal Diagnostics.

Looking at our M&A activities, we have completed five acquisitions year-to-date and continue to have an active pipeline covering both large new platform acquisition as well as smaller bolt-ons. Earlier this week, we signed the acquisition of Norfolk Medical Products, a leading niche provider with soft tissue surgery.

Norfolk is a US-based business that develops, manufactures, and sells specialized implants and consumables, including, for example, a well-renowned urinary bypass implant for cats and dogs. The acquisition adds annual revenues of around $6.9 million and expands our MedTech offering into a new fast-growing niche.

Norfolk's portfolio is complementary to our existing surgical offering, and the operating model are well aligned with focus on close relationships with the specialist community and education to unlock market growth. Profile of the customer base is also largely the same as ours.

Many orthopedic clinics also do soft tissue surgery, and Norfolk has currently a very small sales force, we see good opportunities to grow the business by leveraging our MedTech sales force across the globe. We continue to deliver our sustainability agenda focused on animals, people, and planet, integrated into the core of our operations.

In the quarter, we completed our employee experience survey with continued high engagement scores. We also held our first global leader conference with 100 leaders from around the world to strengthen the cross-company culture and collaboration across the group.

With that, I will hand over to Carl-Johan for deeper insights into the financials.

Thank you very much, Ollie, and good morning, everyone. As mentioned, I will give you a more detailed view on the financial development in the third quarter.

Adjusted EBITA in the third quarter was €29.2 million, an increase of 14% corresponding to an adjusted EBITA margin of 24.3%. As we have previously stated, we foresee a more stable margin development for the full year 2026 versus 2025 driven by our investments to drive growth in the MedTech segment.

The slightly lower margin in the third quarter specifically compared to the same period last year is primarily a result of higher central costs. Central costs amounted to -€3.0 million in the quarter, an increase from -€1.8 million last year.

The increase is mainly a result of expenses related to our long-term incentive programs, in total €0.6 million in the quarter. These are non-cash IFRS expenses that will recur for the duration of the three-year programs.

We report an operating profit of €20.5 million, a 17% increase from last year's result of €17.5 million. Items affecting comparability were similar to the same period last year and totaled -€2.1 million, mainly attributed to acquisition costs in MedTech and Veterinary Services.

Net financial items amounted to -€6.9 million and consisted of three main parts: one, financing expenses of -€4.2 million with an average interest rate of 4.0% during the quarter, partly offset by interest income of €0.8 million; and secondly, a quarterly discounting impact of -€0.9 million; and negative impact of -€2.2 million from probability adjustments related to contingent considerations mainly from new acquisitions; and lastly, a negative impact of €0.5 million from exchange rate effects on the revaluation of debt. Income tax expense for the quarter was -€4.3 million at an effective tax rate of 31%.

In the quarter, the tax expense as a percentage of pretax profit was negatively affected by probability adjustments related to contingent considerations and other nondeductible expenses. In total, this resulted in a profit for the period of €9.3 million with an earnings per share of €0.02 for the quarter.

Cash flow from operating activities reached €22.6 million corresponding to cash conversion, defined as operating cash flow in relation to EBITA, of 71% for the third quarter. Net working capital amounted to €116.4 million at the end of the quarter, equal to 25% of revenue, and an increase from €114.1 million at the end of the second quarter, which equaled 26% of revenue.

Cash flow from investing activities amounted to -€21.0 million, primarily consisting of acquisition and earn-out payments. Capital expenditure amounted to €4.1 million, which is 3% of total revenue, with €2.9 million related to investments in internal R&D and software development, and investments in property, plant, and equipment amounted to €1.2 million.

Cash flow from financing activities totaled €2.4 million, mainly from proceeds from borrowings. At the end of the quarter, net debt amounted to €262.4 million, which is down from €273.7 million at the end of the second quarter.

Cash and cash equivalents amounted to €55.6 million, an increase compared to €51.6 million at the end of June. External lending was €263.1 million at the end of the third quarter.

This resulted in a leverage at the end of the quarter equal to 2.0x, a decrease from 2.1x at the end of the second quarter. We continue to be well capitalized with an ability to execute on our strengthened acquisition pipeline.

With this financial review, I hand the word back to Ollie for concluding remarks.

Thank you very much, Carl-Johan. We delivered continued strong performance in the third quarter with strong total revenue and earnings growth and double-digit organic growth.

We've closed five acquisitions year-to-date, and after the end of the quarter, we entered soft tissue surgery through the acquisition of Norfolk in the US. Overall, we have a clear progress across our strategic initiatives and are well positioned to continue delivering sustainable and volume-led growth combined with value-creative M&A.

On November 24, we will host Vimian's first-ever Capital Markets Day in Stockholm to provide a strategic deep dive and describe the roadmap toward 2030 financial targets. Thank you.

Good morning, gentlemen. First question on North American orthopedics.

Another quarter of growth. Do you feel like that business has now completed its turnaround, and what sort of growth rate should we expect going forward?

Good morning. Yes, we're happy with the development of our US orthopedic business with a second quarter of growth in unchanged market conditions.

As a consequence of the unchanged market conditions, we believe the current growth rate is what we expect in kind of short-term future. We're happy to see that the changes we implemented earlier this year has shown positive effect, and we're confident that the existing new management team will continue to drive operational improvements to maintain and improve our momentum.

That's nice to hear. Then on Diagnostics, especially the margins, second quarter in a row now of single-digit margins.

Is this sort of the level that we should anticipate with investments that you're making in the companion animal health?

Good morning, Adela. I think, as Diagnostics is two parts of the business.

One is livestock, which structurally has a lower margin than the overall margin for Vimian, and the second part is companion. To your point, we are investing in Companion Animal.

Companion has structurally better margin than our livestock business and more in margin that's in line with, you can say, the group overall margin. In the quarter specifically and also in the second quarter, we've had certain integration costs from the acquisition of i-Vet, which is part of our Companion Animal part of the business, and also some investments to drive strong growth in the Companion Animal part of our Diagnostics business.

We foresee in 2027 and onwards that margins will pick up in the Diagnostic segments as our Companion Animal business starts to scale.

That's interesting. Maybe to levels that we haven't seen in more modern times with the Diagnostics business if we exclude the extraordinary levels during the pandemic?

I would say you can expect, you could say, continuous improvement of the margins as the Companion Animal business starts to scale and becomes a larger part of our Diagnostics business.

I see. On Specialty Pharma, appreciate the commentary there of what growth was excluding the campaign timing.

I just want to confirm that that's now fully behind us and there's nothing additional in Q4?

The national sales campaign that we conducted this year, mainly in the second quarter, and that was mainly conducted in the third quarter of last year is something that's call it behind us for 2026. There's no comparative disturbances, to say, in the fourth quarter relating to the national sales campaign.

All right. Then lastly, on leverage and M&A, it declined before the Norfolk acquisition.

How do you view your M&A pipeline at this point and how much additional capacity remains within your preferred leverage range?

As you say, we have leverage of 2.0x. We're sort of well below our long-term financial target, and we have good and solid financing capabilities in place.

From a leverage and financing perspective, we're confident that there's significant headroom for us to drive further M&A. In the pipeline, we see interesting opportunities both from a sort of bolt-on perspective, but also from certain larger interesting M&A opportunities.

Great. Thanks, Carl-Johan and Ollie.

Thank you.

Hi, guys. Good morning.

A few questions from me, please. I'll take them one by one.

First off, the dental business in the MedTech business vertical seems really strong. Could you give any more flavor on this?

How much can we sort of extrapolate, if you will?

No, we see continued strong momentum in our dental business, which kind of comes from strong revenue growth in combination with a kind of slightly better gross margin in general. I think the dental space, as we talked about before as well, is an interesting and growing field, I think we're well positioned to capture that growth with a strong team in place.

Right. Okay.

Regarding the acquisition yesterday, could you tell us anything more about margins, multiples paid, how you think about that and the growth profile?

So [clears throat] I think the Norfolk business currently has a slightly lower margin profile than the Vimian average. As I talked about the synergistic opportunities leveraging the Vimian network and the MedTech or orthopedic sales force, we believe that we can bring that business into higher margins over time.

The company has delivered strong growth. It's a highly attractive niche, and we expect that to continue as part of Vimian.

Multiple-wise, I would say that it's in line with what we historically have paid for businesses, and we expect that multiple to travel down as we realize synergies.

Right. Okay.

Last question. Regarding Veterinary Services, the performance here in the US seems to be strong, right?

Could you give us any color on why it's strong in the US now and seemingly when the veterinary market in the US is reportedly rather soft?

I think Veterinary Services has shown for a long period of time that it's an attractive and consistent business that deliver value for the independent vet community and our partners. US is a strong market for us where we operate under two strong brands, being Vertical Vet and DVM Grow, and I think the service offering, the team we have, and the support the clinic community in the US needs is right up our alley in terms of the services we're offering, and we see continued momentum across the entire world, but in particular US.

Okay. Thank you.

That was all for me.

Good morning, and thanks for taking my questions. First on Spec Pharma and on the national sales campaigns we've seen over the past few years, how should we think about their future contribution?

Are you targeting campaigns of a similar magnitude going forward or is the ambition to further expand their scale? Secondly on Vet Services, margins have obviously improved through the year.

Directionally, how should we think about margin trajectory going into Q4 and 20 27? Thanks.

I'll start there.

Morning. If we start with Specialty Pharma and US specialized nutrition, and maybe sort of to take one step back, in that business, we've successfully grown that business over time with expanding our customer network or our customer base and also expanding our product base.

That's something that we'll continue to drive in 2027 and onwards as well, making sure that, as I said, expanding our customer base, expanding our product portfolio, taking further shelf space with our customers. The national sales program that we now ran for three consecutive years, it's a testament to our strong customer relationship with the large retailers in the US, and that's, of course, something that we will focus on being able to be part of also for next year and going forward.

Just on your second question, that related to Veterinary Services right and margin? Yeah.

In Veterinary Services, and as Ollie mentioned, in the third quarter, we had positive effects in the quarter from a positive mix of high-margin services including partner agreements. Looking at the fourth quarter for Veterinary Services, I would say it's fair to assume that the margins for Vet Services will be on the year-to-date average margin that we've seen for Veterinary Services, around the 28.5%, 29% mark.

Perfect. That's very helpful.

Just a last one, if I may. On Norfolk, how should we view this?

Is this a platform that as you see it that would enable you to do further acquisitions within soft tissue surgery similar to what we've seen in IM3? Do you have targets within this in your pipeline?

I think Norfolk is one of the leading players when it comes to soft tissue surgery, it's a complementary business that strengthens our MedTech offering. We look at opportunities across the board.

We see a lot of opportunities across all four segments when it comes to M&A acquisitions. I think soft tissue surgery and Norfolk in particular complements the business we have with a strong product portfolio that can leverage our sales team in the orthopedic business to drive global growth.

Okay. I'll jump back in queue.

Thank you.

Morning. Thanks for taking my questions.

My first one, sorry just to come back on North America ortho in particular. You previously said to continue to expect low-single-digit growth for the remainder of the year.

Sorry just to clarify, that is still the expectation, right? If I could ask again, do you be some thinking of an improvement in the trajectory next year, especially we can see the market might be starting to inflect there.

Then my second question was just around Spec Pharma. Just to clarify again, there was no contribution at all from the sale in Q2 to Q3, just in terms of timing and any spillover of effect that was fully contained to Q2?

Thank you.

Good morning. On the MedTech questions, US orthopedics was low single digit in unchanged market condition, and we don't expect the market conditions to change in the fourth quarter.

We would expect that the business continue to show growth in that range. For the growth to accelerate to a high single digit or double-digit mark in the US orthopedics specifically, the market would need to change in 2027 and onwards.

Yes, to confirm, we expect similar growth in Q4. For Spec Pharma and the national sales campaign in the third second second quarter of last year and third quarter of this year, no, the majority of everything we delivered in the national sales program was done in the second quarter this year.

That's why we've seen, you could say, comparative impact in the third quarter. I would say it's more reasonable to look at the year-to-date number for Specialty Pharma where that timing effect is washed out, and we see 11% organic growth for Specialty Pharma in the first three quarters of this year.

Got it. Thank you.

If I could just ask a follow-up quickly on the MedTech business. Would you be able to give us a sense of where the Europe APAC margins are?

Because we know dental is dilutive, and obviously there's very strong performance in MedTech this quarter. Just wondering the drivers for why perhaps that didn't fully drop through to margins?

[clears throat] So

from a MedTech perspective, as we stated earlier this year, we've done investments into the organization to strengthen the team. That, from a if you call it short-term perspective, is impacting the margin.

Over time, we believe that the margin of course will improve. As we stated before, the investments we made to strengthen the commercial performance in orthopedics, we kind of do foresee a slight margin decline for MedTech from a full-year perspective.

Right. Thank you.

Hi. Good morning.

Thank you for taking my questions. Sorry if I've missed this, but could you please just quantify or help us understand the contribution in Vet Services from strategic partnerships in the quarter?

Obviously, the margin was stronger, and I believe there's also some contribution to growth. If you could help us to understand what the benefit of that was and how that compared to a typical quarter, that would be helpful.

Thank you.

If you look at the contribution from, and I would say it's a contribution mainly from a shift towards higher-margin services and that's sort of the main sort of way you should think about it and where we've seen some positive effects in the quarter in terms of call it the mix of high-margin services. If you think about sort of, and from a growth momentum, it's continued positive momentum.

We see that Veterinary Services are in a double-digit sort of growth momentum as it's been for many many quarters. From a margin perspective, as previously mentioned, sort of think about Veterinary Services in the Q4 maybe year-to-date perspective as or full-year perspective as margin being around the year-to-date number that we see for Veterinary Services.

Thank you.

Good morning, everyone. I have a well, kind of a follow-up question on the Vet Service.

Looking at the organic growth rate, would it be possible to break it down into some sort of same-store growth and also expansion growth, meaning how much of the growth is driven by new members and what sort of the underlying run rate among the existing members? Would you be able to break that down for us?

So [clears throat] normally the growth rate of existing members is fairly stable. If we look at the new members, it normally takes some time for them to be up to speed with the full service offering we have in the portfolio.

If you look at the specific two markets we entered in Japan and Portugal, we went live end of the quarter, it has very limited effect on the growth rate from the Veterinary Services business in the quarter specifically. I think normally the longer you've been a member in the Veterinary Services segment, the more services are being used as a consequence of knowing the impact of those and knowing us much better.

I would say it's a very sticky and loyal customer base.

Okay. Of the 10% organic growth rate, would you say new members add, I don't know, 3%, 4% or less?

On that then, we haven't disclosed the specifics of how much different you could say services or customer groups are contributing to the growth. To Ollie's point, if you look in a specific quarter, a large sort of very large share of the growth is attributed, you could say, to historical members.

The new members that we acquire are a great base for future growth as they become sort of more purchasing members and we add additional services to those new members.

Thank you. Another way to look at it, I guess, would be also to see you have 12,400 members in I guess is it 14 markets or something like that?

What sort of the total number of potential members in the markets where you are today? Some sort of penetration ratio of where you are.

Is that something you would be willing to share?

I think if you look at the current member base, then the penetration on the different markets, first of all, it's 14 markets. If you look at the penetration in the market, it looks very different depending on how long we've been operating in the market.

If you look at, for example, as VetFamily started as a Nordic or Northern European procurement organization, in the Nordic or the Northern European markets, our penetration is much higher than more recent markets we've entered. I think there's still white space and growth opportunities in all 14 of the markets we are in.

How big that penetration is is very different from market to market, an average wouldn't be relevant to look at.

Secondly, maybe to add to that, it's also our Veterinary Services team are very diligent on the type of members that they include. If we take US specifically, where of course that market is huge in terms of the number of clinics, but the team is very diligent in making sure that we have the right clinics with high compliance and that leverage the Veterinary Services, you can say, partnership and framework in the right way.

Just adding members is not sort of the only focus. It's adding the right members, that's the key focus.

Yeah.

Perfect. Thank you very much.

Hi again. Just a quick follow-up questions here regarding the multiples paid for the acquisition.

I think you said that you're paying in line with the historical average, right? Could you, perhaps give us a range what numbers are we talking about here?

Our historical multiple have been around the 9x

For EBITDA?

Yeah.

Okay. Very good.

Thank you.

Thank you for joining our Q3 earnings call and all the relevant questions. We're happy with the quarter where we delivered continued strong performance with strong total revenue and earnings growth and double-digit organic growth well ahead of the market.

I think we're well positioned in terms of products, services, and have a strong team in place to continue our growth journey ahead. Thank you very much.