Swedencare’s pharma and dental growth offsets US weakness in Q3

Swedencare reported revenue of SEK 732.2 million ($77.6M/€67.4M) in the third quarter of fiscal year (FY) 2026, ended 30 September, up 3% year-on-year (YoY).

This represented slower growth compared with the 11% increase recorded in the same period last year.

The Malmö-based pet care company attributed its quarterly performance to solid developments in Europe and its production segment, alongside continued challenges in North America.

Short of expectations

Organic growth amounted to 2%, down from 15% a year earlier. Swedencare’s CEO Håkan Lagerberg described organic growth as disappointing and below expectations, “My expectation was to be in line with Q2, when we delivered 7%,” he said.

The slowdown was mainly attributable to lower revenue in the Nutraceuticals product group in North America, where lower orders from a few larger customers affected revenue of both private label products and the Group’s own brands.

Meanwhile, the dental and pharma product groups remained the main drivers of organic growth in the third quarter, as in the previous quarter.

Profitability

Net income increased 29% YoY to SEK 28.7 million ($3.0M/€2.6M), while earnings per share (EPS) rose to SEK 0.18 ($0.019/€0.017), compared with SEK 0.14 ($0.015/€0.013) in Q3 2025.

Operational earnings before interest, taxes, depreciation and amortization (EBITDA) declined 3% to SEK 150.1 million ($15.9M/€13.8M), while the EBITDA margin fell to 20.5%, from 21.7%.

Lagerberg said profitability was lower than in the corresponding quarter last year, but the company delivered its highest quarterly operational EBITDA of the year, as expected.

Regional performance

The North American segment is the largest, contributing 56% of total net revenue. Revenue amounted to SEK 406.0 million ($43.0M/€37.4M), down 4% YoY. Organic growth in this segment fell 4%, compared with 18% growth in the same period last year.

The European segment, which makes up 25% of total net revenue, generated SEK 183.7 million ($19.5M/€16.9M) in revenue, rising 13% YoY. Growth comprised 11% organic growth and 2% acquired growth attributed to the step acquisition of Viyo.

Viyo is a Belgian pet health company offering liquid products to support immune function, post-operative recovery and cats with chronic kidney disease (CKD). On 1 July, Viyo became a consolidated subsidiary of Swedencare after the company acquired an additional share, increasing its ownership from 49% to more than 50%.

Dental and pharma drive growth

Dental was the fastest-growing product group, driven by online sales and distributor-led exports. Revenue in the rest of the world rose 63% YoY, from SEK 13.6 million ($1.4M/€1.2M) to SEK 22.2 million ($2.4M/€2.0M), mainly due to growth in China and Chile.

The migration of several local sales websites to a new platform also improved conversion rates and revenue.

Meanwhile, the production segment generated 19% of total net revenue, amounting to SEK 142.5 million ($15.1M/€13.1M), up 11% YoY. Growth was driven by the Pharma and Dental product groups, with revenue from the company’s own pharma manufacturing increasing by 82% and demand for soft chew contract manufacturing remaining high.

Swedencare reported an even geographical distribution within the segment, with 54% of net revenue in North America and 46% in Europe.

Interim results

For the first 9 months of FY2026, Swedencare generated SEK 2.05 billion ($217.6M/€188.8M) in revenue, up 3% YoY. Growth comprised 6% organic growth and 2% acquired growth, offset by a 5% negative currency impact.

Acquired growth was driven by Summit Vets in the first quarter and Viyo in the third quarter. In Q1, acquired growth reached 4%, supported by the acquisition of British veterinary pharmaceuticals company Summit Vets in April 2025. The UK-based company produces veterinary medicines for pain management, cardiology, infectious diseases and gastrointestinal disorders, among other therapeutic areas.

The Group also faced a negative currency impact, primarily due to fluctuations in the US dollar, its largest currency, during the first quarter.

Net income surged 79% to SEK 70.1 million ($7.4M/€6.4M), while EPS reached SEK 0.44 ($0.047/€0.040). Operational EBITDA rose 1% YoY to SEK 407.2 million ($43.2M/€37.5M), with the EBITDA margin declining to 19.8%, from 20.1% a year earlier.

The Production segment led organic growth during the period, at 19%, followed by Europe at 16%. North America recorded a 1% decline in organic growth. The Dental and Pharma product groups were the main growth drivers, with both delivering strong performance across the segments in which they operate.

Outlook

Following its Q3 performance, Swedencare no longer expects double-digit organic growth for the full year but aims to achieve it in Q4.

The company also expects larger partnerships to have an impact ahead of their launches in early 2027, despite continued weakness in the US veterinary channel. Meanwhile, demand remains strong in European and UK production and Pharma, supported by existing customers and new enquiries.

Swedencare also expects a gradual recovery for its NaturVet brand in North America in the coming years, while new manufacturing contracts and planned pharmaceutical production in 2027 offer additional growth opportunities.

CEO transition

Håkan Lagerberg will step down as CEO after 12 years in the role. He expects to leave the company no later than Q3 2027.

Lagerberg will remain in the position during his 12-month notice period, while the company begins the process of finding his successor.