Welcome to the presentation of Swedencare's Q3 reports about our CEO, Håkan Lagerberg, and CFO, Jenny Graflind. We are pleased to have Production Director, John Kane, joining us with a presentation during today's webinar. And as usual, we will have a Q&A after the presentation, so please raise your hand if you have any questions. Over to you, Jenny, Håkan.
Thank you so much. Håkan Lagerberg and Jenny here in Malmö, rainy Malmö. I'm pleased to present our Q3 highlights and the report. Let's kick it off. We had record net revenue and also record operative EBITDA. So we were first time we were over SEK 700 million despite the weak dollar and also over SEK 500 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 Meijer, 140 stores there. And launch was in Q3. All of our sites are now fully stocked 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. So that will go out in Q4. And we will also have an additional marketing campaign with Walmart starting in early Q1 or end of Q4, but we will deliver it in Q4. So we'll actually have separate displays in all of those 1,400 stores, adding six or seven hundred more Walmart stores where we're not present in the lineup. So we will be present in plus 2,000 Walmart stores 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 of the displays, so that will be a bit lower gross margin for that setup. And I will come back to continued launch and discussions with big box retailers. We've also had an organizational overview in the U.K., spurred of a retirement of our long-time colleague, John Lennard, that will be leaving the company for retirement end of this year. And by that, we will reshape our Swedencare U.K. operations into being online only, focusing on U.K. and rest of Europe. And the rest of the, let's say, retail sales apparatus will go over to our sister company, Nutravet. 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 Viyo, adding a new product group is liquid. Mainly, their main product is a 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 U.K., and it will launch as early as Q1 2026. High international activity and internal collaboration. We've been traveling a lot around the 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, product 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 bigger launches and bigger brands that are international, for example, with ProDen PlaqueOff, as you know, most of you, it's steered from our team here in Malmö. And that keeps on improving the collaboration all the time. Financial targets, as you know, we have financial targets that is by the end of 2026. So we've 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.
All right, some financial highlights for Q3. Revenue amounted to SEK 712 million for the quarter. It was the first time we were above 700, as Håkan 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 MedVant, which we acquired in August last year. 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 SEK 2 billion. That's compared to SEK 1.9 billion for the first nine months last year, and an organic growth of 9% year to date.
Our operating gross margin is stable, 58.5% 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 are costs which are directly linked to sales. This quarter, we had NaturVet's Amazon account in-house for the full quarter. That's compared to two months last quarter, so we have about SEK 10 million 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 SEK 155 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. That's due to the acquisitions that we made in Q2 this year. However, it 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 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 Pack Approved acquisition.
We made both the second and the last payment, as well as an earnout. In addition, as Håkan mentioned, we made the minority acquisition of Viyo during the quarter. We have also been able to reduce our debt with SEK 75 million on our loans. And our interest cost has decreased with the lower interest rates. So for the first nine months, we have about SEK 40 million interest cost compared to SEK 57 million 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 12 months, as you can see, the revenue for the 12 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 SEK 24 million for the quarter and SEK 48 million for the year, so this is the difference between the reported gross margin and operational gross margin. This acquired inventory is now sold, so there will be no more adjustments going forward. Product and brand split. 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 Q3 last year, and pharma has the biggest increase in percentage. That's due to the fact that Summit is included in these 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 Håkan.
Yes, looking at our different segments, net sales for North America, SEK 421.7 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, 2024 compared to 2023, and that, let's say, softness has continued. Pet owners visit the vets not in the same amount as the market 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. And that could also actually be said about the major pet retailers and big box. It's supply chain overall in the market is really good. So they are pressing down their weeks of inventory that they have on hand. NaturVet, 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, but the actual change of the product with Amazon and online will be the last change. Looking at NaturVet, the Amazon account, that's been a huge project, as you can imagine. And our Pet MD team that handles it has done an excellent job, but lots of work and also collaborating together with the NaturVet 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 end of August. So from September and onwards, we see we will have full group margin for our sales on Amazon when it comes to NaturVet. So from Q4 on 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 ProDen PlaqueOff 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 pet products. ProDen PlaqueOff, as Jenny said, continue to have really strong sales.
And also one of the latest acquisitions, the Pack Approved line that Jenny mentioned, its 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 mom-and-pop 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 SEK 162.6 million, 39% growth, organic 19%.
Europe continues to be the strongest segment, even though North America is chasing Europe this quarter. It's been basically the same story all year that U.K. Nordics leading the growth. There was a bit, let's say, less sales online, especially Amazon, in the rest of Europe. That's a plan that we had because we're making the same transitions as we did in U.K. one year ago, that we took back the Amazon sales ourselves. Amazon has been selling out their inventory in Q3. We have not had any deliveries basically to Amazon in Q3 for the rest of Europe. That we have started now. From Q4 and onwards, we will be handling the rest of Europe the same way as we handle U.K. You can expect strong growth for the 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. The, 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 Zooplus 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 2026 Q2, we will not have an exclusive collaboration with Zooplus, but they will continue being an important partner for us as they have been the last one and a half years.
Outlook for Q4 is momentum continues. I would say that the really strong momentum that Europe has had will continue in Q4 and onwards. Net sales production almost SEK 129 million, decline of 4% affected by currency, of course. Organic growth was 3%. It was a bit different quarter in the sense 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, 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, it's a stronger demand in Europe than North America. But that's also the fact that 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 a board meeting and also visit. It was very appreciated by the team that the board took time and effort to travel there. I mentioned internal collaboration and know-how transfer. There's been lots going on. 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 2026 from present customers. Priorities for 2025, they are the same. Looking at new geographies and keep on enhancing operational efficiencies, that's really has been key features for us this year. 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 for one, let's say, outlet online affects others. So it's really that if we increase marketing in Amazon, we get more sales in our internal webshops and vice versa. If we do campaigns on TikTok, we see increased sales on Amazon. So it's an intertwined net of opportunities for us to market. And also pursue 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 Kane.
Thank you, Håkan. And good morning, everyone. Today I'll talk about the story of Vetio as we build a global contract development and manufacturing organization, and then how we're leveraging that Vetio Soft Chews technology developed over 10 years to sister companies and different market applications. The story of Vetio almost 10 years ago, what is now Vetio, 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, well, Tetragenics Animal Health, which was 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 a solid dosage plant for pharmaceutical products, capitalizing on the development pipeline that we had in place and now still do, and as Håkan mentioned earlier, is growing nicely. So then as you proceed along in time to mid-2021, Vetio was acquired by Swedencare. And we were in the midst of another expansion in Jupiter, Florida, a second plant for nutritional supplements, leveraging the Vetio Soft Chews technology outside of pharma, for which it was developed into nutritional supplements for pets.
And then the story of Vetio North has always been to acquire customers through other equipment and building a pipeline around development and non-sterile liquid spot-ons primarily, where that capability was put in place and development pipeline put in place, which will eventually feed into Vetio 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 U.K. was acquired, a company, a CMO specializing in the nutritional supplements space. And that company has done quite well under David Rider. We've leveraged Vetio Soft Chews technology to Vetio U.K. And then following that, we've done the same thing. Swedencare Ireland facility, sometime in early 2024, was rebranded as Vetio.
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 230 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 Vetio, 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.
We feel we're out in front with a very quick project to capitalize on that with productions commencing later next year. 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 original one for liquids, about one kilometer away from our nutritional supplement plant. 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 chews, but having a lot of attractiveness with respect to cross-selling synergies across Vetio'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, will 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 U.K. and Ireland will have liquids over time and then treats, as you see, following the implementation in Florida. So a really exciting time. 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 Vetio North in Montreal, Canada. You can see it's about a $14 billion 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 percent share by the administration route, we currently address solid oral dosage in Montreal and then topicals and other in both Florida and Montreal. But this will change as well with the implementation of the sterile project.
This $14 billion market, when you segment it down further, is about a $3 billion addressable market at the manufacturing level, and with outsourcing, still around 50% of manufacturing, both in-house brands and versus CMOs, it's about a $1.5 billion addressable market, so it's quite a nice opportunity for Vetio North and as we grow outside. Switching gears to more retail-focused markets, these are non-RX markets. Vetio globally is right about 50/50% 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 is 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 $2.3 billion.
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 Vetio Soft Chews technology and how we've taken that across all of those categories, including to our sister company, Summit Vet, now that that's part of the portfolio. So this technology, the Soft Chews, was developed over 10 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 Soft Chews 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're 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.
That technology is used for both internal Swedencare customers as well as external clients around the world. 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 Vetio North team and other Vetio people at different sites have helped leverage know-how to the specials area. 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. 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. They basically are a compounding pharmacy, which we would call a 503(b) in the United States.
They're making bulk, small batch bulk products that are sold through the vet channel in the U.K., over 5,000 veterinary clinics, and a very nice facility in the Oxford area in the U.K. These medicines, they're 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 % share is of the U.K. market. It's quite high for both cats and dogs. In particular for cats, because there aren't as many medicines available for cats, this is a more common practice.
It's something that we are very keen on leveraging the Soft Chews technology and will be first to market with that type of technology, which is very innovative. 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. Vetio North had received interest in development projects. We, of course, did not have manufacturing. Some of those we did not take on. But now with a 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.
That's for accuracy and also to protect vet 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 Chews. What's unique right now going on in animal health is there are the biggest generic files, the blockbuster products. Some of the biggest ones in the industry are coming off patent in the coming years. We have received a lot of interest, and we are working with people to capitalize on that opportunity. 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 Håkan alluded to earlier, is this same trend converting towards soft chews in the U.K. and European markets. And with Vetio U.K. and Vetio 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 U.K.. 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 Swedencare 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.
Thank you, John. And by that, we are open for questions. And the first one comes from Johan. Please go ahead.
Yes. Good morning, guys. Thank you for taking my questions. Firstly, a question to you, Håkan. 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?
Yeah. No, that special project is a side project from the other sales that we expect to have with Walmart. So that's just a display that will be set up at different points of sales in the stores and with all of our products jointly set together. So that's part of the sales to Walmart. So I don't expect that that won't alter the sales that we have when being in the ordinary assortment. So that's just, let's say, a marketing investment that we are doing, getting our displays out at another site in the 1,400 stores we're already in and adding 600 more stores where we are in those displays. Okay. So sort of a marginal impact potentially on gross margins and sort of overall in the investment in marketing.
Yes. Okay. Got it. And just to 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?
Definitely Amazon sales both in Europe and the U.S., then looking at Europe, I would say very strong veterinary sales in the U.K. It's a big, big part, and also in the production segment for Europe, and then looking at the U.S., it was, let's say, other pet retail bounced back, so for example, in all of the NaturVet setup, including their private label, they 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. So yeah. But it was, I mean, online main driver, but most of the group companies had fairly good growth or good growth.
Cool. 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? How do you mean positive in adding margin or?
Yeah, exactly.
Yeah, yeah. I mean, I would say overall 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.
Got it. And a final one then on the profitability. I noticed that the lower OpEx is mainly driven by personnel cost. 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 one-time thing in Q3? Or essentially, how should we think about the dynamics going forward?
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 build-up for the first nine months. So yes, it was a bigger release in Q3.
Okay. So if you intend to continue to deliver on solid growth and margin expansion, we should expect the personnel costs to increase. To increase. Yeah. Q4. Yeah. Okay. Cool. Those were all my questions for now. Thank you so much for taking the time .
Thank you. Your next question comes from Adrian. Please go ahead. Okay. We will take the next question. It comes from Christian. Please go ahead, Christian.
Can you hear me?
Yes.
Yes.
Okay. 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?
I'll handle that if you'd like . I mean, we have, as Håkan mentioned, some larger clients in our Florida facility managing down inventories. And that theme will end this year. And we definitely 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.
Okay. Perfect. Thank you. If I jump to the dental product group, this product 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?
I expect dental to continue to grow. We have launched, I mean, within that product group, it's not only ProDen PlaqueOff, 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 Chews, even though we've had them for a couple of years. There are still many markets out there that have just launched them or just about to. We continue to develop that product line, so we will be introducing a very interesting product for cats early next year. We're just in the planning for that with all of the marketing and manufacturing.
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. We've expanded with our, let's say, taking care of the teeth more in general when it comes to toothpaste. We have also launched special wipes for cleaning teeth. They are doing really, really well. I expect the momentum to continue. We see that the subscription rate for our dental products online is really, really high. We're just adding new customers there. It is more focused in the pet space. Of course, we're like veterans in this space, but the dental focus just continues to grow every year. I would say that we expect the strong momentum to continue next year as well.
Okay. That's perfect. Thank you very much.
Let's try again with Adrian. Please go ahead with your questions.
Hi, guys. Do you hear me now?
Yes.
Yes.
Yes.
Oh, excellent. Sorry for that. Had some technical issues. A couple of questions from my side, please. So firstly, it's great to see that you're now active 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 striking new deals with other stores? Or what should we expect now for going into 2026 or even 2027?
I mean, as I said, it's hard work now to really inform 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 for almost two years. So it's long sales cycles. And also, the resets are sometimes only once a year. But 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 we open up some more partnerships in 2026.
Okay. Perfect. Thank you. Another question here. You noted, and I noted at least, that the product category, the other product category, saw some 53% increase year over year. Could you comment a bit on this? What's driving that particular growth?
Yeah. In the other category, you have Summit. So we had that this year. We did not have that last year. So it's including the acquisition of Summit that falls into that category.
And we also have a pill paste that's been doing really well under a couple of our brands that we are now expanding in Europe as well. And that comes into that category. So that's also. Yeah.
The product category. Yes.
All right. Excellent .
Sorry, Adrian. My answer was for the brand split or for the brand split, not the product split.
Yeah. Okay. Thanks. It's a bit confusing. But okay. Fair enough. Okay. So last question here. You mentioned Asia as well, that you've signed some new distribution agreement segments or distribution agreements, right? Could you give some more details regarding these agreements? Is there something that we could see anytime soon having a material impact on the main market?
I would say that it's smaller markets, for example, a couple of partners in UAE and Brazil and South America for a couple of it, 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, but predominantly, that's been it's that we are introducing new product ranges or brands. The champion for our international sales is definitely ProDen PlaqueOff, but we are focusing more now with the rebrand launching in NaturVet 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 leverage the vast, let's say, product range and brand range that we have so that we are getting out in the world with lots more brands.
Okay. Excellent. That was all for me.
Thank you very much. Thank you. That concludes our Q&A session. Back to you guys for any closing comments.
Thank you for showing interest. Lots of people joining our call today. And I'm really proud of the efforts from the whole organization. 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. So you will start seeing more results from the scale of our business, definitely.
Yep.
Thank you.
Thank you.
Bye. Bye.
Thank you.