In This Article:
Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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AddLife AB (FRA:1AD1) reported significant EBITDA margin improvements in both Labtech and Medtech business areas, with Labtech achieving a 12.1% margin and Medtech 13.5%, marking a nearly 2% improvement over the previous year.
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The company experienced a healthy revenue development across most geographies, with notable growth in Spain and Italy, which saw year-over-year increases of 22% and 29%, respectively.
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Operating cash flow improved significantly compared to the previous year, helping to reduce net debt to EBITDA to 2.8%, below the company's target of 3.0%.
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AddLife AB (FRA:1AD1) successfully completed the acquisition of Edge Medical, a company with high margins and strong growth potential in the orthopedic surgery segment.
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The company is well-positioned to handle global trade disruptions, with over 90% of revenues and 80% of suppliers based in Europe, reducing exposure to international trade uncertainties.
Negative Points
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There was a slight weakness in the UK market due to a large instrument order in the previous year that was not repeated this quarter.
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Medtech's organic growth was flat, primarily due to strong instrument sales in the UK last year that were not replicated this quarter.
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The company noted some hesitation in academic research investments, which could impact future growth in that segment.
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There was a slight weakness in demand in the home care area, driven by external factors such as government hesitancy to spend on large construction projects.
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Despite improvements, some subsidiaries are still not achieving the desired double-digit margins, indicating ongoing challenges in certain areas.
Q & A Highlights
Q: Could you specify which Medtech companies showed significant margin improvements this quarter? Additionally, could you explain the 90 million krona provision in the gearing improvement? A: We observed margin improvements across the board, with larger companies showing gradual improvements and smaller companies performing exceptionally well. Regarding the provision, it was a long-term provision that was settled, with a corresponding receivable, so there was no impact on cash flow or profit and loss. Unidentified_1 and Unidentified_2
Q: Can you elaborate on the strong performance in Spain and Italy, and were there any one-offs contributing to this growth? Also, can you quantify the impact of tender wins on Labtech's performance? A: There were no major one-offs in Spain and Italy. Our Spanish business, particularly MBA, showed solid growth and margin improvement. In Italy, we had good orders in Labtech. Regarding tenders, while we've seen positive results, it's challenging to quantify their impact as the full effects are not yet reflected in the numbers. Unidentified_1