1 January 2022 – 31 December 2022
The Board of Directors and Chief Executive Officer for AddLife AB (publ), Company Registration No. 556995-8126, hereby present the annual report and consolidated financial statements for the 2022 financial year. The Corporate Governance report is part of the administration report and is presented on pages 61-74. The Company’s sustainability report is incorporated into the annual report and Consolidated Financial Statements on pages 6-8 and 27-44.
AddLife is a Swedish-listed medical technology company operating mainly in the European market and consisting of 83 operating subsidiaries in the Labtech and Medtech business areas. The Group has 2,219 employees in 28 countries and offers high-quality, cost-effective solutions and products. The product portfolio consists partly of self-manufactured products and partly of products that are made by other manufacturers. The service portfolio includes advice, service and education.
The customers are primarily active in the healthcare sector – from research to medical care. AddLife currently has a presence in about 30 countries, mainly in the Nordic region, Central and Eastern Europe, as well in China and Australia. AddLife shares have been listed on Nasdaq Stockholm since March 2016.
Key events during the year
When we summarize the year, we can state that the strongly positive effect of COVID-19 related sales over the past two years has, as expected, slowed down sharply in 2022. This sale generated good margins as it could be managed by the existing organization without increased costs. Thanks to several major acquisitions in 2021 and 2022, we have replaced the loss of COVID-19 sales with acquired sales to more normal margins.
At the beginning of the year, mutations of COVID-19 resulted in continued high sales of PCR tests. The Omicron variant led to high infection rates among both the general population and hospital staff, which limited the possibility of various treatments and fewer planned surgeries could be carried out. As the spread of infection decreased, healthcare facilities have shifted their focus towards gradually reducing the backlog of postponed planned surgeries that arose during the pandemic. However, this transition takes time and the increase in the number of completed surgeries has been slow due to a shortage of doctors, nurses, and other healthcare professionals. The reduction of the backlog is expected to occur gradually over a longer period, with an increased number of completed surgeries. Some countries are providing additional budget resources to reduce the backlog, and we also see that the shortage of personnel is driving an increased interest in efficiency-enhancing products, services, digital solutions, and home care.
AddLife's sales of products and services, primarily demanded by tax- and insurance-funded healthcare systems as well as within research and pharmaceutical development, have not been significantly affected by the uncertainty in the external environment. However, it has also been challenging for our company with the global supply chains during the year. Shortages of raw materials and components, as well as increased shipping prices, have caused disruptions and lead times have been unusually long in many cases. The situation has improved towards the end of the year, but we still see some uncertainty and therefore a higher capital commitment than is desirable in the long term.
Price increases from suppliers and currency effects from purchases in USD and EUR had a negative impact on gross margins. The continuous work to manage price increases is expected to continue in 2023. In general, there is good understanding and acceptance of price increases among customers, but for a smaller part of sales, a delay in price increases is expected due to longer agreements.
After a few turbulent years, which thanks to our energetic companies have resulted in large COVID-19-related sales and high profitability, we look forward to further developing the Group in 2023 under more normal market conditions with a primary focus on organic growth and over time improved margins, cash flows and new acquisitions.