BUSINESS AREA
Medtech Business Area
In the Medtech business area, the subsidiaries offer products and services in the field of medical technology, as well as assistive equipment and digital solutions for use in home care. Medtech has two business units - Hospital and Homecare. The Medtech offering mainly focuses on publicly funded healthcare care, home care and social care in Europe.
The Medtech subsidiaries offer their own products and a wide range of products from other suppliers as well as training, support and service . The product line ranges from simple consumables to advanced instruments for surgical procedures, as well as welfare technology and assistive technology for the elderly and people with disabilities. The range of products requires a solid foundation of medical knowledge to guide customers in the right direction. Around 85 percent of sales are made through public procurement.
An important trend during the year was the post-pandemic recovery in elective surgery, which AddLife had planned for, resulting in increased demand for Medtech's products. Organic growth, excluding exchange rate fluctuations, amounted to 9 percent for full-year 2023.
Key strategic measures were taken during the year to improve profitability going forward. The eye surgery company AddVision implemented restructuring activities during the year, focusing primarily on improvements in the following areas: a more agile, decentralised and efficient organisation, improved commercial offering and working methods, as well as cost-cutting measures.
In 2023, a thorough review of Homecare's digital development projects was also carried out. Development projects include solutions for self-monitoring (Camanio Health) and social alarms (Camanio Care). As a result of the review, both development projects have been cancelled and the subsidiary Camanio has been wound up. The Homecare companies will continue to offer a portfolio of digital products and services, but they will no longer be proprietary.
These profitability improvement measures are expected to result in a total cost reduction of SEK 80 million on a full-year basis, to be gradually realised in 2024. The total positive cash flow effect of the measures is expected to be SEK 110 million on an annual basis. The measures resulted in a restructuring reserve of SEK 8 million and impairment of property, plant and equipment of SEK 19 million and intangible assets of SEK 106 million in the fourth quarter of 2023.
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Dynamisk graf: Medtech net sales by market
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MEDTECH IN FIGURES Net sales: SEK 6,042 m |
Market trend 2023
In the Hospital business unit, the recovery in elective surgery gained momentum in 2023, although lengthy waiting lists for surgical procedures remained significant across Europe, and even grew in some countries such as the UK. The pace of recovery was slowed by staff shortages, which are expected to lead to a longer period of increased surgical activity. Increased activity in elective surgery spurred demand, primarily in the product areas of orthopaedics, surgery, respiratory medicine and endoscopy. With restrictions on visits eased or lifted during the year, customers were more receptive to visits, seminars, fairs and product demonstrations. Homecare also benefitted from the eased restrictions, since home visits to try out equipment became feasible once again. In Medtech, AddLife has identified prioritised growth segments that are expected to contribute to profit growth. For example, orthopaedics and endoscopy, with margins of over 10 percent, are prioritised growth segments for the Hospital business unit. In Homecare, the company has identified welfare technology and construction, with margins of 6-10 percent, as growth segments.
Acquisitions
In the third quarter, AddLife acquired all shares in the company Emmat Medical Ltd. The acquired company, which will be integrated with the Healthcare 21 Group's operations in the UK, is active in surgery and has sales of about SEK 28 million with solid profitability and growth potential.
Ropox has over 60 years of experience in developing products that help people live independent lives. As world-leading specialists and manufacturers of assistive devices and furniture, they provide custom solutions that ease the lives of users and their families. Ropox offers a comprehensive range of housing adaptations, enabling people with disabilities to live more independent lives. One example is the adjustable height solution for kitchen counters, enabling wheelchair users to optimally use their kitchen.
MEDTECH´S PRODUCT SEGMENTS
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- Employees with extensive medical experience, local knowledge and a high level of service, as well as product developers in welfare technology
- Broad range including both in-house developed products and products from other respected manufacturers
- Great flexibility regarding customised solutions, as well as cutting edge expertise in public procurement procedures
- European distribution and service network for the Group’s own products and services, as well as the products and services of other suppliers
- Large accessible market with high growth and good margins, especially in advanced products
