COMMENTS BY THE CEO
Organic growth at record level in 2023
“Organic growth at historically high levels in 2023 confirms the successful long-term positioning of AddLife for post-pandemic market conditions. The robust organic growth is also an indication of the good health and prosperity of the companies within the AddLife family, including both long-standing members and recent additions. Comprehensive initiatives aimed at enhancing profitability and cash flow were undertaken throughout the year, resulting in strong cash flow at the end of 2023, with further profitability improvements expected for 2024.
AddLife is now a significantly larger entity, with strong positions across Europe During the year we have updated our organization and strategy, so that we based on our new position will continue to meet our financial targets and again double our business in the coming years"
Organic growth at record levels
Organic growth, excluding currency effects, reached 10% for the year, significantly outperforming the market. This achievement demonstrates that AddLife is positioned in attractive, rapidly growing niches and is gaining market share. A key focus this year has been nurturing our companies within the AddLife family and upgrading the organisation through investments in personnel, activities, and resources to drive future organic growth. AddLife's companies are active in healthcare and research, sectors characterized by stable growth and resilience to economic fluctuations.
Significant actions to improve profitability
The more than 85 companies within the AddLife family are developing well with strong profitability. However, In two isolated areas: eye surgery and digital solutions in Homecare profitability has not been satisfactory. Following a thorough analysis, significant actions were taken in 2023 that will lead to annual cost savings of around SEK 100 million, effective from 2024 onwards. The changes will also result in increased decentralisation, strengthening local responsibility and customer focus.
Strengthened cash flow and balance sheet
The AddLife business model is largely based on efficiency, profitability and efficient use of capital. Activities aimed at improving cash flow by reducing working capital were vigorously pursued throughout 2023 across all companies, with particular emphasis on larger entities recently acquired by AddLife. We saw clear results of these efforts in the latter half of 2023, reflected in improved cash flow and a strengthened balance sheet.
Corporate culture and sustainability
AddLife’s vision is to improve people's lives by being a reliable and value-creating supplier to the healthcare and research communities. Our sustainability efforts are deeply rooted in this vision, complemented by our company culture and values, which encompass commitment and accountability. Sustainability efforts have intensified over the year, focusing on three main areas: sustainable health, sustainable culture, and sustainable supply chain. In 2023, we introduced a set of targets and key metrics that we regularly monitor, which have also been integrated into our incentive programs.
Organisation and strategy for growth
Decentralised decision-making, accountability combined with autonomy, and a culture of active ownership are key pillars of AddLife's culture and business model. Our ongoing efforts focus on improving profitability and cash flow, while maintaining high ambitions for organic and acquired growth. To ensure the success of this model within the larger and more European-wide company we are today, we have updated the organisation with strengthened leadership of the business units, fostering continuous active ownership, development, and future growth. Our newfound scale and European coverage also afford us significant new opportunities for development and expansion, prompting us to update our strategy to capitalise on these prospects.
Increased acquisition activity
Over the past few years, AddLife has undertaken numerous acquisitions, some of which have been substantially larger than previously and have involved expanding into new geographical markets. The primary focus in 2023 has been on taking care of these acquisitions and ensuring that their development aligns with our expectations. Over the course of the year we have also identified prioritized areas for acquisitions, refined our acquisition process and strengthened organisational resources to efficiently manage our acquisitions. The stable positive trend in our market and the robust cash flow in the second half of 2023 support our ambition to reduce net debt through internally generated cash flow and, over time, resume an increased pace of acquisitions.
Summary and future outlook
In conclusion, I'd like to express my sincere gratitude to all employees for their dedicated and committed work, always with the customer's best interest in mind and with the ambition to help improve lives. Common characteristics across our companies are dedication, expertise, initiative, strong community, and a positive atmosphere. We have invested in personnel, resources, and employee development opportunities, which has also been reflected in employee satisfaction surveys. The initiatives and achievements in 2023 provide a solid foundation for substantial progress in 2024 and beyond!
Stockholm March 2024
President and CEO