Administration Report

Financial development during the year

Net sales and profit
The AddLife Group’s net sales increased by 6 percent (7) and totalled SEK 10,286 million (9,685). Organic growth, excluding currency fluctuations, amounted to 5 percent, while acquired growth was 1 percent. Currency fluctuations had a marginally negative impact on net sales, amounting to -10 MSEK (520).

EBITA increased by 2 percent to SEK 1,159 million (1,135) and the EBITA margin amounted to 11.3 percent (11.7). EBITA includes a reversed contingent consideration of SEK 4 million (147) and one-time costs of SEK -10 million (-27). Adjusted for these, EBITA increased by 14 percent, and the EBITA margin amounted to 11.3 percent (10.5). Currency fluctuations had a marginally negative impact on EBITA, corresponding to SEK 1 million.

Net financial items amounted to SEK -316 million (-246), and profit after financial items totaled SEK 405 million (339). Net financial items primarily include interest expenses related to the financing of previous acquisitions as well as exchange rate fluctuations. Interest expenses amounted to SEK -300 million (-276), while exchange rate gains were SEK 0 million (30). Exchange rate fluctuations are related to the revaluation of loans and contingent considerations in foreign currencies.

Net profit for the financial year amounted to SEK 254 million (192), and the effective tax rate was 37 percent (43). The high effective tax rate is attributable to the impact of non-deductible interest expenses.

Profitability, financial position and cash flow
At the end of the financial year, the equity ratio amounted to 41 percent (39). Equity per share was 43.54 SEK (40.69), and the return on equity at the financial year's end was 5 percent (4).

Return on working capital (P/WC) totalled 51 percent (50). The long-term P/WC target for the Group and all of its companies is 45 percent. The profitability benchmark P/WC ratio encourages high operating profit and low levels of tied-up capital. When combined with the growth target of 15 percent, this creates conditions that promote long-term profitable growth for the companies and the Group. Average working capital, which when calculating P/WC includes inventories with the addition of the net of accounts receivable and accounts payable, amounted to SEK 2,284 million (2,290) at the close of the financial year.

At the end of the financial year, the Group’s interest-bearing net debt amounted to SEK 4,920 million (5,192), including pension liabilities of SEK 62 million (64), lease liabilities of SEK 531 million (498), and contingent considerations of SEK 106 million (87). Outstanding bank loans at the end of the financial year amount to SEK 4,433 million (4,698), of which short-term bank loans amounted to SEK 749 million (2,212). The credit facilities of SEK 1,000 million and EUR 98.2 million, maturing in the first quarter of 2025, have been extended by 12 months, with an option for an additional 12-month extension.

The Group has a good margin in the covenants applicable under the banking agreements, which stipulate an interest coverage ratio of at least 4.0 times and an equity ratio exceeding 25 percent. At the end of the financial year, the interest coverage ratio was 5.7 times as defined in the banking agreements.

Cash and cash equivalents, consisting of cash and bank balances together with approved but non-utilised credit facilities, totalled SEK 1,013 million (1,013) at December 31, 2024. The net debt/equity ratio was 0.9, compared with 1.0 at the beginning of the financial year. The aim is to lower debt through internally generated cash flow.

Cash flow from operating activities reached SEK 1,095 million (773) during the financial year, mainly because of a higher profit after financial items. During the year, business acquisitions amounted to SEK 59 million (15), and payments of contingent considerations related to previous acquisitions totalled SEK 45 million (16). Net investments in non-current assets for the financial year totalled SEK 281 million (268) and mainly relate to investments in instruments for rentals to customers. Issued, exercised and repurchased call options totalled SEK 12 million (9). Shareholders of the parent company were paid a dividend of SEK 61 million (146) and loan repayments totalled SEK 424 million (233).

Business areas

AddLife's operations during the financial year were organised in two business areas: Labtech and Medtech.

Labtech
During the financial year, net sales decreased by 4 percent to SEK 3,797 million (3,654), of which organic growth was 3 percent and acquired growth was 2 percent. Exchange rate fluctuations had a negative impact on net sales by 1 percent.

EBITA decreased by 6 percent to SEK 445 million (473), corresponding to an EBITA margin of 11.7 percent (12.9).

The organic growth emphasises a strategic commitment to innovation and expansion in areas that continue to show strong demand for advanced technology and solutions, such as Next Generation Sequencing (NGS). By focusing on organic growth, the business area has been able to continue to advance and bolster its position as a leading player in diagnostics and biomedical research.

Medtech
During the financial year, net sales increased by 8 percent to SEK 6,042 million (6,042), of which organic growth was 7 percent. Exchange rate fluctuations had a favourable impact on net sales of 1 percent.

EBITA increased by 9 percent to SEK 746 million (684), corresponding to an EBITA margin of 11.5 percent (11.3). EBITA includes reversed contingent considerations of SEK 4 million (147) and restructuring costs related to AddVision and Camanio, SEK -10 million (-17). Adjusted for these, EBITA increased by 29 percent and the EBITA margin amounted to 11.6 percent (9.3). Camanio had a negative impact the results of SEK 39 million (77), of which SEK 10 million (19) relates to restructuring costs related to the gradual closure of the company, which is now complete. 

Medtech companies have generally experienced good growth, with some countries including Spain, Ireland and the UK performing particularly strongly. This is driven by the recovery in planned surgery as well as developed product portfolios and increasing market shares. During the year, important strategic actions were taken to improve profitability going forward.