ADMINISTRATION REPORT

Risks and uncertainties

AddLife is an acquisition‑driven and decentralised Company Group in Life Science, mainly active in the European market.

Risk management is an integral part of the Group’s governance and follow‑up and aims to identify, analyse and manage the most material risks that may affect AddLife’s ability to execute its strategy and achieve its established targets. The Board of Directors has the overall responsibility for risk management, sets the frameworks, policies and guidelines, and regularly monitors the Group’s material risks.

Group Management is responsible for continuously identifying, assessing, quantifying and prioritising risks within each business area, while the subsidiaries are responsible for the operational management of risks based on common policies, instructions and internal controls. The overall risk profile is reviewed at least annually and is updated as needed during the year, including an assessment of any material changes compared with the preceding year.

AddLife’s risk management is structured around strategic, operational, financial and other potentially significant risks, including financial reporting and regulatory requirements.

Earnings, financial position and strategic position are affected both by internal factors that the Group can influence and by external factors over which the Group has limited control. Among the external risk factors that are most significant for AddLife are general economic and political conditions, public procurement and reimbursement systems in healthcare, technological developments, dependence on customers and suppliers, as well as IT security and cyber risks.

In addition, AddLife is exposed to financial risks such as transaction and translation exposure, financing and interest rate risk, and credit and counterparty risk. A more detailed description of how AddLife manages financial risks is provided in Note 4.

Risk/Description	Management
General economic and political conditions
Geopolitical instability (trade wars, protectionist policies, wars and conflicts) may directly or indirectly affect AddLife’s business or supply chain, resulting in longer lead times, higher costs or delivery disruptions. Demand for the Company’s products and solutions is to some extent dependent on macroeconomic trends. Uncertainty regarding future economic prospects, including political unrest, may negatively affect customers’ purchases of the Company’s products. A significant share of the Company’s sales is to publicly funded operations in healthcare, research and care services. Weakened public finances could negatively affect the financial position and earnings.	AddLife’s decentralised business model entails diversification across business areas, suppliers, and supply chains, reducing exposure to local geopolitical instability. With more than 80 percent of purchased products sourced from European suppliers, less than 10 percent from North America and less than 5 percent from China, AddLife is well positioned. AddLife’s subsidiaries operate in largely or partly non-cyclical markets, which generally makes the Group less sensitive to economic fluctuations. In most countries and situations, healthcare is prioritised even in weaker economic conditions. The decentralised business model means that the Group’s companies have a strong ability to adapt, as decisions are taken quickly and close to the business.
Public procurement and healthcare reimbursement systems
A significant portion of AddLife’s revenues derives from the sale of products to entities within the public sector. In some countries, political decisions have led to a reduction in the number of procuring customers through consolidation into larger units. This has resulted in fewer but larger procurements, often with longer contract periods and increased price pressure and competition. Sales of some of the Company’s products depend on various reimbursement systems in the individual markets. In several of the Company’s markets, it is common for the patient’s insurance company to finance or subsidise the purchase of products for the patient’s care. Sales development for AddLife’s products in these markets is therefore affected by the extent to which the products qualify for reimbursement within these systems.	There is a strong focus on public procurement within the organisation and among the subsidiaries. Considerable effort is devoted to preparing and ensuring that procurement requirements are met, including through internal training. The Company also has a clearly differentiated offering that creates unique value for customers, thereby allowing for a longer-term, value-based focus rather than price alone. The offering is based on deep knowledge of customer needs and often consists of unique, high-quality products combined with a comprehensive service offering. Because AddLife operates in many different countries and across several markets, these risks are limited for the Group as a whole.
Technological development
AddLife’s future growth depends, among other things, on new innovative products and thus the Group’s ability to influence, anticipate, identify and respond to changing customer preferences and needs. There is a risk that the subsidiaries within the AddLife Group may not to a sufficient extent be able to implement new technology or adapt their product offering and business model in time to capture the benefits of new or existing technology.	There is a strong focus on proactive business development within AddLife’s subsidiaries and on future technological adaptation in connection with new acquisitions. In subsidiaries with in-house production, investments are made in research and development, and, where necessary, partnerships are established to safeguard technological development. Structured efforts are also made to identify new suppliers with innovative products. The companies within AddLife primarily act as distributors, which increases the ability to adapt to technological developments by changing or supplementing suppliers.
Suppliers
To deliver products and services, AddLife depends on external suppliers fulfilling their contractual obligations regarding, among other things, volumes, quality, delivery times, and regulatory compliance. Defective, delayed, or missing deliveries may negatively impact AddLife’s financial position and earnings. AddLife has agreements with a large number of suppliers whose operations the Group cannot fully control or have full insight into, which entails a risk that suppliers act in ways that may harm AddLife, for example, through inadequate quality, regulatory compliance or sustainability performance. An additional risk is managing an excessively large number of suppliers, which can be resource-intensive and lead to operational inefficiencies in subsidiaries. At the same time, the supplier landscape is continuously changing. In some countries and segments, consolidation is taking place, with fewer and larger suppliers, while in others, there is a streamlining of operations and the emergence of new niche players and technologies. In this environment, there is a risk that AddLife loses key suppliers, that existing suppliers lose competitiveness, or that critical products are no longer available on terms that are commercially and regulatory sustainable. There is also a risk that suppliers choose to terminate their collaboration with one of AddLife’s subsidiaries, for example, in favour of another distributor or for direct sales. This may lead to lower volumes, reduced product breadth or the need for costly adjustments to the product range and market approach.	Over the longer term, AddLife is not dependent on any single supplier for the continuity of its operations. The Group’s largest supplier accounted for approximately five percent of net sales in 2025, which limits concentration risk. AddLife works strategically with its larger suppliers and conducts regular supplier evaluations that assess, among other things, quality, delivery reliability, commercial terms, regulatory compliance and adherence to AddLife’s Code of Conduct. The Group’s decentralised business model and role as a distributor enable relatively rapid adjustments when there is a need to change supplier or product portfolio. The subsidiaries continuously work to optimise their supplier bases and proactively replace suppliers that are lost or deemed to have declining market potential. Stable, long-term supplier relationships are also an important factor in the acquisition evaluations of new companies. Through AddLife’s growing presence in several European markets, the Group can offer suppliers a broader distribution platform, which strengthens AddLife’s attractiveness as a partner and improves the conditions for securing competitive agreements and access to new products and technologies. AddLife’s subsidiaries offer suppliers a strong commercial platform with high market coverage, technical expertise and close customer relationships.
Acquisitions
Acquisitions are an important part of AddLife’s growth strategy. The risks associated with acquisitions include, in part, the Group not achieving the expected strategic and financial benefits, and, in part, unknown or incorrectly assessed commitments and liabilities not being identified during the due diligence process. Unsuccessful acquisitions can lead to lower growth, reduced profitability and the need for impairment of goodwill. There is also a risk that AddLife fails to identify and complete a sufficient number of suitable acquisitions on attractive terms. Competition from other acquirers, changing market conditions, or limited access to financing may result in planned acquisitions not being completed or being delayed, which may affect the Company's ability to achieve its financial and strategic targets. Even after acquisitions are completed, there is a risk that integration into the Group’s existing operations will not be successful. Differences in culture, processes, systems and management may prevent the achievement of expected financial targets. This may lead to higher costs, operational disruptions, and reduced profitability for the acquired companies and the Group as a whole.	AddLife has long experience executing acquisitions and has established a structured process for the entire acquisition cycle – from identification and evaluation of targets to execution, integration and follow-up. The process is continuously developed based on experience from previous acquisitions and covers financial, commercial, legal, tax, regulatory and sustainability-related due diligence. The Group conducts ongoing, structured work to identify potential acquisition targets across selected segments and geographies. Through its size, long-term approach and presence in several European markets, AddLife can often offer owners and entrepreneurs an attractive platform for continued developmet. This increases the likelihood that AddLife gains access to interesting targets on competitive terms. To ensure a successful integration, integration plans are drawn up in connection with the acquisition decision. By following up defined objectives and key performance indicators, the development of acquired companies is monitored against plan, and any need for additional measures is identified.
Ability to recruit and retain employees
AddLife’s continued success depends on the Group’s ability to attract, develop and retain employees with the right skills and experience. There are key individuals among senior executives in the subsidiaries, Group Management and other employees across the Group. There is a risk that one or more senior executives or other key individuals may leave the AddLife Group at short notice. If AddLife fails to retain key individuals or recruit new, competent key individuals going forward, this may negatively impact AddLife’s financial position and earnings.	AddLife works long-term to be an attractive employer and allocates significant resources to skills development, leadership and culture. Through AddLife Academy, employees and managers are offered structured training programmes, opportunities to share experience, and support in their leadership, which strengthen internal career development and increase engagement within the Group. The Group conducts regular employee surveys and follows up on results and action plans at both subsidiary and Group level to ensure that employees have good conditions to develop and thrive. AddLife works actively with talent management and succession planning and has incentive programmes for senior executives and certain key individuals within the Group. The purpose is to strengthen long-term ownership engagement, increase the ability to retain key skills and ensure continuity in operations.
Regulatory
The healthcare market is highly regulated in all countries where AddLife operates. The Group’s product portfolio is subject to legislation, EU directives and related quality system requirements, including the EU Medical Device Regulation and In Vitro Diagnostic Medical Device Regulation (MDR/IVDR) and national regulatory requirements. There is a risk that changes in regulations, interpretations, or supervision will lead to increased requirements for documentation, clinical evidence, labelling, traceability, or reporting. Failure to comply with applicable regulations or to adapt operations in a timely manner to new requirements may result in delays in product launches, sales restrictions, product recalls, sanctions, and claims for damages. This could adversely affect AddLife’s financial position and earnings.	AddLife allocates significant resources to ensuring regulatory compliance across the Group. Policies, guidelines, and quality systems are aligned with relevant regulations and continuously updated to reflect changes in legislation and regulatory requirements. The Group conducts systematic monitoring of regulatory developments and cooperates with external experts to identify and address upcoming regulatory changes at an early stage. Production facilities and relevant subsidiaries are regularly audited by accredited bodies through internal and external audits. Several entities are certified to the medical device quality standard ISO 13485 and/or ISO 9001, and work to further develop their quality systems continues. Procedures for documentation, reporting and deviation management are in place to ensure traceability, rapid correction of deficiencies and structured cooperation with relevant authorities.
Supplier responsibility and due diligence
With operations in about 85 companies and 30 countries, there are risks related to limited traceability and supplier responsibility in AddLife’s global supply chain. As a distributor, the Group depends on a large number of suppliers, which entails risks of human rights violations, poor working conditions, environmental impacts, or corruption in the earlier stages of the value chain. Regulations in the EU and Norway are gradually tightening requirements for companies’ due diligence across the value chain. Failure to identify, assess, and manage risks in the supply chain may lead to higher operating costs, supply disruptions, legal liability, and sanctions, as well as adversely affect AddLife’s brand and relationships with customers, suppliers, and other stakeholders. In the longer term, changes in relationships or requirements from suppliers and customers may also affect purchasing costs and competitiveness.	To manage these risks, AddLife is gradually strengthening the due diligence process in the supply chain. During 2026, the Group’s Supplier Code of Conduct is being updated and clarified to include, among other things, requirements regarding working conditions, human rights, and anti-corruption. Policies and guidelines are updated to integrate sustainability analyses into purchasing decisions, and compliance is monitored through supplier evaluations, audits, and third-party tools such as EcoVadis. AddLife also plans to introduce more systematic reporting and follow-up on deviations, and to further develop the whistleblowing channel into a grievance mechanism that enables the capture of signals of misconduct across the value chain. Taken together, these measures strengthen the Group’s ability to identify, manage, and follow up on risks, thereby ensuring more sustainable supplier responsibility.
IT security and cyber risks
Digital risks are steadily increasing throughout society. AddLife and AddLife’s subsidiaries, like most companies, depend on various information systems and other technologies to operate and develop their businesses. IT incidents include unplanned operational disruptions, cyber and information security incidents such as data breaches, viruses, sabotage, ransomware and other types of cybercrime. Such events may make critical systems unavailable, manipulated or destroyed and may result in sensitive information being disclosed or lost. Serious IT incidents can result in both loss of revenue and increased costs. IT events or cyber incidents at third parties, such as suppliers or customers, may also impact AddLife’s delivery capability and earnings capacity and damage confidence in the Group.	To prevent incidents, AddLife works in a structured way with information and IT security through regular risk analyses and continuous maintenance and review of IT security at both the Group level and in the subsidiaries. The Group has established a minimum level for IT security measures required in each subsidiary. The decentralised business model, in which each company has its own IT infrastructure within the Group’s framework, means that only a limited number of companies are directly exposed in the event of a major incident in an individual system. AddLife also engages external cybersecurity experts, conducts tests, and offers ongoing IT security training for employees. The security level is continuously adapted and updated based on prevailing threat scenarios, regulatory requirements and customers’ increasing demands for cybersecurity.