Administration Report

Financial development during the year

Net sales and profit

The AddLife Group’s net sales increased by 52 percent (40) and totalled SEK 5,273 million (3,479). Organic growth was 38 percent (5), acquired growth was 17 percent (34) and exchange rate fluctuations had a negative impact of 3 percent (1), corresponding to SEK 121 million (36). During the financial year, EBITA increased by 163 percent (25) to SEK 802 million (305) and the EBITA margin reached 15.2 percent (8.8). The EBITA margin is generally lower in the markets in Central and Eastern Europe. EBITA includes acquisitions costs of a total of SEK 12 million (4) and currency fluctuations had a negative impact on EBITA of 6 percent (1), corresponding to SEK 17 million (3).

Net financial expenses was SEK -13 million (-14) and profit after financial items increased by 261 percent to SEK 659 million (182). Profit after tax rose by 265 percent (10) for the financial year to SEK 520 million (142) and the effective tax rate was 21 percent (22). Earnings per share before dilution for the financial year amounted to SEK 4.63 (1.28).

Profitability, financial position and cash flow

Return on equity at the end of the financial year was 31 percent (10). Return on capital employed totalled 25 percent (8). The equity ratio at the close of the financial year was 46 percent (45). Equity per share, excluding non-controlling interests, totalled SEK 16.73 (13.07).

Return on working capital (P/WC) totalled 103 percent (51). 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 781 million (598) at the end of the financial year.

Cash and cash equivalents, consisting of cash and bank balances together with approved but non-utilised credit facilities, totalled SEK 1,006 million (439) on 31 December 2020. The Group's available credit facilities amounted to SEK 1,492 million (1,102) as of 31 December 2020.The Group's interest-bearing net debt at the close of the financial year stood at SEK 700 million (902), including pension liabilities of SEK 81 million (80), as well as lease liabilities of SEK 233 million (216). The net debt/equity ratio, calculated on the basis of financial net liabilities including provisions for pensions and lease liabilities, totalled 0.4 (0.6).

Cash flow from operating activities reached SEK 950 million (400) during the financial year. The improved cash flow relates to the improved financial performance as well as more efficient management of working capital. Acquisitions of companies amounted to SEK 345 million (325). Investments in non-current assets reached SEK 91 million (85) during the financial year. Disposals of non-current assets totalled SEK 7 million (3). Repurchase of treasury shares amounted to SEK 19 million (43). Issued and exercised call options totalled SEK 58 million (12). A dividend of SEK 59 million (64) was paid.

Business areas

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

Labtech

Net sales rose by 62 (37) percent during the financial year  to SEK 3,212 million (1,981). Organic growth was 42 percent (4), acquired growth was 23 percent (33) and exchange rate fluctuations had a negative impact of 3 percent (1). EBITA rose by 180 percent (22) to SEK 565 million (202) and EBITA margin amounted to 17.6 percent (10.2).

The Labtech business area has undergone strong growth in all geographic markets during the year. The increase for the diagnostics companies is mainly related to sales of certified COVID-19 tests and other tests such as blood gas analysis, used in the hospital ICU units. For other products, which are mainly used in non-emergent medical care, demand has declined since patients have chosen not to seek care during the pandemic.

Research companies have had strong demand for COVID-19 related products, but they were also hit by lower demand when academic institutions were closed.

Medtech

During the financial year net sales totalled SEK 2,061 million (1,498), an increase of 38 percent (45). Organic growth was 31 percent (7), acquired growth was 10 percent (37) and exchange rate fluctuations had a negative impact of 3 percent (1). EBITA rose by 119 percent to SEK 253 million (116), corresponding to an EBITA margin of 12.3 percent (7.7).

The Medtech business has had extremely strong growth during the year with large deliveries of medical device products and personal protective equipment. The number of elective procedures has been consistently lower than normal, which has resulted in lower demand for non-COVID-19 related products.