COMMENTS BY THE CEO
The companies within AddLife showed strong performance development during the quarter. In Labtech, sales growth recovered as expected and margins remained stable. Sales growth in Medtech was good and margins improved partly driven by restructuring efforts that are now yielding clear results. Cash flow improved significantly and after the end of the quarter, an acquisition was made in line with our updated long-term strategy.
Growth recovered in Labtech
Organic sales growth in Labtech was solid and recovered, as expected, after a temporary weakening at the end of the first quarter. Market dynamics remained unchanged with steadily growing demand. In Diagnostics, growth was mainly driven by consumables, while sales of certain instruments were slightly delayed due to customer staff shortages and budget restrictions. In Biomedical & Research, sales to academic research were somewhat slow, which was compensated by continued strong demand in pharmaceutical R&D. Within the business area, efforts to introduce products and broaden the product range in strong growing segments with high profitability continued.
Our companies are growing strongly with good profitability, thanks to competitive customer offerings and well-positioned product portfolios.
Continued strong growth and improved margins in Medtech
The Medtech companies performed well during the quarter with strong growth and significantly improved margins. In Hospital, demand was strong, and the companies gained market share thanks to market-leading customer support, reliable deliveries, and continuously updated product portfolios. Patient waiting lists are still long, and elective surgery is expected to continue to drive demand. The work on profitability improvements yielded clear results during the quarter. The restructuring of the eye surgery business resulted in distinct cost reductions and improved margins. The focus is now gradually shifting to increasing sales growth.
In Homecare, the closure of Camanio is proceeding according to plan, resulting in distinct cost reductions in the second quarter. Profitability also improved in several of the other companies, and overall Homecare reported a strong quarter.
Improved operating cash flow and reduced debt
The long-term work to increase efficiency and reduce working capital continues with full force, and we now see clear improvements also in the larger companies. The good sales growth resulted in a slight working capital increase during the quarter but working capital in relation to sales decreased. During the second quarter, cash flow from operating activities improved significantly compared to the same period last year, and debt was reduced, despite paid dividends and acquisition earn-outs.
Acquisition in line with updated strategy
In early July, BonsaiLab, a Spanish biotech company carrying a portfolio of market-leading instruments and consumables in cell and molecular biology, was acquired. The acquisition aligns with our updated strategy to acquire small and medium-sized entrepreneur-driven companies in defined fast-growing and profitable segments. We are very pleased to welcome the BonsaiLab team to the AddLife family!
Summary
The companies within AddLife improved their performance during the second quarter. Labtech showed, as expected, solid growth with stable margins. Medtech showed good growth and distinct profitability improvement, driven by cost reductions now yielding clear results. Our companies are growing strongly with good profitability, thanks to competitive customer offerings and well-positioned product portfolios.
Cash flow in the second quarter improved significantly compared to last year. After the end of the quarter an acquisition, in line with our updated strategy, was completed.
The companies in AddLife have had a great first half of the year and the prospects are good for the remainder of the year. I want to thank all employees for your dedicated work and wish everyone a great summer!
President and CEO