COMMENTS BY THE CEO
Sales in both business areas were stable during the summer months of the third quarter - a quarter when we typically see seasonally lower activity in diagnostics, research, and in particular elective surgery.
In Labtech, sales of consumables were stable and growing, but particularly in research, our companies continued to see some delays in capital investments, which affected instrument sales in the quarter. As we have seen before, this is not about cancelled or lost deals, but rather orders that have been postponed and are expected in upcoming quarters. This, combined with the fact that sales of newly launched products in some companies developed somewhat slower than planned, led to Labtech's margins being lower in the third quarter compared to the same quarter last year. At the same time, we secured several important tenders for established products with good profitability during the quarter.
Patient waiting lists did not decrease in the quarter and growth in Medtech was somewhat restrained by the relatively low number of surgeries performed. The lower number of surgeries was due to seasonal effects, since fewer surgeries are planned during the summer months, but was also a result of healthcare strikes, staff shortages, and politically driven changes in healthcare in several countries.
However, the underlying patient need remains, as does the political will to address the issues, which makes us optimistic about future activity levels in planned surgery.
Adjusted for revalued contingent considerations and restructuring costs in Camanio, the margin in Medtech improved, and is now established at a higher level during the year. Excluding these items, the EBITA result and margin for the group were at the same level compared to the previous year, and the growth is good in relation to the market conditions.
Sales in both business areas were stable during the third quarter - a quarter when we typically see seasonally lower activity during the summer months.
Continued progress in profitability improvements and cash flow.
Profitability improvements remain the highest priority, and this work is being driven forward firmly and is developing according to plan.
The cost level in AddVision has decreased significantly, and the business has returned to profitability. At this stage, the main focus is on commercial development. Product portfolios have been updated, production capacity increased, collaboration with suppliers intensified, and sales of new products have developed well. During the quarter, we also implemented planned organizational changes for improved commercial focus and increased efficiency.
The closure of Camanio was completed during the third quarter as planned, and the negative impact on results, which amounted to approximately SEK 15m per quarter, will be completely gone from the fourth quarter of 2024.
Efforts to improve cash flow are being systematically driven within the companies. The cash flow is stable, cash conversion has improved, and the work on further efficiencies continues.
Acquisitions in line with our strategy contribute positively.
At the beginning of the third quarter, BonsaiLab, a Spanish company active in biotechnology that provides a product portfolio with market-leading instruments and consumables in cell and molecular biology, was acquired. We are very pleased to have welcomed BonsaiLab to AddLife. The business is developing well, has favourable market conditions, and good profitability. The work of evaluating several similar acquisitions, which contribute to increased growth and profitability, continues with high intensity.
Summary
Organic growth continues in the seasonally weaker third quarter, despite some delays in instrument sales. The margin in Labtech was low, explained by delayed instrument sales, which are expected to recover over time. The positive trend for the margin in Medtech continues, and in the next quarter, we will see the effect of the closure of Camanio.
We look forward with confidence to a seasonally stronger fourth quarter and continued focused efforts on acquisitions in line with our strategy.
As always, I would like to take this opportunity to thank all employees for your dedicated work and significant contributions during the quarter!
President and CEO