Medtech

Companies in the Medtech business area provide medical device products within the medtech market and assistive equipment within Homecare.

The companies within Medtech had an overall good fourth quarter and net sales increased by 10 percent to SEK 1,498 m (1,367), of which organic growth was 6 percent and exchange rate changes positively affected net sales by 4 percent. EBITA increased by 10 percent to SEK 133 m (121), corresponding to an EBITA-margin of 8.9 percent (8.9). Reversal of contingent consideration has had a positive effect on operating profit of SEK 46 m and one-off costs linked to AddVision and Homecare have had a negative effect on operating profit of SEK -27 m. Adjusted for these, the EBITA margin amounted to 7.6 percent. Profitability within Medtech was significantly reduced by the ongoing operations within AddVision and Homecare.

 For the financial year, Medtech’s net sales increased by 16 percent to SEK 6,042 m (5,210), of which organic growth excluding exchange rate differences, amounted to 9 percent and acquired growth was 1 percent. Exchange rate fluctuations had a positive impact of 6 percent on net sales. EBITA increased by 19 percent to SEK 684 m (573) and EBITA margin amounted to 11.3 percent (11.0). The reversal of contingent considerations, primarily linked to the acquistion of AddVision and Healthcare 21, has had a positive impact on the result of SEK 128 m (87) and adjusted for this EBITA amounted to 9.2 percent (9.3). The investment in digital solutions for remote patient monitoring and care alarms has had a negative impact on the result of SEK 77 m (54) including one-off costs of SEK 19 m.

Growth in the Hospital segment was good. Planned surgical activity remains elevated and most countries have a large backlog of patients waiting for surgery. All companies within Hospital had a strong quarter with the exception of AddVision, which has been subject to analysis and improvement activities throughout most of 2023.
The actions in AddVision mainly focus on improvements in the following areas: cost reduction, a more agile and efficient organisation, as well as improved commercial offering and approaches. An organisational overhaul has been carried out, involving the dismantling of the head office function and efficiency improvements in the local organisations in Switzerland, Germany and the UK. In total, these measures are expected to deliver an annual cost reduction of around SEK 20 m, with start in early 2024, and resulted in a restructuring cost of SEK 8 m in the fourth quarter 2023. The product portfolio has been updated and the commercial approach developed and streamlined through new staff, reorganisation and extensive training programmes. These changes are expected to position the AddVision companies for success in a market undergoing changes in reimbursement levels, competitive landscape and customer structure.
Homecare had a weak quarter mainly because of delayed remodelling and new construction projects in adapted housing. Long-term underlying positive growth drivers, such as an aging population and technological advances, remain unchanged. In 2023, Homecare's digital development projects underwent a thorough review. The development projects include remote patient monitoring (Camanio Health) and safety alarms (Camanio Care) solutions. As a result of the review, a decision was taken in the third quarter to discontinue the Camanio Health remote patient monitoring, which will result in annual savings of just over SEK 10 m in 2024. In addition, in January 2024, trade union negotiations were initiated for the planned discontinuation of Camanio Care, and the subsequent dissolution of the subsidiary Camanio. This measure is expected to result in an additional cost reduction of SEK 50 m on an annual basis, gradually realised during the discontinuation period. The Camanio-related measures are expected to have a total positive effect on cash flow of SEK 90 m on an annual basis. This planned closure led to an impairment of intangible assets of SEK 106 m and an impairment of property, plant and equipment of SEK 19 m in the fourth quarter. The Homecare companies will continue to offer a portfolio of digital products and services, but they will no longer be internally developed. In addition to the impairment charges, the investment in Camanio had a negative impact of SEK 17 m (17) on earnings in the fourth quarter.