COMMENTS BY THE CEO
AddLife finishes 2024 with a very strong fourth quarter. Organic growth was 9%, EBITA increased by 24%, and cash flow improved by 49%. The companies within AddLife performed very well, driven by positive demand development and dedicated, long-term efficiency efforts.
Strong Sales Development
The companies within AddLife have had a very positive development during 2024, finishing the year with a very strong fourth quarter in both Labtech and Medtech.
As expected, we saw higher instrument sales in Labtech during the fourth quarter, driven by newly won tenders and previously planned purchases completed by customers in the last months of the year. It is particularly gratifying to see the strong sales development in both business areas during the fourth quarter, despite customers having fewer working days in December compared to the previous year, due to the Christmas holidays.
The larger platform companies in the UK, Ireland, and Spain have developed their organizations, working methods, and product portfolios, which have resulted in strong growth and clear improvements in results throughout the year. These markets are now among the largest and fastest-growing markets for AddLife.
AddLife finishes 2024 with a very strong fourth quarter. The companies within AddLife performed very well, driven by positive demand development and dedicated, long-term efficiency efforts.
Improvement Initiatives Show Clear Results
The initiatives to improve margins and cash flow continue with great focus and have shown clear results during the fourth quarter. The closure of Camanio was completed in the third quarter as planned. From the fourth quarter onwards, the negative impact on results of approximately SEK 60 million and the cash flow effect of approximately SEK 90 million annually are now eliminated, which will continue to provide a positive comparative effect over the next three quarters. Several important steps in the improvement work within AddVision were taken during the quarter, and the positive development compared to the previous year is evident. For a while now, the focus is on commercial activities and this has yielded results, and our ambition and expectation is that profitability improvement will gradually continue in the coming quarters. Additionally, ongoing improvement activities are being carried out continuously in line with our business model.
Cash flow has gradually improved in 2024 compared to the previous year, driven by efficiency efforts, especially in the larger companies within Medtech. In the fourth quarter, cash flow improved significantly, even compared to the strong fourth quarter of the previous year.
Summary
The overall market development trends are expected to continue in 2025. The need for healthcare is steadily growing, independent of economic fluctuations. Patient waiting lists remain long, and many countries have announced initiatives to reduce these waiting lists in 2025. Staff shortages continue to be a challenge for customers, particularly in healthcare and diagnostics. This is expected to increase interest in more advanced products and services that make healthcare processes more efficient and provide better clinical outcomes. At the same time, the trend among global manufacturers to focus their product offerings and reduce direct sales continues. These trends create many opportunities for AddLife's companies.
The development in global trade presents uncertainties for 2025. AddLife is well-positioned to handle this uncertainty with more than 90% percent of sales in Europe. More than 80% of our products sourced from European suppliers, less than 10% from North America and less than 5% from China.
The positive development in our market is stable, and at the same time, initiatives to improve results and cash flow are expected to continue contributing positively in 2025. Cash flow has improved significantly during the year, which has enabled us to reduce debt with approximately half a billion SEK in line with our ambitions. Simultaneously profit has improved, and in combination this gives us the ability to gradually increase the pace of acquisitions again.
AddLife's target is a dividend corresponding to 30-50 percent of the profit after tax, taking into account investment needs and other factors considered to be of importance. For 2024, AddLife's board will propose to the annual general meeting a dividend of SEK 0.75 per share (0.50), which corresponds to 36% of the profit after tax and an increase of 50% compared to 2023.
In recent months, I have had the opportunity to visit many of our companies in different parts of Europe and meet with customers. All our companies have very knowledgeable and dedicated staff with strong customer relationships and a passion for improving people's lives. The professional and dedicated support our employees provide to customers and patients is highly appreciated, and the work to develop and improve our customer offering with new innovative products and services is ongoing and with increased intensity.
I would like to express a warm thanks to all our team members for your engaged efforts during 2024 and congratulate you on achieving excellent results. It is truly gratifying to see this dedicated work resulting in improved lives for patients and users, satisfied customers, as well as profitability, growth, and cash flow.
We look forward with confidence to a strong 2025!
President and CEO