COMMENTS BY THE CEO
Margin improvement continues, the debt level is reduced, and acquisition activity increases
Sales development was positive during the quarter, driven by Labtech with strong sales growth across all segments and geographies. Within Medtech sales growth was affected by the United Kingdom, where the normally strong first quarter was weaker this year compared to last year’s high level of instrument sales. The future prospects in the UK healthcare markets are good. In other areas within Medtech, sales generally developed well, and sales of consumables related to surgical procedures increased.
The work to drive organic growth by gaining market share and developing the product portfolio is ongoing, and clear progress is being made in these areas.
AddLife's companies have their customers primarily in healthcare and research. Demand in these areas is stable and generally not sensitive to economic fluctuations. With over 90 percent of sales and 80 percent of suppliers within Europe, AddLife's companies are well-positioned in a market situation with increased uncertainty around global trade.
Improved Margins
The efforts to drive margin improvements remain a high priority, and during the first quarter, we see continued clear improvements in both Labtech and Medtech. The strengthened margins are driven by extensive improvement work in some specific companies, continuous gradual improvements in all companies, and a general movement of the product portfolio towards more profitable segments and product groups.
Improved Cash Flow, Reduced Debt, and Increased Acquisition Activity
After achieving a very strong cash flow in the fourth quarter of 2024, a lower cash flow followed in the first quarter of 2025, as expected. However, compared to the first quarter of the previous year, cash flow improved significantly, and in combination with positive currency effects, this led to a strengthening of the balance sheet. Net debt in relation to EBITDA decreased to 2.8, and the ambition to reach 3.0 or below has now been achieved. AddLife will now gradually increase acquisition activity in accordance with established plans. In early April, the acquisition of Edge Medical was completed, a company with strong growth, high profitability, and that meets the acquisition criteria we have defined. The UK company Edge Medical has strong customer and supplier relationships and a product portfolio in orthopedic surgery, a prioritized segment for AddLife. In the acquisition process, AddLife has been able to leverage our companies' presence in geographic markets as well as deep product knowledge, which will also be significant assets when further developing the business.
Summary and outlook
The companies within AddLife continue to develop very well and in accordance with our priorities and business model. Our market positions provide good stability despite uncertainty in the world. The determined work to improve margins, drive organic growth, and improve cash flow and reduce debt continues. The work has yielded results, and we are now ready to gradually increase acquisition activity.
I would like to conclude by thanking the team for their valuable efforts during the first quarter of the year and warmly welcoming Edge Medical to the AddLife family!
President and CEO