• Revenue Growth: 8% total growth, 7% currency-adjusted and organic.

• EBITDA Growth: Increased by 21%, with margin improving to 11.7% from 10.4% last year.

• Operating Cash Flow: SEK195 million, up from SEK82 million in the previous year.

• Cash Conversion: Improved to 82%.

• Net Debt: Decreased by SEK120 million in the quarter.

• Net Debt to EBITDA: Reduced to 3.6.

• Interest Coverage Ratio: Increased from 5.3 to 5.4.

• Equity Ratio: 39%, above the 25% threshold.

• Labtech Growth: 8% organic currency-adjusted growth.

• Medtech Growth: 7% organic currency-adjusted growth, with EBITDA increasing by 37% and margin strengthening to 12.3% from 9.7%.

• Inventory: Increased by SEK59 million, maintaining a 17% ratio compared to sales.

• Acquisition: Bonsai Lab, with EUR8 million in revenue and 13 employees, added to the Labtech business area.

• Warning! GuruFocus has detected 10 Warning Signs with FRA:1AD1.

Release Date: July 15, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• AddLife AB (FRA:1AD1) reported strong growth in the second quarter with an 8% increase, or 7% when adjusted for currency and organic factors.

• EBITDA increased by 21%, reflecting successful profitability improvement initiatives.

• Both Labtech and Medtech segments showed strong growth, with Medtech's EBITDA increasing by 37% and margin strengthening to 12.3%.

• Operating cash flow improved significantly to SEK195 million from SEK82 million in the same quarter last year.

• The company successfully reduced net debt by SEK120 million during the quarter, despite paying dividends and acquisition-related costs.

Negative Points

• Labtech experienced a slight margin decline, attributed to delays in instrument projects and cautiousness in academic research due to budget constraints.

• Inventory levels increased by SEK59 million, partly due to supply chain disturbances and the addition of new suppliers and products.

• There are ongoing supply chain issues, particularly in orthopedics, affecting product availability.

• The Medtech segment faces challenges from long patient waiting lists and staffing shortages in healthcare, impacting elective surgery volumes.

• Some areas within the company still require margin improvement, although they are not as significant as the issues faced by Camanio and AddVision.

Q & A Highlights

Q: Can you explain why the Labtech margin was slightly weaker year over year despite good growth? A: Fredrik Dalborg, CEO: The margin is within our expected range of 10% to 12%, currently at 11.6%. It's a decent margin, and the variation is typical quarter to quarter. There's no significant issue causing this change.