AddLife AB
STO:ALIF B
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AddLife AB
Earnings Call Analysis
Q1-2024 Analysis
AddLife AB
The recent earnings call revealed a strong recovery in the company's revenue streams, particularly with the improvement in the ad Vision segment. After experiencing significant losses in Q4 of 2023, this segment has returned to profitability, achieving a single-digit profit margin. This marked recovery is viewed positively, especially considering the challenges faced during the previous quarter.
Poland and Switzerland have emerged as standout performers in the company’s portfolio with both countries reporting strong double-digit profitability. This growth indicates a robust market presence and operational efficiency in these regions. The management is optimistic about continued enhancements, suggesting that there is still room for improvement across other areas of the business.
The company has reported weaker operating cash flow year-over-year, particularly in Q1, largely attributed to seasonal trends. However, management is focused on addressing this by improving inventory levels and ensuring that operational cash flows align with the company’s deleveraging goals. A commitment to reduce debt remains a priority as the company enhances its cash flow generation strategies.
Looking ahead, the company has ambitious plans to expand its acquisition pipeline, with several discussions in progress. While specific revenue growth targets were not disclosed, the management expressed confidence in pursuing strategic opportunities that align with their operational strengths. This gives investors a sense of the company’s proactive approach towards growth through acquisitions, indicating a clear pathway for sustained performance.
Management acknowledges the need for continued enhancements in commercial processes across the business. There’s a strategic focus on positioning the product portfolio competitively to capitalize on market opportunities. This adaptability signals a commitment to improving operational efficiencies that, if successful, could further bolster profitability.
The earnings call also highlighted a significant recovery in surgical procedures, nearly approaching pre-pandemic levels. Notably, while procedures are recovering, they still lag behind in terms of addressing backlog effectively. This scenario presents both challenges and opportunities for the company as they navigate through recovery phases in different markets.
Management noted ongoing shifts in commercial strategies among suppliers, a trend that may create avenues for increased market share. The company is poised to leverage existing customer relationships to expand its portfolio efficiently. This adaptability and proactive market positioning highlight the management's strategic foresight in responding to evolving industry dynamics.
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Good morning, everyone, and welcome to the AddLife first quarter report. We're happy to take you through the presentation today with some highlights from the quarter. After the presentation, we will have a Q&A session. After that, I want to encourage many of you to stay on to listen to a great story of Mediplast, actually our oldest company within the Medtech group and a company that has performed really, really well in terms of profitability improvement.Ă‚Â So AddLife started the year in a very positive profitability trend. And this is, of course, very much in line with the previously announced priorities. On the Latex side, the revenue development was slightly weaker after a very strong Q4 of last year, but the companies were successful in defending the margins. On the Medtech side, there was strong growth, and also very pleased to announce an improvement in profitability adjusting for the one-off effects we saw in Q1 of this year and Q1 of last year.Ă‚Â So the profitability improvement initiatives that we have spoken about for some time now, both in Vision and in Home Care are progressing according to plan, and this is really, really important for us. And then finally, the cash flow initiatives do continue. Q1 is normally not a very strong cash flow quarter, but the operating cash flow was in line within levels of the previous year. The release from inventory continues, which we're very pleased about. And then, of course, we have a currency effect on the net debt side.Ă‚Â So moving on to the sales and EBITDA development in Q1. We saw a growth of 5% in the quarter. And of course, we had a little bit of a currency tailwind. So adjusting for that, the organic currency-adjusted growth was 4%.Ă‚Â Looking at the EBITDA margin, we are in a positive trend comparing to the previous few quarters. And adjusting for the one-off costs we saw in Q1 of this year as well as in Q1 of last year, we are roughly at the same level. So with that, I will hand over to Cristina, who will take us through a little bit more of the details.
Thank you, Fredrik. So sales growth in the quarter was 5%, driven by very strong organic growth within Medtech of 9%. Growth in Labtech was minus 5% due to soft instrument sales explained by delays in projects. Gross margin was stable in the quarter, but we had a mixed bag between the 2 business areas. Within Labtech with soft instrument sales, gross margin was higher and increased compared to last year. Medtech, on the other hand, had strong instrument sales, especially in the U.K. and Ireland, meaning that the gross margin was slightly below last year.Ă‚Â Looking into other income and expenses. Last year, we had the reversal of a continued consideration of SEK 83 million as well as capitalization of R&D within Camanio. Continuing to the one-offs in this quarter, they also relate to Camanio and this restructuring cost. This means that we will see a cost decrease now starting in Q2 going forward, and the aim is for everything to be closed in Camanio by the end of September.Ă‚Â If we adjust for the continued considerations as well as the one-offs, we had an EBITDA growth of 5% in the quarter. That meant that we had a margin of 11.5%, both in this quarter as well as the previous year. Looking at the financial net for the quarter, we had interest costs that were above Q1 last year. If we do look at the last quarters, the last 4 months, we are in the same range of interest net. Also this quarter, we had a negative impact from the exchange rate losses compared to an exchange rate gain last year.Ă‚Â Operating cash flow was just below SEK 100 million following the seasonal pattern with normally a strong Q4 and weak Q1. Inventory reduction continues and the growth in accounts receivables is mainly driven by continuous sales growth. And looking at the different parameters within the cash flow, we can see that working capital was minus SEK 134 million compared to SEK 150 million last year. And the focus that we have had on inventory reduction has been successful, and this continues throughout 2024.Ă‚Â Account receivables is mainly driven by continuous growth in sales and accounts payable can vary a bit between the quarters, but also clearly a reduction in inventory has reduced the accounts payables. Net debt increased in the quarter by SEK 245 million. The majority of the loans are in euros, meaning that we had a negative FX impact in this quarter, just below SEK 200 million, also an increase in leasing liabilities related to both new but also renewed lease agreements impacted net debt in a negative way.Ă‚Â And moving on then to the leverage that increased in the quarter from 3.5% to 3.8%. Net debt driven by FX and increased leasing cost, but also the last 12 months EBITDA now excludes the reversal of the contingent consideration of SEK 83 million in Q1 last year, also having an impact.Ă‚Â Net debt-to-equity ratio is 1.1, just below the internal guidance of 1. And as communicated earlier, the ambition is to reduce debt via self-generated cash flow. We have normal bank loans, approx half short term, half long term. The short-term loans are due in Q1 2025, and we are now initiating discussions regarding those with the aim to have new agreements in place within the coming 6 months. The long-term loans are due in Q3 2027. We have 2 covenants. One is the interest coverage ratio and other equity ratio. Looking at the interest coverage ratio, it should be above 4x in this quarter, it was 5.3%. Equity ratio should be about 25%. And in the quarter, it was 39%, headroom in both covenants. And with that, I hand over to Fredrik.
Well, thank you very much, Cristina, for that clear summary. So now we move on to the business areas. So in Labtech, the growth was a negative 5%. However, we saw a good start of the year and the weakness was primarily in the month of March. So we are confident that will be a temporary weakness. The margins at 11.5%. So in in the higher end of that range of 10% to 12% that we have said that we should be in, so still a healthy margin.Ă‚Â The company did a fantastic job with a good cost control. The gross margins were strong. And the weakness that we see is mainly in delayed instrument sales. We do think that those instrument sales projects are going to materialize just a little bit later in the year. There is some uncertainty around the research budgets. We have communicated about this in the past as well. But clearly, in the pharma industry, the demand is very, very strong. And it's also worth to note that we had a fantastic end to the year of 2023 in our Eastern European business and now we saw a little bit of a slower start to the year as an effect of that. So all in all, a good quarter for the Labtech business, but probably a temporary weakness on the revenue side.Ă‚Â Moving on to Medtech. We saw strong organic growth at 9%. So very pleased with that. The elective surgery activity that we have spoken a lot about continues to increase and is now approaching levels that they were before the pandemic, but this is expected to remain a quite positive trend supporting our growth. We have taken a lot of actions within our eye surgery business. And in this quarter, we are very pleased to note that we are actually seeing clear and tangible improvement. So the teams have done a fantastic job there and it's showing in the numbers. We are progressing with the closure of Camanio, and it's progressing according to plan. We're not seeing that in the numbers as of this quarter, but we expect to be able to shut that down towards the end of 2024.Ă‚Â Moving on to our priorities and actions. They are indeed unchanged. Protecting and improving profitability is a highest priority for us, organic growth, cash flow, and acquisition follow in that order. So in light of the focus on the improvements in profitability, that being our highest priority, I want to share a little bit more details around the situation in the iSurgery business. So we had a good sales development, stable sales, I would say, at the same time, a significant cost reduction, and that is now showing in the profitability. We went from negative profitability in the previous quarter to solid positive in this quarter, so quite an achievement there by the team.Ă‚Â So the organization has really stabilized, and the product portfolio has been updated to a level that we now feel we have a competitive portfolio. Important to note also that the businesses in Poland and Switzerland are doing really, really well. So strong profitability there. We continue with the work with this dedicated effort. And now the companies are really, really focusing on delivering on the plans that we have laid out. So commercial execution is where the focus lies right now. So well done their team.Ă‚Â And moving forward to Camanio. As I mentioned earlier, we are progressing according to plan. The trade union negotiations have been completed as we had expected in the month of February. We have taken restructuring costs in this quarter of SEK 6 million. We have worked very diligently to support all the customers that we have, make sure they have a smooth transition into a new supplier, and that is progressing very well. All customers are now in the process of making that change. The cost reductions will start to show in the numbers in the second quarter of this year, and we hope to be ready to complete all of those cost reductions towards the end of the year.Ă‚Â So I mentioned earlier the elective surgery procedures. They are continuing to grow. We have shown this slide previously at the Capital Markets Day when we saw that these elective surgical procedures were significantly below the 2019 level, the pre-COVID levels. We have seen a gradual increase. And now as we summarize the inputs from all the companies in which we are active, we see that we are now getting close to the 2019 level. So that's a positive.Ă‚Â However, we all know that there are long waiting lists in the healthcare systems all across Europe. So the healthcare systems will need to get above that 2019 level to in an effective way, start to reduce the waiting list. So there is still a lot of work to be done, and we are working diligently to support our customers in that. So an expectation here of a continued growth in the number of elective surge procedures during 2024.Ă‚Â So in summary, we're very pleased to see the companies within the AddLife family are doing really, really well, really strong teams. We're super happy with that. We see favorable market conditions that will help us support our growth ambitions. The priorities are clear to us and the highest priority is indeed to improve the profitability, and that is going quite well. We are seeing some strong progress in those areas and actually moving the eye surgery business from negative to positive. It's a great achievement by the team. Cash flow initiatives are super important to us as well. Those initiatives continue, and we are pleased to see that in the quarter, we continued the positive trend of inventory reduction.Ă‚Â Of course, accounts receivable is growing an effect of the continued growth that we're seeing. So our ambition is very clear. We will continue to reduce debt over time. And once we get to a satisfactory level, our activity in terms of acquisitions will increase, and we are clearly preparing for that with an active pipeline work.Ă‚Â So I can conclude by saying that AddLife is off to a great start of 2024. So congratulations to all our companies, a job really well done. So now we will open up for a Q&A session. But again, I encourage you to stay on until after the Q&A as well, you will hear a great story about Mediplast, a very important company within the Medtech group and a company that has done a fantastic job in growing the profitability. Thank you.
[Operator Instructions]
Good morning, everyone. So I hope you got some clarity in the presentation there, and now we are getting ready for the questions. And I hope this tool works out well. Remember to raise your hand and unmute before you go. So let's see what kind of questions we may have. So we have a first question here from Charles Weston.
You touched on the elevated electric surgery activity and the outlook being so positive there. Can you give me a sense of what the regional distribution is there? I think I asked last time and I know that U.K. was always tough and some of the European countries were much better. But if you could just give us an update on that, that would be great. And then you also mentioned historically about the evolving landscape, I suppose, in terms of some of the large Medtech companies wanting to be more nuanced in terms of their distribution strategy and use partners in smaller territories. If you could sort of give us a sense of how that's developing as well. That would be very helpful. And apologies again if I ask something you've already mentioned.
No worries. Sorry that the technology doesn't work out for you exactly as planned there. But you are right, we do see the continued evolution in surgical procedures. On average, we're getting close to 2019 levels just below now on the European average, but sometimes these are more ahead, I would say, and that will include Spain and so on. Other countries that are behind it will include U.K.Ă‚Â But on the other hand, we have seen recently a nice pickup in the activity in U.K. So a bigger movement in the right direction there. But even if we are on average now back on the -- roughly the 2019 levels in terms of surgical procedures, that's not going to be enough to handle the backlog. So the number of surgical procedures will need to come up further to start really in an effective and meaningful way reducing that backlog. So that's true.Ă‚Â And then your second question was around the changes we see in commercial strategies in suppliers. And that trend continues, and it's really in 2 ways. We see it in maybe in some smaller countries. There is some of the major suppliers are pulling back, and that could help us to either take market share or possibly take over some of the portfolios. But that's not only in the smaller markets. We see it also in bigger markets, where we have some discussions with important suppliers about taking over portfolios. And we may or may not do that, but in general, we have a positive view on that that extra opportunity to broaden the portfolio. And of course, we stick to areas that we know well so that we can leverage the customer relationships we have in that sense.Ă‚Â So I hope that was an answer to your questions. Anything else from Charles or happy? No? Okay. Will it continue with Mattias from Handelsbanken?
So 2 questions, please. On ad Vision, is there any way you can help us understand the pace of the improvement? I think we had the red numbers in Q4. So I guess it's fair to assume we're back in black. But any comment on the magnitude of the improvement? And if you can call out Poland and Switzerland, which were the best performers, are they already where they should be over time? Or is there still more room for them to improve? And then secondly, on the deleverage process, operating cash flow down year-over-year when cash flow generation was perceived weak last year. We all know seasonality, and it improved during the year. But help me understand how this cash flow generation this quarter fits with your internal planning to deleverage the balance sheet and how that feeds into your appetite to do additional M&A?
Yes. Thank you, Mattias. Great question. So yes, we are pleased with the development within ad vision. It has improved significantly compared to Q4 of 2023, where as you correctly state, we were in the red. Now it's actually -- in black again, and say, single-digit profitability, which is an important and rather quick improvement, we think. So happy with that. Of course, we need to continue the development trend. And also important to note that when comparing to Q1 of 2023, the difference isn't as big. But as you clearly, we were in the red in Q4 2023 and now back in black. So we're happy about that.Ă‚Â We do mention Poland and Switzerland. I think Poland is doing a fantastic job, and double-digit profitability, strong double-digit profitability. Switzerland also double-digit. Of course, we always work with tweaking and improving, so we can always get better. But I think those are 2 good examples of countries where we have a great position, and it's working quite well. The work continues to improve in the other parts of the business and strengthening primarily the commercial processes. That's where we need to go. I think we're much more comfortable nowadays with the product portfolio and feel that we have a quite competitive offering there, actually. So that's that when it comes to ad vision.Ă‚Â Then your second question was around cash flow and debt. So it's clear that Q1 was weaker than Q4, but again, very clear seasonality effect. Looking at the main factor we're focusing on when working on our improvement program, that is indeed the inventory levels. And so we're really pleased to see that the positive inventory development continued in the quarter. And of course, accounts receivable came up a little bit, but that's -- we're not pushing the working capital so hard that we want to strangle the sales growth. And then, of course, accounts payable can come down a little bit, but that's also possibly a good sign in indicating that we're continuing to not build inventory. So I think we're moving in the right direction. We won't reduce our activity in the area. We will continue with the work with supporting the companies and improvements here. So that will remain a very high priority.Ă‚Â We stick to our plan of developing our acquisition pipeline. We have a number of interesting discussions ongoing, which we hope to be able to wrap up a few of them during this year. It's mostly around the negotiation process and so on. So we won't rush it, but we are also confident that we should be able to complete a few deals before the end of the year. So hope that's the answer to your question, Mattias. And we have now Christian Glennie from Stifel.
A couple on Medtech piece and then a follow-up on Labtech. So on Medtech, you talked about, obviously, electives getting back to pre-pandemic levels in the main but still a large backlog. Is there any evidence in any countries or particular regions maybe that people can meaningfully work into that backlog and actually make some moves there? Or is it just if things are operating at sort of where they are, maybe that backlog doesn't shift? And then specifically around the 9% in the first quarter, the growth, what's your guidance for Medtech for this year and over the medium term, please?
Nest clear evidence that some health care systems have been making a dent in the waiting list. I think Spain is a good example. We saw that happened a lot during the previous year, but I think they're doing well there. When it comes to Scandinavia, I think it varies a little bit by country and region. Some hospitals, some regions have picked up the pace quite nicely and very strongly reduced waiting list. Other regions, a little bit less. And in Scandinavia, in particular, we're seeing some effects of staffing shortage as well. So work to be done there as well. And probably, as you well know, in the U.K., the waiting lists have been substantial. But in the end of last year, we started to see a shift in that trend and we've seen that to continue in Q1, even though there has been some strikes and so on, but I understand the risks for strikes have been reduced in the past few months here with some new agreements in place with hospital staff. So I think we remain positive around the development there.
And guidance for Medtech.
Yes. The quick answer is no guidance. We don't do that. But I think we don't want to give any outlook or guidance, but we do think that the trends remain. There's a stability in the market, the underlying trends remain. We do expect a continuation of the activity to reduce the waiting list.
And then on Labtech, the minus 5%. Presumably, there's variability within that. Could you just tease out a little bit what -- is it by particular product type or customer type that sort of gets you to that 5%, some probably positive, some negative? So how do you get--
It was [indiscernible] between all our companies. So there was a little bit of a change in the market in March, but we do think it's temporary because after that, we've seen that the activity has picked up again. It was clearly around instruments. Reagent sales continue to be strong, so the instrument sales were somewhat weak. But again, these are projects we work on together with the customers. We don't see that these instrument sales are actually being canceled. They are being postponed. So we do think that this is a temporary setback in the sales growth. So nothing dramatic there on a year level, really.Ă‚Â So that's the way we look at that. It's also maybe important to note that the weakness that we saw is mainly in the tax finance area of research where there are possibly some concerns about budget. But in the private sector, primarily in pharma, which is a very important customer group for us, the activity remains very high. So we see no evidence of any changes in the demand there, and we don't expect to see that either. So again, when it comes to Labtech, we don't give any guidance, but we do feel fairly confident that the slight weakness during the month of March is indeed temporary.Ă‚Â Mattias, did you have a follow-up question?
Yes, I did. Technology wasn't just with me. So just 2 quick follow-ups. So you said admission improved obviously in the quarter and was back into black, but you also made some comments around Q1 last year. I wasn't sure if the profitability is back on par where it was last year in Q1 for addition? Or if it's even better, just trying to understand where we are in this improvement trajectory? And then secondly, any comments around what you see in terms of pricing for transactions that you've seen in your near-term environment, although you haven't participated? What was happening with valuations given that public markets have recovered?
So in the beginning of 2023, we had mentioned that we were in this single-digit or around mid-single-digit profitability in ad vision and then it actually deteriorated during 2023 and then to a clearly negative number in Q4. Now we're back, I would say, in that single-digit profitability again. So there is no dramatic change versus Q1 2023, but the change is dramatic when you compare to Q4 2023. So that's the ad vision one.Ă‚Â And your second question was around acquisitions and multiples and so on. And I think there, we have a number of dialogues ongoing. We have previously communicated that our say historical multiple valuation in acquisitions have been around 7% to 8%. Of course, with the larger company is much bigger. But now we're back with the focus on the smaller companies again, and we are clearly in the lower end of that range. And I would say, in most cases, clearly below even that 7 to 8 multiple. So I think it's a fairly healthy environment right now. We have a number of leads that some of them we've found ourselves of them we have been approached. The dialogues are ongoing. And I think the valuations are healthy.Ă‚Â So let's see, do you have any other questions? Yes, we do. Please go ahead, Karl.
We have some problems getting into the conference, so I haven't listened into anything that's been said before, but as last question here. But my first question would be on ad vision where you state that you have seen better-than-expected improvements. Could you maybe talk a little bit about that? Is it driven by the market coming back or sales coming back? Or is it mainly cost-related and what to expect going forward in ad vision, please?
Thank you, Karl. Well, I think it is true we are seeing stronger and maybe more importantly, quicker recovery in ad vision. So that's really helpful. It's not a market change per se. I think it's more cost control and increased commercial focus that have been recipes for success for us. I think there was a time we lost a few suppliers. We had a little bit of a weakness in the sales team that we had worked on diligently to fix and recruit new people and train and train our sales team, but also the customers. Now a lot of work has gone into that, and we are now much more confident in both the commercial organization as well as the product portfolio. We feel that it's quite competitive with some recent product additions and a good mix really. So super satisfied with that development, but we're not done, but we have been able to get back into profitability perhaps a bit quicker than we expected.Ă‚Â But there are a lot of good things in the AddVision Group. It's important for us to look at this on a company or country-by-country basis, getting back to the decentralized business model with strong leaders that are empowered to do what's necessary in their respective market. And I think Poland is an excellent example of that, where the profitability is in solid double digits, so quite good. And also Switzerland has been improving also in the double-digit area. So we're quite pleased with that. So the recovery is there. It has come a little bit quicker than expected, but we continue the diligent work to make sure that it's solid and improved.
Just a question on the absolute margin level. Are you saying what that is in AddVision or do you look at it as a group anymore?
We don't really look at it as a group. We are looking at a company by company. So that's what we -- that's how -- we still have some issues in some of the countries, but the trend is positive, Karl.
Sounds good. And then just in Labtech, you stated that you saw both lower demand in March and some delayed deliveries, so I was wondering, I mean, quite a drop here, which was not really expected. So I'm just wondering if you would think it's reasonable to expect you to return to positive organic growth already in Q2 here and onwards in the Labtech side?
Well, I think the quick answer is, yes, we do think we will continue the growth. And then to elaborate a bit further on that, a little bit of uncertainty that we have spoken about when it comes to the publicly funded research budgets. So that, I guess, came through a little bit, but not in the reagent sales only in instruments, and also not a cancellation of orders or projects. It's just a some of the processes take a little bit longer. And it could also be somewhat linked to staffing shortages in the lab and also in procurement organizations and whatnot. So again, we haven't lost any of the projects we're working on. They're still live. So we do think we will recover and we have no reason to change our view on the market and the positive underlying market trends that are there.I mean it was an effect in March, and we have seen some other peers have seen something similar as well. But the mood is positive in the teens and early indications of April are positive advance.
And also, like you said, Karl, we have seen delays in deliveries from suppliers as well impacting the quarter.
And that should come in Q2, Q3 or--
That we hope.
That sounds good and promising. And just one question here also on the balance sheet. I mean, net debt EBITDA coming up a little bit here in the quarter. And you now have a net activity of 3.8%. At your CMD late fall here, you said that you aim to reach below 3x net debt to EBITDA in the latter parts of 2024. When I calculate it, it seems quite hard to reach. Have you updated your view here? Or how should one look at it?
I think we should get into the neighborhood of 3 end of this year or early next. That's what we think, and that's what we stick to, really. But I think, of course, it would have been nice if the debt came down. But it has to be remembered here that this is mainly a currency effect, a big share of our debt in euros and given the weakness of the crown, that's some mechanics going on there and the cash flow is, of course, the lever which we can influence and that we are and happy to see inventory levels coming down. But we have more work to be done, for sure, but I think we're on track there.
And cash flow usually is stronger in Q2, right?Ă‚Â Q4 is the strongest cash quarter, right?
Yes, Q1 is traditionally quite weak, so we can expect a gradual increase, yes.
Sounds good. And then just the last question on Camanio and the winding down of that department, you had SEK 21 million or maybe EUR 15 million in, let's say, recurring cost in that side in Q1? Is that expected to be similar for Q2 as well?
No, it should come down. We had a total of SEK 216 million reorganization charge, and so that should come down clearly in Q2 now. All the customers that we have had have now actively started to move towards new suppliers. So that's really progressing well. We are supporting them in that transition. We have to take that responsibility, of course, but we're happy with how that has evolved. That means that we can now move on with the cost reductions. And so we expect costs to come down already in Q2 and continue on that path, and we'll be done with it mostly at the end of Q3.  Okay. Well, thank you all for listening in, and thanks for the good questions. I hope you got the answers you needed. Otherwise, as usual, please don't hesitate to contact Christina or me on the phone or via e-mail, we'll make sure to answer them as quickly as we can. And so all in all, I think we're pleased with the quarter, good improvements in the margins and primarily in Medtech, a little bit of a blip in the curve, I would say, on the Medtech or the Labtech demand, but we are confident that, that will recover, and the diligent work on profitability and cash flow will continue. So now if you have a few more minutes, I would encourage you to stay on to watch this great video we have of Mediplast, really the starting point of the Medtech business area and a company that has been very successful in continuous improvement and profitability improvement. So thank you, and we'll talk soon. [Presentation]The future looks promising for not only Mediplast but for the group in general. I joined Mediplast about 8 years ago. And it's great to see what the company has accomplished. We have more than doubled in size. And actually, 2023, we were able to reach a milestone that was SEK 1 billion in revenue. Today, I'm privileged to introduce you to Mediplast. We were actually one of the first companies that Ad Life acquired creating the med tech like within the company. Mediplast has evolved in the last 60 years from the start-up to a global entity. This has very much shaped us to the company that we are today, put a lot of values in our long-lasting relationships built on humility, but also empathy. I'm incredibly proud of leading this business. As being both the manufacturer, but also a distributor representing worldwide brands and global suppliers, we work really closely with both naturally the customers, but also the patients being able to provide the best services but also the best product portfolio that we possibly can do. We see a greater demand in terms of sustainability. Mediplast was actually one of the first companies creating a full portfolio within transfusion and also infusion sets, PVC-free. We just now also launched the Bambu range within wound care. Mediplast's corporate values is characterized by humility, personal ownership, healthiness but also mutual respect. We've been trying to foster a culture in the organization that is essential for interacting with all our stakeholders, but most importantly, because we do care about people. At Mediplast, we really strive to make sure that each and every individual can be at there. It's really aspiring to be a part of an organization that really sees the culture as an integrated natural part of the strategy and the foundation for future business success and not just as a short-term project. We do believe that our culture will have a positive impact on our employees, future talent, customers, and suppliers, which will help us deliver on our commitments. Being part of AddLife Group has naturally a lot of advantages. We can cross-fertilize not only products but naturally also insights about the European markets. We really promote AddLife Academy a lot. We think it's a perfect tool to develop kind of organization that will be critical and will play a critical part for our future success. Being part of AddLife and the geographical platform that has now been created, we had a little of great companies being able to provide insights that were never doable before. With that portfolio with the organization, with the people we have at hand, I can just say that the future looks promising for not only Mediplast but for the group in general.