Q3 2024 AddLife AB Earnings Call Transcript
Key Points
- AddLife AB (FRA:1AD1) reported a 3% organic growth in both LabTech and MedTech segments, indicating stable performance despite challenging market conditions.
- The company secured several important and profitable tenders in multiple countries, which are expected to positively impact Q4 results.
- The acquisition of Bonsai Lab, a leading Spanish distributor in cell and molecular biology, is seen as a strategic move into a prioritized growth segment with good profitability.
- MedTech margins have improved, with EBITA margin increasing to 10.7% from 10% in the same quarter last year, driven by performance improvement initiatives.
- The closure of Camano was completed as planned, resulting in cost savings of around SEK15 million per quarter, contributing to a full-year savings of SEK60 million and a cash flow effect of SEK90 million.
- There was a noted weakness in demand for advanced and high-margin instruments in the LabTech segment, with some projects being delayed.
- New product launches have been slower than expected in reaching sales goals, impacting margins.
- The UK and Swedish markets have been unusually weak, affected by factors such as NHS strikes and staffing shortages.
- Operational cash flow remained flat in Q3, and net debt was stable rather than decreasing due to the acquisition of Bonsai Lab.
- Sales outside of Europe, particularly in China, have been significantly down, impacting overall performance.
(audio in progress) reduction implemented last year remains with the ambition to improve even further. Net debt was unchanged during the quarter. The acquisition of Bonsai Lab with paid purchase price and the booking of the continuing consideration was a total of SEK115 million.
As most of you know, the majority of the loans are in euros and this quarter we had a small positive impact from FX. With pretty much unchanged net debt and EBITA, the leverage remained at 3.6. and as previously communicated, depth is going to be reduced via self-generated cash flow.
The short-term facilities that was going to be due in Q1 2025 has been prolonged at unchanged terms until Q1 26 with an extension option of another 12 months. The interest rate has gone down from 5.9 continued to be reduced in the fourth quarter. We have two cabinets, interest coverage ratio should be above four, it was 5.4 this quarter as well, and equity ratio about 25% and that was 40%. And with that, I hand over to Fredrik again.
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