AddLife AB (publ)

Good morning everyone and warm welcome to the AdLife fourth quarter presentation. We're very happy to present the fourth quarter to you today and then after that we will open up for questions and answers and after that there's also going to be an opportunity to review a very nice video describing our biomedical research business unit as well as one of our very exciting Italian companies Euroclon. Thank you. So let's move on to the numbers. I'm very happy to present today a very healthy fourth quarter for AdLife. We had a strong growth and a significant improvement in cash flow. Customer demand remains very healthy across the board and we saw a growth of 9% in the quarter and with that we conclude the 2023 with 10% organic growth which is a quite strong number for us. In the lab tech business area we saw a growth of 13% so quite strong and 6% in medtech. EBITDA grew by 7% keeping margins relatively stable. However in lab tech we had a very strong margin at .5% and in medtech in around 9%. Here in medtech though we saw some negative impacts from admission and home care and after a number of months of significant work and analysis to assess the situation we have taken a number of efforts in the past few months that will significantly improve the profitability in these businesses and we will start to see effects of that already early 2024. Last but certainly not least we're very pleased to announce a very strong cash flow in the quarter. 450 million in cash flow compared to 350 in the corresponding quarter of last year. We also saw a significant improvement compared to the previous quarter and we were very pleased to see the release in inventory. So with that we were able to reduce the debt with around 400 million in the quarter as well. So now moving towards the net sales development and EBITDA development. Of course the COVID revenue is now gone but as we've seen now in many quarters our organic growth is able to well compensate for that and in this quarter as well we had a little bit of a help from the currencies. Looking at EBITDA development we can see that both lab tech and are contributing nicely in any balanced way. We have a number of one-off items but this will be presented by Kristina when she does the financial presentation. So Kristina.

So yes thank you Fredrik. So let's start with the write down and one-offs that has impacted the fourth quarter with a total of 134 million. They are all actions related to Edvision and Fredrik will speak more about this later. We had the recurring cost or the restructuring cost in Edvision of 8 million. Then we have a write down of fixed assets within Camano of 19 million and we had the write downs of the intangible assets within both Camano Health and Camano Care summarizing to 106 million. The annual savings from those actions will be a total of 80 million. In Edvision there will be savings of 20 million starting in January going forward. In Camano Health 10 million also starting in January going forward. For Camano Care there will be a saving of 50 million. This will be gradually realized until the third quarter of this year. So the total annual positive cash flow impact from those activities is a total of 110 million. These will also be gradually realized during the year. In the interim report there is a table that explains and shows the allocations in the income statements for the ones that want to know more. The write down in Camano also have a tax impact since losses are not carried forward. If those would have been excluded, that is the write downs, we would have had a tax rate of approximately 34 percent which we talked about in the third quarter. In the quarter we have also made a reversal of the Continuend consideration related to Healthcare 21. They had an ambitious goal and the performance came in just below that ambition goal meaning that will not be a payout for this Continuend consideration. Moving into the profit and loss, strong sales growth again 9 percent. Also the organic growth excluding currency impact and COVID was 9 percent. There is a slightly lower gross margin mainly related to high instrument sales. Also the increased operating expenses mainly relates to increased commercial activities and strengthening of the sales organization within areas where we see future growth. There is also a component on the currency in the operating expenses, 30 percent of the increase relates to this. Other income and expenses have there we have the reversal of the Continuend consideration. Interest cost increased in the quarter but we had positive exchange rate gains meaning that the net was plus 15. If we then take out the write down and the one loss of 134 we end up with a profit before tax of 2 million Swedish crowns. Operating cash flow in the beginning of the year was weak due to the fact that we did use cash flow for investing in current as well as future growth but we did end 2023 in a strong way. This is both relating to seasonality as you can see the fourth quarter is normally the strongest one but also to release a capital. Now we have left COVID behind us we have an increased medtech business meaning more orthopedics, more consignment stock, demand for fast deliveries etc. With a strong ending of the year I would say that we are back on track on the cash conversion with 76 percent ending the year. Operating cash flow was strong 448 million in the quarter. There has been a huge focus on working capital during the last half year and our companies have done an amazing job with the working capital release of 264 million. We have seen inventories decline accounts payable increase and with no surprise accounts receivable has also increased due to continued strong growth. Working capital will continue to be a focus entering into 2024. The net debt was reduced with approximately 400 million and leverage decreased to 3.5. The aim is still to continue to reduce debt by a self-generated cash flow and if we look at our loans they are majority of them are in euros meaning that we have a positive FX impact in the quarter but we also repaid loan of 276 million. And looking at the structure of our loans which are traditional bank loans, approximately half is short term half is long term. The short term loan are due in Q1 2025 and the long term is due in Q3 27. We have variable interest following durable meaning that the interest rate increased in the fourth quarter since we had one quarter delay so now we are hoping that this was the last increase and the average interest rate for the quarter was 5.9%. We have two governance one is interest coverage ratio and the other is equity ratio. We have good headroom in both of them and with that I will hand over to Fredrik again.

Well thank you Kristina for that thorough review of the financials and now we move on to market trends and implications for AdLife. Clearly we are in a post pandemic environment and the healthcare systems are addressing the significant need for surgical procedures so with that we see elective surgery procedures increasing. That has been the fact for us in 2023 and we expect that trend to continue. So for AdLife that means an additional boost in demand for all of the businesses that we have that are engaged in surgery. There is a staffing shortage in the healthcare system and some healthcare capacity constraints. With that we see an increased demand for time and resource saving products and services and this is something that the AdLife companies are really good at so an opportunity for sure for us as a company. The healthcare systems are back to more normal budgets so we see some hesitancy in investments in larger capital intensive projects. That for AdLife is not a big piece of our revenues so it's not a huge impact for us. However we are quite strong in value and productivity selling and we see the greater interest from customers in that area and that is something that we are quite good at within our different companies. And finally and quite interestingly this trend that we have seen now for a couple of quarters with larger global manufacturing really reassessing their go to market strategy that trend continues. It means that some of the companies are reducing their portfolios. They are going back to a distribution model and this is of course for AdLife an opportunity both to take market share and add new products. So many of these trends are really a positive for us as a company. So Labtech had a very strong fourth quarter with a currency adjusted growth rate of 13 percent. The EBITDA was strong at 14.5. The diagnostic business was quite stable as is the nature of that business unit and the margins were quite good. Biomedical research had a very strong quarter we're happy to see with both strong growth and margins and after the Q&A session you'll have an opportunity to get to know that business unit a little bit better and also one of our key companies in that group. In general we see a high customer activity in all the businesses and all companies within the Labtech business area and in particular the activity was high in the pharma industry and that's a very important customer group for us so we're very pleased to see that positive development. In addition to that we did talk in the third quarter about expectation of invoicing in Eastern Europe and I'm very pleased to see that that indeed materialized so that triggered extra revenue profitability and also inventory reduction. So all in all a quite strong quarter for Labtech. Moving on to Labtech we have also a solid quarter organic currency adjusted growth at six percent. The elevated elective surgery activity that we have seen continues. It varies a little bit country by country but all in all and on an European scale we do expect this positive trend to continue as well in the coming quarters. The hospital companies in general are performing quite well so that's very great to see. In advision and home care though there are some challenges and we can see that those challenges are indeed reducing the overall EBITDA margin for that business area but I am pleased to note that we have been reviewing that situation for quite some time now and taken some firm actions that will indeed improve the profitability both in advision and home care and we will start to see those effects quite soon during 2024. So taking a look at the priorities for 2024 they do remain the same. Our first priority is to protect and improve profit and that's why we will focus a little bit soon here now on the measures we are taking within advision and in home care. Organic growth and cash flow are two very important factors for us and you can see in our numbers as we present them today a very strong improvement in both of those areas and of course that opens up for us in the longer mid to long term to again increase the activity in terms of acquisitions. So as I mentioned improving the profitability is of high priority and as many of you know we have had some challenges within the advision group over 2023. However we think that the foundation of that business is indeed strong and what we our goal here is to position advision for success in a market that is indeed undergoing a lot of changes in terms of reimbursement, competitive landscape and customer structure. So the improvements that are required can really be divided in three areas. We need to do a cost reduction effort, we need to become more agile and efficient as an organization and we need to improve the commercial offering as well as the working methods. So we have taken a number of actions to improve things in advision and the first one is restructuring. So we're restructuring the advision group removing the headquarters function and that will of course reduce cost but more importantly improve the efficiency of the decision making and make it more decentralized and more able to respond to local customer needs. Then in the local businesses the subsidiary is by country we have also reviewed the organization and working methods and we have made organizational changes in Germany, in UK and in Switzerland. This will lead to greater efficiency and more focus but also cost reductions. On the commercial side we have worked a lot on improving the portfolio, replacing some products that we have taken out of the portfolio with new ones, we have clarified the priority in terms of profit and revenue potential and we have improved the working methods in the whole commercial team. We have strengthened the sales team significantly in many of our markets and we have put a lot of effort in training of the sales teams to improve efficiency and customer focus. And then finally we have also invested in increased manufacturing. We have had a situation where we have had capacity constraints and not being able to respond to customer demand. Now we have invested in new manufacturing capacity and now we are ready to meet that growing demand. So all in all these efforts are expected to result in a cost reduction of around 20 million coming to effect in early 2024 but most importantly bringing a more decentralized and agile business model back to a vision and with that we expect to see additional and gradual performance improvement throughout 2024. As I mentioned earlier we have had some challenges with the profitability in home care and this challenge is centered around digital development projects that we have in that business. We have taken a thorough review of that product portfolio, the digital development portfolio during 2023 and we have taken a few decisions in that area. So Camanio Health, which is the remote patient monitoring development project, has been discontinued in the fourth quarter of 2023. Camanio Care, the safety alarm development project, in this area we have initiated trade union negotiation regarding a planned closure of that development project as well as the whole subsidiary Camanio. This will lead to a cost reduction of around 60 million and a positive cash flow impact of around 90 million. This was not an easy decision to make, you know, we feel strongly for the employees as well as the users and the customers but we will make sure that the customers and users will be provided with support and functionality during this discontinuation period and we will also make sure that they are offered attractive alternative solutions. The home care companies will continue to offer digital products and services but no longer internally developed. As we wrap up this presentation I want to start by thanking everyone within the AdLife group for an amazingly strong contribution and dedication during 2023. I'm very pleased that we were able to wrap up 2023 in such a strong way with a very solid fourth quarter. If we take a look at the market we see that the customer demand is solid and expected to continue that way and our companies are very well positioned to benefit from that customer demand. The companies are doing a fantastic job developing the products and the service portfolio always with the customer in focus. We have taken significant actions during the quarter that will improve profitability going forward and I'm very pleased to see that we have a strong cash flow generation in quarter three but even more so in quarter four and that has been the result of a lot of efforts across all the companies. This increased cash flow of course gives us a lot of confidence in our ambition to reduce debt through our own generated cash flow and doing that we will gradually be able to increase our pace of acquisition again. So this past few weeks I've been fortunate enough to go visit many of our companies and attend many of the sales meetings that we have in the beginning of each year and the impression from all those meetings has been amazingly positive. We have a very very strong team in all parts of the organization the commitment is very very strong and the passion about what we do. Everyone in this company is very much focused on the patient and improving people's lives. So with that I'm very confident in saying that we have a very positive perspective on 2024. We expect to see continued growth, continuous focus on improvements in profitability and cash flow and we see a lot of new and exciting growth initiatives. So with that we start by opening up for the questions and answer sessions and for those of you who have time do take do take a few minutes to listen to a very nice video of the biomedical and research business unit and the exciting activities we have there. Thank you. All right hello everyone so now we're ready to open up for any questions that you may have. I hope that you found the presentation informative but apologies for the little bit of a glitch in the beginning there. So let's go I think we saw some some questions coming up. Did I see Carl did you have a question?

Yes good morning. Good morning good morning good morning. I have quite a few questions but maybe we can start from the medtech margin. I mean yeah it looks weak of course and I guess it's the worst I think margin for medtech in a q4 ever and q3 was relatively okay I guess so can you just elaborate a bit on what has happened in advision because I guess that's most parts of the delta sequentially. What has happened in advision for and can you say anything what the margin actually is in addition right now?

Yeah you're right I mean advision did pull down the overall margin in medtech you know in a not insignificant way. I think it's important to keep in mind that q4 of last year was an okay-ish margin if you will in in in advision. We had a improvement there from the previous quarter but this q4 now 2023 really was not good you know we we unfortunately we dropped down into a negative numbers for advision so that was painful but on the other hand we're we are pleased that we have been for a number of months now implementing a number of changes in that business area and and that in that company that will that we're confident will turn the trend but yes that's a big that's a big drag in the in the margin for for medtech this quarter clearly but I think it's also important to note that in general the medtech q4 is is a bit weak due to seasonal effects we have always a little bit of a slowdown in surgical procedures during the Christmas and New Year's holidays and for our largest company that's normally a fairly weak quarter as well because of the the fiscal year of of NHS in the UK so yes it's a weak quarter but I think we we understand pretty well what it is and we're taking strong actions to to improve it and I think those those those improvements will start to show relatively soon because they're pretty firm and quite clear.

Yes that's clear and around that you mentioned 20 million in savings in advision but I mean if if we say that advision is a 700 million sales business 20 million and if you're a negative territory I guess it's really not a lot so I mean is it sales growth that is needed to come back to better margins or is there more to do in terms of cost savings so to say?

You're right I mean the point is not to to really take out tons of cost the main thing is really to improve the how that company operates and get the the commercial piece of the business back in a more healthy state and I think many of the parts of the companies are quite healthy I mean we have subsidiaries within that group that are doing very well so so this is a bit of a from a commercial standpoint more you know product portfolio and efficiency of the sales so so picking up the pace in sales but also very importantly fixing the product portfolio moving it towards more high margin products.

Yeah and just one quick one on healthcare 21 you mentioned a reversal of an earn up there should we be worried regarding that company's performance or? Not at all not

at yeah they're doing really well so but we do set the targets pretty high in those in those types of

deals yeah. Okay and then just one on the lab tech I mean the margins looked very strong during q4 and it was 12.5 percent I think adjusted for the full year which is higher than your 10 to 12 percent guidance so to say is there any reason why we should not believe 2020 freeze levels to stay in the bill also going forward?

Well I think it's a q4 tend to be quite strong in that business so that's one factor so 14.5 is is a very strong margin I think we've talked about that business stabilizing post-covid in that range that you just described 10 to 12 but I think we're always striving to to to improve always right then and we've been consistently I would say in the very high end of that range during during 2023 so I don't want to you know start extrapolating trends here but but I think q4 normally quite strong and the business is very healthy I mean yeah that was not being dramatic

that impacted q4 other than maybe the deliveries to Europe or yeah

we had some yeah clear strength there and biomedical research had a fantastic quarter as well and yeah for those of you who have time take five minutes to listen to that video afterwards yeah so I guess yeah so should we open up for a few others as well and then you can come back to you Carl a lot of good questions thank you so much so I think Matthias you raised your hand right yeah yeah good morning

good morning good morning so two questions please then as you enter 24 now the comparables for medtech will become more challenging starting in q1 given the strength you've shown in 23 so you know the six percent growth organic growth you saw here in q4 is that a good proxy for how we should frame our expectations for medtech or is there anything else to add from waiting lines staffing shortages etc in terms of trends that you see that could either help or you know challenge that number I just threw out yeah I think you have

a good point there I mean we have had throughout 2023 that tailwind from surgical procedures and now we start to see that in the comps as well so that that is a good point we do think that tailwind will remain I think we the surgical procedures will still be elevated I think some countries have done well in addressing the the waiting lists like Spain seem to be one of those for example yeah as you probably know they the waiting lists have increased over the entire 2023 in places like the UK even though in November we start maybe to see a bit of a shift in trend so that that could be a positive for us as well if there is a more concerted effort to really reduce that waiting list to stop the growth and start to address it that could be beneficial for us since that's a big market for us so I think it will continue we don't want to give a guidance for growth projection or growth guidance but I think the main trends remain but the comps will be slightly more challenging yeah

and then secondly on lab tech surprising strong organic growth of 13 percent in the quarter just want to make sure there were no large one-off orders that helped the growth you called out Eastern Europe and biomedical research but nothing that you would classify as you know one of rather strength driven by those elements yeah

Eastern Europe was good I mean we we were expecting and you know and had been promised that there will be a lot of invoicing in Q4 and indeed that happened so that was that team is doing very well and delivering on their promises so that's great biomedical research very strong I think that's it's not like a one-off thing there it's more reflecting the the strength in demand in general in that in that business so so so nothing big in terms of one-offs what is it something you'd like to add

it's only the Eastern Europe that was slightly slower in Q3 than yeah catch up in Q4 so of course that was quite strong in Q4

yeah good and then just a final follow-up on on medtech and the margin trajectory you called out some cost savings for both advision and home care for a total of 80 million krona so isolated those translates into roughly 140 base points improvement on an annual basis for medtech but you know they don't come into immediately so you know maybe help us think about the margin uplift for medtech division is it more going to be tilted towards 2025 or help us think about the phasing of the margin improvement you see in front of yourself do

you want to comment on that Christina

I think like Freddy said the Kramani thing will take a while so we won't see an impact of that until the latter part of the year it will happen gradually of course but but not in the first quarter then it starts Q2 Q3 and then in Q4 it will have full impact so so yes you're correct in the fact that it won't be until actually the latter part of the year that we see the full impact

okay thanks so much

good so we have we got any other questions

yes it's Gustaf from Nordin yeah okay thank you I was just on the medtech margin I mean as you say significant impact from home care and and advision but are these basically the only things or are there a mix effect if we also compare if we were to compare to Q3 this year because Q3 was really strong

yeah yeah I think I'm not sure if I you know to make sure I understand your question correctly I think it's important here to note that yes we did have an impact of the advision and it did decline compared to Q4 but also compared to Q3 unfortunately so that that has been a decline and it's not insignificant then home care was unusually weak to be frank as well that part of it is of course related to Camano and all that but but there was a little bit of a weakness in demand as well in primarily related to remodeling and new construction projects in assisted living so that is we think is a it's a short-term effect the the kind of the healthy demand prospects are clearly there for for the mid to long term but we did see a bit of a weakness also in home care so that so there there are a few factors here that that impact the margin in medtech for sure for sure but all of them but all of them I would say are being addressed

yeah okay I was more looking I mean the margin of almost 10 percent in Q3 is there if we exclude advision and home care and all of that is there a big mix effect also worse or a worsening mix effect in Q4 here

Q4 is normally a slower quarter considering that it is Christmas new year etc and the hospitals pretty much close fun actually and I also think that we said in Q3 that the margin was maybe unusual strong since we had the vacations in that period but but I think Q4 is normally slower one for medtech actually

yeah it is for many

reasons

yeah

okay perfect and then maybe on the the reversal of uh continued consideration to to a hc21 here I mean was this based on a margin threshold or what was this based on and then also if you can specify anything in regards to that

it was based on an ebda that should be reached and like we said it's quite ambitious the goals that were set and they are not far away from that one so but normally the structures are normal when you put the consider consideration often the goals are set quite high and I would say that they were quite close so

yeah if we have worries

no worries that business is

performing really well I think if you know if we would have seen that it would be hard to to meet if we could have make an adjustment earlier right but yeah they were really close so we couldn't tell until we were we really had wrapped up the full year so so that business is is doing very well so we're very comfortable with that

okay good and then just the last one here on on uk maybe I mean I think the numbers we are seeing there from from the backlogs and nhs is turning more positive actually but I mean of course you have the strikes and so on can you give anything in regards to to what you're seeing right now and maybe in the start of q1 given sort of that healthcare 21 does have its strong quartering q1 here that's

right I mean so it was it was great to see that turn of the trend actually in terms of patient waiting list it's been increasing as you well know up until November of 2023 so so there was a change in in the trend you know of course if you read the articles around that you know to really make a dent in that massive patient waiting list it has to be an increase significantly increased surgical activity for many quarters maybe even years to get to that I think that would be a solid tailwind for us and I think it seems to be accelerating we do see and we hear from our teams I've had the opportunity to chat with many of our team members over the past few weeks and we see that there is indeed an increased activity we also see that the healthcare system are taking new approaches to more efficiently reduce the so so so there is a bit of a trend shift there.

Okay

perfect thank you. All right thank you so much let's see who else has a question Charles Weston yeah

that's great thank you yeah Charles Weston from RBC three questions please if I can on medtech the first one is on the rationale for the medtech companies that strategic shift that you talked about more towards the use of distributors if can you give us a bit more color on that with regard to perhaps you know the the product categories the complexity of those products you know whether they're more commodity or high complex products and perhaps what you know any other sort of trends you can pull out that?

Well I think there there seems to be a review ongoing with many of the larger global manufacturers to take a look at product portfolios where to focus where where they perceive they have a you know an edge and where they think they're not maybe maybe not efficient as they need to be so that's happening so that means for us that maybe some competitive products will disappear so we can we can take a market share that way or if we find attractive and we have good discussions along those lines with many global suppliers that you know that we can also take over some of those product lines given the you know of course we are pretty particular about in terms of the profitability we can we can generate from those products so that's that's one thing and I think in addition to that many companies are seeing that it's very complex and costly to to set up own direct sales force for the vast and fairly complex European markets right so if you have a partner with a strong foundation in place in a particular country and and very importantly service and support resource that can be extremely valuable and I think for someone like us who have who has a pretty broad product portfolio and the ability to continuously evolve it and and with that we can we can defend having a very very strong commercial and service field team that that is becoming even more attractive of an asset so so so there are a lot of the dynamics going on here I think we it gives us an opportunity to take on some some really high tech products that do require a lot of service and support but also more volume products if we decide that that that makes sense for us did that answer your question yes

that gave me some more color thank you and the second question is is on is on like for like pricing what was your tailwind in 2023 and given the pricing discussions you've had at the beginning of this year what how would you anticipate that looking in 2024 so

I think for us it we have a very broad range as you as you probably know about 18 million SKUs so it's it's hard to say you know a specific number but we have seen of course price increases from suppliers we have been able to pass most of those on not immediately always because a large share of our business is indeed linked to tenders and long-term contracts so so it has been a process where we the majority we could relatively quickly pass on the others have been a little bit of more of a protected process and so we have been gaining a little bit of course from that price increase it's hard to say the exact number but a few a few percentage points I think is coming from price increases

um okay so a few percentage points but perhaps not as much as mid-single digits

no

I

would say two three something like that maybe four yeah okay

thank you and then just lastly on the competitive landscape and pricing for M&A opportunities that you're seeing in Europe given valuations in the public markets have declined I know it always takes a lot longer for private transaction multiples or expectations to decline as well but have you started to see that what's what's what's your view on sort of deal volume in the markets

we are involved in in a few discussions we think that the multiples are you know a little bit lower than what was our traditional multiple levels of around seven eight maybe I think the discussions we're having at this point in time are lower than that and that's also confirmed by some of the transactions that we have been able to read about so I think that the prices have come down it's been a bit of a slow process as we have stated before so I think that it's it's an you know it's starting to become a more attractive market for us and you know luckily for us that coincides with them we've been you know that we foresee an increased ability for us to do more transactions now since we see a positive and quite positive development on the cash flow and that situation as well

and has there been a pickup in in potential exits from owners

well it depends on what what category of companies you you think about I think you know there might be you know private equity companies that want to realize investments or whatnot that may not be the most interesting for us we are more looking at the small to medium sized companies and that they tend to be owned by the entrepreneurs themselves you know the founders and there the dynamic is slightly different it's it's not like they need to exit at a certain point or the deadline expires or whatever this is more a longer term consideration you know looking after the well-being and the future life of that company and and finding a new home for for for the company that will allow it to grow and and that will be a good experience for for the customers and the team and that's where I think we have a huge huge benefit so there there's no there's no you know timelines or anything like that but that need is there we are quite attractive as a potential a new home for these companies and we are having multiple increasing number of discussions around that

great thank you for taking my questions

thanks charles so I think that car you have some follow-up questions it looks like right

yes there are some follow-ups first one is on the on the cash flow here and on the working capital so could you comment anything of are you done with the

well I think you know the efficient working capital that's kind of one of the hallmarks for ad life right that's something that we spend a lot of time on from day one in the the trainings we have for new companies that we take on board and and that we continuously drive in in our target setting in our board meetings our business reviews and everything so no for sure it's it's not done but we are pleased though with the fact that on top of all those measures we did ask all the companies to to commit to a goal and to complete that goal during the second half of 2023 most of the companies have you know have been able to meet those goals and in many cases overachieve them as well some companies did not quite but on on them on on a total we're satisfied with the result it doesn't mean that we will stop the activity you know this has on the rather on contrary I think it's been it's been very helpful because we have had a lot of discussions about the importance of this and that's been well received it's been a somewhat new approach to some of the companies but the over the past six months or so this message has really been you know consistently communicated and I think it's been well received and we're seeing a lot of actions taking place some of it is you know has a bit of a short term side of it but most of it is more long-term behavioral and process change and that's the key here so so we're certainly not done

and where do you think working capital to sales should be for ad life I mean it's yeah being quite volatile and with acquisition changing there are pictures now of where it should be

well I think you know if we look at the numbers that Christina just presented I think we start to see cash conversion and so on and the profit versus working capital and so on in you know starting to to look a little bit better it looked you know at mid-year this year it looked quite weak but now it's picked up again so we're I think we're certainly on the right track now

yeah and I have one question also on the capex investments because capital has come up quite a lot in ad life I don't know it's related to some extent to rental etc but I mean it's it seems quite high at least to me here in the quarter of 92 million can you say anything what that's related to and if 92 or is that the reasonable trend going forward also

I think that you should look at the four-year figure and divide it maybe by four I think that's probably more realistic but as I think I said previous as well it's mainly related to instruments etc to the customers and with new hospitals as new customers etc you need to do an investment so it's mainly that is driving the increase in q4 but I wouldn't take q4 as the new run rate okay

understood understood but it is a good thing you know every new customer we sign up triggers a little bit of investment in that for that type of customer and so in a way it's a positive sign yeah

yeah and then I had a question on just some q4 lab tech have you seen any trends of cove with 19 testing coming up because I'm hearing that in some countries you are testing a bit more so just to make sure it's no not that that is no no I agree

with you call that you know the influenza impact has picked up you know we see that you know when traveling in some countries you know it seems to be a you know more people staying at home because of fear of influence or whatever so I think that's happening but but it it doesn't trigger an enormous amount of cove testing so I think that's that that is firmly behind us

yeah that's good and just one final one on the strikes we have seen in the uk has that impacted you in any sense in the beginning of 24 yeah

it has it has impacted us a bit you know not enormously though but but it has impacted and it has kind of reduced the surgery activity and I think it's partly you know this is one of the reasons were that why the waiting list haven't been coming down in during the year but but now you know we're cautiously optimistic here you know reading the numbers seeing the fact that the trend seems to have changed we're picking that up also from our sales team that indeed the activity seems to be picking up and new and new measures are putting are being put into place I think there's an increased willingness and activity in terms of engaging the private health care systems as well to address the the waiting list so that that is potentially a change in trend could be to politics as well who knows you know elections may be coming up and we certainly saw that trend in spain in 2023 yeah that's good that's all for me all right thank you all right thank you carl thank you good questions and thanks everyone for for listening in do we have any further questions no okay well then thanks everyone for calling in good questions and again we're super happy with the with the quarterly numbers that we were able to present team has been doing an excellent job now for those who have a few more minutes do stay on to see the video that we put together focusing on biomedical research which was a which was a part of our business that did really well this quarter so thanks everyone and see you soon take care bye

I It's great work with Franco and the Euroclone team. He is the perfect example of entrepreneurship, passion and engagement. This is the type of company we are looking for when we build our pipeline for future growth.

When I sold I thought, let us see, I had to stay a couple of years, I did it with enthusiasm, with commitment, with everything. At the end, he told me if you want to stay Franco, you can stay, I want to stay. I enjoyed it and still I enjoy it. I see this as an opportunity to continue the journey I started. Not only as I did it, but even in a more constructive manner because there are a lot of things to do in a group. Because there are many other companies and supported by the Adlife management, I am exploring other areas that can contribute a lot to the growth of the company, growth of the group. So I am enjoying the same passion as before. Euroclone route go back to the main person and everything started with a dream. As an entrepreneur, to create a company, to be able to bring the Italian scientific community innovative products available in other parts of the world as soon as possible to give them the best and the least to continue their research. In fact, our mountain is self-scientific. This generated a solid tradition with the Italian scientific community. Why this tradition? You can change according to the change of technology. You can change according to the Adlife as a parent company, I could invest in something useful at that time that created important revenue, important profit that was invested to strengthen the company and to look for new venture. New venture is new technology that are emerging, specially past-hyptomic and next generation sequencing. And now we can enter in this market that is growing double digit and then will continue to grow long long term. We created good partnership and we are now continuing in our strategy to serve science through innovation.

At Adlife, we know the decentralized model works very well. I mean, the decentralized model is very good. In the Euroclone case, we know that it enables Frank on his team to develop something which is more agile, a bit more adaptable and kind of the market changes that occurs in Italy. For example, they have built a very strong relationship with the scientific community but also suppliers. And you know, that's something that we want to occur also after the acquisition. The Euroclone growth strategy was developed closely with Adlife and primarily the Euroclone board. Within the Adlife group, there are a number of distributing companies with identical focus area and that gives us a unique opportunity to develop not only customer application but also product application and market knowledge. Apart from being the chairman of the Euroclone board, my role is to facilitate the information flow between the companies. Our way of doing that is to create informal network within various groups inside the company. We now have an opportunity to sell the next generation sequencing where Euroclone successfully has been working with the major player and now we have an opportunity to expand that collaboration geographically to other subsidiaries in Adlife.