AddLife AB (publ)

In early July, adding a new business to our group, Bonsai Lab, right in one of those segments that we have defined as our long-term strategic direction. So with that, we move forward and take a little bit of a deep dive into the numbers. Kristina.

Thank you, Fredrik. So we saw continuous growth into this quarter, 8% in total. Organic growth was 7% in MedTech and 8% in LabTech. Stable gross margin and product mix was in favor of consumables with slightly lower share of instrument sales. OPEC's grow only by 2% and in addition to our companies being cost-efficient, we also start to see the positive impact of the cost savings within Advision and Camano. EBITDA growth or profit expansion was strong 21% and margin improved to 11.7 compared to 10.4 in the corresponding quarter last year. Net interest was 75 million, meaning same range as we have seen for the last four quarters. So the variance in financial net relates to currency and other financial costs. Operating cash flow was significantly better in this quarter compared to the previous quarter, and that being despite sales growth, of course, drives working capital. Cash conversion improved to 82%, and that is a result of the focus on inventory reduction as well as working capital efficiency. Operating cash flow was 195 compared to 82 in Q2 last year. Working capital was negative 80 compared to negative 130. For the last three quarters now, we have seen inventory decrease, but in this quarter it actually increased with 59 million. That is, of course, relating to sales growth, but also to the addition of new suppliers and new products as well as buffer stock relating to supply chain disturbances that we still see within some areas. Other working capital that includes costs relating to project sales, but also accrued expenses. If we take a step back, during the first half of 2023, inventory increased. That was due to investment into future growth, adding suppliers and products, but also we did have quite heavy supply chain disturbances. And we were able to deliver to our customer, gaining both new customers, but also market shares when other competitors have problems. Then during the second half of the year, we implemented inventory reduction targets towards the larger companies. This was successful, and by end of the year, inventory compared to sales was 17%. And even though we have increased inventory in the quarter in million Swedish crowns, inventory compared to sales is still 17%, meaning same range as by year end. So inventory and working capital will be a continuous focus during this year. And with processes and tools in place, this is a strength of ours. Net debt decreased with 120 million in the quarter. In this quarter, we have paid also dividends as well as continued considerations, meaning earn as acquisition from previous years. This was approximately 100 million in total. With the main part of the loans in euro, of course, effects had a positive impact in the quarter with 65 million. Net debt to EBTA reduced to 3.6. Also net debt to equity should be around one or below, and we bumped back to one in this quarter. And as said previously, debt is to be reduced by a self-generated cash flow. The average interest rate was 5.9 in the quarter. That is the same as we have seen for the last three quarters. Moving into Q3, we will start to see a reduction in interest rates, and let's hope that continues going forward. The loans are approximately half short-term, half long-term. The long-term loans are due in Q3, 2027, and the short-term loans are due in Q1, 2025. Dialogues regarding the short-term loans is ongoing, and a agreed solution will be in place during Q3. We have two governance. Interest coverage ratio should be about four. This quarter, it increased from 5.3 to 5.4, and we have equity ratio should be about 25. This quarter, it was 39. And with that, I hand over to Fredrik again.

Thank you very much, Kristina. Now we go to talking a little bit about the business area performance. So in lab tech, the organic currency adjusted growth was 8%. So as many of you remember, we had a bit of a weakness at the end of the first quarter this year, but that recovered as expected in a very strong way. In general, the consumable sales is quite strong. We see some delay in instrument projects, like many of our industry peers are also seeing. However, we are expecting them to come to fruition before the end of the year, so we're not talking about canceled orders here. There is some cautiousness in the academic research as well, driven by budget constraints, but that is more than compensated, I would say, by industrial research customers, where demand is quite strong. And this is primarily within the pharma industry. We saw a stable EBIT margin, EBITDA margin at 11.6, and the fast-growing segments that we're active in and we're growing in, some instances of major competitors withdrawing from some markets, and then new products that we continue to offer and add to the portfolio gives us high confidence in the growth opportunities in this business. Moving on to MedTech then. Here we had an organic currency-adjusted growth of 7%. The patient waiting list that we've been talking a lot about, they remain long. Elective surgery is expected to continue to be a driver for growth in the long term. EBITDA increased by 37% and margin strengthened to 12.3 from 9.7, so we're very pleased with that. And it's really a reflection of performance improvement across most of the MedTech companies, really. Of course, also, the actions we have been taking in companies like Advision, where we have restructured the business in a fairly strong way, is really yielding results in this quarter. And also, the closing of the Camano business is progressing according to plan, and the shutdown is expected to be completed in the third quarter of this year, so that is also showing in the numbers of Q2. So moving on to look at the market trends and their implications for ad life. We talked about the patient lists. They remain long, and we will see an increased demand for elective surgery for a long period of time ahead of us. The staffing shortage that you've all read about in the papers gives healthcare capacity constraints. So that means for us, of course, an increased need for time and resource saving products and services, and this is an area in which the ad life companies are really strong. Healthcare system-budget constraints are evident in some countries, and that means also that capital intensive projects may be a little bit further scrutinized and somewhat postponed. But on the other hand, we also see very clear government initiatives to target certain areas of the healthcare system with big investments, so that could be an interesting factor for us and the companies within the group. And combined with that, of course, showing the value of the technology that we bring and the productivity increase that it could bring to the healthcare system is, of course, extremely valuable, again, an area of strength for the ad life companies. The large manufacturers are indeed changing their -to-market strategies, and that opens up for opportunities for the ad life companies. We're seeing some companies pulling back from some of the smaller markets in which we're strong, and we're also seeing larger companies abandoning certain areas and reducing staff in the local organizations, and with that, losing some of their credibility and strength in the market. Again, another opportunity for the ad life companies to enhance the positions. The priorities and actions for 2024, they do remain the same, protecting and improving profit, the organic growth, the cash flow, and then acquisitions. And I think it's fair to say we're making good progress in all of these areas in this quarter. We will talk a little bit about the improvement initiatives and starting with that vision. Here, as many of you know already, we had a fairly comprehensive restructuring of this organization going back to a decentralized business model that we really like, and with that, we are seeing a significant cost reduction. We had promised around 20 million in cost reduction on an annual basis, and we are meeting that target and we are exceeding it. We have dismantled the central functions, but also seeing a lot of efficiency improvements in the respective companies. The product portfolio and sales efforts are now focused on profitable segments. We are seeing improved margins, and now the activities that we are driving within these separate companies are shifting focus more and more towards driving sales growth. Another important factor in improving our profitability is, of course, our initiative to progress with the closure of the Camano business. I'm pleased to note that that is progressing according to plan, and in this quarter, in Q2, we did see significant cost reductions already. It is important for us to take good care of the patients and the users of this technology, and the end customer really is the municipality who takes care of these patients. The last municipality will migrate their users during the third quarter of this year, and with that, we expect to be able to close down the business fully towards the end of the third quarter. That means that all costs should be gone by Q4 of this year, and just as a reminder, we are talking about here a full year cost in 2023 of around 60 million, and the cash flow effect of around 90 million. So as you can see, we're making great progress with the profitability improvements, and there is also significant work going into working capital efficiencies and cash flow improvement, and that gives us confidence in moving forward with the acquisition strategy. This is a strategy that has been reviewed and updated in the past year. So I'm pleased to note that in early July, we were able to close the deal to acquire Bonsai Lab, a leading Spanish distributor in the field of cell and molecular biology. This field, cell and molecular biology, is a fast-growing and profitable segment, and it is a prioritized one for AdLife, so it really fits the strategy well. The company has around 8 million euros in revenue and 13 employees, and has operations in Spain as well as Portugal. Bonsai Lab will be included in the lab tech business area, and more specifically within biomedical research. So we're really excited to welcome the Bonsai Lab team to the AdLife family. Most welcome to all of you. So now we move forward to the summary and the outlook. So we are very, very pleased to note that our companies are growing strongly and with good profitability, and this is true for almost all the companies within the group. We have a very competitive customer offering and well-positioned product portfolios, so that bodes well for the future. The restructuring and the efficiency initiatives, they are now yielding distinct results showing in the profitability numbers. We're very pleased to see that, and that will be continuously a priority for us. The cash flow improved significantly in the quarter, and with that we have completed an acquisition which is perfectly in line with our long-term strategy. The companies within AdLife have had a great first half of the year, so congratulations to all of you, dear team members. You're doing a fantastic job, and I think the prospects are really good for the remainder of the year and for the future. So thanks everyone, and now we open up for a Q&A session. And again, I want to remind you to stay on after the Q&A as well to see a great video of the Biomedica Company.

All right. Hello everyone. So let's get going with

the questions then. I see that Carl, you raised your hand.

If

you want to go ahead,

don't forget to unmute your microphone. Can you hear me? Yes, we hear you now Carl. Yes,

good. A couple of questions from my side. Maybe we start with the lab tech, where you saw quite good growth, but the margin was down a little bit year over year. I joined the call a little bit late, so maybe you touched upon this, but is it possible to tell us a bit more why the margin was a bit weaker year over year in lab tech?

I think we don't make too much of it. I mean, we talked about the range of 10 to 12 percent. Now it's 11.6, so I think it's a decent margin. It varies a little bit quarter to quarter, so we don't, you know, there's nothing big in there that makes a change really. Just something you like to add to

that. And then a question on the medtech side. I mean, quite strong margin improvement here. So I was just wondering a bit if you could quantify maybe a little bit where the advision is trending right now in terms of the margin development there. Is it mid single, mid high single digits or?

It's mid single digits still. I think they improved significantly last quarter and they're continuing in that same pattern, so to speak. So still in the mid single digits profitability. And do you expect that to improve in second half compared to Q2 levels? In second half, yes. You know, I'm not saying it's an easy thing, but costs have come out significantly. The commercial focus is there. We're focusing more on high profit products and we have been ready to abandon lower margin products and now we're shifting the focus in the improvement activities clearly into sales and the commercial activities, supplier focus, new customers. So yes, I expect it to improve.

That's clear. And then there's the question in medtech here also. You had a quite strong Q3 last year, I think, where the margin improved sequentially within the medtech side. I don't think that's the normal seasonality. Can you just remind us a little bit how we should think in the medtech margins here going into Q3?

Yeah, that's a great comment, Carl. I think we have to remember that a lot of the surgical activity, the planned surgery activity normally comes down in the summer months. So I think it's reasonable to expect that this summer as well. And many of our companies, you know, are clearly impacted by that, like Health Care, like MBA, Medi-Plus, and so many of the large companies will feel a lower surgery activity during summer. So that seasonal pattern is there for sure.

Okay, so a little bit lower margin than being Q3 compared to Q2, I guess. Yes, I think we have to think that, yes. Yeah, that's good. Just the last one from my side on the acquisition of the Bonsai Lab. Yes. Would be interesting if you could quantify a little bit regarding the margins in that business going forward. Well,

I think we have identified that, as you also noted, that this is one of the segments that we identified as prioritized, and it's because it's a fast-growing segment and also a profitable segment. So we don't give the detailed numbers on that, but it's clearly above what we're seeing in Lab Tech today. So it contributes nicely to margin improvement in that way. Yeah. That's all for me. Thank you. Thanks, Carl. Thanks. So let's move

on now. And I think we have Ulrik. Please don't forget to unmute. Now, hopefully you can hear me. Now, now I hear you.

Yes.

Please go ahead. Good

morning. Thank you very much. A few questions on my end, and perhaps we could start off with the Lab Tech segment. It showed some really strength here in Q2, but still, you sound like there are limitations in the cap expending, both in the academic side and on the diagnostic side. So what current sort of trend or current trading are you seeing in those segments, and do you have any expectations on when they are to be lifted? And do you believe that it's manageable for Lab Tech to continue at this high pace of organic growth for the second half of the year?

Well, I think we don't want to give an outlook on specific growths. But of course, clearly, Lab Tech is growing faster than the market. We have to remember, Lab Tech market is maybe around 3%. But we are shifting focus towards more high-growing segments, right? So that's a key driver. I think you shouldn't make too much of this investment hesitancy in big instruments, because most of the time, actually, our instruments aren't like multi-million type of instrument sales in terms of the cost. They are high-value products, but not the biggest investment types that you can think of. So there's a little bit of hesitation, and we want to be open with that. And we've seen some industry peers talking about the same thing. However, it's not an enormous effect. We think the leads we have, the projects we're working on, we still expect them to be finalized during the year. And it's also not always a bad thing to delay an investment a little bit, you know, because oftentimes we can use the old instrument for a little bit longer and continue selling the consumables and reagents for that. So for us, it's not an enormous thing. We just want to highlight that there is a little bit of a cautiousness there. And also, again, if there is a cautiousness in the academic research, you know, on the industrial side, there is certainly not that. And there, the demand is strong. So not to worry there, I think.

Great. Thank you. And the next question would be on medtech. And you're obviously experiencing strong underlying trends in elective surgery that is supporting very high growth. Two-part question there. I know there's a strike in the UK and Sweden. How much of a limitation have that played out in Q2? And follow up, which would be quite contradicted, then. Election in the UK, how much of that played into potentially on favouring the overall elective surgery trend and on your end, positive trend on surgery volumes?

Yeah, that's a great question. I think we have that pent up demand, the waiting list, for sure. I think that the general trend in the second quarter was that, you know, it wasn't a quick reduction of those waiting lists, right? So, I mean, in multiple countries, we actually saw that the number of procedures wasn't that high in the quarter. So it's more like the curves of the waiting list flattening rather than, you know, coming down. And of course, the strikes are part of that, you know, both in Sweden and in the UK. We have lost a few surgery days from the strikes, right? And that has an impact. So, yes, it hasn't been as strong in this quarter, but I think, you know, the waiting lists are there, the patients needs to be handled. So, you know, that has to be taken care of. And I think this is a long-term effect from that sense. When it comes to elections, you know, that this Spanish elections of last year, I think, had a clear positive effect on us. Now, I'm not sure we've had such a positive effect from the UK election yet. I think it's more around a little bit of uncertainty there on the future direction. I think, long term, you know, with the new government, there might be, it's likely to be further investment in the health care system, but that's not going to materialize overnight. But I think it's not too aggressive to expect that the new government will increase fund-raising for the NHS over time. So I think over a bit of time, this should be a positive development here.

Great. Thank you. And last question on my end. And I know that you don't want to talk more specifics about bonsai labs, but if you can provide some type of granularity in terms of where target multiples are moving, I know that you historically or lately have talked about them being more favoring versus how it's been looking historically. Are you still in that phase with interest moving down that you're seeing that multiples are favorable versus historical targets?

Yeah, quick answer, yes. Favorable multiples. But of course, every deal is unique. And as you correctly state here, we have said that, you know, in the past when acquiring small to medium sized companies, maybe we paid seven to eight times EBITDA. You know, this is a deal that is quite heavy on the Arnold side because we see a great, we share with the management a great development plan for that company going forward as well. But, you know, when we talk about the, you know, the multiple, it's clearly below that range that we talked about before, seven to eight.

Great. That was all for me. Thank you, Fredrik and Kristina.

Thanks, Odrik. Great questions. And so I guess we move on now. And I think Mattias has raised his hand. So please move on

then and don't forget to unmute. Good morning. Thanks so much for taking my question.

So two questions, please. Firstly, if you can talk about the MedTech margin improvement and perhaps talk about where we are in the process of improving margin. So initiatives you have put in place when it's a fair time to assume the vast majority of those show through in the numbers. Is that by the end of this year or is it rather fair to assume that we are still in the early phase and we need to take into consideration large part of 2025 as well? And then secondly, your appetite for M&A is obviously back illustrated here through the transaction order. Can you talk about the funnel of objects that you're contemplating and that your organization is, you know, scouting and maybe how that compares with the previous sessions?

Yeah, if we start with the funnel, yes, we were very happy with the Bonsai Lab acquisition. It's a great company, great margins, great team, strong custom relationships, great suppliers. Yeah, so that is a nice addition. We have been working for quite some time on the funnel, including the updated target segments that we have defined. And so that funnel is looking good, you know, I would say for the coming quarters. And we are also looking, of course, and building a plan with a longer horizon than that. But we are also not rushed. You know, we do analyze these cases. We take the time to assess and see that it really fits and works well with our business, both from a financial and a cultural perspective. So we have a good funnel. We were working on it diligently, but we're also not, you know, getting carried away here. So I think that's important. So good funnel. And as you see, we're also pleased if we can find really good companies within the lab tech space because not only is the margin and growth profile good, but here also a nice working capital efficiency. So that's a good one. And so the second or the first question was around profitability in medtech, right? And so I think there we do like to underscore that it's actually driven by a lot of things. Good solid performance in the core companies, if you will, and that are continuing to grow and tweaking and improving and getting a nice margin improvement. And then on top of that, we have the improvement initiative. So when it comes to Camano, that one is fairly clear cut. We're seeing costs coming down now in Q2. They will be below what they were in 2023 in the next quarter as well. And we will kind of complete that dismantling during Q3. And then that cost will be gone in Q4. So that by Q4, that will be over. And then, of course, that will be nice comps for a number of quarters ahead. When it comes to admission, profitability has come back. We are in the mid single digit profitability. And so that's good. But our mission is, of course, much higher than that. So we will continue to work to move that gradually upwards. And I think it's reasonable to believe that we get back in double digit, but probably not this year. I would expect that to be somewhere around next next year. And the focus has shifted a little bit. We have we have zeroed in on the profitable segments and customers and suppliers. And we want to work really diligently with those to drive the portions of the portfolio and the business that is that has a healthy profitability. So so so you're shifting over that to to grow in profitable business. I think most of the cost reduction is probably done. So but that has gone quite well. So that was a long answer. I hope you got the answers you needed there.

Sure. Yes, the quick third one and final one, if I may. So on the cash flow improvement, it sort of feels like you sound more optimistic that there is more to do in the CEO statement. And at the same time, the mix of your business has changed somewhat with some of the platform acquisitions you did during the pandemic. And then you and Christina's inherited as a leadership team. So what in particular makes you confident that there is more improvement to do at the current stage?

Well, I think you have a good point there, that that, of course, the new larger platforms within MedTech and in particular, you know, various surgical procedures, they do carry more more more inventory. That's just what it is. We can tweak it, we can improve it. But there is a little bit of a difference in the nature of the business compared to that that has been more or traditional in our portfolio. So that's true. And that's a good point. We do think that there is all there's always room for improvement. And I think we've been really pleased to see some of the larger companies within the group really making great strides. You know, MediPlast has done a fantastic job in improving their their working capital efficiency, but also very pleased to note that NBA and have kept going to go on a little bit newer to the group have done a really good job in in scrutinizing their processes and finding tweaks to improve. And I think that's that's promising in our mind. So the work continues.

Good. Thanks so much.

All right. So now we continue

with the questions and I think we have good stuff right here. Yes, can you hear me? Yes, we can hear you. Yes.

Good morning. All right. So maybe just to start off here. I mean, in terms of these sort of structural market trends we are seeing with with the health care backlogs and so forth and also the pick up activity. I mean, are you seeing an increased competition in the market for for M&A within MedTech as well as sort of the procurement processes as sort of companies want to position themselves towards this more resilient market that we're seeing?

Yeah, so yeah, I think I mean, we can note that there are another few companies within, you know, within the space that also seem to be looking for acquisition. So we can understand that anyway. You know, it's an attractive market. It's seldom though that we kind of get into like a head to head because we try to find the leads on our own and through our networks and whatnot. So so I wouldn't view it as a problem. You make a point about resilience. I think that's that's an interesting area. I think that's a trend, you know, in in Sweden for sure and probably in all of Europe. So that's something we're we're looking at. We are, of course, already an important supplier to to the health care systems and to the military as well in in in multiple markets. So so that's an area where I think we're well positioned and we're and we're watching very closely. I think there will be some news in that area during them during the fall, for example, and for the clarity on how that's going to pay out. So was that an answer to your question? Yeah,

that's clear. That may be just a build on what Mattias was talking about regarding the medtech. Martin, I was just wondering, I mean, if you could give some more color on your portfolio of companies today. I mean, come on, you know, they come on your business was obviously running with low profitability. I mean, it's low hanging fruit sort of exiting this business. So I was just wondering if maybe the first one here, if you're doing any work work here to look in what else you can possibly divest. Then then also, if you do have other businesses running in in red numbers today.

Yeah, OK. Well, I think the vestiture not really in our playbook. So nothing planned in that area. Of course, at vision and come on, you are are are big items as when we look for performance improvement. I it's good to see, you know, most companies are doing quite well, I would say. But but not everyone, not not not every company is firing on all cylinders at once, of course. So so it's also in our nature and our culture to continuously work with those things. So we have a few areas where we have some activity to improve, but they are not of the magnitude that we've seen in come on. In addition, so so absolutely. We have a list of activities to improve margins in other parts of the of the business as well. Along with, you know, just. Profitable growth initiatives like we see in many of the other companies in the group as well, you know, expanding into two new areas, adding new suppliers, adding new customers. So there are many levers, but they were are all little smaller, I guess, than the come on you and then this one.

Yeah,

perfect.

And then just the last one here. I mean, you comment on supply disturbances still ongoing. What sort of areas are these related to?

Well, I think supply from China is still interrupted, you know, by the unrest in the Red Sea and whatnot. So that's that is affecting us to some extent. But fortunately, the percentage of products coming from China to us is very, very small. We're talking about a few percentage points here. So so not a big exposure. However, there are other suppliers and I would say primarily in orthopedics that that that are still have some challenges on the supply side. So so we have some some backlog there. And so that is an issue. And what we do there is, of course, you know, try to work proactively with those suppliers and and find ways to make sure that we don't disappoint our customers that we that we and then that we may need from time to time building buffer stock and whatnot. So so it's something we manage actively. And it's still it's still happening. And it's not it's not small numbers, actually. It's the backlogs are significant in some of the companies.

Okay, just to follow is the the reason for the supply issues within orthopedics. Is that due to them sourcing from China or is it due to something else?

No, no other manufacturing capacity constraints. Yeah. All right. So sales are good and it's hard to keep up. All right. Thank you very much. Yeah. All right. So we have further questions. We have Charles. Are you ready? Don't forget to unmute.

Hello. Thanks for taking my questions. So to the first one is on the medtech business. I don't think I've ever heard you split your product by those that are more procurement or tender based bulk buys versus things that are more sort of surgeon driven. Do you have that split? Can you give us that sort of split? And is there a difference in terms of the trends you're seeing in terms of demand or pricing in the market?

Well, a great question. You're right. We haven't really said that. What we have said is that around 80 percent of our business is long term and that could be, you know, as part of a tender, but also part of other longer term agreements or even instrument placements and stuff like that. So so that's 80 percent. But of course, we participate in tenders and we are active in that. We also sometimes don't participate in tenders if we think that they are too only price focused and it's more of a volume volume business at low margins than we may choose not to. We also supply, you know, more specialized product that aren't really part of a tender and and it's more driven, as you say, by the decisions of this individual surgeon. So when I we don't have a clear and easy way to to divide that up and say what's what. But we do both. And I think we do it well. Also, those parts of the business

and both would be growing similarly at the moment, would they? Yeah.

Yeah.

OK. OK. And then on lab tech, you mentioned that academic demand was difficult at the moment, presumably around funding. But if you could give us a sense of, you know, where that's being particularly impacted, what sort of funding sources or countries or just any other color you can around that, that'd be helpful.

Yeah. So difficult, I think is a strong word. I think we know this somewhat of a caution around there. I think the volumes, the consumables, the reagent volumes, they kind of they kind of are still there, not changing. The research projects continue. So not not a problem. Maybe there's a little bit of slight more cost consciousness around around that. And so that's what we're sensing that a little bit. But it's not it's not it's not really a big deal, I wouldn't say. We just know to a certain level of cautiousness that I think the activities are ongoing. The research projects are are still moving forward. So so I wouldn't make too much of it. And then I think also, as we also mentioned in the report, there is the other side of the business. There is the industrial research, primarily pharma and there the demand is very buoyant. So yeah, so they want to go all in all. It looks pretty good. Great. Thanks very

much. Congrats on the results.

Thank you. Thanks. Thanks, Charles. And so let's see, do we have any more questions? It doesn't look that way, does it? OK, well, then thanks, everyone, for for listening in. And congratulations to all the companies within the group for a job well done in this in this quarter. I also if you if you have a few minutes more, you know, I really encourage you to stay on and see a nice video of our Biomedica business that is really strong and centrally in Eastern Europe.

All right. Should we start the video?

Within Biomedica, we have 280 employees and those are not only coming from our territories. Within Biomedica, we have 280 employees and those are not only coming from our territories, but they come from almost all continents all over the world. And they actually significantly contribute to our culture. Having different perspectives, having different views, different ideas and different cultural background, we can actually support innovative ideas. We can pick up trends from all over the world and try to implement this into Biomedica and being part of AdLife, actually, and having all these sister companies out there in the European field. This is even more contributing to a cultural diversity. Now 45 days later, we have established 12 fully-owned subsidiaries. We are now present in 13 countries. We speak 15 languages. Nine of our countries are members of the European Union, four are non-members, and we have 10 different currencies. Being that diverse, we have to make sure that we are going to comply with all the legal regulations, not only the local ones, but also the European ones. And NDR and IVDR is only one example for the popping up or coming up in the next years and what we have to take care of. So what we have to establish is a good regulatory affairs and a quality management system where we put in all the new regulations, the documents needed, the policies needed to being able to sell our products into the various countries. Having such a broad portfolio, we can serve a lot of different customers in the healthcare sector. 75% of our business comes from the government money and 25% is from private customers. Our customers are hospitals, of course, laboratories, we have research institutions, universities are our customers, and of course the industry, pharma industry, biotech and good industry as well. Our suppliers actually really appreciate is that the medical with being headquartered in Vienna is going to provide one entry point into a very diverse territory.

We continuously have to adapt to all the local and European regulations. We have developed our quality center last year, which gives all our employees access to all process instructions, policies, trainings, which makes their lives a lot easier and it enables us to adapt to the market needs, which are also continuous changes.

I'm convinced that this cultural diversity is going to be contributing a lot to our sustainable growth.