AddLife AB (publ)

Good morning everyone, and welcome to the AdLive fourth quarter presentation. This morning we will take you through the highlights of the quarter, and then of course open up for a Q&A session. After that Q&A, we do encourage you to stay on because we have recorded a wonderful video of one of our companies, this time Biolin, a manufacturer of advanced research instruments. So now, let's go. I'm very pleased to note that the AdLab companies were able to wrap up 2025 in a good way. We saw continued profit improvement, we saw strong profit and strong cash flow. On the EBITDA margin account, we saw that Labtech were able to protect the very high level at 14.1% EBITDA margin, same as we had in the strong fourth quarter of last year. And on the Medtech side, it improved to 12% compared to 11.6%. in the corresponding quarter of last year. Overall, we saw healthy customer demand in our markets, but of course currency effects impacted our sales growth, but the currency adjusted sales increased by 2% in the quarter. We are working diligently with profit improvement initiatives, and this is one of the core parts of our business model. We have seen for many quarters now a continuous improvement, and we do expect that to continue in the future as well. In the UK, we have had a long-standing dialogue with a key partner in the area of endoscopy. They have chosen to go direct, and we have supported them in that, handing over the team and the resources related to that business, and we have received the consideration of 158 million kronas in the quarter. So this, in combination with the strong cash flow that we saw, has helped us to achieve a net debt to EBITDA of 2.2. So with this, we achieve our goal of remaining at 3 or below, and we have actually far exceeded the ambition as well. So very pleased with that. So now I hand over to Kristina, who will take us through the details of the quarterly financials. Welcome, Kristina.

Thank you, Fredrik. We had a stable growth in the quarter after a very strong fourth quarter last year. Organic and acquired revenue growth was 2%, while adjusted EBITDA growth was 5%. In the quarter, we had negative effect from currencies. And looking at revenue, it was minus 5%, and the EBITDA was impacted with minus 7%. We have two financial targets within Adlife. One is to improve profit with 15% year over year. On the long term, this is supposed to come approximately half from acquired and half from organic growth. Looking at 2025, organic growth was 10% and acquired growth contributed with additional 2%. Then we had FX impacts in the quarter, so total EBITDA growth for 2025 was 8%. So, including currencies, sales growth was minus 3% in the quarter, with organic and acquired growth of 1% respectively. We had stronger gross margin. This is due to price management, also increased prices in new tenders, and the product mix where we are moving towards more advanced high margin products. We had higher OPEX in the quarter as well, driven by growth investments and also some specific projects. The adjusted EBITDA margin was up to 12.4 in the quarter compared to 12.3 last year. Also, lower interest costs continue to have a positive impact on the profit and loss, and then adding divested operations, profit before tax increase with 129%. EBITDA margin is clearly in a positive trend. Looking back to 2023, we were at 10.5, increasing to 11.3, and now we end 2025 on 12.1. Looking at the fourth quarter, Labtech margin remained at a high level of 14.1, same as last year, while Medtech increased to 12 from 11.6. Full year EBITDA margin has also increased for both business areas. They are approximately at the same level now. Labtech 12.5 and Medtech is on 12.4. An increase in EBITDA margin has been a focus area throughout the last three years and that remains a top priority moving into 2026. Operating cash flow is normally high in the fourth quarter and this year was not an exception. We delivered almost 900 million in the quarter. For the full year, it was 1.4 billion. Also, cash conversion remains high at 111%. Excluding sales of operation, it was at a high 98%. And to be above 100, that is a little bit too high. So going forward, probably in the range of 95% is more realistic. And of course, focus on working capital efficiency remains a priority also in 2026. Working capital contributed with 426 million in the quarter. And here we had lower inventory, we had strong collection of accounts receivables, and also account payable was higher. Looking at inventory towards sales, we were at 16% throughout 2025, slightly better compared to 24, that was 17%. Acquisitions in the quarter relate to Pharmacol and OPTEC. Net debt was reduced with almost 800 million in the quarter. With majority of the loans in Euros, here we had a positive impact from currencies. But the main reason for the net debt to be reduced in the quarter was due to repayment of loans and increase of cash. When we talk about net debt, we include in addition to bank loans and deducting cash, lease liabilities, continuing consideration, pension liabilities and provisions. Net debt in 2025 decreased with almost 900 million and at the end of the year leverage were at 2.2, which is clearly below the target of 3 or below that we set up for ourselves. Net debt towards adjusted EBITDA was 2.5. The second financial target for Adlife is to have a profit over working cap of above 45%. 2025 ended at 62 compared to 51 last year. And debt has been reduced via self-generated cash flow. And entering into 2026, we now have a balance sheet that supports both organic and acquired growth. And with that, I hand over to Fredrik again.

Well thank you Christina for that thorough review and now we'll get into the business area summaries. So starting with Labtech, as you may remember Q4 of 2024 was a very strong quarter for Labtech and this quarter we saw currency adjusted revenues decline a little bit by 3%. We're really pleased to note that the EBITDA margin were maintained in spite of that slight drop in revenue so we are still at 14.1% same as the corresponding quarter last year, so that's very healthy. We saw a little bit less instrument sales in this quarter compared to last year, and in that last year quarter we had a very high level of instruments being delivered linked to various tenders that we won. In the market in general there has been some hesitation with academic market sales, We saw that this quarter also, but slightly better, I would say. We also saw a little bit of caution in the pharma industry segment. In the third quarter of this year, we were really pleased to note a very healthy development in Central and Eastern Europe, and we saw that continue into Q4, so that helped a lot. wrapping up the quarter for Labtech in a very healthy way. Moving on to Medtech then, we saw growth excluding currency effects at 4% and acquired growth was 1%. EBITDA margin improved to 12% from 11.6% in the corresponding quarter. Capital sales in the UK have been weak for some time now, as many of you have noted, We were really pleased to see that that actually improved in the fourth quarter, so that's great news. As I mentioned earlier, we have an agreement with the supplier to hand over the endoscopy business in UK and receive the consideration for that. Elective surgery in general in the European market tended to be relatively flat. The patients list weren't really shrinking and on top of that we also had strikes in UK as well as in Spain during the month of December. So the number of surgical procedures was relatively low. But anyways a good growth in the in the Medtech business and also helped by healthy development in home care which we think will continue going forward. We talked a lot about improving margins and that is indeed a key activity for us actually what we have chosen to prioritize the highest. So what are we actually doing? We are working on margin improvement initiatives in the eye surgery business, we are strengthening the margins in home care, we are working with specific initiatives in the companies where we see further improvement potential. And then on a more general level, we are always driving gradual and continuous performance improvement programs across all companies. This is a key piece of our business model. We are also pruning our product portfolio, removing products that are less profitable and adding new and advanced high margin products. We are also increasing the share of our own products and of course the acquisitions we make are focused on higher margin segments and are expected to contribute to this positive development in terms of margin. And we do these activities, we drive them, of course, starting with our fantastic companies within the group. They are all led by strong and empowered leadership teams and they have a very nice entrepreneurial spirit that we like to see. So they are very strong in this continuous work to improve margins. They are also supported by a group of experienced business unit leaders. We are also leveraging the activities we have within AdLife Academy and a strong group of business controllers. And on top of that, the companies together with their business unit leaders work on an acquisition agenda. improving margins over time. So with this we have a lot of activities ongoing, we have seen a lot of good results and we do expect those results to continue. I also want to highlight our unmatched European coverage. This is something that we have been working on for quite some time creating a pan-European footprint. So of course our origins in the Nordics are strong, but we are very strong in Western Europe, Central and Eastern Europe, as well as Southern Europe. This is important for us because it gives access to a very large market. It gives us more supplier opportunities. We are also able to choose from a broader range of acquisition targets, which is quite powerful because we can be selective and really choose the acquisition targets that are attractive in many ways, including healthy multiples. I also want to move forward to acquisitions now. Acquisitions are again becoming a very important growth driver for us and in the month of December We were very pleased to welcome two new companies to the AdLife family, starting with PharmaCold, which is specialized in highly customized refrigeration technologies, as well as services for the pharma industry and for the healthcare sectors. Together with Holman Halby's customer base and regulatory know-how, we see great potential for these highly customized products and to grow that business even further. So a very nice and healthy acquisition here, relatively small but with great potential. Another acquisition that we concluded in the month of December is a Danish manufacturer specializing in patient positioning products that address both staff ergonomics as well as the patient safety. We have worked with this company for many years, we know the products well, and they are really well renowned in the market. This business will become part of Mediplast and very much in line with the strategy that we have to increase the share of our own products. So a nice addition to the business and very much in line with the strategies that we have laid out. So very happy to also welcome Opitech to the AdLife family. So to summarize the quarter, We are very pleased to note that the margin improvements, they do continue in the fourth quarter as well as for the full year, of course. And we are working diligently on these efforts, and we do expect further potential to improve the margins going forward. Of course, currency effect impacted revenues, but organic and acquired growth were positive compared with a strong Q4 in 2024. We're very pleased with the fact that net debt to EBITDA is now at 2.2. So this means that our ambition to reduce it below 3 has been achieved and exceeded. With this, we have strengthened the balance sheet, and this enables us to really pick up the pace with acquisitions again. which we did already in December, and we expect a lot of activity going forward. So I can really say that we look forward with confidence and enthusiasm to a strong 2026. Thank you very much. And with that, we open up for a Q&A. All right, so thank you for listening in to the presentation, and now we are ready for questions and I think we see a few of you having raised their hands already. So, Philip, maybe you can start and don't forget to unmute.