AddLife said second-quarter profit margins improved and cash generation remained strong, helping drive a sharp rise in its shares. The Swedish healthcare group reported an EBITA margin of 12.6% in Q2, up from 11.9% a year earlier, while organic growth reached 4% and total revenue growth was 6%. The stock was last up 40.84% at $168.3, compared with a previous close of $119.5, placing it well above its recent trading levels and near the upper end of its 52-week range. Despite the sharp rally, InvestingPro analysis suggests the stock remains fairly valued, with the company trading at a P/E ratio of 36 but a notably attractive PEG ratio of 0.42, indicating reasonable valuation relative to its growth prospects. The platform’s Fair Value analysis places AddLife near equilibrium, offering investors a balanced risk-reward profile at current levels.
Key Takeaways
EBITA margin rose 70 basis points to 12.6%, showing continued profit improvement.Organic growth was 4%, with acquisitions adding 3 percentage points to growth.Profit before tax increased 29% year over year.Operating cash flow rose to SEK 165 million from SEK 119 million a year earlier.Management said recent acquisitions are contributing meaningfully to earnings growth.
Company Performance
AddLife said the quarter reflected broad-based improvement across its businesses, with stronger margins in both Labtech and Medtech. The company said gross margin improved by 50 basis points, helped by price management and a higher share of advanced products.
The group also said operating cash flow remained strong, with cash conversion at about 100% over the last 12 months. Working capital improved to negative SEK 149 million from negative SEK 180 million a year earlier, even as end-of-quarter sales patterns and new product inventories affected timing.
Management described the quarter as evidence that its long-running efficiency efforts are working. The company has been leaning more heavily on advanced products, product mix changes and operational improvements, while also adding growth through acquisitions.
Financial Highlights
EBITA margin: 12.6%, up from 11.9% a year earlier.Organic growth: 4% in the quarter.Acquisition-driven growth: 3% contribution.Total revenue growth: 6%.EBITA growth: 11% year over year.Gross margin: up 50 basis points.Profit before tax: up 29% year over year.Operating cash flow: SEK 165 million, up from SEK 119 million.Working capital: negative SEK 149 million, compared with negative SEK 180 million a year earlier.Leverage ratio: 2.6x, below the company’s internal ambition of 3.0x or lower.
Earnings vs. Forecast
The company did not provide actual EPS or revenue figures in the supplied data, so a direct comparison with forecasts was not available. The forecast called for EPS of $1.07 and revenue of 2.67 billion, but no reported figures were included.
Even without the direct beat-or-miss comparison, the operating data pointed to a solid quarter. Margin expansion, stronger cash flow and double-digit EBITA growth suggest the business performed well against expectations. The 70-basis-point increase in EBITA margin is a meaningful move for a company that has been emphasizing profitability improvement. According to InvestingPro, AddLife has been profitable over the last twelve months and holds a “GOOD” Financial Health score of 2.93 out of 5. The platform identifies the company as a prominent player in its industry, with over a dozen additional ProTips available to subscribers. For deeper analysis, investors can access AddLife’s comprehensive Pro Research Report, one of 1,400+ available reports that transform complex data into actionable intelligence.
Market Reaction
AddLife’s shares surged 40.84% to $168.3 from $119.5, a move that suggests investors reacted strongly to the company’s improved profitability and outlook. The stock is now trading closer to the high end of its 52-week range of $133 to $207.6.
The size of the move is unusual and points to a strong reassessment of the company’s earnings power. In a sector where daily moves are often modest, a gain of more than 40% stands out as event-driven. No trading volume data were provided, but the price action indicates heavy investor interest.
Outlook & Guidance
Management did not issue detailed quantitative guidance for the coming quarters, but it said margin expansion remains a top priority. The company said it expects the current 12.6% EBITA margin to hold at a higher level, supported by advanced products, better mix and continued operational improvements.
The balance sheet remains positioned to support both organic growth and acquisitions, with leverage at 2.6x and net debt to equity at 0.8x. With a current ratio of 1.08 and strong cash flow generation, InvestingPro subscribers can access detailed financial health metrics and peer comparisons to evaluate AddLife’s capital allocation strategy. Management also said the pace of M&A should increase, with a stronger pipeline of active processes than a year ago.
Business-specific comments pointed to continued growth in research and diagnostics, especially in Eastern Europe, gradual improvement in the U.K. capital goods market, and further progress in home care and eye surgery.
Executive Commentary
“Margins, our highest priority, are improving significantly,” CEO Fredrik said, pointing to the 12.6% EBITA margin versus 11.9% a year earlier. The comment underscored the company’s focus on profitability rather than growth alone.
“Advanced products are driving growth and margins,” he said, highlighting a core part of the company’s strategy across segments.
CFO Christina said, “The balance sheet now clearly supports both organic and acquisition-driven growth,” a sign that the company has room to keep investing while maintaining financial flexibility.
Risks and Challenges
Spain strikes: Management said labor action is reducing surgical procedures and holding back Medtech growth.Weak U.K. capital spending: Customers remain cautious about equipment purchases, which could delay revenue.Working-capital swings: Inventory and receivables timing can affect cash flow from quarter to quarter.Acquisition execution: AddLife is pursuing more deals, which can bring integration and pricing risks.FX pressure: Euro-denominated loans created a negative foreign-exchange effect in the quarter.
Q&A
Analysts focused on several key issues during the call. Questions centered on the U.K. capital products market, where management said the order book remains strong and that gradual improvement is more likely than a quick rebound. The company also addressed acquisition margins, saying the high margins of recent deals appear sustainable.
Another area of focus was eye surgery, where management said the business has moved from negative margins to the mid-single digits and should continue improving gradually. Analysts also asked about home care, which management described as a fast-growing business with better margins and new product launches.
Questions on working capital drew attention to inventory growth and receivables timing, while questions on Spain highlighted the impact of strikes on Medtech. In Labtech, management said profitability was sustainable and not driven by one-offs, with demand in research, diagnostics and genomics remaining solid.
The company also said recent tenders in Eastern Europe and Sweden should begin contributing in the coming months and may provide revenue for one to two years after award.
Full transcript – AddLife AB (0REZ) Q2 2026:
Fredrik, CEO, AddLife: Good morning, everyone, and welcome to AddLife second quarter call. As usual, we will be providing you with an overview of the quarter, then go through the financials, then have the Q&A. After the Q&A, as always, a video from one of our subsidiaries. This time around from Ropox, one of the companies within the home care area, which we are focusing on a little bit extra in this quarter. Let’s move on to the numbers. In the second quarter, we are really pleased to note that we see positive development across AddLife’s companies. Margins, our highest priority, are improving significantly. 12.6% EBITA margin for the group, compared to 11.9% in the corresponding quarter of last year. Margins improved in both business areas. In Labtech, a full 1 percentage point up to 13.4%. In Medtech, a strong improvement to 12.8% EBITA margin.
Improvement initiatives are part of our DNA, and in many areas we have had long-standing improvement efforts. In home care, we are pleased to note that we see a significant growth in the quarter and margins are clearly improving. In eye surgery, there’s been a long effort to gradually evolve the business, and now we are in a very positive margin trend, and we think this demonstrates stability and confidence in the future. Overall, sales is in a positive trend. Advanced products are driving growth and margins. We see strikes in Spain and a little bit of subdued capital spend in the U.K. market. That did hold back revenue growth a little bit. Strong growth in the Nordics, solid improvement in Eastern Europe, and continued positive development in research, as we have talked about in the past.
Then, as I mentioned early on, very good growth in home care. A lot of positives when it comes to growth. Then finally, we are pleased to note that our recent acquisitions are really meaningfully contributing to earnings growth. Now I hand over to Christina to take us through the detailed numbers.
Christina, CFO, AddLife: Thank you, Fredrik. Organic growth in the quarter was 4%, while acquisitions contributed with additional 3%. Organic growth of 4% had been adjusted for the divestment of the endoscopy business in the U.K. end of last year. Also, the doctor strikes in Spain had a negative impact on organic growth. Profit expansion or EBITA growth was 11% in the quarter. Organic growth was 5%, and acquisition contributed with additional 6%. Revenue increased with 6%. Underlying organic growth was 4%, and acquisition was 3%. Gross margin improved in the quarter with half a percentage point. This is due to diligent price management within our companies and also product mix with a higher share of advanced products. OPEX increased. This is reflecting both growth investment into current companies, but of course also the completed acquisitions and acquisition costs.
If we divide both of them, it is approximately half-half between current business and new acquisitions and acquisition costs. EBITA margin increased to 12.6% from 11.9% last year, and profit before tax was up with 29%. EBITA margin has clearly established on a higher level. It was 12.6% in the quarter compared to 11.9% last year, and EBITA margin increased in both Labtech and Medtech. Labtech increased with one percentage point to 13.4%, while Medtech was at 12.8% from 12.4% last year. Margin expansion has been a key priority for us since 2023, and that remains going forward. Operating cash flow increased SEK 165 compared to SEK 119 last year, and last 12 months cash conversion remained strong at around 100%. Operating cash flow SEK 165, working capital was a negative SEK 149 compared to a negative SEK 180 last year.
Working capital includes lower accounts payables, also slightly higher inventory driven by introduction of new products and suppliers. We had an expectation of an account receivables release in the quarter due to strong sales end of Q1. We also had strong sales end of Q2 in June, meaning that it was approximately the same numbers. Closing cash was impacted by acquisition and dividend payments. Acquisition and dividend payments of around SEK 400, lowering the cash balance is the main reason for net debt to increase in the quarter. With majority of the loans in EUR, we had a negative FX impact of EUR 58. The acquisition also comes with earnouts, and we have booked earnout liabilities of SEK 114 million in the quarter. Leverage increased to 2.6 in the quarter, mainly driven by acquisition and dividend payments. This is comfortable below our ambition of being at three or below.
Net debt equity ratio was 0.8 below the internal guidance of one, the balance sheet now clearly supports both organic and acquisition-driven growth. With that, I hand over to Fredrik again.
Fredrik, CEO, AddLife: Labtech had a strong second quarter. Currency adjusted growth was 7%, and EBITA margin improved a full percentage point to 13.4%. The positive demand trend that we have talked about for a few quarters now in research, that really did continue and strengthened further during the quarter. That is a positive sign. Customers in Eastern European countries are investing significantly in research and diagnostics. We see a positive development in multiple countries, including, for example, Poland. Recently completed acquisitions really are making a significant contribution to the positive development, both in sales and margins. Moving on to Medtech. The acquired growth was 2% and organic growth five, solid growth there. EBITA margin also improved to 12.8%. Growth and profitability was quite strong in the Nordic region. Advanced products is really driving this growth and the margins improvement as well.
In Spain, we had a good underlying growth. Our strong companies there are really delivering. However, there was a doctor strike in the country that affected each month of the quarter in a significant way. That certainly held back revenues a bit. In the U.K., the subdued market for capital investment in the healthcare system was still ongoing. It was a bit slow, but the order book for capital goods for us is strong. We are confident in the future. In eye surgery and home care, as I mentioned earlier, we have been driving long-term significant improvement programs, and we are really pleased to see that in both of those areas, we are making strong improvements. I will talk a little bit more about home care. That’s an important area for us and also where we will be focusing with the video after the call.
Moving on to home care. Here we have a quite comprehensive product offering. Our products include home adaptation to update and adapt homes for people to be able to live at home for longer. We have technical aids that are portable and fixed. We have welfare technology, various digital solutions such as fall detectors, safety alarms, and so on, and also construction supporting in the work to create adapted homes for elderly and the people with various disabilities. All in all, a very comprehensive product portfolio. This is indeed important because just one product cannot achieve the goal of having a high quality life in your home for longer. You need a range of products, which we are pleased to be able to provide. The product portfolio that we have really corresponds well with the macro trends that we see in home care.
We all know that the population in Europe and in other parts of the world is aging. With that comes the requirement for allowing people to age at home for longer. That is a quality of life topic, but also a way for the societies to handle that potential burden. Fortunately, there are a lot of new things coming, new technology. The digital products, for example, are a big piece of the puzzle, allowing for a safer environment at home, and we have those products in our portfolio. Taking care of all these elderly people is, of course, a challenge to society, in particular, in light of the fact that we see healthcare staffing shortage across Europe.
These technologies that we are able to provide from home care can really help address these things in an efficient way, taking care of more people with fewer staff. All in all, we have a portfolio that fits really well with the market trends. The AddLife home care offering then to summarize, it’s a comprehensive combined product portfolio which we’re quite proud of. We have a large share of proprietary products, much more than the rest of the company. Actually, around 50% of the products we make ourselves. That’s clearly a strength. We are well established in the Nordic region, and the Nordic region is leading in many areas of home care. We have a growing export business, and we certainly have the ambition to expand this business outside of the Nordics.
The business unit consists of six well-established companies, a turnover of around SEK 700 million, and with improving margins. To summarize the second quarter. We see consistent positive development across the board. Sales, earnings, operating cash flow all developing quite well. We have been driving for quite some time, the initiatives to increase the share of advanced products in our product portfolio, and we are certainly seeing that in this quarter that it is generating both growth and improved margins. We are also consistently and diligently driving improvement efforts in our companies, and sometimes these are long-term efforts. In home care and eye surgery, we have really seen in this quarter strong improvements and stability that gives us good confidence for the future.
We see strong growth in the Nordics, in Eastern Europe, in research, in home care, and we are really pleased to note that the recently acquired companies are making a significant and important contribution to our earnings growth. Also, of course, we are actively pursuing a number of new acquisitions. We are developing our processes, and we are developing the resources to further pick up the pace when it comes to acquisition. With that, we can sum up the quarter and open up for Q&A. Okay. We got a bit of an echo here, but let’s open up for questions. Maybe we start with Sino.
Sino, Analyst, Handelsbanken: Yes. Good morning. Sino from Handelsbanken here. I’d like to start off on the U.K. capital products you talked about. A bit low on the sales side, but strong order book. Can you talk a bit about the conversion assumptions you have for H2 related to that?
Fredrik, CEO, AddLife: Yes, I will answer that. The question was around the U.K. capital investment. You are correct. We had a quarter where we continued to see a bit of a hesitation around the capital investment, as we’ve seen in previous quarters also. This continued in the second quarter, but I would also say that we are fairly confident in a positive development there because we do have a good order book. We have instruments in stock, and we have orders, so we will be delivering those as it suits the customer. A little bit of still a slow-moving activity there, but the orders are coming in, and we are ready to ship.
Sino, Analyst, Handelsbanken: Understood.
Fredrik, CEO, AddLife: Does that answer your question?
Sino, Analyst, Handelsbanken: Yes, very much. I know you don’t report it, but is it possible to share and talk about the book-to-bill on the segment?
Fredrik, CEO, AddLife: Yes, we had a little bit of trouble hearing the question. Could you please repeat?
Sino, Analyst, Handelsbanken: Yes, of course. I know you don’t report on it, is it possible to talk about the book-to-bill in the segment? I’m sorry, I can’t hear you. Okay. Now. Can you hear me?
Fredrik, CEO, AddLife: Yeah, we can hear you.
Sino, Analyst, Handelsbanken: Perfect. Is it possible to comment on the book-to-bill in the segment? Can you hear me?
Fredrik, CEO, AddLife: No, I wouldn’t want to comment on a detail level like that. I think, as I mentioned, there is a bit of a
Sino, Analyst, Handelsbanken: I could not hear the last part, I heard that you could not comment on it, at least. You guys are muted.
Fredrik, CEO, AddLife: Did you have another question, Sino?
Sino, Analyst, Handelsbanken: Just lastly on that same topic, if there are any new dynamics to it, or if it’s just the same as we’ve seen in the past quarters.
Fredrik, CEO, AddLife: Yeah, we’re working on the sound quality.
Sino, Analyst, Handelsbanken: Okay.
Fredrik, CEO, AddLife: Is it working now? Can you hear us?
Sino, Analyst, Handelsbanken: Yes.
Fredrik, CEO, AddLife: Okay, good.
Sino, Analyst, Handelsbanken: Yes, now it’s working
Fredrik, CEO, AddLife: Yeah. Sorry about that. Let’s give it another try. Sorry about that. Please give us your final question again.
Sino, Analyst, Handelsbanken: Yes. The final question on the same topic. I’m wondering if the hesitation that you’re seeing, if you could talk a bit more about the underlying drivers behind that. Since you have increased order intake, or it sounds like that, if there are any concrete shifts you can talk about that happened during the quarter?
Fredrik, CEO, AddLife: Okay. That’s a great question. I think the challenge that we’ve seen for quite some time now in the U.K. has been a knowledge that there’s going to be changes in how things are done in the NHS. I think that change is continuing. We have been seeing, for example, new guidance for procurement that was issued in June. This change towards more, for example, more value-based procurement is continuing. That’s a positive. I think the slow sales of capital has been there for a while, we all know that cannot go on forever. Equipment needs to be changed and updated, and so on. I think what we’re seeing is a decent development after all. In this quarter, we know that some of the customers preferred to wait a little bit with deliveries. For what reason, we don’t know.
I think we shouldn’t expect a massive change in the short term. I think what we’ve seen in the past is slow, but gradual improvement, and I think that’s the case this time around as well. The number of procedures seems to be growing. The waiting lists are coming down, not drastically, but a little bit. I think what we can conclude is gradual improvements and not a dramatic shift.
Sino, Analyst, Handelsbanken: Very clear. Thank you.
Fredrik, CEO, AddLife: Okay. Let’s move on. We have, let’s see, Alvin here. Are you ready?
Alvin, Analyst: Yes. Good morning.
Fredrik, CEO, AddLife: Morning
Alvin, Analyst: Thank you for taking my questions. Maybe beginning a little bit on looking at the acquisition breakdown in the report. From what I can gather, since you’ve consolidated the businesses and the kind of pro forma first half of the year, the margins in these companies seem really, really strong. Is there anything we should have any respect for in that regard that has affected these companies’ performances so far during the year? Or is this the level where you expect these companies to operate as, given that it’s more or less twice the margins of AddLife as a whole?
Fredrik, CEO, AddLife: Yes. That’s correct. You’ve done a good analysis there. The acquisitions we have made in the past few quarters are quite solid when it comes to growth and margins. There is nothing out of the ordinary, really, in the margin levels in the quarter. We do expect continuing roughly at that level. Is there something you have to add to that, Christina?
Christina, CFO, AddLife: No, I think that that’s as far as functions. That I think those are high margin companies, so we could expect this to continue.
Alvin, Analyst: Okay, great. Maybe looking a bit on eye surgery as well, and home care. It’s obviously positive to see that the initiatives are yielding such good results in home care, and that in eye surgery that your gradual improvements there. Can you perhaps give us some color on how far you’ve progressed within eye surgery, how much improvement potential do you still have left in that area of your businesses, and how far away in time do you feel that that is until you’re “done” with those improvements, so to say? I think your sound went away.
Christina, CFO, AddLife: You’re muted, guys.
Fredrik, CEO, AddLife: Okay. Now can you hear us?
Alvin, Analyst: Yes.
Fredrik, CEO, AddLife: All right. We start with eye surgery now. Eye surgery has been a long-standing improvement project. We have addressed cost, we have addressed product portfolio. Having done that, we have shifted over to focusing on sales. Now there has been a while where we actually had a negative EBITA margin. We have started to move upwards. In the last year, we had around mid-single digits margins over the past year. Now we have seen a gradual improvement from that, and we also did not see the drop in margin that we did last year in the second quarter. Instead, the margins continue to improve over the year. That gives us much better confidence that we are on the right track here. We are now above that 5% level that we were at last year, gaining a few percentage points.
We do think that evolution will continue. We know that some of the companies are in double digit territory. We think that the whole group should get to that level in the coming quarters. Not super quick, but gradually in that direction. When it comes to home care, here we have also had a number of improvement initiatives. Here we see a combination of stronger growth, new product launches, and more streamlined operations, more efficient operations. With that, we are confident too that we are on the right track there as well. We are at a very good margin level in this quarter. Q2 tends to be the strongest quarter in home care, but I think we are still pretty confident that this is also a business that will be contributing to margins. On top of that, it is a fast-growing business as well.
I think we are fairly optimistic about home care as well, and the position is strong. Many companies are showing improvements. I hope that was an answer to your question.
Jakob, Analyst: Yes, of course. Maybe if I may, one last question is regarding working capital. You had quite a big buildup in Q1. If I remember, it was due to quite significant late deliveries toward Q1. Then you have a more favorable working capital effect year-over-year here in Q2. I would have expected perhaps a bit more favorable effect, so to say, in the quarter, given the buildup in Q1. Is there anything specifically driving these dynamics here in Q2 that we should be aware of, and should these effects reverse to a larger extent than normal towards H2? How should we think about working capital?
Fredrik, CEO, AddLife: I think that’s a great question and good observation there. I think we still had a fairly high inventory in the quarters, and that was partly driven by, of course, these deliveries and related to the order book that we had that didn’t happen in the quarter. In the first quarter, in the final month of the quarter, we had a strong sales increase. That then, of course, ties some more capital in accounts payable, or accounts receivable. Actually, if everything would have been stable throughout the quarter, you would have seen a little bit of a release in accounts receivable. We had, in some ways, a similar pattern in Q2, a strong final month of the quarter. Therefore, we didn’t have maybe a release of accounts receivable that we thought. Maybe you want to add to that something, Christina?
Christina, CFO, AddLife: Well, no, as you said, we also expected a release in accounts receivables. Like Fredrik said, strong ending to the Q1 was the reason in Q1 for building working capital, and we had the same situation in Q2 then with a strong June. Also inventory increased a bit, but that is mainly driven than one that we haven’t delivered on order intake that we have in orders. Also that we introduce new products to the market. We are hoping that we will have a release in accounts receivables, assuming a more steady pattern throughout the quarter in sales then. No worries otherwise. As usual, this is a focus area for us.
Fredrik, CEO, AddLife: Absolutely. Yes. Should we move on then? I see that, Jakob, you have a question or two.
Jakob, Analyst: Yeah. Good morning. My first question is on M&A, and I appreciate the comments here in the report that you have a lot of active processes. From my perspective, you’ve been talking about the intention to do more for some time now. When I calculate over the past year, you have only added 2% to top line from M&A, which I guess is below your ambitions. I’m just wondering if there’s hard-to-close deals or if it has taken some time to sort of get going with the M&A engine or what you’re seeing there.
Fredrik, CEO, AddLife: Well, thank you, Jakob. That’s a good comment. We do need to increase the pace, and it depends a little bit on how you look at it. If you look at the past seven months or so, we have done four deals, but some of them have been on the smaller side. As was previously commented also, they have been also with quite nice margins. That also helps for sure. We do have a lot of discussions ongoing. The timing of it is sometimes a little bit tricky, especially when we focus on these small and medium-sized companies and we have processes exclusive with the seller. We do feel quite confident about the pipeline and about the processes that we’re in and that we’re about to enter. I think we’re on the right track here.
The pace when it comes to revenue in relation to the total will need to pick up a little bit. I agree with that, I think we are fairly confident that will happen.
Jakob, Analyst: Okay. If I may follow up, if you look at the active processes you have now in a late stage and I guess the sort of sales or EBITA potential of those, is that sort of materially higher than it was a year ago?
Fredrik, CEO, AddLife: Yes. I would say so. Absolutely. In the number of processes that we are in an advanced stage, for sure is higher than last year.
Jakob, Analyst: I have a question on Labtech, which did a strong profitability here in Q2 and has been at strong profitability levels for some time. I guess my question is there any one-offs or large orders or something that is helping that, or do you see the current profitability level as sustainable?
Fredrik, CEO, AddLife: Nothing particular in terms of one-offs really.
Christina, CFO, AddLife: No. It’s not.
Fredrik, CEO, AddLife: It’s progressing well as it usually does. Diagnostics quite stable, moving forward, adding products, winning tenders. Research, we see a pickup in demand as we have talked about earlier, but that continues. That’s a nice development there. No, I think it’s nothing out of the ordinary, but we have also noted a good demand development in Eastern Europe. That’s another positive, and of course, last quarter we talked a lot about genomics, and that’s also a positive in Labtech. Nothing out of the ordinary, but a lot of good things going on.
Jakob, Analyst: Okay, good. On Medtech EBITA margin, I’m wondering if it’s possible to quantify how much gain or tailwind you get from improvements in home care and ophthalmology in this quarter?
Fredrik, CEO, AddLife: I wouldn’t want to quantify that. I can give you some hints then. I think that when it comes to eye surgery, we have talked about mid-single digit margins in the past. Now that has improved a few percentage points, we haven’t seen the reduction in margin in the second quarter that we’ve seen in previous years. That gives us confidence that we are on the right track. When we talk about home care, a very strong growth there and a lot of companies contributing to that growth. Pleased to note that due to product launches, product mix, increased sales and the margins have increased. Normally, it tends to be slightly below the average of the group, but in this quarter, it was actually a positive contributor.
I think that in the future it should be something important for us in terms of margin support and then also quite healthy growth. I think that’s a positive. I think we cannot give into the specific numbers there. Good contribution there and good outlook, I would say.
Jakob, Analyst: Okay, good. If I may have a final question, just on Spain. It looks like it was quite good growth despite the strikes here in the quarter. I guess the question, is there anything in particular that is driving Spain or something you’re doing well there?
Fredrik, CEO, AddLife: I think I would highlight two things. First of all, our Medtech business in Spain is MBA. They’re doing a fantastic job. They’re continuously evolving the product portfolio, adding more and advanced products to the mix. They have a fantastic underlying growth. The strikes that have been ongoing for about a week per month during the quarter, they have held back on many of the planned surgical procedures. That has been a not insignificant drag, but the overall still growth. Also on the Labtech side, we have strong primarily genomics business in Spain and Portugal, and that developed also very nicely. Spain is going well in many ways, and in spite of the little bit of a headwind there when it comes to the strike.
Jakob, Analyst: Okay, good. Thank you.
Fredrik, CEO, AddLife: Thank you. Let’s see. Do we have more questions?
Moderator: Gustav.
Fredrik, CEO, AddLife: Gustav.
Gustav, Analyst, Nordea: Yes, good morning. It’s Gustav here from Nordea.
Fredrik, CEO, AddLife: Morning.
Gustav, Analyst, Nordea: Good morning. Just to be on Spain here and Jakob’s question, is it possible to say, quantify, I know maybe you don’t want to quantify, but just elaborate a bit on the margin impact, negative impact from the strikes in the quarter. What could Medtech have been, so to say?
Fredrik, CEO, AddLife: I probably will not give you a detailed answer to that, I’ll give you some flavor at least. I think in the Spanish business, now we’re focusing on Medtech then. We are seeing one week per month of strikes, during that week, of course, it’s not that there are no surgical procedures, but it is a significant reduction in procedures during that week, for sure. It’s compensated in some ways, but that’s a significant impact during that week each month. That’s one thing. There is a lot of work to add new products, that’s going very well. That also drives an improvement in gross margin. The gross margin is improving in our Spanish business because of the product mix primarily. Of course, adding new products also requires a lot from us in terms of staffing and running trade shows and whatnot.
That’s a cost associated with these advanced product. I think it’s being compensated by the better gross margin. Once you see increased sales, of course, that would be a positive, we hope these strikes will be resolved soon.
Gustav, Analyst, Nordea: Yeah. Do you see any risk of, what you hear today, risk of strikes in Spain or U.K. here in Q3?
Fredrik, CEO, AddLife: A risk of what? I didn’t hear that.
Moderator: Strikes.
Gustav, Analyst, Nordea: Risk of strikes also.
Fredrik, CEO, AddLife: I think from what I understand, these are difficult topics to speak with confidence about, my understanding is that the strike situation in U.K. has improved a little bit. There has been some agreements and whatnot. Maybe a little less worry there. The Spanish one has been ongoing now for five months. That’s a long time. I don’t want to speculate on how quickly that can be resolved. In general, there will be pressure to get that sorted one way or the other. That’s certainly a hope that will go away soon.
Gustav, Analyst, Nordea: Yeah. Okay, perfect. Then just one last question on Labtech here. You comment on in the quarter that you’re seeing some results from the previous larger tenders that you won, but you also comment on securing new tenders. Just are these material and should we expect them to come through already here in Q3, or?
Fredrik, CEO, AddLife: I think material tenders. As you correctly state, we are benefiting from previously won tenders and sometimes the installation of instruments and machines can go on for one to two years after the tender has been won. I think we’re benefiting from that. Then, of course, the consumable side of things. We have spoken about tenders won, then I’m particularly thinking of a number of tenders in various parts of Eastern Europe, but also another big one in Sweden. These tenders should start to come into fruition in the coming months, I would think. I think that’s a positive. The Swedish one, you can find that it’s SJ Atlant. Positive there. Those things tend to become very long-term positive additions.
Gustav, Analyst, Nordea: They tend to be gradual, or is it full effect from day one?
Fredrik, CEO, AddLife: Well, some of them can be a big immediate effect if it’s big instrument installations. I think more normally it would be such that there’s an over time replacement of previous instruments that can stretch over a two-year period, then, of course, the new pricing would come to effect immediately. That should be a positive normally, then consumable. I think it’s both a bump and then establishing business at a higher level.
Gustav, Analyst, Nordea: Perfect. That was very clear. Thank you for taking my questions.
Fredrik, CEO, AddLife: Thank you. Let’s see, do we have any other questions? I know it’s a busy reporting day today as well. Thank you for listening in, and we do apologize for the challenges with the sound there. If you have a few more minutes, we do encourage you to stay on to see a nice video from the Home Care business unit focusing on Ropox, a really strong company that has great product range, but also quite qualified manufacturing. Thanks, and please listen in a few more minutes. After that, we wish you a good Thursday and a nice summer.
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