AddLife — Interim / Quarterly Report 2018

Jul 13, 2018

INTERIM REPORT 1 JANUARY – 30 JUNE 2018

" Continued favourable development"

1 APRIL – 30 JUNE 2018 (3 MONTHS)

• Net sales increased by 9 percent to SEK 622 million (572).
• EBITA increased by 9 percent to SEK 63 million (57), corresponding to an EBITA-margin of 10.1 percent (10.1).
• Profit after tax increased by 19 percent and amounted to SEK 35 million (29).
• Cash flow from operating activities amounted to SEK 29 million (37); the decrease is attributable to changes in preliminary tax payments.

1 JANUARY – 30 JUNE 2018 (6 MONTHS)

• Net sales increased by 6 percent to SEK 1,219 million (1,148).
• EBITA increased by 8 percent to SEK 120 million (111), corresponding to an EBITA-margin of 9.9 percent (9.7).
• Profit after tax increased by 5 percent and amounted to SEK 61 million (58).
• Earnings per share amounted to SEK 2.54 (2.39). For the 12-month period, earnings per share amounted to SEK 5.09 (5.12).
• Cash flow from operating activities amounted to SEK 68 million (84), the decrease is attributable to changes in preliminary and final tax payments.
• The equity ratio amounted to 42 percent (40).
• Return on working capital (P/WC) amounted to 65 percent (64).
• During the interim period two acquisitions have been completed, and another one after the end of the period, with a combined annual sale of about SEK 110 million.

	3 months ending				6 months ending	12 months ending
SEKm	30 Jun 18	30 Jun 17	change	30 Jun 18	30 Jun 17	change	30 Jun 18	31 Dec 17
Net sales	622	572	9%	1,219	1,148	6%	2,404	2,333
EBITA	63	57	9%	120	111	8%	243	234
EBITA-margin, %	10.1	10.1		9.9	9.7		10.1	10.0
Profit before tax	42	38	10%	76	76	0%	158	158
Profit for the period	35	29	19%	61	58	5%	123	120
Earnings per share, SEK	1.45	1.21	20%	2.54	2.39	6%	5.09	4.95
Earnings per share after dilution, SEK	1.45	1.21	20%	2.53	2.39	6%	5.08	4.94

AddLife in brief

AddLife is an independent provider in Life Science that offers high-quality products, services and advice to both the private and public sector, mainly in the Nordic region. The Group is divided into two business areas: Labtech and Medtech. The Group comprises 30 operating subsidiaries that provide equipment, instruments, medical devices and reagents, as well as advice and technical support to customers primarily in healthcare, research and academia, along with the food and pharmaceutical industries. The Company is mainly active in the Nordic countries and is also represented by smaller businesses in Germany, the Benelux countries, Estonia, Italy, UK and China. AddLife is the market leader in the Nordic region in several well-defined niches in the market areas of diagnostics, medical devices, biomedical research and laboratory analysis.

Comments by the CEO

AddLife continues to perform well and during the second quarter sales rose by 9 percent to SEK 622 million. The business situation remains favourable with stable and high demand in most of our niches. Organic sales growth was 3 percent for the quarter and both business areas reported positive organic growth. Strong sales in several markets in Medtech compensate for the continued weak sales to health services in Finland. The acquisitions contribute with growth of 3 percent for the quarter. Overall, the Group's companies performed well in the quarter and delivered improved EBITA result. The quarter's EBITA margin was 10.1 percent, which is at the same level as previous year. Accumulated for the entire period, sales increased by 6 percent to SEK 1,219 million and we have improved both EBITA result and EBITA margin. Our business model stands firm and our methodical efforts to build a long-term sound and profitable business in Life Science continues.

Markets

The business situation in the markets we are active in continues to develop well. The trend in society with a growing and aging population suffering from chronic diseases that require lengthy treatment is clear throughout the Nordic region. Demographic research indicates that the proportion of the population that is age 80 or older will double over the next 20 years. In order for society to meet its future obligations, structural changes will be required in health care to improve efficiency and adopt a preventive approach. AddLife can make a difference by offering new treatment options, proactive diagnostics, technical aids and digital solutions

that contribute to both patient and social benefit. In all Nordic markets we see various initiatives to shift care and treatment from the hospital to the home. All of the Nordic countries are focusing on Life Science in various ways to strengthen their respective competitiveness in Life Science research.

In Sweden, the government's Life Science office has formulated a roadmap with prioritised areas to further strengthen Sweden as a Life Science nation. Increased collaboration involving health care, academia and the business community is essential to consolidate Sweden as a research nation and to ensure sustainable welfare with access to innovations and new technology.

Denmark's government has adopted a growth plan for the Life Science industries, and the pharmaceutical industry in particular will be further strengthened. The pharmaceutical industry, which has experienced positive growth, has implemented several staff cutbacks over the past few years, but continues to invest in both research and production.

The Norwegian Life Science industry is growing year by year. The government's investments in both medical care and research continue, with a sharp focus on cancer, a research area that Norway wishes to gain ground in. There is also an express political goal for more elderly people to live at home for longer, with a greater need for various assistive devices for home care.

In Finland, discussions continue regarding both health care and healthcare reform. In June the government announced that the aim of the reform is to offer equal treatment throughout the country beginning in 2021. Several questions remain regarding what this will entail for the various stakeholders and the market is therefore perceived as cautious within certain segments.

Our export markets are developing well, with high demand for our own products in both health care and laboratory.

Acquisitions

We are constantly looking for new acquisition candidates and suppliers with Nordic potential, companies that drive the Life Science market. During the first quarter we completed two small acquisitions, Ossano Scandinavia and Food Diagnostics, which together are expected to contribute about SEK 30 million in annual sales. During the second quarter they were integrated into our existing Medtech and Labtech operations. After the end of the period Väinö Korpinen Oy was acquired for the Medtech business area. The company has around 15 employees and sales of about EUR 8 million. The company develops and designs accessible bathroom solutions, primarily intended for nursing homes for both private and public environments. The acquisition is a positive complement to AddLife's other companies in home care in the Medtech business area.

Kristina Willgård, President and CEO

Group development in the quarter

Net sales in the second quarter increased by 9 percent to SEK 622 million (572). Organic sales increased by 3 percent and acquired growth totalled 3 percent. Exchange rate changes had a positive effect on net sales of 3 percent, corresponding to SEK 19 million. EBITA increased by 9 percent to SEK 63 million (57) and EBITA-margin amounted to 10.1 percent (10.1). Exchange rate changes had a positive effect on EBITA of 4 percent, corresponding to SEK 2 million. Net financial items amounted to SEK -1 million (-2) and profit after financial items reached SEK 42 million (38). Profit after tax for the quarter increased by 19 percent to SEK 35 million (29) and the effective tax rate was 17 percent (24). During the quarter, the deferred tax in Norway was revalued as a result of a changed tax rate, resulting in a positive tax effect of approximately SEK 2 million.

Group development in the interim period

During the interim period, net sales increased by 6 percent to SEK 1,219 million (1,148). Organic sales decreased marginally, due to the weaker first quarter, and acquired growth totalled 4 percent. Exchange rate changes had a positive effect on net sales of 2 percent, corresponding to SEK 28 million. EBITA increased by 8 percent to SEK 120 million (111) and EBITA-margin amounted to 9.9 percent (9.7). Exchange rate changes had a positive effect on EBITA of 3 percent, corresponding to SEK 3 million. Net financial items amounted to SEK –6 million (-4), and was attributable to exchange rate changes. Profit after financial items reached SEK 76 million (76). Profit after tax increased by 5 percent to SEK 61 million (58) and the effective tax rate was 20 percent (23). The lower effective tax is attributable to the revaluation of deferred tax in Norway.

Development in the business areas

Labtech

The Labtech business area consists of 17 companies active in the market areas diagnostics, biomedical research and laboratory equipment.

		3 months ending			6 months ending	12 months ending
SEKm	30 Jun 18	30 Jun 17	change	30 Jun 18	30 Jun 17	change	30 Jun 18	31 Dec 17
Net sales	364	336	8 %	716	679	5 %	1,430	1,393
EBITA	41	39	6 %	80	74	8 %	157	151
EBITA-margin, %	11.2	11.4		11.2	10.9		11.0	10.8

Labtech's net sales increased in the second quarter by 8 percent to SEK 364 million (336), of which organic growth increased 4 percent and exchange rate changes totalled 4 percent. EBITA increased by 6 percent to SEK 41 million (39), corresponding to an EBITA-margin of 11.2 percent (11.4). Net sales increased during the interim period by 5 percent to SEK 716 million (679), which organic growth amounted to 2 percent and exchange rate changes totalled 3 percent. EBITA increased by 8 percent to SEK 80 million (74), corresponding to an EBITA-margin of 11.2 percent (10.9).

Our operations in Labtech continue to perform well in the Nordic markets. Demand is high in our diagnostics companies and our success in the market continued in the second quarter and throughout the interim period. Growth potential remains the highest within niche areas in molecular biology and microbiology. Our favourable performance can be attributed to our product portfolio from various innovative suppliers, combined with the high level of expertise within our subsidiaries. Our companies are attractive as partners in the Nordic market and we continuously engage in discussions

regarding distribution with more innovative agencies in the Nordic region. Despite our high market share in certain niches, we continue to win new bids and strengthen our positions. Instrument sales to diagnostic laboratories were lower in the second quarter than the previous year, while consumable sales for previously delivered instruments were robust in all Nordic markets.

Sales to research, both in industry and academia, developed steadily in the Nordic region. Demand is good for both instruments and research reagents. The activity level for the quarter in academia has been favourable in Sweden and Finland, but somewhat lower in Denmark and Norway. We see growing interest in instrument investments for product testing for the EU in the Nordic region, though this option is no longer viable in the UK due to Brexit.

Sales of our own instruments have shown good growth, especially in the Chinese market. This quarter we expanded our collaboration with various reference laboratories in China to offer customers testing opportunities for new instruments. In the US, our own instruments have been sold by a distributor since May, and the closure of our own sales office has resulted in additional costs of approximately SEK 2 million during the quarter.

Medtech

The Medtech business area consists of 12 companies that provide medical device products within the medtech market, with a focus on surgery, thoracic medicine, neurology, wound care, anaesthesia, intensive care, ear, nose and throat, ostomies, and home healthcare.

		3 months ending			6 months ending		12 months ending
SEKm	30 Jun 18	30 Jun 17	change	30 Jun 18	30 Jun 17	change	30 Jun 18	31 Dec 17
Net sales	258	236	9 %	503	469	7 %	974	940
EBITA	25	21	15 %	46	42	8 %	97	93
EBITA-margin, %	9.7	9.2		9.1	9.0		9.9	9.9

In the second quarter Medtech´s net sales increased by 9 percent to SEK 258 million (236), of which organic growth increased 1 percent, acquired growth totalled 6 percent and exchange rate changes totalled 2 percent. EBITA increased by 15 percent to SEK 25 million (21), corresponding to an EBITA-margin of 9.7 percent (9.2). Net sales during the interim period increased by 7 percent to SEK 503 million (469), the organic growth decreased by -5 percent, acquired growth totalled 10 percent and exchange rate changes affected positively by 2 percent. EBITA increased by 8 percent to SEK 46 million (42), corresponding to an EBITA-margin of 9.1 percent (9.0).

Sales were robust in both health services and home care during the second quarter. Strong growth in several markets compensate for the continued weak sales to health services in Finland.

Sales growth has been highest in the markets in Sweden, Norway and the Benelux countries. Our product mix throughout the period has been favourable in terms of sales, with an increase in the proportion of our own products primarily in surgery and ear, nose and throat. Growth in the markets in Sweden, Norway and Denmark is stable, with large and intensely competitive calls for tender and higher demands from health services regarding not only price, but also sustainability and reliable delivery. The increase in procurement entails both increased opportunities and increased risks for our companies.

Political initiatives and reform proposals in the Nordic countries aimed at enabling more people to remain at home will lead to positive growth in the home care market over time. Given the right assistive devices, people can remain at home longer, resulting not only in patient benefit, but also in savings for society. Our subsidiaries continue to focus on both sales resources and product development in order to further expand our offering.

Väinö Korpinen Oy, which was acquired after the period, develops and designs accessible bathroom solutions, primarily intended for nursing homes for both private and public environments. The company is expected to be a positive complement to existing companies in home care within the business area.

Financial position and cash flow

At the end of the interim period the equity ratio stood at 42 percent (40) and equity per share totalled SEK 33.12 (29.72). The return on equity at the end of the period was 16 percent (18). Return on working capital, P/WC (EBITA in relation to working capital) amounted to 65 percent (64).

The Group's interest-bearing net debt at the end of the period stood at SEK 594 million (605), including pension liabilities of SEK 67 million (60). The net debt/equity ratio, calculated on the basis of net debt including provisions for pensions, totalled 0.7, compared to 0.8 at the beginning of the financial year.

Cash and cash equivalents, consisting of cash and bank balances, together with approved but non-utilised credit facilities, totalled SEK 228 million on 30 June 2018.

Cash flow from operating activities reached SEK 68 million (84) during the interim period. The change in tax paid of SEK 24 million is mainly attributable to the payment of tax for 2017 in as well as increased preliminary tax payments in all of the Nordic countries. Acquisitions of companies amounted to SEK 19 million (249). Investments in non-current assets during the interim period amounted to SEK 24 million (18). Disposals of non-current assets totalled SEK 4 million (0). Dividends paid to the shareholders of the Parent Company amounted to SEK 53 million (37).

Employees

At the end of the interim period, the number of employees was 593, compared to 592 at the beginning of the financial year. During the interim period, implemented acquisitions led to an increase of 8 in the number of employees. The average number of employees during the latest 12-month period was 593 (518).

Acquisitions

Acquisitions completed from the 2017 financial year are distributed among the Group's business areas as follows:

Acquisitions	Time	Net sales, SEKm*	Number of employees*	Business area
TM Techno Medica AB, Sweden	January, 2017	30	5	Medtech
Hepro AS, Norway	March, 2017	165	40	Medtech
Krabat AS, Norway	July, 2017	30	13	Medtech
Ossano Scandinavia AB, Sweden	February 2018	20	5	Medtech
Food Diagnostics FDAB AB, Sweden	March, 2018	10	3	Labtech
Väinö Korpinen Oy, Finland	July, 2018	80	15	Medtech

* Refers to conditions at the time of acquisition on a full-year basis.

During the interim period, two company acquisitions have been completed;

On 23 February 2018, all shares in Ossano Scandinavia AB were acquired to the business area Medtech. The company has five employees and net sales of approximately SEK 22 million. The acquisition represents an expansion in the area of orthopaedics. After the takeover, the business has been integrated in Mediplast AB.

On 2 March 2018, all shares in Food Diagnostics FDAB AB were acquired to the Labtech business area. The company has three employees and net sales of around SEK 8 million. The acquisition entails an entry into the field of food diagnostics. After the takeover, the business has been integrated into the diagnostics company Triolab AB.

The combined effect of the acquisitions on the AddLife Group's net sales was SEK 13 million, on EBITA SEK 1 million, on operating profit SEK 1 million and on profit after tax for the period SEK 0 million. Had the acquisitions been completed on 1 January 2018, their impact would have been approximately SEK 15 million on consolidated net sales, on EBITA about SEK 1 million and on operating profit about SEK 1 million and SEK 0 million on profit after tax for the interim period.

The fair value of not yet paid contingent consideration for acquisitions made during the interim period is calculated to SEK 1 million, which is approximately 34 percent of the maximum outcome. The outcome depends on the results achieved in the companies and has a set maximum level.

According to the preliminary acquisition analyses, the assets and liabilities included in the acquisitions carried out during the financial year 2018 were as follows:

	Fair value
Intangible non-current assets	17
Other non-current assets	0
Inventories	2
Other current assets	15
Deferred tax liability/tax asset	-5
Other liabilities	-5
Acquired net assets	24
Goodwill	-
Consideration 1)	24
Less: cash and cash equivalents in acquired businesses	-11
Less: acquired debt to acquired companies	-
Contingent consideration not yet paid	-1
Effect on the Group's cash and cash equivalents	12

1) The consideration is stated excluding acquisition expenses.

Transaction costs for the acquisitions totalled SEK 0 million and are recognized as selling expenses.

During the interim period, SEK 4 million has been recognized as other operating income due to estimated contingent considerations, relating to previous acquisitions, deviated from the actual outcome.

Shares structure

The share capital at the end of the period stood at SEK 50 million.

Share class	Number of shares
Class A shares	1,011,766
Class B shares	23,605,327
Total number of shares before repurchases	24,617,093
Of which repurchased class B shares	-445,000
Total number of shares after repurchases	24,172,093

The own holding of 445,000 Class B shares corresponds to 1.8 percent of the total number of shares and 1.3 percent of the votes. The treasury shares cover the company's undertaking in outstanding call options program from 2016 and 2017. The average purchase price for shares held in treasury amounts to SEK 158.53 per share. The average number of treasury shares held during the period was 445,000 (230,000). The share price at 29 June 2018 was SEK 190.00 and the most recent price paid for the AddLife share on 12 July 2018 was SEK 210.00.

In accordance with a resolution of the May 2018 AGM, 30 members of management were offered the opportunity to acquire 170,000 call options on repurchased shares. The programme was fully subscribed. If fully exercised, the number of B shares outstanding will increase by 170,000, equivalent to about 0.7 percent of the total number of shares and about 0.5 percent of the votes in the Company. The call options were transferred at a price of SEK 15.30 per option, equivalent to the market value of the options based on an independent valuation conducted in accordance with the Black-Scholes model. The redemption price of the call options is SEK 234.40, corresponding to 120% of the average share price during the measurement period 25 May – 8 June 2018. Expiration period is from 16 June 2021 through 28 February 2022.

AddLife has three outstanding call programmes, see table below. Issued call options for treasury shares have resulted in a calculated dilution effect based on average share price for the period of approximately 0.2 percent (0.1) during the interim period.

Outstanding programme	Number of options	Corresponding number of shares	Proportion of total shares	Initial exercise price	Expiration period
2018/2022	170,000	170,000	0.7	234.40	16 Jun 2021 – 28 Feb 2022
2017/2021	215,000	215,000	0.9	222.50	16 Jun 2020 – 28 Feb 2021
2016/2019	230,000	230,000	0.9	148.10	17 Sep 2018 – 28 Feb 2019
Totalt	615,000	615,000

Parent company

The Parent Company's net sales for the interim period amounted to SEK 16 million (14) and profit after financial items amounted to SEK -5 million (-6). At the end of the interim period, the Parent Company's net financial debt stood at SEK 533 million (835). The share capital at the end of the interim period was SEK 50 million (50).

Accounting policies

This interim report was prepared as per IFRSs and IAS 34 Interim Financial Reporting. Information in accordance with IAS 34. 16A exist, except in the financial statements and the related notes also in other parts of the interim report. The interim report for the parent company was prepared in accordance with the Swedish Annual Accounts Act (1995:1554) and the Securities Market Act (2007:528) in compliance with recommendation RFR 2 Accounting for Legal Entites, of the Swedish Financial Reporting Board. The accounting policies and basis for calculations applied in the 2017 annual report for AddLife AB were also used here except for the revised accounting policies described below.

IFRS 9 entered into force on 1 January 2018. In 2017 AddLife analysed possible effects of the introduction of IFRS 9. The conclusion of the analysis is that the introduction of IFRS 9 and a forward-looking impairment model based on expected future losses has not any effect on the Group's financial reports.

IFRS 15 entered into force on 1 January 2018. An analysis of the impact of IFRS 15 on the Group was carried out in 2017. The conclusion of the analysis is that IFRS 15 has not any effect on the accrual of the Group's revenues. IFRS 15 results in increased disclosures, see table net sales by revenue type.

At the end of the interim period, the Group determined that there are no changes in the analysis regarding IFRS 9 and IFRS 15, as disclosed in the Group's Annual Report for 2017.

Alternative performance measures

AddLife presents certain financial measures in the year-end report that are not defined according to IFRS. The Company believes that these measures provide valuable supplemental information to investors and the Company's management as they allow for evaluation of trends and the Company's performance. Since all companies do not calculate financial measures in the same way these are not always comparable to measures used by other companies. These financial measures should therefore not be considered to be a replacement for measurements as defined under IFRS. This report provides information in greater detail regarding definitions of financial performance measures.

Transactions with related parties

No transactions with related parties that materially affected the Group's position and earnings took place during the interim period.

Events after the end of the interim period

On 2 July 2018, all shares in Väinö Korpinen Oy were acquired to the business area Medtech. The company has successfully established itself as the leading supplier on the Finnish market for accessible bathroom solutions. The company has 15 employees and net sales of approximately EUR 8 million. The acquisition represents a continued expansion in the home care sector.

No other events of significance to the Group occurred after the end of the reporting period.

Risks and uncertainties

AddLife's earnings and financial position, as well as its strategic position, are affected by various internal factors within AddLife's control and various external factors over which AddLife has limited influence. AddLife's most significant external risks are the state of the economy and market trends combined with public sector contracts and policy decisions, as well as competition. The risks and uncertainties are the same as in previous periods. For more information, see the section "Risks and uncertainties" in the administration report (page 44-48), in AddLife's annual report 2017. The Parent Company is indirectly affected by the above risks and uncertainties through its function in the Group.

Stockholm, 13 July 2018

Kristina Willgård President and CEO

This report has not been subject to review by the company's auditor.

Financial calendar

The interim report for the period 1 January - 30 September 2018 will be published on 7 November 2018. The year-end report for 1 January – 31 December 2018 will be published on 5 February 2019.

Teleconference

Investors, analysts and the media are invited to a teleconference at which CEO Kristina Willgård and CFO Martin Almgren will present the interim report. The presentation will be given in English and takes about 20 minutes, after which there will be an opportunity to ask questions.

The teleconference will be at 10:00 a.m. on 13 July 2018. The presentation will be available via the following link: https://5569958126.globalmeet.com/MartinAlmgren Please call on: +46 8 22 90 90 code: 113242

Affirmation

The Board of Directors and the President deem that the interim report gives a true and fair picture of the Company's and the Group's operations, position and earnings, and describes the significant risks and uncertainty factors to which the Company and the Group are exposed.

Stockholm 13 July 2018

Johan Sjö Birgit Stattin Norinder Håkan Roos Chairman of the Board Director Director

Eva Nilsagård Andreas Göthberg Stefan Hedelius Director Director Director

Kristina Willgård President and CEO

For further information, please contact: Kristina Willgård, President and CEO, +46 70 510 12 23 Martin Almgren, CFO, +46 70 228 15 45

Business areas

	2018				2017
Q2	Q1	Q4	Q3	Q2	Q1
364	352	415	299	336	343
258	245	253	218	236	233
-	-	-	-	-	-
622	597	668	517	572	576

EBITA by business area		2018				2017
Quarterly data, SEKm	Q2	Q1	Q4	Q3	Q2	Q1
Labtech	41	39	52	25	39	35
Medtech	25	21	29	22	21	21
Parent Company and Group items	-3	-3	-2	-3	-3	-2
EBITA	63	57	79	44	57	54
Depreciation intangible assets	-20	-18	-19	-18	-17	-14
Operating profit	43	39	60	26	40	40
Finance income and expenses	-1	-5	-3	-1	-2	-2
Profit after financial items	42	34	57	25	38	38

Net sales by revenue type		6 months ending		6 months ending
		30 Jun 18			30 Jun 17
SEKm	Labtech	Medtech	The Group	Labtech	Medtech	The Group
Products	499	451	950	474	418	892
Instruments	158	52	210	156	51	207
Service	59	0	59	49	0	49
Net Sales	716	503	1,219	679	469	1,148

Net sales by business area	3 months ending		6 months ending		12 months ending
SEKm	30 Jun 18	30 Jun 17	30 Jun 18	30 Jun 17	30 Jun 18	31 Dec 17
Labtech	364	336	716	679	1,430	1,393
Medtech	258	236	503	469	974	940
Parent Company and Group items	-	-	-	-	-	-
AddLife Group	622	572	1,219	1,148	2,404	2,333

EBITA and EBITA-margin by business area and operating profit for the Group

			3 months ending			6 months ending				12 months ending
SEKm	30 Jun 18	%	30 Jun 17	%	30 Jun 18	%	30 Jun 17	%	30 Jun 18	%	31 Dec 17	%
Labtech		41 11.2		39 11.4		80 11.2		74 10.9		157 11.0	151	10.8
Medtech	25	9.7	21	9.2	46	9.1	42	9.0	97	9.9	93	9.9
Parent Company and Group items	-3		-3		-6		-5		-11		-10
EBITA		63 10.1		57 10.1	120	9.9	111	9.7		243 10.1	234	10.0
Depreciations of intangible non-current assets	-20		-17		-38		-31		-75		-68
Operating profit	43	7.1	40	7.1	82	6.8	80	7.0	168	7.0	166	7.1
Financial income and expenses	-1		-2		-6		-4		-10		-8
Profit after financial items	42		38		76		76		158		158

Group summary

Income statement		3 months ending		6 months ending	12 months ending
SEKm	30 Jun 18	30 Jun 17	30 Jun 18	30 Jun 17	30 Jun 18	31 Dec 17
Net sales	622	572	1,219	1,148	2,404	2,333
Cost of sales	-395	-362	-776	-733	-1,535	-1,492
Gross profit	227	210	443	415	869	841
Selling expenses	-142	-131	-278	-257	-545	-524
Administrative expenses	-42	-32	-81	-69	-155	-143
Research and Development	-5	-4	-9	-8	-19	-18
Other operating income and expenses	5	-3	7	-1	18	10
Operating profit	43	40	82	80	168	166
Financial income and expenses	-1	-2	-6	-4	-10	-8
Profit after financial items	42	38	76	76	158	158
Tax	-7	-9	-15	-18	-35	-38
Profit for the period	35	29	61	58	123	120
Attributable to: Equity holders of the Parent Company	35	29	61	58	123	120
Earnings per share (EPS), SEK*	1.45	1.21	2.54	2.39	5.09	4.95
Diluted EPS, SEK*	1.45	1.21	2.53	2.39	5.08	4.94
Average number of shares '000s	24,172	24,387	24,172	24,387	24,214	24,347
Number of shares at end of the period, '000	24,172	24,387	24,172	24,387	24,172	24,172
EBITA	63	57	120	111	243	234
Depreciations included in operating expenses
– property, plant and equipment	-5	-4	-10	-9	-21	-20
– intangible non-current assets from
acquisitions	-16	-14	-31	-26	-62	-57
- other intangible non-current assets	-4	-3	-7	-5	-13	-11

31 Dec 17 120
-12
-7
1
-18
102
102 -

Balance sheet, SEKm	30 Jun 18	31 Dec 17	30 Jun 17
Goodwill	657	646	627
Other intangible non-current assets	512	507	499
Property, plant and equipment	79	75	71
Financial non-current assets	15	13	15
Total non-current assets	1,263	1,241	1,212
Inventories	292	271	278
Current receivables	345	368	316
Cash and cash equivalents	11	11	22
Total current assets	648	650	616
Total assets	1,911	1,891	1,828
Total equity	801	748	725
Interest-bearing provisions	67	67	60
Non-interest-bearing provisions	80	76	73
Non-current interest-bearing liabilities	-	4	7
Non-current non-interest-bearing liabilities	0	0	1
Total non-current liabilities	147	147	141
Non-interest-bearing provisions	3	3	6
Current interest-bearing liabilities	539	529	560
Current non-interest-bearing liabilities	421	464	396
Total current liabilities	963	996	962
Total equity and liabilities	1,911	1,891	1,828

Statement of change in Group equity, SEKm 1 Jan 18 – 30 Jun 18 1 Jan 17 – 31 Dec 17 1 Jan 17 – 30 Jun 17 Equity excl. noncontrolling interests Total equity Equity excl. noncontrolling interests Total equity Equity excl. noncontrolling interests Total equity Amount at beginning of period 748 748 717 717 717 717 Call options issued - - 3 3 - - Repurchase of treasury shares - - -37 -37 - - Dividend -53 -53 -37 -37 -37 -37 Total comprehensive income 106 106 102 102 45 45 Amount at the end of the period 801 801 748 748 725 725

Cash flow statement	3 months ending		6 months ending		12 months ending
SEKm	30 Jun 18	30 Jun 17	30 Jun 18	30 Jun 17	30 Jun 18	31 Dec 17
Profit after financial items	42	38	76	76	158	158
Adjustment for items not included in cash flow	23	18	45	39	84	78
Income tax paid	-17	-7	-40	-16	-66	-42
Changes in working capital	-19	-12	-13	-15	16	14
Cash flow from operating activities	29	37	68	84	192	208
Net investments in non-current assets	-13	-10	-20	-18	-44	-42
Acquisitions and disposals	-	-	-19	-249	-66	-296
Cash flow from investing activities	-13	-10	-39	-267	-110	-338
Dividend paid to shareholders	-53	-37	-53	-37	-53	-37
Call options issued	-	-	-	-	3	3
Repurchase of treasury shares	-	-	-	-	-37	-37
Other financing activities	24	8	16	227	-15	196
Cash flow from financing activities	-29	-29	-37	190	-102	125
Cash flow for the period	-13	-2	-8	7	-20	-5
Cash and cash equivalents at beginning of period	23	22	11	15	22	15
Exchange differences on cash and cash equivalents	1	2	8	0	9	1
Cash and cash equivalents at end of the period	11	22	11	22	11	11

Fair values on financial instruments		30 Jun 18		31 Dec 2017
SEKm	Carrying amount	Level 2	Level 3	Carrying amount	Level 2	Level 3
Derivatives held for trading purposes	3	3	-	-	-	-
Total financial assets at fair value per level	3	3	-	-	-	-
Derivatives held for trading purposes	0	0	-	0	0	-
Contingent considerations	5	-	5	14	-	14
Total financial liabilities at fair value per level	5	0	5	14	0	14

The fair value and carrying amount are recognized in the balance sheet as shown in the table above.

For quoted securities, the fair value is determined on the basis of the asset's quoted price in an active market, level 1. As at the reporting date the Group had no items in this category.

For currency contracts and embedded derivatives, the fair value is determined on the basis of observable market data, level 2. For contingent considerations, a cash-flow-based valuation is performed, which is not based on observable market data, level 3. For the Group's other financial assets and liabilities, fair value is estimated to be the same as the carrying amount.

Contingent considerations		3 months ending 6 months ending				12 months ending
SEKm	30 Jun 18	30 Jun 17	30 Jun 18	30 Jun 17	30 Jun 18	31 Dec 17
Carrying amount, opening balance	8	26	14	13	26	13
Acquisitions during the year	-	-	1	13	1	13
Consideration paid	-	-	-6	-	-6	-
Reversed through profit or loss	-3	-	-4	-	-17	-13
Interest expenses	0	0	0	0	1	1
Exchange differences	0	-0	0	-0	0	0
Carrying amount, closing balance	5	26	5	26	5	14

Key financial indicators	12 months ending
	30 Jun 18	31 Dec 17	30 Jun 17	31 Dec 16	31 Mar 16
Net sales, SEKm	2,404	2,333	2,168	1,938	1,562
EBITA, SEKm	243	234	218	189	135
EBITA margin, %	10.1	10.0	10.1	9.7	8.7
Profit growth, EBITA, %	11	24	47	47	13
Return on working capital (P/WC), %	65	63	64	62	64
Profit for the period, SEKm	123	120	125	112	78
Return on equity, %*	16	17	18	21	25
Financial net liabilities, SEKm	594	588	605	366	538
Financial net liabilities/EBITDA, multiple	2.3	2.3	2.5	1.8	3.6
Net debt/equity ratio, multiple*	0.7	0.8	0.8	0.5	1.6
Equity ratio, %*	42	40	40	45	27
Average number of employees	593	579	518	452	370
Number of employees at end of the period	593	592	584	545	427

* Key financial indicators are calculated based on equity that includes non-controlling interests. For definitions of key financial indicators, see below.

.

Key financial indicators per share	12 months ending
	30 Jun 18	31 Dec 17	30 Jun 17	31 Dec 16	31 Mar 16
Earnings per share (EPS), SEK	5.09	4.95	5.12	4.87	4.15
Diluted EPS, SEK	5.08	4.94	5.12	4.87	-
Cash flow per share, SEK	7.93	8.55	8.51	5.79	6.27
Shareholders' equity per share, SEK*	33.12	30.95	29.72	29.40	17.60
Average number of shares after repurchases, '000s	24,214	24,321	24,438	22,950	18,749
Average number of shares adjusted for repurchases and dilution, '000s	24,249	24,347	24,440	22,950	-
Number of shares outstanding at end of the period, '000s	24,172	24,172	24,387	24,387	19,694

* Calculations based on proportion of equity attributable to the equity holders.

In calculating the average number of shares outstanding it was assumed that the 500,000 shares at the time of AddLife AB's formation were present throughout the reporting periods. Subsequently, the bonus element of the bonus issue carried out in July 2015 was adjusted retroactively. Since there is no listed share price for AddLife during the historical financial years, the bonus issue element was calculated based on a value per share used in the time around the non-cash issue that occurred in connection with the acquisition of Mediplast. The non-cash issue itself, carried out after the three historical financial periods, is assumed in the calculation of earnings per share to have been made at fair value and therefore does not affect earnings per share for the three periods.

Parent company summary

Income statement	3 months ending			6 months ending		12 months ending
SEKm	30 Jun 18	30 Jun 17	30 Jun 18	30 Jun 17	30 Jun 18	31 Dec 17
Net sales	8	7	16	14	33	31
Administrative expenses	-11	-10	-23	-21	-50	-48
Operating profit/loss	-3	-3	-7	-7	-17	-17
Interest income/expenses and similar items	1	0	2	1	4	3
Profit/loss after financial items	-2	-3	-5	-6	-13	-14
Appropriations	-	-	-	-	46	46
Profit/loss before taxes	-2	-3	-5	-6	33	32
Income tax expense	0	0	1	1	-8	-8
Profit/loss for the period	-2	-3	-4	-5	25	24

Balance sheet, SEKm	30 Jun 18	31 Dec 17	30 Jun 17
Intangible non-current assets	0	0	0
Tangible non-current assets	0	0	0
Non-current financial assets	1,440	1,521	1,512
Total non-current assets	1,440	1,521	1,512
Current receivables	9	89	12
Total current assets	9	89	12
Total assets	1,449	1,610	1,524
Equity	584	641	646
Untaxed reserves	30	30	19
Interest-bearing long-term liabilities	66	157	123
Non-interest-bearing long-term liabilities	2	1	1
Total long-term liabilities	68	158	143
Interest-bearing short-term liabilities	749	734	712
Non-interest-bearing short-term liabilities	18	47	23
Total short-term liabilities	767	781	735
Total equity and liabilities	1,449	1,610	1,524

Note. Pledged assets and contingent liabilities for parent company

SEKm	30 Jun 18	31 Dec 17	30 Jun 17
Pledged assets	-	-	-
Contingent liabilities	41	41	40
Definitions
Return on equity	Profit/loss after tax attributable to shareholders, as a percentage of shareholders' proportion of average equity.
Profit/loss for the period Average equity Return on equity	2018-06-30 123 758 123/758 = 16%	2017-12-31 120 728 120/728 = 17%	2017-06-30 125 704 125/704 = 18%
Return on working capital (P/WC)	EBITA in relation to average working capital.
Operating profit before amortization of intangible assets	2018-06-30 243	2017-12-31 234	2017-06-30 218
EBITA, (P) Average working capital (WC) P/WC	371 243/371 = 65%	369 234/369 = 63%	349 218/349 = 64%
EBITA	Operating profit before amortization of intangible assets.
Operating profit Depriciation of intangible assets Operating profit before amortization of intangible assets 243	2018-06-30 168 75	2017-12-31 166 68 234	2017-06-30 165 53 218
EBITA margin	EBITA in percentage of net sales.
Operating profit before amortization of intangible assets 243 Net sales EBITA margin	2018-06-30 2,404 243/2,404 = 10.1%	2017-12-31 234 2,333 234/2,333 = 10.0%	2017-06-30 218 2,168 218/2,168 = 10.1%
EBITDA	Operating profit before depreciation and amortization of intangible assets and property, plant and equipment.
Equity per share		Shareholders' proportion of equity divided by the number of shares outstanding at the end of the reporting period.
Cash flow per share			Cash flow from operating activities, divided by the average number of shares.
Net debt/equity ratio		Financial net liabilities in relation to shareholders' equity.
Earnings per share (EPS)	Shareholders' proportion of profit/loss for the year in relation to the average number of shares outstanding.
Profit growth EBITA	This year's EBITA decreased by previous year's EBITA divided by previous year's EBITA.
Financial net liabilities	Interest-bearing liabilities and interest-bearing provisions, less cash and cash equivalents.
Financial net liabilities/EBITDA	Financial net liabilities divided by EBITDA.
Equity ratio	Equity as a percentage of total assets.

The key figures presented above are central in order to understand and evaluate AddLifes business and financial position. The key figures are presented in the "Key financial indicators" table on page 13 and they are commented on pages 1-4.

This information is information that AddLife AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 a.m. CET on July 13, 2018.

AddLife AB (publ), Box 3145, Birger Jarlsgatan 43, SE-103 62 Stockholm. info@add.life, www.add.life, org.nr. 556995-8126