We have to change to English. This will be a session in Swenglish, as we say. We are Swedish, all of us. We will try to speak English because we know that we have a lot of friends looking at the webcam right now. I wish you most welcome to our Capital Markets Day today. I think it is one and a half years since we had the latest Capital Markets Day. A lot of things have happened in AddLife since that time. We are here to present. You can ask questions. We will tell you how we look today and what is happening right now and in the future and in the market that is to come. Welcome all. This is the speakers, all of us. It is me. I am Kristina Willgård. I am the CEO of AddLife. I have been that since the listing in 2016.
Here is the rest of the management team. It is Martin Almgren, our CFO. Here comes a lot of people in. Welcome. Lars-Erik Rydell and Peter Simonsbacka. You will hear them much more later on, because we will all try to tell you a little bit about our company. The agenda for today is. I will start with some update about AddLife. How do we look today as a company? Martin will do some financials, of course. Many of you are focusing financials, I know that. We have to try to tell you what is important financials in this company. One important thing is actually our vision and corporate philosophy. Many of you know that we have a very specific, I would say, a specific corporate philosophy in the group from our heritage, from Bergman & Beving through Addtech and now AddLife.
A corporate philosophy course is something that all employees in the group attend. All new acquisitions also attend these courses. They are normally for two days. We will let you out after 30 minutes approximately today. You will get a very brief summary of what do we talk about in these courses. Peter will have that point. Lars-Erik will talk about the Medtech. We will talk about the Labtech. We will do a summary and Q&A. If you want to shoot questions during this, please do that. We will try to answer. If we think we have the answer later, we will just say that it will come later on. Hope you enjoy this. Around 12:00 P.M., I think we will end the session. We ended with close to SEK 2.5 billion in sales.
Another figure for this year is that we have two business areas. I think most of you know that we have the Labtech business area. It is approximately 60% of our sales. We have the Medtech business area. They correspond to close to SEK 1.5 billion and SEK 1 billion in sales during last year. The group ending December has now close to 900 employees. We are very equal. If you look at men and women in the group, close to 50/50. We have a little bit more than 40 subsidiaries right now. Many of you probably read that in the end of December, we acquired a company in Austria, which added a lot of subsidiaries to our group. They are not yet part of any figures in 2018.
If we start with some financials, though, you can see that from 2012 to 2018, this is the development we have had from a sales perspective. The first four years, we were part of Addtech. This was mainly Labtech business. In the summer of 2015, we acquired Mediplast, who started out as our part in the Medtech division. We continued 2015 and 2016 in the Medtech segment, where we took off to a new level in the group. In 2017, we did most acquisitions in the home care. That's why we have another figure in this slide. Since the listing in March 2016, we have been growing from 25 to 43 companies in the group. We have been growing from close to 430 employees to 873. Sales has increased from SEK 1.5 billion to close to SEK 2.5 billion, which is average of 18% growth yearly.
We have done 10 acquisitions, adding SEK 500 million, we have organically grown approximately SEK 400 million. The organic growth during these close to three years has been 7% yearly on average, the acquisition has added 11% yearly. Our EBITA, which is the line, was when we were listed, SEK 135 million, now we ended this year with SEK 245 million. It's an increase with 24% yearly over the three last years. Organically, the growth has been more than 7%. What we do when we acquire companies that we work a lot with the margins, improve the margins, and make sure that the efficiency in the companies is increased as well. This is a picture we often show when we talk about our market. Do you know that we are in the healthcare and the life science market?
The life science market, you could say, is like an ecosystem where each part are dependent from each other to be able to grow. We work in R&D, diagnostics, healthcare, and home care. We are a niche player, so we don't have a total product portfolio, of course. We are targeting different niches in these areas in the market. The Labtech business area are on the diagnostics and R&D side, the Medtech business area are working more in healthcare and home care. The Nordic market is approximately SEK 50 billion in size. It has a growth of somewhere between 2% and 4% on average yearly, which is actually the same as in the European market. There are not actually any official statistics in the Nordic market, but this is what we, from our knowledge, have seen that is happening in the market.
We would say it's 2% up to 4% growth, the same as we see in the European market. What do we do? Well, very often we talk about products. Products. I would say we would be nothing if we didn't have the other three legs. For us, the most important thing is actually the knowledge with our employees. They give advice to our customers, and what we see is that customers today, they are focusing their core business, and they don't have money enough, you could say, to have experts. Very often, our employees act as expert for the customers to help them to choose the right products.
Technical service, extremely important, especially in the Labtech business area, is both to connect the instruments, but then it's a lot of aftermarket to make sure that the instruments do whatever we intend them to show, especially in the diagnostics field, but also for researchers. Then we do a lot of training. These four parts is our offering in the market. I would say that the competitive advantage that we have is the skills with our employees in the market. That's really how we can take market share in the market today. The trends in the market. Well, the first one I think we all read and know, the population is growing. We are aging. We live longer in proportion, and the number of elderly people increases all the time.
In the Nordics, the growth of people will be 15% until the year 2040, which is much more than the average in Europe. One of the reason is that we have healthier lives here, but we have also taken on a lot of immigrants to these countries, especially Sweden. The number of people more than 65 is growing. If we talk about Finland, for example, in 2030, which is just 10 years ahead, half of the adult people will be more than 65. Yes, of course, they will be perhaps a bit healthier than my great-grandfather, but still, the need of more healthcare or the need of more treatments will increase over time, which is good for us from a market perspective. What we also see is that there are growing areas for diagnostics.
Diagnostics have had a fantastic technology change over the latest seven to 10 years, I would say. Now we can, through diagnostics, foresee a lot of things for each and every person. There are personalized treatments. There are tests to make sure that what we read every day, bacterial resistance, is a big problem, I would say, to the world, that the increased bacterial resistance. What will happen in the coming 10 year if we don't take care of it? Therefore, diagnostics is important. We also see that advanced DNA analysis, for those of you who have read our report, have seen that we write something we call next-generation sequencing. It's a way of looking to each and every person's DNA and make sure that the treatments can be done exactly for you.
Now, these methods is coming also from research into the diagnostics test in the hospitals. Then we see in the diagnostics area, we see a change in the market. We see that larger laboratories are centralized, and at the same time, these new techniques means possibilities for decentralization, which means point-of-care tests. You do tests very close to you, and you get the answers very quick. This is a driver in our system. Digitalization, I think, for us all, changes how we work every day, also for healthcare and also, I would say, for this meeting we have today, since we are now live on YouTube. I don't think we could have done that a few years ago, actually. The next point is public procurement. More or less everything we do is public procurement today.
What we see is that the procurements are consolidated, which means they are getting larger and larger, and the timeline for these tenders are getting longer, which means that either you're in or perhaps you can be out of the market. This will be very challenging for smaller players in the market, we think. The largest players that already are in the market will be beneficial from these changes we see in the market. A trend we see in the public procurement that they don't only talk about price. Of course, all of us don't want to pay more taxes because this is taxes that pays for the healthcare. The price pressure, it's strong, but we are talking much more about quality of service, how is the support, and sustainability, increasingly important.
Peter and Lars-Erik will come back to that because that's really a trend we see in a lot of procurement that's up right now. When we talk about the public procurement, I would say there is a good lock-in effect. We who has been in the market for many years, we are a well-known actor in the market. If we are established and if we deliver the instrumentation that we mainly do in the diagnostics, we will be able to continue year after year because it costs a lot of money for the public to change all the instrumentation, to train our personnel in a laboratory, for example. If you are an actor who already are in the market, you will feel a benefit from these trends that we see.
The fifth trend is the entry barriers, I very often talk about the Nordic market a bit specific, and I think the new markets that we're going into also are a bit specific. They are quite small geographies. We have a lot of different languages. We do procurement in different parts in Sweden, Norway, Finland, and Denmark, for example. There's a need to be really local to be good in the market. Another entry barrier is really the product security. Product security is fundamental if you want to work in medical devices. There is coming a lot of new regulations, especially from the EU, to make sure that all devices will, in the coming year, have more and more demands on them. This will be hard for smaller suppliers in the market, and that can also be difficult for innovative small companies to come into the market.
You have to have a bit of a strength to be able to play in these markets going forward. The last bullet is something I also often talk about, how does this market look like? It's a very fragmented market. If you look at Europe, you see a few large international players. You have Siemens, you have Roche, you have Becton Dickinson, you have J&J, companies like that. They are huge. Of the 27,000 companies who works in MedTech in Europe, 95% are SMEs with less than 50 employees. The market itself is really dominated by smaller players in the market. Many of them, of course, are interesting acquisition objects for us. This market, there is some sort of collaboration between larger players, smaller players, and distributors. We have to work together in different areas, or we compete in different areas in the market.
It's a difficult market in that sense. You can't really see what's happening in one place goes all over because it's a lot of smaller changes everywhere. As I said, sustainability. This is our way of trying to explain how does the goods or whatever we do in the group go through us. We look for long-term healthy development. To be long-term healthy, you have to have growth, you have to have profitability, but you have to act sustainably. If you don't act sustainable, you will not be able, in the long term, to have a healthy growth. This really is dependent on each other. For us, the central word, code of conduct and core values, is probably the most important that we have because that gives a sort of a framework for all our employees, how shall we work in this environment.
For us, it's very important that we work with high ethical standards and that we do business in a very good manner because we are getting paid from tax money. I think that's very important to understand. Talking about our employees, I said they are our most valuable assets in the company, we really have to treat them. Of course, we have to be a good employer. If we are not a good employer, we will be out of the market. We have to behave, do the very best to make sure that our people stays in our group, continues to develop in the group. That is really core for us, how do we work with employees. Then we do yearly surveys, et cetera, et cetera, to be able to show that we over time are a better employer.
Our business is based on long-term relationships with suppliers and with customers. Of course, we have to make sure that our suppliers behave. Those of you who read Swedish newspapers today could read about Top Glove, a company, I don't know, Malaysia, they are produced. When there have been audits in their factory in Malaysia, somebody thought, "It doesn't work good enough. They don't treat the employees good enough." This is a big issue. We have to make sure that our suppliers are sustainable long-term, otherwise that will hit us in the market. We have to be a good citizen and work for a better world. This is very important to work with, and we do, of course, service, and we go out and meet our suppliers and make sure they behave and do the best they can.
Very often, when you talk about sustainability, we talk about environmental, this is not just about carbon. Of course, we are transporting products. In that sense, yes, we are part of the environmental. Again, I think as the distributor, which is our main business, we don't really do so much push on the environmental side. I think we should work on the supplier side, make sure they behave better, we should take care of our employees, and that we make sure that we, together with our customer, look for a better world in the future. Coming from long-term healthy development, this is our financial goals. We have a goal, which is not a top-line goal, it's profit growth 15% yearly. That's the goal we have. Actually, that's what we have done since we were listed.
Not every year, but over time, that's what we would like to achieve. Profitability, which Peter will talk much more about later, is important for us because we want to get cash flow in the business. Of course, all of you who are shareholders would like to have some dividends. One goal we have is to pay out dividends every year, 30%-50% of the tax. That's what we are aiming for. To reach these goals, we have three strategies. As I said, we work in niches, to be profitable, we have to be market leading in the niches. We try to get market leading positions in the niches that we have chosen to work in. The second one is that we want to have operating profitability, and that is really our business model.
We like to work with smaller, agile company who can adopt to market changes, technology changes. That's why we have the business model, which we will come back to. The third one is acquisitions. That is actually to be able to grow, attract more technology to the group, and make sure that we fulfill the goals we have. Talking about acquisitions, well, Peter and Lars-Erik, who is in the slide, they are the ones who is really hunting out there. They do a lot of coffee drinking, as we call it, meet a lot of companies all the time to make sure what companies do we think we should add to our group. What do we look for? We look for profitable companies. We're not good in startups, I would say.
Even though there's a lot of startup with interesting technology, I think we want them to prove that their products are commercial. We are looking for new markets, geographical markets, or new segments in the existing markets. We are looking for trading companies because trading is where we come from. We also would like to add own products in niches where we think we are beneficial to have our own products. The last bullet, I would say, is probably the most important, it's a strong management because when we acquire a company, we want them to continue with us. We want their management to stay with us, that we have a continuity over time.
Very often, a lot of companies, they are in sort of a generation shift, We would like to know that he or her will stay another 3-5 years so we can have a good succession over time and make sure that this company develops as we want. When we talk about acquisitions, the Nordic market where we have done acquisition until, I would say December 2018, is a market where you have a population of 32 million, if you include the Baltics. As you see, we already have subsidiaries in Italy where we have some production. We have Benelux, where we sell some own products. We have that also in the U.K. The ring on the right corner, that's China, where we have a sales office with own products. This is where we are today, or until December 2018.
In December, I think it was November, actually. In December we finalized the acquisition of Biomedica. That was an acquisition that we have, I would say, looked into for many years. It's a company that we have known for long. Lars-Erik have known them for many years. They have actually visited us in Sweden before to learn how we act in the market and see how can we collaborate in the market. During the spring and the summer in 2018, we suddenly realized that, well, why don't you become part of us? That was the natural step to do an acquisition of Biomedica into us. What we wanted to do is to get a gateway into the European market. With Biomedica, we got that gateway. They are working in 13 countries in Central and Eastern Europe.
They have great business-related similarities. Peter Husek will come back to that and tell you about how that works within both the Medtech and the Labtech business. Exactly as us, 60% is Labtech, 40% is Medtech. Headquarter is in Vienna. Of the 13 countries they work in, six of them are so large that they are 80% of the net sales. This is a privately held company. The family started it in 1978. Now they will remain and work with us. As I said, strong management is essential. We will keep the same management. They are very positive, and we are working together right now to see how can we develop over time. The net sales they had when they closed the books in March, because they have March closing, was EUR 65 million in sales.
They have a little less margin than we have had in AddLife. They have between 5%-7% EBITDA margin. With this acquisition, this is the step we did. We came from a population of 32, added on 132 another people, because population drives healthcare. Most of these countries, both in Nordics and Europe, spend approximately 10% of the GDP on healthcare. Some of these countries are rather small. They don't have the size of the GDP as we have in the Nordic countries, but still, they spend some 10% of their GDP at healthcare. They will want to become more and more technology-advanced. We see a lot of similarities in these markets. In the markets in the Central East in Europe, it's public procurement, just the way that we do in the Nordics. That market, we know. That's the reason for this expansion.
What we see in this expansion is, I would say, a sales synergy. We don't actually look at the cost and say, what can we do from a cost perspective? It's more, how much product can we sell together? Because we have similar suppliers in some parts in Labtech. We can see that we can work better with those suppliers and get them into more markets. In the Medtech part, we have more complementary product portfolio. There, we can sell products in another way. With this acquisition, we hope that we can increase the total volume of the sales over time. Also in December, we announced another acquisition, which is actually that we buy a part of the company. That's the company named Wellspect HealthCare. It's owned by Dentsply Sirona. Dentsply Sirona is one of the leading dental manufacturers in the world.
For many years ago, they acquired a company called Astra Tech, which I think a lot of Swedes recognize, renamed that to Wellspect HealthCare. In that company, they sell surgery and respiration, which is something completely different from their dental focus. They approached us with this portfolio of own products. We acquired a portfolio of own products, and we integrate the business they have in the existing business we have. They are today acting in 26 different geographies, but AddLife, including Biomedica, have operations in 22 of these, I think, Lars-Erik. Yeah. There are four countries where we don't operate today, and that is where we have to do distribution through them for a while until we have built up our own representation there. This acquisition is intended to be completed end of Q1 this year.
Most of the products from Wellspect are produced with Nolato in Hungary, so they don't have that huge production facilities. You probably know that we are not a manufacturer. We sell our own product, but we don't manufacture so much of it. We actually use subcontractor, which is the case here as well. With this acquisition, we also got, actually, a subsidiary in Australia. I got the question, how come that you got into Australia? Well, actually, we have had a lot of sales. Not a lot of, but we have had sales in Australia from own products from the Mediplast company for many, many years. We knew the Australian market a little bit, and that was the longest step for us to go into the Australian market. Now we have our own subsidiary with some net sales of SEK 50 million in Australia.
If we summarize the growth from November until now, geographically, we have covered More or less the whole of Europe, except for Portugal. To be frank, in most of these countries, we just have one or two offices, but still we are there and we can start to operate in these markets. It's a big step for us. What we see, if we continue with the sales graph that I showed you before, if we just put AddLife 2018 figures, adding Biomedica and Wellspect, we will end up with a net sales of some SEK 3.3 billion, and we will end up with an EBITDA margin just north from SEK 300 million. I would say for us, this is a game changer. We have done a big step from 2015 until now. I just have one more final slide, and that's something I think most of you know about.
We are right now in the middle of a new share issue. The board of AddLife, together with us in the management team, decided that we wanted to do a rights issue to be able to continue this growth, because we see a lot of opportunities to grow further and add new acquisitions, both in the Nordic market, but also in the new markets where we today are working. We will know on February 21st the results. I'm waiting to see what happens in the new share issue, but that is really where we're standing today. I will hand over to Martin now.
Thank you. Figures and facts for 2018. We continue and start with acquisition-intensive quarter. That was the headline of our Q4 report. We had sales of SEK 685 million in the Q4 2018, which was a 3% increase compared to the same period previous year. All of the increase comes from acquired companies. If we go to sales in 2018, we had, as Kristina said, a little bit less than SEK 2.5 billion in sales, an increase of 6%. All of it comes from acquired companies also. What we see in the fourth quarter is that we have had a little bit weaker instrumental sales to researchers and also weaker sales to customers in Denmark, in the pharmaceutical companies. In the Danish market, there have been some cost savings and staff cutbacks, as we already wrote about in the Q3 report.
Now in the Q4, we see effect of that. We also see that in the home care, the sales in 2018 has been strong during the year, but in December, they closed in mid-December. The last two weeks of December, we didn't have so much sales to the NAV, who is the main customer in Norway in home care. If we look at the EBITDA, SEK 74 million in the fourth quarter compared to SEK 79 million the year before, which is a decrease of 6%. In the fourth quarter, we have had SEK 6 million in acquisition cost for the Biomedica acquisition that we did. If we adjust for this acquisition cost, we will be on par to previous year. The same EBITA margin, 11.7%, if we adjust for the acquisition costs.
In 2018, we had an EBITDA of SEK 245 million compared to SEK 234 million, and an EBITDA margin of 9.9%, which is almost in line with the previous year. If we look at the business update, overall, we have a good demand in all the Nordic markets that we see. If we start with the Swedish market, we have a stable growth in Sweden, and we still see that the government continue to invest to make Sweden a leading research nation within life science. We also see the trend that Kristina talked about before, increased demand on sustainability questions in our public tenders. On the total, the Swedish market is stable and growing. If we continue to Norway, the government in Norway are continuing to invest both in research and also in newer hospitals. They are building newer hospitals in this country.
We also see that there is a trend in the home care going to more welfare technology. That's a new trend that we see. New technology in elderly homes and institutions are increasing in home care. Finland, we have talked about the healthcare reform in Finland previous that has been going on. What we have seen in the last two quarters in 2018 is that it has been more stable market for us. We still see that there are some projects in some segments that are affected by this healthcare reform, but the business is more stable there. In the diagnostics field, we also have good positive signs there. Also, the Finnish government has announced that they will increase their grants to their researchers in 2019. There are some positive signs in the Finnish market.
Going to Denmark, the fourth quarter, as I just mentioned, was a little bit weaker in some segments, but on the long-term, we see that they're continuing to invest in new hospitals. We also see that we continue to invest in research grants from mainly privately funded research funds, for example, in the genetic research, which is a niche area that we are present and working in. If we look at the rest of the world, we have started to have business in the Baltics, and we have mainly started to focus on the Estonian market, and we had a positive first year in Estonia. In 2018, we also changed our sales organization in the U.S. We closed down our sales company there, and now we are using a distributor instead, and we see that this has had a good and positive effect on the result for 2018.
In China, are still continuing their research, we are continuing to have good sales in China as well. If we go to Labtech and start with sales there, the sales in Q4 were almost on par with the previous year. We have a decrease of 1%, mainly due to the sales in Denmark that I talked about before. EBITA margin is on par with the previous year. As you can see, we have both in the quarter and year-to-date increased our EBITA margin. In Labtech, we have been working with profit expansion and increase our profits, which we see as a result. We also have had a good year in diagnostics. We continue to have good growth in our traditional markets, blood gas, for example.
We are capturing market shares there, and we also see that we have good growth in newer markets like food and veterinary that we have just entered into. Our Finnish diagnostics company has had a really good 2018 with new instrumental sales, a lot of reagents sales to their already installed instruments, and also good sales of service to already installed instruments, which is positive. If I continue with the Medtech, we have had a good sales increase both in the fourth quarter and year-to-date. 8% up in sales in the quarter and 10% up in sales for the year 2018. This increase comes from acquisition companies. If we look at the EBITA margin and EBITA, we see that we are on par with previous years. We see also that the market has been stable in Sweden and Norway.
In Denmark and Finland, we had a tough start first quarter, and we have not really been able to compensate for the tough start that we had in the first quarter. We see also a trend in the market, especially in home care, with more focus, as I said, on the welfare technology, but also in the bathroom segments. Continuing to the balance sheet. Oh, sorry, the profitability. Profit through working capital is next slide, sorry. We ended 2018 at 62%, which is in line with the previous years that we have had. We are stable around this level, and it's well above our target of 45%. Continue with the balance sheet then, which is my last picture.
As you can see, the balance sheet has grown almost SEK 700 million compared to December 2017, this is, of course, due to the acquisition of Biomedica that was integrated in the balance sheet end of December. That's the reason behind that. Still, we have a healthy balance sheet with a net debt to equity of 0.9, equity ratio of 35%, and financial net liabilities to the EBITDA of 3.3. As Kristina said, we are looking to further strengthen our balance sheet with the preferential rights issue that is going on at the moment. We add another SEK 500 million. We can continue our journey and growth strategy going forward.
Okay, thank you. That was everything from me. Kristina mentioned that.
Our vision and core philosophy is really something we're really proud about within the group, it's been a long legacy coming, starting after Bergman & Beving, then Addtech, then into AddLife. I think this is really the core for the AddLife companies. It's really something that bring us the soul and, of course, the idea to the companies, how we're working together, gluing us together as an organization due to the fact that we are working decentralized. It can be somewhat tricky from that point of view. Usually, this kind of training is a two-day training session, for all the employees in a company, that's really important. It's really for all the employees to have the understanding about what kind of requirements do we have within AddLife, but also what about our core values?
If we acquire a company, usually we run it for the company between three to five, six months after the acquisition with all the personnel. We should, of course, start with the vision. I have to say that I think we have a fantastic vision. Strive to improve people's life by being a leading and value-adding player within life science. Isn't that a fantastic purpose? You're happy when you go to work. Today, I'm going to really strive to improve somebody's life. Without making anything bad to society, it's really to do something good for the society. I think this is a very strong part in our organization. The other thing I think is value-adding.
Addtech, where we're coming from, AddLife, is really that we have to add value to our offering because I think that's the key thing for us, that we have to add value by not only moving boxes, these kind of things. We have to add value through the fact that we have skilled personnel in the company that really can help the customer to gain the best out of the kind of solution we are giving to the customer. From the AddLife point of view, if you look at the basic requirements, what we have on all the companies within AddLife is actually three different requirements. Kristina already mentioned two of them, it's actually growth. That should be 15%. I will come back to that. It's profitability. Should be more than 45%.
Last but not least, it's also development, because we need to develop the companies, otherwise we won't see growth over time. That's also a very important part we have to look at. When we talk about growth in AddLife, what do we mean? We talk about profit growth. That's the first thing what we talk about, is profit growth. Of course, over time, to have profit growth, we also need to grow sales or revenue, but really the focus is profit growth. The group target is 15% annually over a business cycle that we should perform, and 15% is quite a challenging growth target. What we say is that half of that should come from organic growth, and the other half should come from acquisitions. That's how we reach the 15%. What does it mean to have 15% profit growth annually?
That's quite fantastic with mathematics, actually. If we have that in five years, every year 15% growth, we're actually going to double the profit in five years. It's quite fantastic to develop the profitability in the company. When we talk about profitability, if we can have the profitability more than these 45%, we can actually also help that us to invest to really reach that kind of growth. Have the kind of cash flow to reach the growth to achieve this doubling in five years. How have we done throughout the past? If we look at Addtech from 2002 to 2015, it was an average 18% profit growth. If we look for AddLife since our start, 2016, we've had 24% in average. We're a bit actually ahead of the 15%, that's always nice to be on that side.
Very important in these kind of trainings, of course, to get the understanding for the employees, really how we can achieve this kind of targets, how can we achieve this kind of growth. Talking then about profitability, it's really to optimize six parameters. It's not really that rocket science, but it really is something that everybody can understand. How can we influence the profit? How do we get the profit? I think that it probably starts first with some sales. Of course, we have to think about how can we increase the sales? How can we sell more? That's, of course, a very important step to get the profit. Of course, we need to have a gross margin. With the gross margin, we would like to have as high margins as possible.
On the other hand, we're in a competitive world, it's not that easy to just put the gross margin we would like to have. We have to work with that, of course. It also have to be competitive, and we can, of course, lower the purchase price, getting that kind of increased gross margin. We have the expenses. That's something that we have control about in the company. We can always be more cost-cautious, more cost-efficient. I think to get the profit, it's, of course, to have the sales times the gross margins minus the expenses. We get the EBITDA or the profit. How can we influence the working cap? Of course, we have the inventory, we can, of course, work to see that we have a very efficient handling of inventory. We have a high inventory turnover rate.
Of course, if we can reduce the inventory, it also has a very positive effect to work with that part. We have, of course, customers paying us the accounts receivables. Of course, if they pay in time, it's fantastic. Then it's money in our hands. So of course, to work with accounts receivables to get the payments in time. Then, of course, we have the accounts payable. I hope we don't hurt the suppliers here, but we try to pay them as far away as possible. No, we stick to the agreements, of course. But of course, we can work with that too to really optimize the working cap when it comes to paying the suppliers.
I think one of the big takeaways from these training sessions that we have with all the employees is really that everybody in the company, it doesn't matter what kind of position you have, what kind of work role you have in your company, you can influence at least one of the six parameters in order to optimize the profit in the company. I think this is really something that makes everybody aware about that actually, I can influence the profit, the profitability of the company in my work. Because usually many talks about the salespeople, the service technicians, they are the stars of the company. No. Everybody. Work in the logistics, you can still make improvement on what you can do on that side. I think this is really the key takeaway when it comes to this training for the people.
It's so fun to see how enthusiastic they are when they are leaving this one training session. They get so many good new ideas how they can improve in their work but can really help the customer in the future or the company in the future. Then, of course, this was Charles Darwin. "It's not the strongest that survive, but the ones most responsive to changes." I mean, we're living in an environment now, it's a lot of changes. It's a lot of changes in our business. Of course, that means that we have, of course, to think new, we have to learn new and actually also try something new. That's also why development is so important for the companies for the future, that we are developing the company really for the future.
When we talk about development within AddLife, it's really linked to how can we optimize, once again, these six parameters we talked about. How can we optimize this through our developments, what we have in the different kind of companies? Of course, there can be several types of developments. For instance, think about organic growth. How can we increase added value, for instance? Can we do more with services? Can we do more in that kind of direction? Should we have own kind of products to gain more organic growth? Of course, new suppliers as being a distributor, we're always looking for new suppliers. It's happening so many things in the marketplace, we like to really be in the front and to have the most interesting suppliers also for the future.
Of course, acquisitions is a very important part, what we have, but it can also be that we're acquiring part of an agency into a company like we have. It doesn't always mean that we have to acquire a complete company. Last but not least, I mean, the people in the company, that's really our assets. They make the difference every day meeting the customers. Of course, the most important development is really to how can we develop our personnel in the company to have the right skills, really to do their job in the best way and support the customer in the best way. That goes really as a key thing. As we mentioned before, it's of course, really very important for us to have a strong cash flow, and we get that really to have control about our profitability.
As Martin mentioned, we're at 62% last year profitability, so we're actually far ahead of the 45. That's good. That was talking about the requirement, what we have on the companies. The other part during this kind of training is really talking about the values, the culture that we have in AddLife and the culture in the other companies. We have four different core values, in AddLife. The first one is simplicity, the second one is responsibility, the third one is commitment, and the fourth is innovative. Just to give you a little bit of a highlight, what we mean by these kind of core values. Simplicity is really a bit what it is. It's really trying to do work at ways to do everything what we can in the most simplest way, the most efficient way.
It should be easy to do business with us for our customers, also, of course, to deal with us with our suppliers. We're working a decentralized organization. That's our kind of model. Of course, we have to every time, I would say, when it come to simplicity and also efficiency, question what we're doing right now, what I'm doing right now, is that giving value for the company? Is it not giving value for the company? Hey, we shouldn't do it. There are so many times there are a lot of tasks done in companies done by tradition, because we always place that paper in that folder. It was on that drawer, and we've done it for five, 10 years, but nobody looked in that folder. Somebody told somebody that that's the way you should do it.
We should always be critical and say, "Okay, if it doesn't make value for the company, why do it?" Let's spend time on something that really gives value for the company. Of course, we have some different kind of tools we can use, when we're analyzing the companies we're working with. The next one is responsibility. I think what people like to highlight is really not just to get responsibility, because getting responsibility, it's a bit of a passive way of doing it. I like when people say, "I would like to take responsibility." Because sometimes when you ask, "Okay, who will take the notes for this meeting?" Usually, don't ask me this time again. If somebody raise their hand and say, "Okay, I would like to take this responsibility.
I would like to take this responsibility for this kind of project" what do you think about that outcome? You have the strong heart behind, it's going to be fantastic. We really encourage our employees not only get responsibility, take responsibility. Of course, it goes all the way when it comes to develop, the organization, develop the company, but also to develop yourself. That's also your responsibility to see to it that you develop yourself. Especially when it come to leaders, it's really also important. I think sustainability, we are in a market really where sustainability is very important, of course, overall for society. We have to see to it that we are working in a sustainable way. What is really important when it comes to responsibility, it also if you take responsibility, we get a lot of freedom in our companies, in our organizations.
I think if you would ask employees, what is the most thing you like working in an AddLife company? I think it's really having that kind of freedom and responsibility, because you have to have both, otherwise it don't work. It's built on trust. Trust between the people in the company with the managers. The third one is commitment. Of course, I think motivation, commitment, going to work and realize this, today I'm going to do something fantastic in order to make people really strive to make they're healthier in their life. I think the dedication is really a very important thing when it comes out from employees. They're really dedicated. They're highly motivated. I think it's really a matter of the whole development of the organization. I think once again, when it come to managers, I think we have to be good role models.
We have to walk the talk. We have to really see to that we follow our core values. We are working as good examples because other ones, nobody will see this is not important. Why should I even do anything about it? It's a changing environment, of course, we have to be innovative. Change can be seen two different ways. We can see, of course, opportunities in changes. We can be proactive, or we can be reactive. I think we would like to see changes in a proactive way. Actually, that can give us business opportunities, if we are proactive. Every day, also, we need to also challenge ourself. I think we always have to challenge. We have to take the next step, the next boundary to really see that as part of our DNA in the company.
Also challenge the way that we do the business, we do the business as good as possible, what we can do. Once again, I think responsibility and freedom is really a key factor for people working in our organization. On the other hand, it also means that some people probably wouldn't work well in our organization, wouldn't fit into our organization, because some people would like to have somebody telling them what to do, because that's the way when they are more successful and being self-driven this kind of time. I think that's people that doesn't really feel comfortable in our organization. We're pretty clear on that also when we're recruiting people. We like people to have a strong own driving force. How do we keep this kind of thing together, with this kind of vision, corporate philosophy?
I think that one of the key success factors is that we immediately, when we started AddLife, we said that we have to have control about how can we develop our employees in the company. We started up actually what we call the AddLife Academy. The AddLife Academy is taking care about the trainings, what we have within the AddLife organization. The first basic training, what we talked about was this vision and corporate philosophy that all the employees has to go through in the company. For salespeople, we have different level of sales training. It's in what we call effective sales and business acumen. We make the trainings, when it comes to the sales trainings, we make them in Danish, we make them in Finnish, we make them in Swedish, and we make them in English.
We're trying to keep the language as local as possible because then it's also easier to adapt to learn from these kind of trainings. Leadership trainings. We have leadership trainings for the managing directors, for the sales managers, but also for all leaders in AddLife companies. If you have a leadership role, if you have a personnel responsibility, then you should go through these leadership trainings. Everybody got the same kind of information about leadership and trainings. Other areas is within marketing. We really have developed our marketing, I have to say, during these three years. We try to use, of course, best practice because we still have more than 40 companies now, and of course, some are really in the high end of outbound marketing, inbound marketing, and we have some that are not that advanced so far.
We're trying to use the benefit from the ones that we can learn from. That's really been very successful, these kind of trainings. The same goes with the finance people, and also the training for the service technicians. It's not in training with the technicians how they can actually repair the instrument. It's more about how can we deal with the customers, how can we help the customer even more. It's more about that kind of relation with the customer. We are working within supply chain, also to have trainings, how we can organize that. This figure, 820, I'm really proud about that. Any idea what that can be? It's actually the number of people going through the trainings since March 2016, so it's almost three years now.
We have a very high pace when it comes to trainings, and I think that's really important to keep it in a good way. I think this ends up with our model. This is the model we are working on because we are a decentralized organization. We like entrepreneurial drive within those companies. When we acquire companies, as Kristina said, we are acquiring well-performing companies. The idea is, of course, that we can help that kind of company, to actually also develop in the future. We like the kind of flexibility in the small company, the personality that they have, and also the effectiveness in that company. As AddLife, we then can support them with resources, with networking, and of course, sustainability. We really like this small-scale business, large-scale wise. That's really a model that is working great for us.
Thank you very much.
Okay. I will try to tell you a little bit about our Medtech business. As Martin already said that we were crossing, so to say, 1 billion SEK last year, we are still a little bit behind the Addtech, we are fighting strongly to get up in a more equal position. We are working in different areas and different segments. The areas we are working in mainly is the hospital area, coming more and more special surgery and also home care. If you go for the segments, in the hospitals you have general surgery, you have ENT, ear, nose and throat, you have ICU products, and also ostomy and wound care. If we go for special surgery products, we are in the thoracic surgery, nerve surgery, interventional surgery.
In the home care, we are mostly in the home adaption segment and in the aids and equipment supply, also more and more welfare technology, and also in a niche like hygiene products. If you go for the hospital segment, there are mainly disposables, we are also selling medical devices and equipment to the hospitals. The customers are primary public healthcare sector, close to 95% of our business are in public procurement, the average length of every contract is around 2-4 years, mainly 4 years, you get them 2 plus 1. In the hospital segment, we have around 20% of the turnover in our own products. We are really in the front line when we are discussing PVC, key product, or sustainability. We have been there for more than 10 years.
We are really, as I said, 1 on the front line. Totally PVC free product portfolios in infusion and respiration. I think the rest of Europe are not there, we are already ready for the European market. If we go for the specialized surgery, many countries are going towards högspecialiserad sjukvård, what we call it in Swedish, specialized surgery. Sweden is one of them, the greatest example is here in Stockholm, when you have the Karolinska University Hospital which is really specialized hospital. What we call in the specialized surgery group is, of course, the neuro, thoracic, and interventional, and also the orthopedic surgery. We are not selling too much of our own products in this field. We are distributing both equipment and disposables for mainly worldwide producers.
We are, of course, attracting both innovative new suppliers, both from the U.S. and from the Far East. We are also, I think, which is bigger and bigger account for us, working with worldwide companies, part of their portfolio, which they are not focusing by themselves. There is one difference if you take also from the hospital side to the specialized surgery side, this is also the sales force and the product management. If you go for the hospital, you have more broader and not so deep. If you go into the specialized surgery, you are very narrow and very deep knowledge because here you are mainly also the support to the doctors doing operations. We are really standing in the operating room every day.
90% of the sales are also in the public procurement for this and the same setup for the company for the contracts. If you go for the home care, we have changed a little bit about the vision. We have stay longer at home in the early days, but now we have stay at home. It's a big difference from our perspective because with our products, we don't need to have another destination of the patients. They can stay at home with the welfare technology and also with the products we are supporting them with. There is, as you have heard, there is a huge demand for improving the healthcare quality for the future because we are getting elder and elder, and that will be a challenge for the future for all of us.
You have probably read in the newspaper this weekend, there is a famous artist, a song artist in Sweden, she's really claiming now the elderly home for her father. I think that will have a big impact for the next 12 months for these discussions. We are working mainly in the home adaptations, the welfare technology, that's the main focus. In the home adaptation is more for the hygienic products, as you are probably the same as I am with the integrity and this is from the last part of the help we want to have is on the hygienic side. We are now trying to have adjustable toilets, adjustable basins and so on.
Of course, in the future, together with welfare technology, it will hopefully change if there is one coming in the toilet or at home, if there are some difference in the length of the couple and so on, there will be automatically change when the people are coming into the toilets. We have not close to 90, we have 75% is public procurement in the home care side. There are a big difference compared to the hospital and the other side. Here we have 75% of own products in the sales. Of course, what also Kristina told about is there will be a lot more home care in the future and also more and more treatment at home because there are one third of the cost if you can treat the patient at home instead of by institution.
Our own product is, of course, more and more important on the hospital side and also on the home care side now when we are making our geographical expansion. Then we are owning the product, we are owning the product portfolio, and there is much easier to go outside the Nordics with our own products. Most of the products are either supporting the distribution products or helping them to give us a better proposal to the customer. Mainly, we have higher gross margin on the own products, which is, of course, very good in the final end. We are using both own production, but mainly we are using subcontractors. The own production we have is more assembly units, so we are using subcontractors for the basics, and then we are making the assemblies and final testing in-house.
Today, end of 2018, in the Medtech side, we have around 30% of the total sales was in own products. You have heard about the Wellspect products and when we are in the rolling 12 in end of 2018, we will be close to 40%-45% of our own products in the Medtech. I will not go too much deep into this because this was exactly what Martin was saying, a little bit about the growth or the market in the Nordics. I think one part here in Sweden is that there is, as Kristina mentioned, there is a very strong focus on the sustainability at the moment, both in Sweden and also in Norway. I'm sorry. There was one more.
For instance, the Stockholms läns landsting in Sweden has been a lot of claims regarding Stockholms läns landsting, on the other hand, they are doing also very much good in the point of sustainability. They are making their own sustainability investigations by the suppliers, and they are really focusing on the environmental questions for the future. As I've mentioned, we have PVC-free products, which started 10, 12 years ago, and we can be honest, there are very few customer outside Sweden for the PVC-free products, even if there are a lot of discussion everywhere, no one are taking the final decision. If you see the Danish, I think, most of them was informed by Martin. There is one difference between the markets and the Danish market is a little bit more flexible than the other Nordic.
They have more price agreements, which are more on a generally one year basis. In Norway, there are a lot of discussions also about sustainability, and they have also gone a little bit further than the Swedish because they are visiting also the suppliers, Helse Sør-Øst. You can say in connection with Stockholm's Länslandsting and Helse Sør-Øst, we have very two strong partners, for the sustainability questions. There are also some positive, negative things. It depends on which side you are. You know that one of the biggest customer, the national tenders in Norway, they called NAV. They have now opened up, so there are more than one winners, because as always, when you are making a new systems, you are going in this direction, and now they are coming back a little bit because they have seen that the competition is, so much weaker, so they need.
I think that that's positive for the market, even if you are perhaps on the winning side from the beginning. I think it's very good that there are more companies coming up. Finland is probably the country that don't have so much focus on the sustainability yet, but it will probably come. Otherwise, I think most of the points was covered by Martin. Also, you can say that overall, the points which were not covered by Martin in that case, there are a new directive now coming into 2020, that will be much higher pressure on the producers and also on the distributor side, because today the pressure on the distributor are not so high as the suppliers.
There will be a new directive coming in 2020 in May, and one year is going very quickly, and I'm sure that the threshold for small companies will be, in some cases, too high. There are a lot of companies who are actually now recognizing that this threshold will come. There is a lot of discussions both for acquisition and partnership, because they need to have a much stronger quality department than they have today.
Which market is that concerning?
Whole Europe.
Yeah.
You can say that what they are doing in Europe is a little bit strange because all of you know the FDA in the U.S., but the new MDR requirements, they are even higher than the FDA rules. That will probably mean that in the future, small and innovative companies from the U.S., they will not go to Europe because then they need to make another step than the FDA. Sorry, that's a big change. It's a huge change for all companies in Europe. As you have heard, we have had a hard time during the last half year or year to discuss the acquisitions, and we are extremely happy that we succeeded with both Biomedica and Wellspect. For the Biomedica, which is a little bit mirror over AddLife.
We have 40% Medtech, and they are mainly in the medical device business, which is similar to what we have here in the Nordics, hospital and also specialized surgery. They also have one part which is clinical IT, which is more patient monitoring system, especially for the intensive care units. That's a big product group for Medtech in Biomedica. Peter will cover the other. What we are doing at the moment with Biomedica, we are making what we call cross-fertilization. We are having cooperation between our organization, both Medtech and Labtech. We have meetings from different sides. We are discussing our own product portfolio, how to go with our own products into the Biomedica, and Peter will also discuss how to take the Biomedica's own products into the Nordics. We have a lot of suppliers in the Nordics. They have a lot of suppliers in their countries.
We are now discussing with some of these suppliers in order to work also to have more countries. Of course, there will be a lot of possibilities for add-on acquisitions in the Biomedica area in order to be even more stronger. There are so many nice opportunities. For the Wellspect, which is also a fantastic complement to the existing hospital business, there will be, as Kristina mentioned, there will be own products into the existing product portfolio. As you saw on the map, we will integrate most of the business into existing sales and product management. We are working with a lot in Hungary, and as we said, or Kristina was mentioning also Australia, which is, of course, far away.
On the other hand, we have been there for more than 10 years with our ENT products. Now we are actually taking over the existing subsidiary for Wellspect. We are turning around. We are distributing the Wellspect urological portfolio in Australia. That will give us the company around SEK 50 million and with eight or nine employees. That will also, of course, be the first step in also to make cross-fertilization with other products, with our own product portfolio and also with distribution products. There is a lot of positive discussions already with our existing suppliers here in the Nordics, to first of all go to the Biomedica areas and also to Australia.
I think in overall the summary, which is fantastic 2019 ahead of us for both AddLife and especially the Medtech, because there are so much things happening at the moment. Thank you very much.
Excuse me. On Wellspect, what would be the main kind of products they sell or distribute?
You can say the main 50% of the sales are in the wound drainage side. Then they have some blood collecting system, and they have some operating suction sets, which is in one case, all of the products are in one way or another way already supporting the existing product portfolio, what we have today in the Mediplast area and also the Biomedica area. You can say that Mediplast will take care of the Nordics and some of the European countries. Biomedica will, of course, take care of their countries and Austria and Switzerland. There will be people coming in from Wellspect, employed in Vienna by Biomedica, already working in Austria and so on. They are fitting very well into the existing product portfolio.
Okay. Thank you.
Thank you. Then coming into Labtech. Looking at some figures we saw before that we made almost SEK 1.5 billion in net sales. We had a profit EBITDA of SEK 165 million, and net promoter was 11.4%. Even though that we didn't grow as much that we actually had hoped for in net sales, we were able to increase the profit by 10%. We went from 10.8 net promoter to 11.4. Maria was working hard with that kind of achievement. Looking at what kind of segments are we working in, and the green one is those who is actually covered by the IVD diagnostic part. I think it's quite important to understand that diagnostic is a broad area, and we are in IVD diagnostic, in vitro diagnostics, what you do outside the body.
You have a lot of X-ray or other kind of things, or these kind of things. They also cover in diagnostic, but we are not active in that part. This is really going for the hospitals in this area, and we are especially, I would say, focusing within molecular and microbiology and also point-of-care and pathology. Clinical chemistry, that is more the traditional IVD diagnostic tools that are more in a central lab with a huge system, we're covering that kind of things. We are not really that much into that kind of things in this huge kind of systems. Looking then at the blue or purple is then for what we do for the R&D side and also for industrial analysis. In R&D, we do a lot about all kind of research going later on into IVD diagnostic tests.
It's very much in that kind of field, what they do in the academia, for instance, and also pharma companies. We're also involved with advanced instrumentation when it comes to all the quality control out in the industry. We're also covering, let's say, food industry. We cover also veterinary, that is then not the human diagnostic, but it's fairly close, of course. Of course also into pharmaceuticals and also environmental analysis. It's a quite broad scope overall what we're doing in the Labtech part. Quite interesting to mention is that one of the Nobel Prize winner last year in medicine, James P. Allison, he was working with immunotherapy. Part during his research a way years back, he was using different kind of kits from our supplier, Cell Signaling Technology.
It means that we are in the forefront with our suppliers that we even can help somebody to get the Nobel Prize. Looking then into diagnostics. We are then selling instruments and products that are of course used for the IVD diagnostic market, to all kind of laboratories, both public, of course, there is a few public, but also private laboratories. The customers are primarily in the healthcare sector. 90% of the business we do there is according to public procurement. The same as also what we see in the Labtech part. The length of the contract is usually between 4 to 6 years, approximately. Instruments is 20% of the sales and reagents 80% of the sales. It's a very interesting business model, really, what we have here. We call it the razor blade business model.
Actually, the instrumentation is then the razor and the reagents are the razor blades. During this 4-6 year period, we're supplying the reagents to the hospital, to the customer's lab, running then on our instrumentation. It's a very nice business model. It's also that we have been very successful in maintaining our customers year-over-year. Very much to the fact what also Kristina mentioned is due to our service offering, is due to our training, what we have with the customers. It also builds up a certain barrier that also keeps us really continue to work with the customer in a very good way. Very closely linked, of course, as I mentioned before, is then also the veterinary, where we also are working with the veterinary side. The veterinary side is also a very interesting market.
Sometimes we spend probably almost more money on our animals and pets than we do on ourselves. It's an interesting market from that point of view. Getting into the biomedical research. Here we're also selling instruments and reagents then used for the research laboratories, but also for quality control in the industrial labs. Customers are primarily into academia, private laboratories research, both in healthcare, pharmaceutical, and also into food industry. It's a little bit less public procurement. It's 70% in this case. We have 10% is own products. Here's a little different business model. It's 75% is more instrumentation and 25% is reagents. It's a little bit of a mixed picture, what you see when it comes to the diagnostic part. Looking a bit about the market, the market update, I think we covered a few of those.
Looking into Sweden, is that we can still see that we have a very good market, actually, both for the healthcare but also for the research market. There's a lot of money also put into from different kind of foundations into the research. We got, of course, the new Karolinska Solna, but also they also have the Karolinska Institutet with the Biomedicum on this. There's a lot of interesting things happening in the market. We can see that in general, in all the Nordic countries, it's a lot of things happening in the healthcare market, but also in the research market. That's really very inspiring. Of course, Sweden would like to be really in the lead. We haven't been in the lead for life science research for quite some years.
There was an initiatives coming that the previous government, actually at the beginning of 2018, decided to establish a life science office, really with the goal to see to that we can reach that kind of position. It seems that it's still continuing after this election, what we had, they are coming up with some kind of a national strategy for the life science industry in Sweden, and that's quite interesting. We can also see some other initiatives into the same kind of field. We can see a lot about research taking place when it comes to genomics. I think that really is what will change or has already changed a lot about the industry, or also within the healthcare, that we now can have a totally other kind of tools to make diagnosis and also to see the genome.
This is a very interesting thing coming up with this Genomic Medicine Sweden. It's seven central places within Sweden actually working that we are bringing out this kind of new technology to the patient, but also to establish new kind of therapies. This is really a very important step. Also we can see that, also looking into this antibiotic resistance, it's also an issue taken where, how can we improve that part, not only on the Swedish level, but also on a global level. Denmark, we mentioned that we had a little bit of a weaker sales at the end of the year, and that was primarily coming from the pharma sector. Novo Nordisk was actually laying off some 400 people in one of their major research site in Måløv. That made a bit of a stop in their kind of business development.
Of course, when it comes to instrumentation, it is a bit of digital. I think that will be overcome over time. It is already mentioned that in Denmark, we also have this super hospitals set up coming that are built and also going to be increased to a higher level when it comes to the services. Denmark has also the same kind of initiatives when it comes to this genome research, genome screening in Denmark. That is also now established, the National Genome Center. For the first time actually, probably in 2019, the pharmaceutical export in Denmark going to be number 1. They have been number 2 for many years. It has always been agriculture that was number 1. Actually, it seems like they are going to be number 1 then in 2019. That is what we like. We can supply to them.
Norway, also mentioned before, it is a good activity in the marketplace. There also this kind of some health reform was actually started up some years back. And one of the part in that reform was actually to bring out more into the primary care to make, let's say, more diagnostics tests closer to the patient, and also that you can get a result much faster. Actually, you can wait one hour or two hours, and then you can have a diagnosis. That has really been a positive step. I hope, and I believe that this will be a development we will actually see in more countries to come. Because nowadays, the diagnostics tests are so good, and it is also so easy to use and secure to use. I think we will see much more going into the primary care.
You don't have to wait for a week or something before you can get some kind of a decision, what kind of therapy you are going to get. I think this is a very positive step. Also mentioned before was new hospital also in plan for Norway. In Finland and the Baltics, in Finland, we had a really outstanding performance in 2018. We had a fantastic growth, both in sales, but especially in profit from all our companies in Finland. Finland was a very positive step going forward. In the beginning or the end of 2017, we started up our organization in the Baltics, and we have started up quite well, actually. We are now covering, since more than one year, we are covering Estonia, Latvia, and Lithuania.
That time, of course, we knew that Latvia, Lithuania is a bit different market to Estonia, so it will take a certain time to get into that market. I have to say that we have really been starting up quite well, and that looks promising for the future. They have this kind of SOTE comprehensive change in the healthcare and the social service reform. Actually was planned from the very beginning to come in place 2019, but it has been postponed many times. Now they have an election in Finland this springtime. That would probably nothing happens until probably half a year ahead or one year ahead. What will come out of that kind of fix, nobody knows. Really positive in Finland is that they have been cutting down for many years the funding for the academic research.
Actually, now the government told that they're going to actually grant some EUR 12 million to the research side. I think that's a really positive sign in Finland. We haven't seen this for many years. I think that will be interesting to follow that kind of development. International. International for us means the part of our own products that we have in Labtech. When it comes then to a company called Biolin Scientific that we acquired in December 2017, they are a global company. They are making instrumentation for surface science. They have had a fantastic development the last few years in China, and that seems to continue that part. Kristina already mentioned that we had a dynamic sales organization where we actually acquired the company in the U.S., but we wasn't really that happy with that kind of performance.
During springtime 2018, we changed to a distributor in the U.S., and that seems to have had a very, very good effect. We've had a good development in that company. The other part of our own products is a company called LabRobot, down in Stenungsund. They are making special solutions for microbiology measurements when it comes to food. They are also a global company working with distribution. There we also have broadened the number of distributors. Now we're also active in South America. We also went into South Korea and also went into Portugal. We are spreading a bit the map around the world, and that's really very exciting. Food is almost producing as close as pharmaceuticals when it comes to taking care about the security. Coming to Biomedica.
Already mentioned so far is that the Labtech part is approximately 60% in Biomedica. Australia, as Lars-Erik said, is a mirror of AddLife. They are active in IVD diagnostics as we are. They are also into veterinary and food diagnostic as we are. They are also into life science, what we call biomedical research. They also have their own products, actually own manufacturing that we don't have. That's really very exciting coming to that. Otherwise, they're covering the same kind of market that we are active within. We can really say it's a perfect fit for us. Of course, we really can have the cooperation within the group because we already have some common suppliers that we can work together with around those suppliers. Especially, there's a number of suppliers that we have that they don't have today and vice versa.
Hopefully we can attract some of the suppliers also moving into the other markets. I think also our offering, now we can cover somewhat 20 countries in Europe and the Nordics. It's quite a strong offering when we are talking to potential new suppliers that they can actually get that in one hand. I think that's a very strong offering what we have. Of course, they have their own immunoassays. This is an interesting thing because they haven't been that successful in the Nordic market. This is really into some niche biomarkers, but very special. They have the production in Bratislava. This is something that we can bring now to our organization in the Nordic countries, but also we can look for supporting them in finding also distribution worldwide for these kind of products.
This, I think, is a very interesting opportunity for us getting into this. Coming up, just summing up a bit about the trends that we saw. We talked about this consolidation at the customer sites in the different councils in the different countries. We can also see it, of course, on the supplier side. There's been a lot of acquisitions going on the last few years from the big ones, and that's probably going to continue. We can see for sure that having this kind of pan-Nordic setup is really attractive, and now also then adding Biomedica, the 13 countries in the CEE into the picture, really going to be a very strong thing for us to attract new suppliers. I think it's really key for us. We can see higher requirements for services, actually.
Kristina was mentioning that, many of the customers today really don't have the chance to have all this expertise in-house. In many cases, these kind of laboratories is more like a production facility. There we can really add our services around the product and help them in this kind of way. Also, when it comes to research, it's not always easy to use these kind of new tools, to use this kind of new technology, and there we can also help the customer to use the products in the best way. It's more consulting point of view. We already mentioned that the growing need for diagnostics, no doubt. We talked about these demographics coming on. We're going to live longer.
We're going to have a number of chronic diseases, but we can keep them in place due to the fact that it's good medicine, but we also have to have diagnostic in place to follow this kind of treatment, what we have. We see it also, of course, when it comes to personalized medicine. Really very interesting. In the past, they had the same medicine, more or less, for the same illness. Now we find out through all this genomic screening, these kind of things, that it's different for different persons. This, of course, also have much higher criteria to really have the diagnostic tools in place. I think that's also really very good for us for the future. In general, the rapid technology development. We talked about digitalization. There's a lot of data coming out when you make, for instance, this kind of NGS screening.
The critical part is more to take care about the data, the big data. That's really interesting. We can, of course, see all these steps into e-health that's coming on. More and more, we will see home diagnostics. This is another interesting area also for the future. I think last but not least, this kind of preventative healthcare. In the past, it was always to go to the healthcare to be treated for a disease. What about scanning your genome, you can see that there is a risk that you can get this kind of disease or illness. Of course, what can I do, really, to have a healthier life to hopefully not get into that position? If you can see, for instance, that probably you have a good chance that you can get Alzheimer.
If you start to treat that kind of patient two, three years in advance before you saw it with the old kind of diagnostic, that is really interesting, and it is also a lot of saving for the society. Money saving, but also good for the patient. Thank you very much.
It is me.
It is you.
Standing up. Oh, you are awake still, I hope. A lot of things we want to tell you about AddLife, but this was what has happened the last years. I would like to say, this is the new AddLife. We go from the Nordics, more covering Europe, a little bit in Australia, of course, but this is the new AddLife, and we are all looking forward to seeing what we can do in the future with this fantastic company. I hope you got a flavor about the culture, how we want to work internally, because that gives a feeling of, I think we are a bit different from a normal, big organization. We try to be decentralized, quick in the market, smaller companies, another efficiency and another way of working.
As the last slide, I just want to show, if you were a shareholder, 16th of March 2016, you have had quite a good journey until now if you compare to the average index in Stockholm. This is what we work for. Except for reaching the vision, we work for increasing the share price actually as well. Okay, questions or comments? Yes.
May I start? Just looking at this profitability target, [are through our rate], obviously you produce 65%, which looks very good, how does it look when you split it up on the two business arms?
You could say, since you saw that in Labtech, we have a little bit higher EBITDA margins, we have higher profitability in the Labtech area. That is both because we have higher margins, but also that kind of business, there isn't the same demand of having a big inventory. Of course, instrumentation, or perhaps you want to comment, Peter, but instrumentation is quite quick through our inventory directly to the customer, we don't need to have as much as inventory as we have to have in Medtech. What we have done in the Medtech segment, we have a little lower margin. We have to have a bigger stock.
You jumped it over very fast, Lars-Erik, we have invested a lot in our better logistics in Sweden because we need to make sure that we have a higher turnover rate in the logistics area there to be able to increase. We are a bit higher in Labtech, we are above the 45% in the Medtech. That's how it looks today.
When you drill down a further level than to the business units, how big part of the group is above 45% today?
Martin, can you help me? I would say, it can't be more than three, four companies that are below 45. 45 is the lowest level we accept. When we acquire a company, they are almost never close to the 45. That is the first thing that we start to work with. If we're good there, over time we can get out the cash flow and continue. It takes time. You don't change processes because this is to change process in a company. You can't just shut down the stock. You have to change the ways you're working.
Drill that to the next level, then obviously you have a very decentralized organization which seems to work very well.
When you look at those two, three companies that are below 45%, how much focus do you put on those from AddLife Group management, so to say, to really squeeze them to get where it should be?
Actually, what we always work with is the race at the lowest level, make sure that the lowest level always gets up. Companies who have problems, who are not that profitable or doesn't have the right sort of margin that we want, of course, we work with them much more. We have the second strategy, which you saw. The first was to be market leading in niches, the second one's to have operating mobility. That is something we work with a lot. That means that the company has, call it a bit more problems. We can either put in more resources or perhaps we split that company and move parts to another company, so they can focus even more to be more profitable. This is a continuously work always. There are a few ones not performing well.
We work a lot with them. It comes new ones. That's the continuous work that mostly Peter or Lars-Erik is working a lot with that. Do you want to comment?
I think as you mentioned, that's really a continuous work all the time. I think everybody knows what is the hygiene level. Of course, I think it's quite clear also that if you're on a certain level, what should you focus on? There's no question in a company, if there will be below the 45%, it's clear for the company that you have to focus on profitability. That's the number 1 that we have to work with. It's quite easy for people in the company to understand where to put all the focus and all the activities.
To come back to our financial goals, profit goals and profitability, here we benchmark all the companies, which is a fantastic way of challenging people. Nobody wants to be in the bottom, there's always a company in the bottom who wants to be better. To benchmark all the time and work with that, people are a bit competition-like. If you're an MP, I would say, in a company, you want to be better. It's a good way of making people to perform better. Actually, those who are in the top, they get a special award every year when we have larger meetings.
Two more quick ones on our sort, okay. Looking at Biomedica, how are they looking in that kind of situation? Particularly, if you look at the 20% that is then outside the core markets, is it really possible to drive that kind of profitability target on those kind of volumes?
I would say yes. Coming back to when we acquired Mediplast, actually, because when we acquired Mediplast, you were not close to the 45. After a few years, continuously hard work with all the employees in the company, we have been able to raise that. I would say yes, but it takes time. You don't do that in a quarter or a year, but it takes a few years, change process, best practice, and you will be able to come up to these levels. I'm very positive to reach that as well. Any more questions?
Yeah. We pick a web question.
We got a question on the web. Okay.
Thanks for hosting this live, much appreciated. I have a question on capital allocation. Could you please share your thoughts on keeping the dividend while simultaneously raising equity? Thanks.
Okay. That was a discussion we had in the board. As many of you have read the report, we have decided to continue with dividend, even though we are doing a rights issue at the same time. Of course, you could say, is it wise to first take in money and then give some more in dividend? We think that goal we have is to continuously give dividends, and the percentage is one point whatever of the share price is actually the dividend. We think it's fair to continue to have a dividend even when we do this rights issue. That was a decision we have to don't raise it, but keep it at the same level as we had last year.
Björn.
Yes. You are acquisition experts and you have long experience in this. You're trying to acquire good businesses and keep management and so on. At the same time, you are learning your culture and so on. That seems to be quite good to work in the Nordics, at least. When expanding into Europe, I guess there are even more differences in cultural views in companies. Do you see that as a challenge, or will you handle that differently than the Nordics?
Right now, we've done, I would say, one acquisition outside of the Nordics, and I think the reason why it came an acquisition was actually the culture, because they have met us for many years. We have met them for many years. They work, and I call they Biomedica in this case, work very decentralized with their subsidiaries, very close to how we work in the Nordics. We share this basis of working in a decentralized organization. I think that was one of the reason why this was a very good match for both parties. During all these talks, we see so many similarities, but from both sides, we see also that we can learn from each other, things that Biomedica is very in the forefront of in different areas where we could get help in the Nordics to be a little bit better and vice versa.
I think these acquisitions, I prefer when they take a long time, because then you have the time to really get acquainted, sit in the same room, discuss going forward. In this case, it was fabulous, actually, that we didn't have any broker with us. We just sat together and talked, and over these discussion, suddenly we realized, well, why don't we do an acquisition? It was a good fit for them, it's a good fit for us. Yeah. That's why I like this long time coffee drinking. That's the basis to make sure that we understand each other and have the same thoughts about how to deal with the future.
In reality, Biomedica is not one company. It's also including all the subsidiaries.
Yeah, of course.
You take a cautious view there to if it works, don't fix it, or at least let it take some time, or do you try to force the culture to small subsidiaries in remote parts of the world?
I don't think it's easy. I don't think it's wise to force a culture. What we will start up is that Peter, as you heard talking about our culture here, will be, as always, the man in charge to make sure that people hear about our corporate culture. We will start trainings here in April.
April.
April, beginning of April, of all employees. That will take time. It has to take time. I think all of us, it takes time to change. I think the fundamental important here is that the management in Biomedica has bought in, really, on where we're standing. You have to have the leaders in that organization bought in this new model, and that will take some time. I think that's fine. Also, you have to understand that the same way that we operate in Sweden, we will probably not operate the same way in Czech or in Slovenia, because it's a different country. We have different culture, but we can still share the same way of helping out, benchmarking, how we go to the market, and how we look on freedom, responsibility, things like that.
They are the experts in their local market. We really must be humble when we look on the skills we see there.
Yeah. To go with the Nordic market is also quite different because of the culture.
We know that. Nordic market isn't one market. It's very different from Finland to Norway and Sweden and Denmark, yeah.
Yeah. It's more of financial type of question.
The first step is to take a pro forma approach on just adding the things together.
A lot of the driving force there seems to be cross-selling opportunities and so on. I think you have to change in your distributors. Of course, you can take your products to Europe and the other way around.
Are there also overlaps in distributors that they don't want to
Sort of summarizing for people looking at the web. Yes, we're talking about sales synergies. Of course, we sit perhaps with suppliers in Finland, if you compare to Hungary, which could be, and are, competitors in the world. That is really the fact already as we have in the Nordics. We have, in some cases, the main competitors working within as a distributor by AddLife. I think that we are very used to, how to handle different suppliers, even if they compete in the world. We will do that with smartness. You have to be very transparent. You have to discuss with them. We meet them. Of course, we started out sending a mail and a telephone, saying, "Oh, this is what happened." Then we have a lot of meetings with all the suppliers, saying, "Do you want to have this market as well?
Perhaps you already have a distributor in Austria or Sweden or wherever." They prefer to change, but that's nothing that happens the first week. That will take some time. I think we have to realize this will take some time, or this is a revolution. It's an evolution. We are on that journey, and I cannot promise, say, "Well, in six months this will happen." Of course, we try to do everything as quick as possible. Again, you have people who want to do it. You have to make them getting responsible commitment and feel that this is the right way to work. We will not stand in Stockholm and pointing at people, saying, "You have to do this." We like to get everybody involved in these changes.
I think opportunities, and perhaps you heard that from all of us, we see opportunities, but it will take some time.
I suppose you're not prepared to give a number?
No, I'm not prepared. I never give predictions. You know that. That's what you have to calculate yourself and see perhaps they can come to this figure. Who knows? Okay. Do we have any more questions, or is it lunchtime perhaps? Big thanks for coming to us. We are available for questions afterwards, of course. If you have questions later on, call us, mail us, whatever. Thank you for listening in, and thank you for today.