Companies. Investor is a believer in engaged ownership and has always had a long term perspective. Our companies are world leading within each of their areas. They are represented in over 200 markets and are the foundation of our business. We work continuously to support our companies to remain or become best in class.
We firmly believe that sustainability integrated into the business model is crucial for creating long term value. Investor creates value for people and society by building strong and sustainable businesses.
Very warm welcome to Investors Capital Marketing Day, who today take place here at Winterthur Gordon at Grand Hotel. I have the my name is Pia Jupmarc and I have the great privilege to work as CEO for The Grand Group, who today have 3 hotels. This Grand Hotel, this fantastic historical international luxury hotel who has been on the market for nearly 150 years. Next door, we also have the lifestyle hotel, Lidmar Hotel. And the last but not least one is located at Stureplan, more of a colorful boutique hotel with name The Sparrow Hotel.
To run and operate a hotel in buildings like this is a great privilege. And another fantastic thing is to work long term with so fantastic property owners like Victor.
Thank you, Pia. I would also like to welcome you to this fantastic building even though it's virtual today. My name is Joel Ambre and I'm the CEO of Vectura. We own and develop real estate, both commercial and community service properties. And as Pia said, we manage Grand Hotel.
We are Sweden's most experienced newcomer. We combine innovation with experience and knowledge. We use our heritage and add new thinking. People is our most valuable asset. And that might sound strange for a real estate company.
But we need to provide better indoor spaces and more sustainable properties than ever before. And that's actually something where Pia and I what we have in common in our businesses. Isn't that true, Pia?
This is true, absolute. To run hotel is a must to like to meet and work with people. It's the employees, it's the guests and of course, the owners. Our biggest assets are the employee, and our vision is to provide world class quality and service every single day, 20 fourseven, 365 days per year. Create people to feel welcome to be the perfect host.
Of course we work and we'll develop for the future. It's yes, it's really challenging time for us right now. But on the other hand, we learn a lot. We think differently. We work differently.
We be more innovative, creative, and we have to stay fast with our fighting spirit. So we also take the opportunity during those times to investigate and in the property as well together with Vectura. We do big renovations and refurbishment. And just to mention a few, the Bolinda Palace, we are so ready with 19 new colorful, well designed hotel room with many suites. And also on floor 56 here at the grand building, we have 75 rooms out of order right now to open up during next year in full renovated.
So this is for me a very good thing to do in times like this. And we also do something other.
Yes. Sustainability is the core of what we do. And a very basic requirement when it comes to sustainability is that all of our buildings are accessible to all people. So we're taking this opportunity here at the hotel to upgrade the entrance so that the entrance is accessible to all people and welcoming to all people. Going forward, climate is a top priority for all of us.
But we also need to challenge ourselves to make our buildings a meeting place for people. That is important, and I think most of us really miss not catching up with each other in person. So for us to create those spaces, it's to secure our value going forward.
With those words said, we will once again welcome you all and wish you a really fantastic afternoon. And both of us also want to have the opportunity to welcome you to our hotels and buildings in near future in real life. Thank you.
Thank you.
Thank you, Pia and Yuval. And I would like to extend a very warm welcome to all of you for participating and joining us today for Investors Capital Markets Day 2020. It was actually 3 years ago that Investor hosted its last Capital Markets Day. And I think you all agree with me that so much has happened since then, of course, out in the world. But also, if we look from the inside out at investor, so many activities, so much has happened out in the companies where we are engaged in.
And as Pia and Joel were saying, we are here at the fantastic Winter Tregorden at Grand Hotel today, but we meet you virtually. My name is Wirveke Hirdmann Ruhrbei. I head up Corporate Communication and Sustainability here at Investor. And I will be guiding you through this day together with my colleague, Magnus Dahlhammer, Head of IR. We hope that over the next 2.5 to 3 hours, we hope to present you with more increased knowledge about investor and, of course, about our companies and also about our engaged ownership model, what does it actually mean.
You will be meeting my colleagues in the management team and you will be meeting the CEOs of the different Patricia Industries Companies. We do hope that you take this opportunity to ask us question and interact with us. You can do that by phoning in questions. And we will have a facilitator, Evelina, who will moderate the questions you have over phone. And you can also post your questions over the web.
What will we be doing over these 2.5 to 3 next hours? Now let's see. Here's the agenda. We will start out with our CEO, Johan Fuschel followed by our CFO, Helena Saxon and then the 2 different investment organizations with Daniel Nordhel from listed companies, followed by the co heads of Patricia Industries, Christian Seeaderholm and Noah Valley. And then over the next hours, we will be meeting all the different CEOs from the Patricia Industries Companies.
By that, I would like to introduce our very, very first speaker. It's our CEO, Johan Fuschl, who please come here and join me up here on stage. You will give us a strategic update, some deliverables over the past years, what we have been actually doing and also, maybe even more importantly, what lies ahead of us. Welcome, Johan.
Thank you, Vivek. And once again, warmly welcome to our Capital Markets Day. This is our portfolio, including the recent acquisition of Advanced Instruments. We today have 24 high quality companies with a combined market value of more than SEK 500,000,000,000. This is our purpose, to create value for people and society by building strong and sustainable businesses.
The good part is that we truly believe that this correlates really well with our target to create a strong TSR in the long run. So to succeed with that, basically, it boils down to 2 things. Number 1, that we are successful in our role as an engaged owner and secondly, that we make good investments. Let me then start with the first one, our role as an engaged owner. These are the key pillars in that strategy.
First of all, we are fortunate. We have a portfolio of strong companies, and that's, of course, always a good base. We have a clear governance model and that is there is a clear divisional responsibility between our role as an owner, the boards and the management teams in our companies. We all know the importance of people. For us, it is essential to have the right people in our companies and, of course, also at investor.
Here, we work very hard to make sure we have strong Boards of Directors in our companies, and especially important is, of course, the share persons and the CEOs of our companies. We have a strong industrial network, and we try to utilize that in a number of different ways, one being what I talked about earlier, populating the boards the CEOs and so forth. But the second part of that is that we are fortunate that we don't have competing businesses in our portfolio. And that means that we can bring all the people together and they can learn from each other because we recognize that we don't know everything at Investo. But by bringing people together from our companies, they can share experience and therefore develop business to really beat competition long term.
To give you a few example, my Chairman and myself, we invite all the shares in our companies, both the listed ones and the unlisted, twice per year, where we discuss important topics. We have a network for sustainability people, and we also have networks connected to, for example, digitalization. Since 5 years ago, we created a company called Combiant, and most of our companies are part of that sharing knowledge to develop for the future. The final pillar is that we are a strong believer in the importance of having a strong financial position, And that's for two reasons. First of all, to be able to handle tough times, but equally important to be able to grab opportunities out there.
We develop value creation plans for all our companies. And of course, they differ between the companies. Some companies might focus more on growth, some might focus more on efficiency improvement depending on what stage they're in. But there are a couple of areas that are important for all of them, and you can see them on the slide. Daniel, Christian and Noah will talk more about this later, so I will not go into the details, but let me touch upon 2 of them, corporate structure and sustainability, starting with corporate structure.
Over the last years, we have been highly involved in the split of Atlas Copco in Tatas and Epiroc and the split of Electrolux, creating Electrolux Professional. These are all about creating more focused organizations. After the divestiture of Power Grids, ABB is now working hard in implementing a decentralized business model with 18 operating units under the leadership of Bjorn Roosenglier. Daniel will come back and talk more about that later. I also want to stress that you see in the bottom corner a number of companies that have done sizable acquisitions in adjacencies, and that we believe is very important for long term value creation.
And I'm glad to say that you will hear much more today from, for example, Labri, Permobil, PIAB and Cernova since the CEOs for these companies are here or virtual. The second area is sustainability. In the beginning of this year, we launched new sustainability targets both for investor and for the portfolio of our companies. It's related to business ethics and governance, climate and diversity and inclusion. For us, this is all about future proofing our portfolio, making sure that our companies will win our competition also in the long term.
So this was just a brief overview of some of the things that are important for us as an engaged long term owner. And once again, you will hear more both from my management team today, but also, of course, from all the CEOs working in our companies. But let me now turn over to the 2nd pillar, which is investments, starting with the listed ones. For our listed companies, the key priority is to invest in the existing ones when we see attractive opportunities. And this year, we have invested in ABB, Ericsson and Electrolux Professional.
But over the last 5 plus years, we have invested SEK 20,000,000,000 in that portfolio and generated an IRR of 14%. Within Patricia, we do look for new investments. And recently, we closed the acquisition of Advanced Instruments and Noah will talk more about that later on. Here, we have clear priorities when we look for new companies. In terms of geography, it's Nordic or the U.
S. In Industry, we look for attractive industry segments, segments where we see good growth opportunities, but also where there is a structure that you can make good money. In terms of companies, we look for market leading companies with strong profitability, good cash flow, agility and maybe most important, strong corporate cultures. So in essence, what I'm saying is that we look for great companies and we are willing to pay for that. We'd rather pay more to buy a great company than buy a weaker company at what looks like a cheap price on paper.
Since 2015, we have acquired 5 new platforms, investing more than SEK 20,000,000,000 and the subsidiaries within Patricia has made more than 50 add on acquisitions. And we believe that is a great opportunity to create value also going forward. Noah and Christian will come back to that later on. The 3rd business area, Equity. Today, we have an investment about SEK 50,000,000,000 in Equity, close to 10% of our assets.
We have had a fantastic return on our investments here, almost 40% IRR since 2015. That strong performance has been driven by the IPO of IKKA B and secondly, strong performance in the underlying funds. In terms of cash flow, net cash flow to investor, over these 5, 6 years, we have received SEK 11,000,000,000 in cash flow. So roughly SEK 2,000,000,000 per year on average, even though, of course, it fluctuates between the years. So let me now turn over to the future, our priorities going forward.
We have 3 key priorities. 1st, sharpen our role as an engaged owner secondly, make sure we have an attractive portfolio And thirdly, always make sure we have a strong financial position. Starting with the first one, sharpen our role as an owner. These are the 5 key pillars. Number 1, drive our sustainability agenda to reach our targets and future proof the portfolio.
Number 2, capture opportunities related to digitalization and automation third, continuously ensure strong corporate structure, and I talked about that before. What is correct or what is the optimal corporate structure? Of course, that depends on what company we talk about. But in general, our view is we prefer to have focused decentralized organizations with clear responsibilities and the right incentives tied to those responsibilities. The 4th point, focus on investments and the important part here is and continuous efficiency improvements.
As a long term owner, we think it's absolutely highest importance that our companies invest in R and D, digitalization, automation, sustainability and geographical expansion to create long term value. But the companies must also, every day, go to work and gradually improve the efficiency because there is a tough competition out there. And all this, of course, goes also for investor. The 5th one, strengths and succession planning in our companies. And it goes without saying, whatever we do, we need great people running our companies.
Moving down to the portfolio side of the priorities. Also here, five priorities. We will continue to invest in our listed companies when we see attractive opportunities. We are constantly looking for new investments within Patricia. And as I said before, we believe there is a great potential to add value by our subsidiaries doing add on acquisitions.
We will continue to invest selectively in Equity Funds. And then finally, of course, we need also to constantly evaluate the potential in our companies and make sure we are the right owner. And last year, we, for example, came to the conclusion that we were not the right owner of Alaris and then we did an exit. The 3rd pillar, financial strengths. Helena will come back later and talk about our balance sheet liquidity.
I will not touch upon that, but I will stress something that is very important and that is the cash flow in and cash flow out. This is an important part of our business model and in my view a key strength of investor. Here you can see that between 2015 2019, over that 5 year period, we have generated about SEK 85,000,000,000 in cash flow, roughly half are dividends from our listed companies, about the third is distribution from Partition Industries Companies and the remaining part is the net cash flow from EQT. So how we use those SEK 85,000,000,000, half we have given in dividends to our shareholders. And then more than 40% we have used to invest in the listed companies and to build new platforms within Patricia.
And still, we have had money to reduce the net debt over this period. And I think that's the strength. We have so good cash flow that we can do all of this, maintaining also a good balance sheet. All in all, our work as an owner and the investments made have historically generated a good return. The dotted red line is our return requirement of 8% to 9% and the blue bar is investors' return over different periods and the gray bar is the corresponding return for the Swedish stock market.
As you can see, irregardless of the period, we have been able to beat our return requirement and also the stock market. But we know this is history, and now the clock starts again. But we are fully committed and believe that we will continue to generate a strong return also going forward. And why do we believe that we have good prospects of continuing this development? We own market leading companies that have strong exposure to trends out there, growth trends out there.
On the blue part of the pie, you see our health care exposure. Here we see great opportunities related to demographic, but also many of these companies have a huge potential to grow outside U. S. And Europe. On the advanced engineering side, we have a number of companies that should benefit from automation and electrification.
In technology, we have Ericsson being a leader within 5 gs. We have NASDAQ being a leader within market technology for exchanges. And within the financial sector with SEB that should benefit from the increased savings and we own AKT, which is a leading private equity company that really benefit from a strong trend of alternative investments. So all in all, good growth trajectories, good growth opportunities and companies with leading positions. So to summarize, we are committed to continue to deliver great value.
We have a proven ownership model. We have a portfolio with exposure to attractive long term trends. We have companies that are having really strong market positions and we have a strong industrial network and that in combination with our financial strengths makes it possible for us to support this development. So we have strengths. We have a strong platform, but we also know that, that this is the same.
We will work according to this model, but we know the world is moving faster and faster. So we will try to do the same, but we will try to do it also faster than we have done historically. So with that, thank you, and I hand over to you, Wiebe.
Yes. Thank you, Johan. Now this is really a day for all of you who are joining us virtually, And this is really also time to pose questions. And let's see from Magnus here if we have any questions for you, Johan.
We do. I can read them back to you. And the first question is from Peter Heymans, and he writes, sir, investor has an excellent track record, but some analysts mentioned the regional bias as a vulnerability despite the fact that your companies are global companies. Do you look at opportunities in other parts of the world?
That's a great question, and I touched upon it in my presentation a bit. It differs, of course. We have some companies that's in decades are very much established in emerging markets, markets outside Europe and U. S. For example, Atlas Copco, EBD and Ericsson that are truly global companies.
But we also have a significant part of the portfolio that so far mainly sells in Europe and the U. S. And for these companies, for example, some companies within our health care portfolio, For this company, we see a great potential to move into new regions. And it's not only the definition mature markets or emerging market, it can also be new markets. Bengt is here and he will talk about Permobil, for example, to give one example.
For Permobil, Australia has been a key growth market that has really supported growth since we acquired that company. So there is a lot of opportunities to grow in new markets. Okay.
We will have a joint Q and A session once Helena Saxon, Daniel Nordhel, Christian Siederholm and Noah Valley has been presenting. And then we will sum up some of the questions. So we will soon meet you again, Johan. Okay. Good.
And there are also questions that you can raise. You can use the phone and you can see the numbers here on the slide. And you can also, in your web interface, see the numbers to phone in. And Evelina will guide you through if you use the phone.
We have telephone questions. Excuse me? We have telephone questions now.
We have telephone questions now, but we will wait a little while and we will have them for the joint Q and A session. By that, I would like to present our next speaker, Helena Saxon, the CFO of Investor, who will give us an update on how we safeguard our financial strength and thus can act really from a position of strength. So please, Helena, come and join me here up on stage. And the floor is yours.
Thank you, Wiebeke. Hi, everyone. I will speak shortly about our financial flexibility. I will talk about our operating priorities, and I will end by answering a question that I get quite often. So let's look at our financial flexibility.
It is, of course, key to our strategy that we have a strong balance sheet, as Johan already mentioned. And this flexibility builds on having a conservative leverage policy, having a funding profile that reflects the long term horizon of our investment side and also we have to manage our balance sheet proactively. Looking at our leverage policy, we can see that our target range is 5% to 10%, it's the blue band in the graph, over a business cycle. And of course, this target range is set to allow us to both capture investment opportunities but also support our companies in tougher times. And on this page, you can also see our credit ratings, and they reflect the strong or the quality that our name has in the credit markets, and it allows us to access funding, attractive funding in the Eurobond market.
Looking at this slide, we can see the proactivity that has been going on the last few years. The pillars in this graph is the
we have been active, as I said,
and we have raised 3 eurobonds, we have been active, as I said, and we have raised 3 eurobonds at long 10ures, 12, 15 20 years, a total of €1,600,000,000 at very attractive terms. Now over to our operating priorities. For the last decade, we have focused on 3 things: growing the net asset value, operating efficiently and paying a steadily rising dividend. So how have we performed? Well, our net asset value has grown, as you can see in this picture.
The annual average net asset value growth, including dividends added back, has been 14%, and this compares favorably to 6 AREX TSR of 11%, and it's also an outperformance of our own return requirement of 8% to 9%. Operating efficiently. This is what we do every day. We're very careful about spending it. It amounts to roughly 10 basis points of our net asset value.
And I think we have improved the productivity in the organization in the last few years, and this is proven by the fact that since we have acquired, managed and consolidated several new subsidiaries, not the least in the U. S, our management costs have during this period remained roughly the same. So we do more with the same resources, but we constantly strive to improve efficiency in everything we do. And then dividends, our 3rd operating priority. Of course, it has been a strength for us to deliver a steadily rising dividend.
And in the last for 9 consecutive years, investor increased the dividend by SEK 1 per year per share. And this year, for 2019, the Board of Directors proposed a lower dividend, a dividend of SEK 9 per share. And of course, this is a reflection of the lower dividends received that came in during the spring but also, of course, the uncertainty around COVID-nineteen. A second dividend was considered during the spring, and we were hoping to come back to market with a second installment. But it was announced today that the Board of Directors have considered all the parameters and decided not to call for an extra general meeting in 2020.
Coming then to the question that we often get, Magnus and I I'm looking at Magnus. It regards estimated market values. And we have, to set the context, since 2017, started reporting estimated market values for our major subsidiaries. This in a move to increase transparency and make it easier for our investors to understand our private holdings. But now and then we get questions, how do we arrive at these estimated market values?
Well, they are based on multiples, typically enterprise value over EBITDA multiples. And these multiples are compiled by an external party, and they are based on relevant listed peers but also broader industry indices. The broad peer groups are there to provide some form of stability so that we don't have too volatile development of these market values. And the operating profits are adjusted to reflect, for example, pro form a effects of completed add on acquisitions or certain non recurring items. And while these market values might not be what we believe are the true intrinsic values, They are an attempt to reflect what these companies would be worth if they were listed on the stock exchange.
And this is how we usually answer this question, and this is the end of my presentation. Birvekar, yes. I hand back to you.
Yes. Thank you, Helena. And you will be back as well for the joint Q and A session because we thought it's better to sum up some questions at one time, and we will have time for questions then. So we will be seeing you soon again. Thank you.
Thank you, Helena. Now Johan Fuschel gave a strategic update and also discussed our model for engaged ownership. And the 2 next sessions will be about how we do it more in practice, dig deeper into the listed companies and also to Patricia Industries. We will start out by the listed companies headed by Daniel Nordhel, who will start out. And Daniel, please come here and come up to the stage.
And then followed by Christian Sederholm and Nova Valle. Please welcome, Daniel.
Thank you, Vivek, and good afternoon. So we're going to spend some time on the listed companies. As Johan mentioned, we split 2 companies over the last couple of years and the portfolio today consists of 13 well positioned companies. We are typically the largest minority shareholder in these companies with board representation. Historical returns has been good, well above our return requirement and also outperforming the stock on stock exchange.
Our focus when it comes to engaged ownership is to continuously challenge and support these companies to reach their full potential. And when it comes to investments, we try to take advantage of the stock market volatility to selectively strengthen our ownership at attractive prices. So our engaged long term ownership model, we focus on long term value creation for the companies. As Johan mentioned, this is about having the right people. We need the right people in the investment organization.
We need the right people in the board, the right board composition, the right share persons, but also about having the right CEOs and the right management in the companies. We believe in strong shareholder alignment and we encourage both boards management to build up a strong share ownership over time. Therefore, we have also recently issued long term options to the chairpersons in the companies offered at market valuation. Internally, we focus a lot on primary analysis, trying to focus on the key strategic challenges and opportunities for the different companies. Here we identify key value creation drivers and activities to make sure that we continue to develop these companies.
And of course, our target is to make sure that we continue a strong continue to see a strong operational performance in the companies and build more sustainable best in class companies. So just look at some recent activities in the portfolio and activity has been very high. We split Atlas Copco and Epiroc. We split Electrolux and Electrolux Professional to increase the end customer focus. This is something that is driven by the companies but supported by us as the largest shareholders.
ABB has increased its end customer focus as well following the divestment of Power Grids and now going through decentralization under new leadership. We also have some good example of operational excellence in the portfolio. Husqvarna has doubled the EBIT margin over the last couple of years while building a world leading market position in robotic lawn mowers. Ericsson has delivered a strong successful turnaround and recently through the acquisition of Cradlepoint, they also positioned themselves for the faster growing enterprise segment. And I think SARB is a good example of a company that has broadened its exposure and improving its long term growth potential through recent acquisitions.
We see significant value creation potential through similar activities in the current portfolio. We have over the last couple of years also increased the focus on 3 important areas, which to some extent are interlinked: digitalization, talent management and sustainability. In terms of digitalization, we are seeing faster technology shifts and changing customer behavior in a number of industries. This is to a large extent driven by digitalization and automation. This is something that has been accelerated during the pandemic, and I'm really impressed and satisfied with how the companies has handled this tough situation, bringing customer relations online, launching e commerce solutions in markets where traditional distribution shut down, etcetera.
We really need to ensure that we keep this speed and agility going forward to make sure that our companies lead the transformation. We need to continuously develop new products, new services, but also reinventing the way we do business. Collaboration and partnerships will become more and more important in a connected world. To maximize customer value, you need to bring solutions to the customers. And here I think the collaboration between Epiroc and Ericsson is a great example of how they bring wireless networks to the mining customers.
But of course, this puts pressures on a number of companies. We all need to reinvent ourselves. We need to make sure that we have new skills and new knowledge within the workforce, both at investor and in all the companies. To make sure that we lead and solve these future challenges, we need to be able to attract new talent. But we also need to make sure that we upscale and rescale the current people in the organizations.
And here I think that a number of companies in the portfolio is doing a great job. Take SEB Campus as an example. They launched a corporate digital university available for all the employees to make sure that they develop themselves for future challenges. And of course, giving our long term perspective as an owner, making sure we have the best right people here and now is extremely important. But we also need to make sure that we develop future leaders, the next generation of leaders that will take over and run these companies over the coming years.
And here it's extremely important to work proactively with talent management to develop clear succession plans for all critical roles in the companies. We prefer to see 2 strong internal candidates for all critical roles, but we also need to benchmark these versus external talent. And here we are working proactively to broaden the network even further to be able to attract the next generation leaders. And to be able to attract the future generation, the future leaders, diversity and inclusion is going to be extremely important. We believe that this is a necessity for all companies.
We believe that you need to provide equal opportunities no matter ethnic background, gender to attract the future generation. So this is something we are working more proactively with all our companies. Of course, business ethics and governance are extremely important for all companies. Business ethics is about license to operate. You need to have a 0 tolerance when it comes to ethics and compliance.
But we also need to make sure that all companies act very fast and forcefully as soon as they identify any deviations here. And turning to the environment. This is probably one of the biggest challenges for our generation. As a society, I really believe we need to deliver on the Paris Agreement and reach net Sierra emissions in 2,050. That's why we launched the targets for the portfolio as a whole, and I'm very pleased to see that this is high on the agenda in all the companies.
One leading example being AstraZeneca targeting to be carbon neutral in its own operation by 2025 and targeting to be carbon negative across the value chain in 2,030. And of course, to be able to deliver on this, new technologies and digitalization is going to be extremely important. For many of these Nordic companies, sustainability has been high on the agenda for a very, very long time. They are to a large extent focused on resource efficiency and total cost of ownership for the customers. So this is all about reducing water usage, energy usage, etcetera.
So let me briefly touch upon the investment part as well. As Johan mentioned, we've been investing around SEK 20,000,000,000 over the last 5 years with attractive returns. Our focus is and continues to be to strengthen the ownership in selected listed companies and also to support the companies in rights issues. It might be in terms of driving M and A agendas or strengthening balance sheets when needed. And by that, let me sum up.
We have a strong proven model for engaged ownership in public companies. Looking at the portfolio today, we have companies with strong market positions and attractive growth opportunities. Thank you. Thank you, Daniel.
Thank you. And also you will be back in a little while for our joint Q and A sessions. And I have been flipping through the questions. There are some questions and we will really try to address all the different questions in a little while. Now moving over to Patricia Industries.
As our wholly owned subsidiaries, our wholly owned companies are organized today within Patricia Industries, which was established back in 2015. And now we will be joined by our 2 co heads. So please, Christian Siederhorn, who is here with me in Stockholm. And we are joined by Noah Valle, our co head back in New York. And the 2 of you will be having a joint presentation now and describe our ownership model in the context of Patricia Industries.
Thank you very much, Wiebke. Good afternoon and good morning to all of you folks in the U. S. So as you think about the performance over time of Patricia Industries, it's actually quite simple because it's just the accumulated performance of all the subsidiaries or portfolio companies. So I think in that spirit, Noah and I will be pretty brief and then we'll leave plenty of time for the respective CEOs to present and discuss their respective businesses.
But Patricia today then in a nutshell about 10 companies based in North America and the Nordics, all high quality companies with really good management teams and importantly good growth opportunities really across. In aggregate, it says of about SEK 40,000,000,000 and EBITDA of SEK 8,000,000,000 and cash flow of SEK 6,000,000,000. The cash flow is before any add on acquisitions, of course before other M and A and before the dividend we pay to investor each year. As active long term owners, we'd like to think about ourselves and our ambition is to be a great home for great companies. Now what do we mean by that?
Well, it's really creating the best possible circumstances for each company to fulfill and reach their full potential at all times. So a couple of principles or practices that guides us in doing this. First of all, we're firm believers in the power of empowered people and teams. This means we operate by decenter model where all the subsidiaries or portfolio companies always should have the highest possible degree of independence and freedom to operate. Our key platform of active ownership is really through the boards and in setting the boards, we benefit usually from the investor and the Wallenberg networks in finding good people for the depending on what the situation and the task at hand is.
As you know, well by now the boards of course assigns the CEO who then together with the board sets out a strategy and the targets. And then it's a lot about following up, challenging from time to time, but also importantly to support the companies in reaching the full potential. However, it is always and must always be the management teams that run the daily business that's important to us. We also make sure to align interests. We work with management participation program or equity participation program similar to what you find in other private equity.
And finally, of course, we're willing and ready to assist with capital when good opportunities arise. If we look at our priorities as Patricia, they've been relatively stable over the years And first is always to develop and support the companies in the portfolio. This is really what defines our reason for being. Secondly, we've added a number of new platform companies over the years and we certainly remain open for new business as well. And thirdly, we work to realize or exit most of the financial investments over time really reallocating both capital, but also human resources or time towards our strategy of wholly owned companies.
Just to say a few words on each of these, starting then with developing existing companies. Now given our long term investment horizon, over time profitable growth is really the top priority here. Organically of course investing in R and D, product refinements, but also adding sales force in existing companies or countries or geographies, but also new geographies as both Johan and Daniel alluded to. And on top of the organic growth, we also use add on acquisitions as an integral part of our strategy. We generally believe that speed is of great importance.
It's typically an underappreciated competitive advantage and by using or doing select M and A we can really accelerate our movement towards the strategic goals that we set out bringing along also great people and great new teams along the way. So if we look at that on add on acquisitions in a little bit more details, as Johan said, we've done 50 plus add on acquisitions or the companies have done 50 plus add on acquisitions, really deploying some SEK 17,000,000,000 of capital. Happy to see that 2020 was a record year. Now please don't extrapolate that, but rest assured that we will continue working with this in all the companies. Talent or people is the other one dimension I'd like to touch upon here.
We truly believe that people is I dare say, the number one bottleneck and critical asset in terms of reaching full potential in all our companies. And there are a number of areas where we feel we can do even more. For example, we believe that we can do more to develop the people who have in the companies. That may include promoting internal recruitments and also making sure that all leaders have succession planning top or high on their mindset at all times. As we see it, this is really goes back to sustainability.
I mean being too dependent on external recruitment over time is not a sustainable way to build a business and the culture. So with that, I'd like to leave over to you, Noah, and I'm happy to help you with clicking here.
Thank you. Thank you, Christian, and good morning, everyone. Good afternoon for those of you in Stockholm, obviously. As Christian said, beyond growing and developing and improving what we already own, our second strategic priority is to find high quality new platform acquisitions. And in this area, 2 weeks ago, we were fortunate enough to close on Advanced Instruments, which is our 5th new platform since starting Patricia.
I'm going to briefly try and describe what Advanced Instruments does. It basically provides an instrument, a scientific instrument, consumables and services for measuring something called osmolality, which essentially measures the concentration of a solute, whether a solid, liquid or gas in a solution. And the company got its start actually in the milk business, helping verify that farmers were not watering down their milk and it was actually sufficient milk fat and milk solids in milk. And you can see on the chart today that the food business is still a small part of their business today. But over time, they evolved into other markets, the clinical market and most recently the bioprocessing market.
And those are 2 really attractive markets. This investment really picked ticked almost every box for us in terms of what we look for in an attractive new platform acquisition. It is the clear global market leader in its business. It has a very strong position in the U. S.
And is the largest player internationally as well. And we love the fact that it also is a well established business internationally already with 35% of its revenue coming from overseas. As I said, it operates in 2, 3, but really 2 fantastic growth markets. The clinical market is large. It's been growing steadily for a long time.
There's every reason to believe it will continue to grow at those kind of rates. And the bioprocessing market is really very exciting with the exploding prevalence of new gene and cell therapy drugs. And we think growth there will be really has been extremely fast over the last few years and will probably continue to grow at that rate or faster going forward. The company has a largely recurring revenue base. Almost twothree of the revenue comes from services and consumables, which obviously makes for a much more reliable business model than one that's based purely on equipment.
The company has global blue chip customers and has a proven market proven development process for bringing new products to market. It's really been an innovator in its space, has consulted with its customers on what they need and has a strong track record of reintroducing these new products and then being successful. Obviously, we require a strong financial profile and this company has that in spades. It has grown very strongly. It has best in class margins and has really high free cash flow conversion.
And as we look forward, we're excited about the many opportunities for growth here, both organically within their existing markets through the introduction of new products and new solutions, but also internationally where though they have a good start, there's lots to do. Per Johan's comment earlier about expanding into markets beyond the U. S. And Europe. And then there are lots of inorganic opportunities for this company as well.
So we feel very strongly that we can continue to grow this business at or better than the rates that it's seen historically. Next slide, please, Christian. So our 3rd priority is to realize the value that has tied up been tied up historically in our old legacy venture portfolio, which was, as many of you know, spread over both the U. S, Asia and Europe. And when we started in 2015, we had almost SEK 12,000,000,000 in that activity.
Since then, we've realized €10,000,000,000 of that in over 50 exits, including €1,000,000,000 this year in 4 additional exits. I'm happy to say that the value of the portfolio has also grown over that time by about $1,500,000,000 So today, the residual holdings represent roughly $3,000,000,000 So we've made a lot of progress here, but I think we still have a little bit more work to do to realize the remaining value. We're down to slightly more than a dozen holdings now and some venture funds in the U. S. And are actively working on plans to get liquid on those remaining holdings over the next few years, we hope.
Next slide, please. So really this is just a summary. And the point here I think is that we believe that by pursuing these three priorities that we detailed with energy and determination over the last 5 years, we've produced quite strong results. We've doubled the portfolio EBITDA. We've done more than 50 add on acquisitions, as Christian and Johan noted.
We have 5 new platform companies in the portfolio. We've had 50 exits or more in the old legacy portfolio and freed up $10,000,000,000 in liquidity, which we've hopefully reinvested intelligently in new platforms and add on acquisitions. We have a strong financial position in Patricia today with over SEK10 1,000,000,000 on the balance sheet, very strong annual cash flow generation. In fact, if you look at the dividends from the portfolio this year, the PI portfolio, they almost paid for the new acquisition in Advanced Instruments. And we've done all that while maintaining moderate gearing on the portfolio, which is roughly 2.5x to 3x leverage.
So we think so far we've done a reasonable job here and we hope to continue that going forward. Now Christian, I'd like to hand it back to you for a recent positive update on the portfolio.
Thank you. And this is just taking the opportunity since this is new out there. What we announced yesterday was that we transferred our 40% of the passive infrastructure assets basically the masts or towers of 3 Scandinavia into newly formed company, Zhongkong Holdings Networks. And this company was then eventually sold to Cellnex for a consideration of SEK 10,000,000,000 of which we will receive SEK 5,000,000,000 sorry, 5%. Now what is this about?
Well, it's really to the basis of this is to increase focus in our businesses much like Daniel referred to previously. So 3, we'll focus on acquiring customers, providing best in class service, building for 5 gs services, etcetera, etcetera. And then Cellnex, who is doing only this, taking care of the passive infrastructure, we'll do that in a great way. And while doing this, we also realize some cash and proceeds from this business, further strengthening our balance sheet. So that's on a happy note and we end there.
Thank you.
Okay. Thank you, Christian, and thank you, Noah. You will be joining us now for a Q and A session. And Noah, you will stay with us, and we will interact with you as well. And I know we have quite a few questions.
And I know one of the questions that were one of the first questions were related to the dividend and what about our dividend policy and what will happen going forward, Johan.
Yes. If I start with the dividend that or the decision we have taken, We have taken the decision for 2 main reasons. First of all, we can all see that there is a spread, the second wave of COVID-nineteen, which, of course, creates uncertainty. The second part is that we said that we should also consider the dividend coming in. And there is no secret that we have one company, decision made.
Having said that, I think it's worth remembering that this is a very special year with the corona situation. And actually, despite this challenging year, we are giving a dividend of SEK 7,000,000,000 per year, which is roughly 2 third of the previous level, in a year where almost half of the companies on OMX 30, the 30 biggest company on the Stockholm Stock Exchange, actually pays no dividend at all. And at the same time, in the beginning of the year, we invested more than SEK 4,000,000,000 in Laboree that made a significant add on acquisition. We have invested more than SEK 3,000,000,000 in the listed portfolio in ABB, Ericsson and Electrolux Professional. And we recently announced the acquisition of Advanced Instruments that Noah talked about.
Despite the dividend paid, despite all these investments, we will end up the year with a very strong financial position. So we have tried to make a balance. In the medium term and the plan going forward, of course, our ambition is to come back and deliver on our dividend policy that firmly stays where it has been before.
Okay, Magnus. Let's see. Should we take some questions over the phone or from the web? You decide.
We can take a couple from the web first, and they would be from Johan Hoeghbari of Danske Bank. And the first one is, could you talk about your comment on selective investments in EQT? Is that a change to how you have invested in EQT funds in the past?
Yes. First of all, is it a change have we invested in all funds historically? No, we have not. There are some credit funds, etcetera, that we did not participate in. So from that perspective, it's not a change.
But in connection with the IPO with EKT AB, we actually rearranged the setup, the agreement, and that means that we now have more flexibility. We have a right to invest a certain part carry free, but there is no obligation for us. And that means that we have the flexibility to invest if we want in the funds. Having said all that, if you look on the historic track record that I showed before, IKT has in a number of their funds delivered excellent returns. So for sure, we plan to participate in some of the funds also going forward.
Thank you. The next question from Johan is how would you say that the landscape has changed when bidding for new companies? Do you face new competition from new potential buyers? We only hear about completed M and A, but how many auctions or potential deals have you stepped away from due to valuation becoming excessive?
Do you want to take that?
If I start, Noah, and then you chip in. Well, I think it is hugely competitive, but I would also say that it has been usually competitive for the last, well, 5 years at least. And as I think Johan mentioned, we are in the business of buying and developing good companies. That means we will always pay a high multiple. So I would say if anything to some extent it's an advantage to be in this environment because at least good companies may be for sale, which typically aren't in the slightly tougher environment.
But to answer the question more specifically, do we step away because of valuation? Yes, that has happened a number of times. It happens all the time basically both on new potential new platform acquisitions as well as on the add on acquisitions. You just have to be disciplined.
I have nothing really to add to that. I think that's a comprehensive answer.
Okay. I know we have some questions over the phone now. And Evelina?
Thank you.
And we do have a question from Derik Laliberte from ABG. Please go ahead.
Yes, good afternoon. I think everybody else really appreciate you hosting this Capital Markets Day.
So I was wondering how do
you work with the opportunities and risks associated with shifts in technology and how do you support your holdings? Looking at Wartsila specifically, what's your view on the future of the energy business given it's still heavy dependence on fossil fuels along with the opportunities and threats stemming from the ongoing shift to renewables? Thank you.
Thank you for the questions. I think a number of my colleagues here in the management team can chip in on a couple of them. But let me start with the question specifically on Wartsila. I think for Wartsila, we have 2 business segments, one being the marine related and one being the energy side. On the marine side in terms of technology, there are, of course, a lot of important aspects, one being to make sure that you can handle the sustainability in the short term and that you can handle with different kind of technologies, for example, scrubbers.
In the more medium to long term, of course, it is essential that Wartsila will be the leading player when it comes to becoming fuel compliant on engines in the future. And also important, of course, we'll be able to migrate the engines from the current ones that might be run on LNG or something else to this clean fuse in the future. On the Energy side, there is a steady base business today, which is the baseload business with normally very good service offerings related to that. But with more wind and more solar coming on, which is our intermittent, as we all know, that will, of course, create a large need for balancing power. And to handle balancing power, you need a lot of different techniques, one being engines, others being batteries.
There are different solutions from different situations and of course, dependent on how much balancing power you need. For us at Wartsila, it will be important to create a very strong offering not only for Baseloop but also for balancing power. And to be able to do that, you must, of course, make sure you have a competitive product offering because it is a fact that the utilization of the engines are lower in that segment. And you need, therefore, to be able to sell on value what you create for the customer in that segment. So those are top priorities for us in Wartsila.
Okay. More questions?
We have a question from Perk Kollian of Fjerda Apfonden. Johan, investors really ingrained in the stock market being listed yourself and many of your holdings are listed companies. When will we see an IPO from Patricia? And what will be the fundamental hurdles to that decision? Or why not float Patricia itself?
Thank you. Thank you for that question. First of all, and maybe Christian and Noah wants to comment here, but if I start with Patricia, I hope that I have really showed that we believe it's a key strength to have the 3 business areas and not the least, Patricia, to have that because it's not only a fantastic potential for us to create long term value, but it also generates stable cash flow that can be used to further develop Patricia, but also pay good distribution to Investo parent company. So for sure, our plan to continue to work with both listed and Patricia and the investments in EQT. On the other part on do we plan to list the subsidiaries?
Actually, I would like to come back to what I said in the beginning. We, Christian and Noah and their team, they work so hard to try to find absolute top quality companies out there, and that is very, very difficult. So if we succeed with that and acquire these fantastic companies, we truly believe the best value creation will be to develop them for the long term. But please, Christian and Noah fill in.
I think it's a comprehensive answer.
Are there any more questions? One left.
I have a few more. Maybe we should check with the phone first.
Okay. Okay. Evelyn? Please go ahead.
Thank you for that. So coming back to the cash flow platform from Patricia you alluded to, Johan. Obviously, that has I mean, to own your own cash flows makes strategic sense. But can you talk a bit about the proceeds if you intend to basically use the proceeds in a similar fashion as you've done throughout, let's say, past 5 years in the coming 5 years? Or will there be a slight more tilt to either one of the segments?
Thank you. That's a great question. And we will continue to invest in all areas. And I cannot answer the question. And the reason for that is that we are continuously looking for great opportunities.
And if more opportunities will come in one area, we will probably do more in that area. And on the listed side, of course, it also depends, to be honest, on the stock market development. So it will be very difficult to say a firm view on that one. Our long term strategic growth is though to continue to really develop unlisted side.
Thank you, Johan. A couple of more questions, one from Derik Lundiberty of ABG. What's your view on M and A within your holdings? And do you support them in this process? Would you prefer bolt ons or be open to larger equity finance deals?
Well, if we start from our perspective, yes, we're certainly supporting that. I think what is great with that on acquisitions is the companies are typically sourced by the management teams, meaning that we know the companies in some sense, we know the markets. So that's lower risk. Then in terms of the execution, certainly I mean over the years we've accumulated some experience within Investo and Patricia as well. So we're happy to help there.
And the last part of the question I didn't quite understand comparing it to
Boltons or larger equity financed deals basically.
Okay. I
mean we so our way of looking at it is bolt on is something you add to an existing platform and then sometimes those are bigger and then it may need equity financing from us. But it's really about add on acquisitions and that's one of our top priorities.
It's the
same for the listed part. How do we view things there?
Yes. More or less the same. I think we support and challenge the companies when it comes to M and A through our Board representatives. Take Atlas acquisitions into vacuum, for example, that really reposition the company into new growth area. And that's usually a very long discussion between management and the board, and there we support our board representatives.
The last thing before we close this, we have a question. We realized that we use some financial language and we had a question about we use the acronym TSR all the time and that's total shareholder return. That's the share price return including reinvested dividends. No more questions.
Okay. Thank you. We will now take a very short break, like 3 minutes, so that you can grab a cup of coffee or so. And then we will start off by our presentations by our Patricia Industries Companies, the CEOs, starting out with a brief introduction by Slatka Ritter, the incoming CEO of Mannliche. So see you back in like 3 minutes.
Welcome back, everyone. Now we will have quite a lot of presentations from the different Patricia Industries Companies, but we are very happy to start out by a brief introduction from the incoming Mannliche CEO, Slatko Ritter, who is joining us from the south of Sweden. And hello to you, Slatko. I know everyone is very eager to listen in to you. Welcome to the Investo family.
Thank you very much. Calling in here from partly cloudy Lund this day, this Friday. And I got opportunity here to introduce myself shortly. And of course, please, next slide. Some of you have met before in my current role, so to speak.
Again, next time we meet, I hope that we can discuss MUNLEC opportunities and strategies and execution of those much more than we do today. I will join on November 30, a little bit more than 2 weeks from now. Next slide, please. And then my background is that I spent the last 25 years in the medical device industry in different companies. And if we take next slide, those companies and areas that I've worked within the last years has been dialysis products and services, big companies like Gamba and Baxter, also patient handling part of the Yetinge group.
These days it's Arjo, it was their extended care division and also IVF. And the last 6 years in diagnostics trying to digitalize something that's been done manual for many, many years. I have a pretty broad range of responsibilities. I've been heading primarily, I would say, R and D and Innovation throughout the years, but also have experience as Head of Division. I've been running sales both globally and regional sales teams like EMEA in the different companies.
And as I said, the last 6 years, I've been the CEO at the Sellavision, which is a listed mid cap company at Stockholm Nasdaq. I think probably what I'm most proud of being part of is that I have directly and I would say indirectly been responsible for, I would say, 35 plus global medtech launches. So I can probably walk into any hospitals around the world any hospital around the world and find some product I've been somehow involved in, for good and for bad. Also have some board experience, which I think is important as a CEO, since you are working very close with the board. Been at the ETAC Board, which is another metaccompany the last 4 years, which is also in the patient handling area.
And then I have one word off, and that is that I'm also a board member of Malmefef, which is a Swedish soccer team. We recently won a Swedish league, so it's been a few happy days despite all the COVID issues. So that's a little bit of my background that I'm bringing into this role the coming years. And I think what's key for me when you move into medtech and my experience there is that the starting point, I think that's valid for any company and any operation you do is the customer's call point. I mean, that's always important.
I think what is specific for MedTech is that it's a pretty complex setup with a lot of decision makers and stakeholders. And that's why it's really important to understand how you kind of make yourself attractive into that call point. Usually in MedTech, in the health care system, you're part of a workflow, so you have to add something to the chain, be a strong link. Either you have a large part of the workflow or small part of the workflow, but it's always a workflow. And I think the value creation today in Med tech licensing kind of the combination.
In the old days, if you had a good product that had some kind of clinical benefits, you should sell it to high price. These days, it always goes with the value you create by efficiencies or saving money at the same time when you have this kind of innovation edge. And I think Customer Insights going back to that is again to understand the met unmet known and unknown needs of the customer is always, always key. And then finally, I think and this is, of course, a new trend, not unique for MedTech, but I think MedTech, the business and I think the Healthcare business is a little bit late into this is the whole digitalization AI or the deep learning methodology that is coming in now. I've been kind of banging my head the last 6 years in diagnostics trying to transform traditional microscopy into digital microscopy through the throughout the company that I'm serving at this stage, CEO of Silavision.
And that's been a fantastic journey, but also a lot of challenges. And I hope and I think all kind of medtech segments will need to understand what digitalization and AI will mean for them because this is such a strong trend and it adds so much value creation for the customer because they can do things faster, cheaper and better basically using these type of tools. And of course, this is something that needs to be mastered, and that will also go from Endelik, because I think that is something I hope that I can bring in. And by that, that's a short introduction for me. I hand over back to Vivekha.
Thank you so much, Slatko. And listening in to you, we realize you're really a champion in so many ways, not only in terms of being part of the Southern Football Champions. I know that all the participants here today are very keen to meet you once you're on board in less than a month. And now we will have Barry McBride, Interim CEO of Mannliche, who will go through Mannliche's strategy and way forward. And then we will have a brief Q and A with Barry.
So welcome, Barry, and thanks for joining us.
Thank you, Vivek. Absolutely delighted to be here. So it's been an interesting and I can't see the slides, by the way. So I assume my second slide, please. Next slide.
So just a little bit about me. I've been with Monlika for 6 years. It's been an exciting journey. And I'm looking forward to tell you about 2020 and the journey we've been on. So there's 8,000 of us talented folks in our team.
And we've had to be agile and pivot to really respond to changing demand and meet our customers' needs. So next slide, please. So if you look at our business, really what we're talking about is 2 main parts of our business. Hold on a second. We've got Wind Care and Surgical.
And when we look at the both of those franchises, we really are talking about a premium business. So everything that we do, we are absolutely premium. And that's how we position all of that. We've got a fantastic team, as I said earlier. And each of those that we look at, we've got a little bit of diversification.
So without going into too much detail, when we look at wound care, we are active in the home care market. We're active in the OR. We're active in the ICU and all of the wards and then all of the post acute markets as well. When we look at our surgical business, it's the same way. So we're in the OR with our trays, then we've got the staff protection and the surgical gloves in the OR.
And we've got antiseptics, which are preoperative and both postoperative and in wards as well. So we're highly diversified across channels and different sectors in that market. So next slide, please. So in those areas that we play, if we look at wound care, we're the largest player, also in surgical. And in wound care, what we've call it actually is advanced wound care dressings.
So on the right, you can see actually that if you compare Q3 on Q3 versus our competitors, we actually grew like for like from 2019 to 2020 in Q3 by 5%. All of our key competitors went backwards. So I'll talk a little bit about that more. We also saw a dip in Q2, but we really came on stream. The strategies that we've deployed really seem to resonate with our customers and the total value that we've got.
So next slide, please. The factors that really are driving our business in developed markets, it's really the aging population and then lifestyle diseases, if you like. So diabetes is a large driver of a lot of our wound care business. When we look at more emerging markets, generally speaking there, it's more access to HealthCore. It's they're developing in terms of the number of funds available.
So that's what's driving it from that perspective. And some of the things are really compelling demographics, unfortunately. Diabetes, I would point out in particular. If we look worldwide, it's 1 in 11. The highest percentage we've seen of diabetes is some of the countries in the Middle East are approaching 30% diabetes total.
So that drives, unfortunately, a high demand for wound care products and associated comorbidities. Next slide, please. So we've really got 3 So we've really got
3 aspects to
how we're going to grow and maintain our premium. First of all, we are investing and growing in our core business. We're doing all the usual things in that in terms of innovation and driving clinical evidence and really converting that into conversations as you would expect. Then on top of that, we're looking at new geographies and new channels. So new geographies, it's just as we get critical mass in a new country that's going forward, then we'll actually put in a direct sales operation.
All of our products reach our customers already through distribution. But as we get critical mass, then they'll want to invest in going direct. And when we talk about channels, then really what we're talking about is following our customers' purchasing pattern. So we're very active in the acute market. Where appropriate, we get into the home care market.
And then as we can see, and particularly over the COVID period, we've had to develop a little bit as well and make sure that our products are available in pharmacies and in some cases as well direct to the consumer, just to follow how they can get their hands on the products. And then in terms of new technologies, we have a number of new platforms coming on board. So 2 I'm going to call out in particular is our Granulox product. It's a product technology we acquired a few years back. It's really starting to get traction.
And that product is an oxygen therapy product that really promotes wound healing. Our new negative pressure product, our Advanced Solo, we've just launched the product in Europe and in our target markets, really a new platform that we see really exciting future growth for. And just on the slide, I've just called out a few CAGRs that you can see. Some of the markets we've emerged in over the sorry, focused on over the last 3 years, you can see the sort of CAGRs that we're getting in, if you like, the Middle East, Brazil and China in particular. So a little bit getting more into 2020 and our incredible results that we actually had in Q3.
So first of all, our customers really came to us in a bit of a panic, obviously. So when this pandemic happened, we really felt that we needed to help our customers and help society. So there was government procurement organizations were not set up to cope with staff protection and all of the requirements that were really required. So what we really did is pivoted, showed agility, started to work with those customers. And when we went into Q2, then what we've done as Monologa, working with our factories and with our supply partners, we've really actually brought on increased capacity for staff closing.
And then on top of that, we've really built relationships at a top government level and a top hospital level with hospital chains on different levels to really help them out of a sticky situation. In doing that, we've really as we've delivered, we've shown that quality, reliability and a good company like Monlika is when the things get when the going gets tough, we can really help. So if you go to the next slide, please. When we talk about PPE and staff protection, we really feel like we need to earn our position as the premium player. Everything we do in Monlika, we're a premium player.
So as a leader, we think we've shown leadership in terms of focusing on quality and sustainability. And we invest in innovation. There's a lot of new players coming along. We invest also our products, our medical devices gone through the whole regulation. They're also PPE.
And we focused on innovation around sustainability as well as you would expect as a Patricia company. So just giving you a few examples in the slide. We're reducing the amount of fossil fuels that are used. We're reducing our CO2 in the products. And where appropriate, we're getting a lot more sustainability around that.
So we just see this business and what we've done with the new relationships that we've built up, we really see that protecting frontline healthcare staff is absolutely critical going forward. And Monlika is really helping our partners to do that, our customers. So next slide, please. So when we talk about our premium, so there are a lot of pressures. So prior to COVID, if we look at our wind care market and also a lot of our other markets, we see a lot of our new competitors coming in.
We also see the burden with increased demographics, with increased people requiring healthcare, with the increasing amounts of surgery, with the aging population coming along, there's a lot of pressure on healthcare budgets. And the easiest thing in the world and what a lot of the competitors are really doing is just coming in and giving the lowest cost. So what we really do as Monlika is focus on listening to our customers first. So we really reach out and look for customers' needs. What are their pain points about solving customers' pain points.
So the first one I would point out in this slide is innovation and product pipeline. So on our existing products and our new portfolio, we make sure that it solves a customer problem. Then what we actually do is the next step for us is clinical evidence. And again, that's what differentiates us and gives us a sustainable business going forward. We make sure that our product is backed up by solid clinical evidence, best in class to really prove that it does what we said it would do by all of the necessary means.
Then the next step that we go into is health economics. So we take the product innovation, the technical features, the customers pinpoint and actually translate that into an economic message that really resonates with C suites and also with clinicians as well. So we convert that into commercial language. And then the final one is investing in our people and commercial execution that we can take that product pipeline, the clinical evidence and that story and really bring it to our customers and actually deliver and demonstrate that we can give a total value to our customer. Next slide, please, and final slide.
So just looking forward, if COVID continues, obviously, we see a little bit of second wave in some markets coming in and different waves. We're set up for that with our supply base. We're ready to pivot towards that. We're also ready if hopefully COVID slows down. Our core business is really starting to pick up.
So we see wind car coming on stream. So we think we're really, really well positioned. And what makes us comfortable coming out is we had a fantastic Q3. We saw our core business in terms of wind curve coming on stream. And Q4 is already starting to look very well, if you look like.
So we obviously have seen October results, and they should also demonstrate the strength. So just I think the diversification that Monlika has in its portfolio across its geographies and across its channels into healthcare, the fact that we have premium positions, the fact that we have invested in that portfolio and our team over time and can demonstrate that really shows and we're in a good position. And finally, what I would say is our relentless focus on our customer is deep in our part of our core values. And then really this year, the entire team, our 8,000 team members have shown extreme agility and extreme resilience to just pivot towards what we needed to do to meet our customer demand. And really then, it boils down to the team.
So I said it's like protect and invest in our people. So Vivek, that's the presentation.
Thank you so much. The dimension of people comes back over and over again, I think, during the course of this afternoon. And now I know we have 1 or 2 questions for you, Barry, from the participants. Let's hear them out, Magnus.
We have a question from Dierkla Liberte of ABG. Where are you at in your R and D cycle within wound care? Any flavor highly appreciated.
So where we are and that's obviously my day job, if you like, is R and D. So what I would say is we have got the freshest portfolio. If we look at our core, we see our core as advanced wind car dressings. We refreshed all of our core products within the last 5 years. So we are really current products.
We continue to invest in them. And then like I said, I actually pointed out that we've brought a new platform. So I called out 2. So I called out our Granulox platform, which starting to get traction in some markets. And we're investing a lot in clinical evidence in that.
And also then our new platform in terms of negative pressure wound therapy, where there's 2 key players in that market. Monlec as the main player in skin contact layers and we are known for our safe tack and for our skin friendly dressings. We really think that market, we're bringing something that's really going to disrupt that market and we're going to be a really credible player in that going forward. So I think we have a good balanced portfolio. So if you like the core, we refreshed all of our products in the last planning horizon over the last 5 years and we have projects on the way to actually bring more value to them and respond to them.
Plus then we're diversifying and making sure that we've got some earlier stage technologies coming on as well. So I'll call it granulox and then investing in the new platform, the negative pressure. So we think we're in very good shape.
One more question.
I think we should check with the phone.
Yes. Evelina, do we have any questions from the ones phoning in questions? Yes. We do have a question from Joakim Knoenel from DNB Markets. Please go ahead.
Your line is open.
So, Sluvko alluded to the digitalization of the industry, obviously. And as we think of COVID-nineteen, we have seen how, say, virtual care delivery model, etcetera, probably more than any other area, has really been brought to the mainstream. And I mean, I guess this is not an apples to apples comparison, but how would you say that this have or going it's going to change your industry over the coming years?
Yes, I think it already has in a little bit. And I'll give one example. So it's certainly an area that we're investing in actively. But one of the key cornerstones of what we're doing is to get that message across of health economics. We invest a lot in clinical education.
And obviously, the clinical education, most of that has been face to face. So coming into 2020, as we went into Q1, we had to pivot towards delivering that clinical education to our customers digitally. That was not the plan. So the plan was face to face classroom style meetings. And so actually what we've done from Q1, from we pivoted and did that digitally, We've actually put nearly 25,000 healthcare professionals through our accredited training programs.
So we actually pivoted to get the message across. We had to do that. The other thing that we're having to do as well that we see is because a lot of our customers would tend to be the aging population as well. During COVID, there was a lot of people shielding themselves. So they didn't go to their GP or they didn't go to their wound care center.
One of the other things that we've really had to do is to make sure that easy to understand information of how to best use our products, if maybe a health care professional is not available and you need a dressing change or you need to treat a wound, without crossing the lines of from a compliance perspective, going beyond the use of the product, if you like, just making sure that information on how to best use this product and how to look after yourself or your loved one, we've really had to step up in terms of that. And I think the lesson we've learned from that during this COVID situation, we're going to make that standard in many of our products going forward. So we're going to make the instructions for use, the availability around how to do our products and how to engage with our customers, part of our standard practice.
One final question.
Yes. That one is from Johan Hoeghbari of Danske Bank. And apart from product innovation, how else can you accelerate organic growth? And how do you think about M and A?
Yes. So in terms of organic growth, there's a number of channels that we can do. I think the first one in terms of organic growth is when we look at our market shares, we still have market share to go. So the first thing is in our core, I think I already called it out in one of the slides, but it's the fairly basic thing. Listen to our customers' pain points, make sure that our product pipeline is there and I'm not going to talk about that.
But then really it's about making sure that our customers understand how, if you like, we can solve their pain points and actually improve workflow through the organization and reduce total cost. And professional education is really the tip of the spear for us on how to deliver that and making sure that our sales force really simplifies their message, but raises their game and gets quickly to speak into a way that really makes sense. Instead of talking about product benefits, it's really how can the Monlika portfolio really drive forward and help the customer with their total business. Then from an M and A point of view, we've been doing pretty well organically and we're very, very open for that. I think the main focus that we're looking at in terms of Bonn Loke is looking around, looking for new technologies that really make sense with our portfolio.
And we are focused on driving value
and driving growth. So we have many discussions with our owner and with the
board about should we growth. So we have many discussions with our owner and with the board about should we be consolidating and just getting bigger. And what we've really focused on is with the growth that we've got, we see that going forward, we want to make sure that we really maintain a sustainable business. To do that, we want to make sure that we're a better company, not just a bigger company. So it's continually focused on the basics of going in.
So I think M and A will play a very important point. But we as a management team are equally focused on our normal organic growth.
So thank you so much, Barry, for joining, and thanks also to you, Slatko, again and the whole Mannlicher team. Now we will be joined by Morten Kristjansson from the CEO of 3 Scandinavia, who is joining us from Denmark. And hello, Martin. I hope this works out fine now with the links and so on. And the floor is yours.
Thank you very much. Thank you very much indeed. And thanks for having us on board this afternoon. And I would say the good morning and good afternoon also. Just a very quick word about myself.
I've been heading up the 3 Scandinavia operations, which encompasses operations in Denmark and in Sweden for the last two and a half years. And prior to that, I have quite a long history with the company running and building the Danish business before I took over the hat of running Scandinavia. Next slide, please. Just to give the audience a flavor of the kind of business that we're operating, It's a mobile network operator in both countries. We have seen very significant and very steady growth basically since we entered the market.
We have also managed to keep our cost relatively flat during that time. And it only goes to prove basically that this is a volume game. It's a numbers game and that we by adding customers in large proportions and not adding costs to the same rate actually became around 2,008, 2009. In between the Danish and the Swedish market operations, we have another country, basically, as I like to see it, which is our technology department. They run and our all our IT systems, they run our networks, they design our networks, and they do, obviously, vendor contracts and new technology.
So we have a shared technology set up between the two countries, which I think is rare to see in this form. It's something that we actually appreciate between both countries quite a lot because it works quite well. We spend a lot of time on it in terms of governance, how do we spend the money, how do we what projects we prioritize and so forth. And before leaving the numbers, I should say that the growth that you're seeing and we're demonstrating is, 1, is completely organic growth. We haven't acquired any companies during our travel.
And also, this only goes to 2019. So 2020 is looking okay. Definitely, we see in the Danish market, we will have a year on year growth, however, somewhat smaller than expected due to COVID-nineteen. Sweden has somewhat larger growth. The impact hasn't been so great there.
But 2020, definitely, for both countries, show growth. So just to recap quite fast, we have a market position in Sweden, where we are number 4, with a market share of 14%. In the Danish market, we have a 3rd position, a number 3 position, market share of 18%. In both markets, we have challenger brands that are basically putting us into a position where we can challenge both through the 3 brand and also through our second brands. But we are very much in a challenger position.
We define ourselves as challengers. We work and think like challengers. And I like to think that we are very customer centric. How do we do the growth? Well, we do hacks by having really clever propositions, we believe, often accompanied by relatively generous data volumes.
We are very service focused, very sales driven organizations. And I like to think that we think out of the box. We are not so technology driven. Well, we are, but we are also very, very focused on the fact that we have to turn technology around to make sure it makes sense for the customers. People obviously are extremely important.
There's 2,500 of them. And I don't have time to get too much into that, but I'll just say here that the average age is in both companies up below 30. Next slide, please. We run 2 second brands, no frills brands online only that are called Oyster and Helen. They are easy.
They're simple. They're online. They have no binding. And these parts of the markets are taking a very big chunk of the total telecom market. On our residential brand, 3, which is has the same name both Denmark and Sweden, for Sweden, the main claim to fame is Tresamla, which is a clever family bundle, basically putting a lot of subscriptions into the same propositions.
It's also having a very clear and sharp position on handsets and subscriptions. So new handsets with a sharp price and a subscription has been the main driver up until the Treysandla actually has taken over. This is supplemented by Tre Verden, which is a traveling proposition. In Denmark, it's definitely been our version of that called Free Like Home. We came with this proposition that you could use your subscription outside the boundaries of your country in 66 countries, to be exact.
And we did this a couple of years before the EU legislation came through. And this is at no exocross. Of course, the 3 leg room right now is challenged a bit. On the business side of things, 3 business, same name, Denmark and Sweden. Sweden has a lot of success with their proposition where it's basically one size fits all.
It's unlimited, low price. What you see is what you get, simple and easy, generous data bundle. And also, Triwerten is there basically addressing the SMB market. In Denmark, 3 like home, simple and easy, generous data. We go very much for both SMB, but recently have picked up the last couple of years some of the very large accounts, so it's like Maersk Carlsberg to mention just a few of them.
What is enabling all that? Well, we like to pride ourselves about simplicity. We actually take much pride in that, as I said, because it's painful. Imagine having been in the market since 20,021,003, respectively, the number of price plans and products that would exist in your IT system. We have simply taken the pain of removing all the old price plans and migrating customers from old price plans to newer price plans.
That means that we have a lot fewer than we used to. And that actually drives a lower OpEx spend. It's faster and better IT time to market. And it also because of the simplicity that we're able to offer actually also drives a very high NPS score, which is very important in our industry. So next slide, please.
I would also say that value for money is important. We have clever IT solutions. We, of course, are very proud and have a very efficient network that we drive, even if that is one of the key challenging points that we are faced with. Next again, please. I need the one that says challenges on top.
Right. I'll just start talking. Challenges that we are facing this year, obviously, is the slowdown caused by COVID-nineteen. It's the next one again, please. We are seeing a slowdown in the market, actually not on very much on usage.
It's that's actually the opposite. But the need general in the market for changing subscription and handsets has been slowed down. Also, people are not traveling, obviously, because of COVID-nineteen. So our travel products does not do not really function for us that well at the moment. So we have shifted focus onto domestic products very fast, very recently.
And by using domestic products instead of the international products, we're able to regain some of the lost grounds that we see we are losing out to COVID-nineteen. Another thing that has worked really well is our broadband product, our mobile broadband product. As people started to work from home and in other locations, it really, really took off quite heavily, especially in the spring when the Danish market was in Danish country was in a lockdown and generally people work from home, we had enormous success by selling that product. People could be online with good stable connections and good download speeds anywhere they wanted to, whether that was from their homes or the summer houses or wherever. Another thing that has picked up tremendously is something you see in a lot of other businesses, of course, has been more online sales.
And when a crisis like this hits, you see you really see what parts of your organizations hold and which ones do not hold as well. So it has also been an inspiration to change the structure and redesign parts of our businesses during this year. The next big chasm we have to cross is on technology. It's on network. It's the 5 gs animal, if you will.
We are bidding for a 5 gs spectrum in both countries. Sweden, it was supposed to be ongoing right now. Long story short, it's been delayed. It's postponed until some resolution about some legal issues can be resolved. But we will be bidding in Denmark also in March, and this is for the fast 5 gs spectrum called 3.52.3 gigahertz that we need to put into our network so we can build the fast connections and really give that 5 gs experience.
But it's also something else. It really is about growth and seeing opportunity into new areas where we are at this moment, but with 5 gs enabling us to become much, much more competitive against the fiber providers, we think where we can take a big slice of what would have been the fiber market. But with our fixed wireless access products, we can tap into that. People can get a mobile a wireless fiber connection, we call it, internally. And thereby, I get the really fast download speeds and the low latency in a mobile version.
And we think there is a big potential for us here. We think our competitors will probably be somewhat confused about this because they have both mobile broadband and fiber. Where should they really focus? We won't we won't be confused. We will focus solidly on the on the mobile part.
And I think that focus is going to drive us pretty far. So the single mindedness, the mobile only, is a good way for us to pull through. We did it with 4 gs, and I'm sure we will do it even greater in 5 gs. Next slide, please.
Otten, I think we are a bit short of time. So if you just quickly wrap up. I just
have a few points left, so I will be very quick. So for as key takeaways, I think I would mention that we are and we will maintain being a challenger and build on our challenger position. There's still a lot of market we can have as a mobile operator. We haven't seen any slowdown in our ability to gain. We will use 5 gs as a new tool to eat our competitors' lunch.
It is an expanding and new market for us. We are focused on mobile, simple and easy solutions and out of the box thinking. So that is one of the key driver for us. And of course, I will never waste a good crisis because it is telling you a lot of things when you're faced with these challenges that we've been in. And I think we'll come out stronger and better and even more efficient once COVID-nineteen is over.
Thank you very much.
Thank you so much, Morten. Now this whole afternoon is about creating value for people and society by building strong and sustainable businesses. Now let's tune in to one example of this related to advanced mobility and seating rehab solutions.
So good morning and good afternoon to everyone. My name is Bengt Thorson. I'm the CEO of Permobil. I would like to start with introducing DJ Muto on the picture here. DJ Muto is a young disc Yockey in Japan.
He is also diagnosed with ALS. But with his Permobil F5 VS is able to still continue to entertain his audience. Regardless where you are in the world or if you have a diagnose of ALS, spinal cord injury, MS or CP, we customize solutions mechanically and digitally to reach the highest possible ability. But Permobil is also contributing by focusing on education for healthcare and rehabilitation and the personnel there. We have an open dialogue with the society about health economics and secondary implications.
We are a global company. Our revenue is SEK 4,500,000,000 and one of the largest companies in our industry. More important is, we are the global leader in what we can redefine as the most critical advanced segment, complex power wheelchairs and seating and position. Representing 50 markets, we have our own representation in 2017 and we have our headquarter in Timbro in Sweden, north of Stockholm. We have production sites in Sweden, in U.
S. And in China. We have 1600 employees in our team and we have the industry's highest spend on research and development. The revenue comes from the 3 regions with a split of 2 thirds from Americas, 26% from EMEA and close to 10% from APAC. Panmobil have a strong history of growth.
Over the last 5 years, we have grown 17% per annum. When we look forward, we see following growth drivers in our industry, and there are our possibilities. The new product introductions with a reinforced research and development program that will secure our technology lead for the future. Market access through clinical evidence will open up reimbursements, and it will differentiate us from the competitors. Local representation and knowledge.
Permobil continues to work with a decentralized structure where competence and accountability is in the local markets. Digitalized products in combination with connectivity will increase the retention and the relationship with our users. Service and uptime is the main driver for customer satisfaction. It's also a prerequisite for new business models. M and A, we constantly scan the market for opportunities, It could be products, it could be markets, it could also be innovations.
At Permobil, we have an increased focus on clinical evidence for market access. I think there are 3 rationales behind this. By accompanying our product with evidence, many more users can get access to our products. As an example, if we have a solution for wound presentation, it is important that many users as possible with skin problems get access to that product. For the payer, it's of course important that they know what they should expect and what they get for the products that they pay for and compensate for.
And for Parmobil, it is of course a possibility for us to differentiate our products from our competitors. I would like to give you 2 examples. On the illustration you see on the screen, you see our Explorer Mini. Recently, we have launched a study or presented a study showing that very young children with a powered mobility device develop spatial and cognitive skills in a much higher pace than otherwise. On the other picture, we try to illustrate something that one of us experienced over the last 6 months with COVID.
Different ways of lockdown, different possibilities of meeting family, friends and relationship outside our home. That is the scenario that most of our users live in, in daily life. We know that isolation contributes to challenges, both physical and mental challenges, by being isolated. With on the picture our new M range shares, Our users are able to get out and increase their well-being. Permobil have been offering connected power wheelchairs since 2017.
Today, we have more than 7,000 active connected power wheelchairs. The connectivity can be viewed in 3 different perspectives. My Permobil, we just launched an app where the users can follow the performance of their share. The user can also get support and recommendations how to use the functions to fully utilize the equipment that they have. They can see how much power reserve they have in the battery, they can see how far they can travel with that energy and they will even see the route that is suggested how to get there.
On the Permobil fleet management side, the service provider will be able to read out remotely error codes. They will see charging cycles and battery conditions, all to secure a trouble free usage and a high uptime. The 3rd side is the data that is gathered for research purposes. It is of course made under numerous. We are in the research using the data to better understand usage pattern and to guide us for further improvement of the product.
At the Permobil, we always focus on the user. Kjell, he needs his share for his everyday work in a factory in Sweden. Oren in an Explorer Mini is exploring the world around him. Natalie, one of the best racing car drivers in the UK, She is using her Permobil TiLite manual share when she is not in the race car. And finally, the Permobil team in full protection gear making a tryout in the middle of the pandemic.
Thank you for your attention.
Thank you so much, Bengt. We will have a joint Q and A session soon. So why don't you take a seat? And then we will and I will please come and join me here, Klas, who is Klas Gunebari, our next speaker, CEO of PIA. Because today, we have been, in many ways, touching upon the accelerating trends of digitalization, automation and sustainability.
And being the CEO of PIAB, representing a company which is a provider of gripping and moving solutions for automated manufacturing and logistic processes. It really fits very well in, I think. Welcome, Klas.
Thank you.
So let me present to you this fantastic company, PAIAB Evolving Automation. Summarized in one sentence, we offer gripping, lifting and moving solutions with a broad range of applications in diversified end markets to a broad customer base. We have sales of SEK 1,500,000,000. We have 6.30 employees, and we are divided into 3 divisions. And the biggest one represents 50% of our sales is vacuum automation.
The second one is ergonomic handling represents 30% and the third one, vacuum conveying, represents 20%. We have 20 sales offices over the world in total 16 countries. They engage or they employ 200 direct salespeople. We have more than 700 distributors in more than 100 countries and we have 4 regional assembly and distribution centers in Europe, outside Frankfurt in North America, outside Boston in China, in Shanghai and for Southeast Asia, in Singapore. So what's so beneficial?
Why is it so beneficial to be sorry, go to this slide first. Our products can be found everywhere in a production process. It's vacuum pumps creating mechanical displacement. We have vacuum suction cups, which are creating suction to grip and move products. We have end of line end of robot arm end of arm.
Robot end of arm tools, which are gripping, lifting and moving objects. And we have vacuum conveying, which are moving dry material from one point to the other using vacuum. Finally, we also have semi automated lifting tools that are helping to make ergonomic handling of heavy objects. And interesting in the production process or in a robotic cell or something like that. The value of our products is approximately 3% of the total investment for a line like that.
So of course very beneficial to us because there's no focus on the price of our products. Also very good for us, our products are not industry or segment specific. They can be used in any almost any segment. Now why is it so beneficial to be in the Industrial Automation area? Because the underlying growth is structural and it's unlimited for a foreseeable future.
I think we can see all that all production processes, they undergo this development. You start manual, you go automated and then nowadays finally also go into Industry 4.0. And of course, some production some had did this many, many years ago, some are just starting. And for us, it's very beneficial because we have products for each one of the steps in this automation process. In addition to the underlying basic growth of industrial increased industrial output, there's a growth driver coming from increased penetration of automation like we described on the previous slide.
A fairly recent but very strong growth driver is the explosion of new use cases. And one example is the e commerce driving warehouse automation. And for us, it's very interesting mainly for the pick and pack of unstructured objects. And then an emerging growth driver coming from delivering value from software and products that are connected and can communicate with other products. So it's hard quite hard to estimate or assess how big is the addressable market.
As you know, it comes to transform manual handling into automated solutions. But we have assessed it to be around SEK 28,000,000,000 and growing at a pace of approximately 9% plus every year. Our market share here in the total addressable market is like 5%. And in our core areas there, we have our vacuum automation, ergonomic handling and vacuum conveying, we are around 10% to 15%. Our strategy, we have 4 clear strategic key initiatives, which are common to all of our 3 divisions.
So the first one being increased segment focus, where in order to secure market leading position in high potential segments. 2nd one, expanded market coverage to ensure a dominant presence in high potential geographic markets the third one, strengthened product offering in order to fortify our position as the technology leader and market innovator and the 4th one being enhanced aftermarket and service in order for us to strengthen the customer loyalty and increase our aftermarket share to increase the recurring revenue. We also have what we see as 3 very important strategic enablers: digitalization, go to market models, acquisitions and partnerships. We have a very ambitious acquisition agenda. And we are increasing our focus on this and we are confident that we can build on the experience that we have gained over the last 4 years in doing all in total 8 acquisitions.
The latest one being Tavi, the biggest one SEK 350,000,000 and also the acquisition that has been the most successful from an integration point of view. So to summarize, the market potential is unlimited and underlying growth drivers support high growth rates. Our innovative product portfolio, our extensive market reach, our asset light global supply chain and our strong market position creates a solid foundation for continued growth. And there's a potential to accelerate growth with add on acquisitions and to continue building a leading automation provider through acquisitions in adjacent technologies. And as explained on the previous slide, our major strategic initiatives are all generating continued profitable growth.
So to summarize, the sky is the limit.
Thank you, Klas. Thank you. Why don't you join us also here in these sofas, and we will have a Q and A. And I before we kick off this Q and A session, I also want to say that all the presentations are available on our website, investorab.com. And in some cases, for some of the companies, there is also some additional background material.
Now, Magnus, let's hear if we have any questions.
Yes. We have one for Permobil first and you being a member
Sorry, I just want to say also, Morten is still with us from Copenhagen. So you are also part of this Q and A session. Sorry, okay, Magnus.
Parmobil, you are a medtech company and typically a quite a non technical business. But how have you been doing under the COVID-nineteen pandemic? And what's the development been like for you?
Yes. I think very early in the spring, we thought we had a demand problem a supply problem only. And then in March something we also realized of course that as the pandemic expanded, a lot of our user groups were also in the risk group. And of course, we didn't want to risk the problem or the situation where we would spread the virus to our users or to our staff and personnel. So I think we have been extremely cautious.
A lot of them can use the equipment for a longer time and they have had somewhat a slower replacement circle. The other ones we have been very, very thorough with the equipment, with the procedures in order to make sure that we don't by any means would spread any disease to anyone. This have given us a set back, I would say, both in the U. S. And in Europe.
However, it's more of a pent up demand of postponed replacements that we as soon as we have a vaccine or as we are through this, we will expect to see a rebound coming back.
Thank you. A couple of questions for you, Klas at Piag. And the first one is your products represent a small fraction, well, of the customer's total investment. How dependent are you on the supplier of the main part of the investment? And I would like to ask you as well about COVID-nineteen and the impact on automation and your operations.
For us, it's important to we go to market in different ways, but it's of course very important to have a good relation and sell to the machine builder. But for part other divisions for some divisions, we go directly to the machine builder, other divisions we go to the end user. So it varies, I would say. And then you said about the COVID
Yes, automation and what kind of implications from the pandemic would you see?
Yes. We see we believe that this situation will help us help the demand for our products. And we saw that very early during the pandemic when we saw the problem for the food industry. They didn't want to have anyone touching the foods. They would there were urgent need for suction cups and stuff like that, that could move the food without touching it from a human being.
Thank you. And to you, Morten, regarding the divestment of the tower business yesterday, what would you say are the sort of long term implications for you on that when it comes to flexibility and structure and so on?
Well, I think that this is something we had some time to adjust to this situation. And it really, really just is a commercial agreement between the operating company and TAOCO. That has to do with how we work together, how we roll out, the number of sites where TAOKO is involved that we have sorted out in commercial agreements. And so well, it gets maybe it's different, but we don't see it as any operational challenge at all actually.
Thank you.
Okay.
Anything on the phone?
Yes. Let's see if we have any questions over the phone. Evelina? Yes. We do have a question from Joakim Genel from GMB Markets.
Please go ahead.
Thank you. So a question perhaps for both Piave and Permian. But in terms of, I mean, being unable to meet your customers on, say, trade fairs, market and venue products, etcetera, how do you believe this will change your go to market strategy?
Yes. I think we have a few good examples really because we launched our new tool for connected shares in the middle of the pandemic, which was actually couldn't be better timed. All of a sudden, we could launch digitally a new digital service. At the same time, we launched a new share generation, which is a mid driven power wheelchair. And I would say the combination of the digital training and the webinars we have done to train rehabilitation personnel and health care personnel, this has been well perceived.
And we have I think in a very different way, we have gone to the market. But I would say we have had the same impact as if we would have done it the traditional way and met at exhibitions and fairs. And perhaps even slightly better because we could really par it with the training we have in complex rehab questions and long term solutions. So in a sense, we get a little bit more time to explain all the features and all possibilities. So in that sense, it has been a positive experience.
And what about you, Josep? Yes.
I think in the beginning, we saw a big, I would say, problem then that we couldn't reach out in exhibitions and so on. But we fairly quickly adopted and started to go digital, a lot of online meetings and we participated, we experienced with what is out there in the form of digital exhibitions and so on. So we are gradually seeing that this is definitely a tool for the future, which will be a complement to also physical trade shows in the future.
Okay. Let's see. Any more questions? All your questions registered. Okay.
Thank you. Then I would like to thank Martin in Denmark and also Bengt and Klaus with us here in Winter Tregoarden. And we will now take a short mini, mini break of 3 minutes. And then after the break, we will listen in to the Patricia North American Company's CEO. So welcome back in like 3 minutes.
Welcome back, everyone. Now we will have 3 company presentations. We will start out by Labrie and the CEO, Michael Frasette. We are so happy that you are joining us today. Welcome.
Well, thank you. Hello, everyone. I'm Mike Ferzetti, President and CEO of Laboree. And I've been at Laboree since September of 2017. I'm coming to you from Boston, Massachusetts, and I'm delighted to be with you today to have this opportunity to talk about Laboree.
As you'll see or as I hope you'll see, we're a company with a rich tradition of innovation, a long standing history of success and a tremendous runway for growth. So next slide, please. Okay. I can't see the slide. So hopefully, the slide that's up there says who we are in the upper left hand corner.
I'd like to start by telling you a little bit about Labria and who we are. We design, develop, manufacture and market medical technologies. And those technologies include equipment, software, devices, implants and consumable supplies, both reusables and disposables in the urology, gastroenterology, labor and delivery in the neonatology fields. Okay, we're 1 global enterprise with 3 distinct customer facing business units. We've got nearly 900 employees located in 11 different countries.
We have over 10,000 and 10 countries. And those customers are served by both direct and indirect sales and service organizations just depending on where we are. And we're growing. We're growing both organically and inorganically through significant M and A activity, something the company has done well since being owned by Patricia Industries in September of 2016. Our mission is a simple one.
It's to help improve lives. And we do it with committed and dedicated employees who wake up every day and work in our sites around the world or today, more often than not, they're working remotely, but still living our values of quality, perseverance, accountability and teamwork every single day and I'm proud to be associated with them. So next slide please. I said Laboree is 1 global enterprise with 3 distinct business units that you can see depicted here on this slide. We're comprised of powerful market shaping brands.
As an example, most urologists or urogynecologists around the world know Lavery well. They train on Lavery equipment. If they're doing urodynamics today, with very few exceptions, they're using Lavery equipment or one of our legacy companies equipment. Likewise, gastroenterologists know the UniSensor brands and they know the Solar GI brands, especially in the pediatric space. And anywhere where babies are born, and that's in a lot of places in labor and delivery, doctors, nurses and midwives know the trust of the Kiwi brand and the Koala brands.
They're well known high quality brands that resonate well with key opinion leaders around the world. As a result of this, we hold high relative share positions in our products and procedures across all three of our global business units. Again, moving left to right on this slide, in urology, we're the global leader in urodynamics in the diagnostic market, both in capital equipment and in the procedure based consumables that go along with the capital. We also have some market leading technologies that are used to treat overactive bladder and adult incontinence, 2 very large markets in our space. And just last month, we announced a strategic partnership with a company called Eurotronic.
It's a Minnesota based company with a proprietary drug coated balloon technology called Optilume. Optilume is a disruptive technology that's been developed in response to patient and clinician dissatisfaction with the current treatments for urethral strictures, as well as benign prostatic hyperplasia BPH. This novel technology represents an efficient, minimally invasive treatment option for millions of patients suffering from these conditions globally. We've got CE Mark, we're launching in Europe in Q1 and we expect US approval sometime at the end of next year 2021. In GI, our product portfolio is diagnostic capital equipment along with a unique combination of solid state, water perfused and air charge catheters.
It's a typical razor razorblade model. And just last month, we also announced a strategic partnership with a company called GI Supply, a Pennsylvania based company here in the U. S. This deal broadens our global GI portfolio and also gives us channel scale in the U. S.
Today, the U. S. Represents only about 20% of our total GI business. So clearly a large GI market opportunity for us. And then in February of this year, we expanded our business units by adding clinical innovations, a Salt Lake City, Utah based business, which is laser focused on labor and delivery and the neonatal intensive care unit or NICUs, and whose mission there is to help moms and babies every step of the way.
In fact, our clinical innovations business is one of the largest healthcare manufacturers exclusively focused in this space with more than 10,000 devices used per day in labor and delivery in NICUs around the world. Examples, as I said earlier, are Koala intrauterine pressure catheter and the Kiwi vacuum assisted delivery product, both global market leading brands. So next slide, please. The LabRie story is one of continuous profitable growth. We have a solid recurring revenue stream of consumable sales that complement our capital equipment business and which represent about 60% of our annual revenue.
In 2019, we had combined revenues of US275 $1,000,000 with an EBITDA margin of 29%. This compares favorably to 2016, where we had revenues of $123,000,000 and an EBITDA margin of 25% or 23%. In 2020, like everyone, we've been impacted by the pandemic. For us, it's been a negative impact. Year to date, we've seen revenue and operating margin sharply lower in the legacy lab re business due to a significant drop in elective procedures around the world, about 75% of our business is elective or supports elective procedures.
At the same time, performance in the acquired clinical innovations business has improved because the impact was more limited in non elective procedures like labor and delivery and neonatal intensive care. So babies keep coming even in a pandemic. Now we started to see some improvement in the trajectory of the business in the Q3 and a continued improvement into the Q4, as many markets are now trying to recover elective procedures. Still a little choppy, but we expect it will continue to be choppy for some time. Next slide, please.
So from a strategic imperative standpoint, as we build our businesses, we focus on these 5 strategic imperatives on the left. Whether we're acquiring or organically innovating, we want to be sure we're creating value and not just onboarding more complexity into our businesses. So it's critical that we integrate properly, that we maintain customer intensity within our unique business units, and that we work hard to simplify our business to our systems and processes and to continuously improve and upscale all of our group functions. These 5 strategic imperatives inform our annual operating plan. And on the right side of this slide, you can see that in addition to executing on the growth initiatives, which are the key revenue drivers of the business, we've got several initiatives focused on improving performance, building, simplifying and optimizing our operations.
And this includes everything from rooftop consolidations to implementing 1 piece flow, lean and 6 Sigma, integrating ERP systems and harmonizing our quality management systems for starters. We believe by optimizing operations across our group, these improvements give us opportunity to leverage those core capabilities, expand margin and mitigate the cost of complexity, while at the same time keeping our business units focused on our unique customers. Next slide, please. So let me just sum it up for you. Laboree is a diverse medical technology company with a strong and resilient revenue stream, attractive profit margins supported by organic growth of our core business, as well as strategic and well executed accretive acquisitions.
We've got a global leading market shaping portfolio of brands, all with high relative share positions throughout our portfolio, and we expect to deliver best in class returns as a result. For a company of our size, we have top talent and exceptional organizational capabilities backing our group functions and our global business units. And this includes executive leaders in all functional areas who live our values and are key to realizing our potential and our vision. Our products, our brands, our customer intensity, and most importantly, our talented people and capabilities will ensure long term success for Laboree, our customers and the patients that we ultimately serve. So that concludes my remarks.
Thank you very much, and I'll look forward to taking some questions at the Q and A.
Thank you so much, Mikael. And you will remain with us because after we've listened into Sernova and also BraunAbility, we'll have a joint Q and A session with you. So now welcome, Jeff Prestel, CEO of Sarnova, and thank you so much for joining in.
Good day, everybody. It's wonderful to be here. I'm coming to you from Arizona and would like to spend a little bit of time talking about Sarnova. Just a bit of history, Sarnova is headquartered in Dublin, Ohio. We are the leading U.
S.-based value added health and safety distributor and we're comprised of 2 businesses, our emergency preparedness business as well as our acute care business. Sarnova has about 650 employees located across 3 offices and 7 strategically located distribution facilities. In our calendar year 2019, Sarnova sales were about 650,000,000 dollars and we sell products and services across the healthcare continuum. And that begins with pre hospital, everything in the back of an ambulance, all the way into the emergency department through the hospital and into the ICU care sites. Talking a little bit about the businesses, our emergency preparedness business serves 1st responders and we go to market through 3 brands, our Boundary, EMP and Cardio partner brands.
Boundary is the leading distributor of emergency medical supplies and equipment to the EMS services in the United States. EMP is a leading online distributor of health and safety products to lay rescuers and first responders. And our Cardio Partners business is a leading distributor of sudden cardiac preparedness, including new and recertified AEDs as well as CPR training services. On the acute care business, we really go to market under one brand, our Trion and Barand, which is the leading provider of respiratory and anesthesia critical care products. We have a very deep and comprehensive set of products and services within both of those businesses and we sell over 100,000 unique SKUs available for distribution.
Next slide, please. Our mission is to be the best for customers who save and improve patient lives. And we do this simply by striving to be the best in all facets of our business. That includes being the best partner for our customers as well as being the best advocate for our vendor partners as we sell their therapies and build markets for those products. Our focus is also on efficiencies and delivering the best operating performance and by doing so that drives the best in class financial operating financial performance.
Ultimately, this allows us to invest in our people and providing the best opportunities to attract, retain and develop our employees. Next slide please. Sarnova is not simply a distributor of healthcare products. We're really a sales and marketing company with distribution sell health and safety solutions to
meet the needs of
more than 20 sell health and safety solutions to meet the needs of more than 25,000 customers in multiple market segments. Next slide please. CerroPlex delivered profitable growth over the past 3 years and we expect to continue that trend in 2020. We have an asset light business and operate an efficient enterprise. We continue to implement software solutions that technology enable our business and we're also focused on process improvements and efficiencies throughout our organization, while offering our customers a better customer experience.
As you can see, we have delivered consistent organic sales and EBITDA growth above market at over 6% organic growth year to date. This is despite and we also have realized adjusted EBITDA margins of over 11% year to date despite having made consistent investments in our business to support our long term growth plan. As we look to the future and even more profitable growth, I'd like to take a bit of time to share more about our strategic imperatives. Next slide please. Our strategic vision is to achieve the 5 Cs by 2023.
Now we have a very, very clear strategic plan that outlines our objectives and our goals and our strategies and measures, but we've distilled it down to the 5 C's and I'd like to take you through those a bit. So first, customer centricity, which puts the customer first. Our strategies include expanding our sales force and optimizing territories to better serve our customers. We'll also invest in solution training and clinical resources to educate our customers and drive greater adoption of our therapies. And we'll continue to develop best in class digital resources, giving our customers the best e commerce experience in a growing digital world.
CuraPlex expansion is another one of the Cs and CuraPlex is our private label brand and it provides customers with a value based alternative. CuraPlex also happens to be highly margin accretive to Sarnova. We accelerate the launch of new CuraPlex products and expand our kitting capabilities And by doing so, we expect that we'll have up to 25% of our revenue being driven by the CuraPlex brand by 2023. Our R and D and quality assurance resources will enable that growth. Complementary acquisitions are another key part of our growth strategy.
And our business development team is really focused on both tuck in acquisitions to grow market share as well as more transformative acquisitions that expand our product and service capabilities. Now as we grow the business, we have to expand our capacity and infrastructure and that's necessary for us to be able to reach our goals in 2023. We'll continue to invest in building capacity within our warehouses and implementing digital tools and automation that optimize our distribution network. And we'll also be transitioning to a more robust ERP system and we'll expand use of our data and analytics and artificial intelligence to better manage our business and improve our operating leverage. And the last C is cultural sustainability.
People are really our only sustainable competitive advantage. And at Sarnova, we put our culture first and we really believe that an engaged work force will allow us to reach our goals and build our long term and sustainable business. And with organizational design, we'll optimize how Sarnova is organized. We'll put system and processes to support the business and also make sure that we attract the right talent so that we're able to execute on our strategies. Next slide please.
Our growth strategy is multifaceted and balanced. And when you look at this, we intend to drive organic growth 1.5 to 2x market through better execution looking at things like new product release, CuraPlex kitting as well as digital enhancements, while also investing resources in our core business. We'll supplement that organic growth with mergers and acquisitions that complement Surnova's existing customer base. Our recent acquisition of Digitech and R1's EMS revenue cycle management business also known as Intermedix makes Sarnova the U. S.
Leading EMS RCM company, a complementary service offering to our already market leading EMS business. Next slide, please. We acquired Digitech and Intermedix businesses on October 30, quite a faith to go through that due diligence during the pandemic, but we're very excited and it will operate as Digitech going forward. We feel this combination creates the market leading player in EMS, revenue cycle management, which is a durable market with plenty of organic runway and strategic growth opportunities ahead of us. The acquisition provides Sarnova with a highly differentiated and complementary product offering as well as recurring revenue stream from that service business.
We look forward to the synergistic opportunities that those two business will have built and supported underneath Sarnova. So from all of us at Sarnova, we're very passionate and thankful for the opportunity to serve and support the medical community, especially during this time of need. And I'll now turn it back over to
Thank you so much, Jeff. And you will also be joining us in a little while when we have the joint Q and A. And now it's time for Stacy Kuhn, the CEO of BraunAbility. Thank you so much, Stacy, for joining us today. And please go ahead.
[SPEAKER STACY KREUND, INC.:]
Stacy KREUND, Inc.:] Well,
thanks, Vivek. I'm really happy to be here. And more importantly, I'm really proud to share the BraunAbility story. So we can start with the first slide that shows what we do. And what we do is help people with physical disabilities lead independent lives.
As the global leader in mobility products, we are counted on to have the broadest portfolio, the best quality, the best customer service and expertise that's commensurate with our nearly 60 years of dedicated mobility experience. You can see here that we have a strong market position in each of the core mobility product lines. Wheelchair accessible vehicles, they're the largest product line and represent about 3 quarters of our revenue. Our factory in Indiana converts minivans and SUVs to ensure safe and convenient wheelchair access. The conversion includes lowered floors, ramps, wider door openings, and, removable seat bases.
The other products you see here, lifts, seating, restraints, flooring, those are really complementary businesses and enable us to offer the entire suite of mobility products. In the U. S, we vertically integrated into retail sales with a series of acquisitions starting in 2017. Strategically holding these company owned stores ensures our long term distribution channel and it also promotes our continued domain expertise through that direct customer relationship. But in addition to our own retail outlets, we continue to partner with independent retailers and we see our dealer channel as fundamental to our distribution strategy.
Next slide, please. This slide actually better represents what we do. We change lives. We help people like Todd and Anna and Inga and Brianne find their mobility independence. It's our honor and our commitment to provide them these life changing products.
We're inspired and compelled to continue innovating and growing so that all individuals with physical disabilities can have moving experiences. Next slide, please. The business has been on a growth journey with revenues of over US730 $1,000,000 in 20.19, And you'll note a growth inflection point in 2015, which not coincidentally, it corresponds with the Patricia Industries acquisition. Our revenue drivers have included end market growth, our share growth within those end markets and inorganic growth with entry into our retail business that I just described as well as our purchase of the auto adapt business located in Europe. The core legacy business, which you can see on the top dash line here, has demonstrated really meaningfully improved profitability since 2015, driven primarily by operational improvements and scale advantages.
The consolidated profitability since 2017, which is the bottom of those two dash lines, reflects the impact of retail and European acquisitions, each with lower structural margins, but both critical to our long term strategy and accretive to the overall EBITDA dollar growth. Next slide, please. We're confident that growth can continue long term, despite the recent coronavirus impact. Both our revenue and our EBITDA were impacted in the Q2 pretty substantially, and that was tough. But we did rebound quite a bit into the Q3.
Our revenues didn't fully return. They were still more than 20% lower than the same quarter of 2019. But our EBITDA margin nearly matched the prior year. We serve an at risk demographic, so the rate of our recovery in our market remains a little bit uncertain, perhaps more so than the global automotive market for that reason. We've reset our cost structure for assuming a slow gradual recovery.
Certainly, we're hopeful for something faster. Either way, we're prepared. We've demonstrated that we can achieve good margins despite these lower volumes. And importantly, we've done so without sacrificing our long term growth. So regardless of which economic scenario plays out, we're going to continue to invest in our people, in our customers and in innovation.
Next slide, please. So this is why we expect that favorable growth over the long term. First, the aging demographic. As people age, the percentage affected by mobility challenges increases substantially, representing growth in our target population. In addition, the market remains underserved with single digit penetration of wheelchair users having access to wheelchair accessible vehicles, which indicates long term growth potential in the category.
In the European market, it's actually quite fragmented with differing testing standards and funding schemes by country. BraunAbility has the largest portfolio in the region, which gives us the opportunity to test as a system and elevate the testing and safety protocols, which positions us to gain in Europe. In the North American market, we have 277 points of distribution today. And even with that, some customers still don't have easy access to mobility dealer. And so therefore, we're going to be expanding our points of distribution.
So couple this with the exciting new products that we're launching and I'll talk about shortly, we're really positioned to continue to gain in North America. And then digital selling, click and drive. That's the name of our new online selling platform. In the U. S.
Light vehicle market, the percentage of customers who completed some of their vehicle purchase online tripled during COVID. So certainly it's critical to have a digital selling platform. But we're approaching this a little bit differently than other manufacturers and that we're enabling our dealers with this platform so that consumers can maintain that personal connection with their local dealership, which is particularly critical in such a personal product. There's one more important trend that we believe is going to propel our long term growth, and that is the technology shifts that are occurring in the automotive industry. And that's on the next slide.
So there's 4 big trends: connected vehicles, autonomous, shared mobility, electrification. All are significant trends in the automotive space. But what we find particularly interesting is the outsized impact these technologies could have on wheelchair users, giving them additional freedom and independence. We're committed to ensuring that wheelchair users' needs are addressed as these technologies advance. As a result, we've engaged in several partnerships, both alongside government agencies, as well as with advocacy groups to ensure that the voice of wheelchair users and people with physical disabilities are included in these areas where investments are occurring.
We're also partnering with autonomous and electrical vehicle startup companies, researching the unique challenges and opportunities of wheelchair accessibility in these applications and ensuring we develop tailor made solutions. We've got early design pilots on the road. They're serving customers and they're capturing real time market feedback. So we're positioned to be winners in this space. Then of course, we've got the investments in our newest wheelchair accessible vehicles, which are generating some near term growth.
We just launched the most spacious accessible SUV on the market and that's on the Chevy Traverse. And we'll be following that early next year with our 1st wheelchair accessible hybrid electric vehicle on the new Toyota Sienna platform. So we continue to invest in innovation. We're out front. We're confident that we will continue to be the market leader with advanced technologies and these trends are sure to be a growth driver.
So next slide. Ralph Braun, who was born with spinal muscular atrophy, he founded BraunAbility to achieve his own personal independence. Since then, our Company has transformed into the mobility industry leader. We have the industry's broadest portfolio of products with leading market positions in each. We've demonstrated double digit growth and the ability to overcome COVID market downturn.
Our growth plan is aggressive, but it's well supported by secular demographic and technology trends. But most importantly, we remain guided by our passion for changing lives. We know that it's our job and it won't be done until everyone, regardless of physical ability, achieves their own mobility independence. Thank you.
Thank you so much, Stacy. Now we will have a very brief, joint Q and A with, Stacy, Jeff and Michael. And how is it, Magnus, do we have any questions?
Yes, we do. We have one question from Jeff at Sarnova to start with. Can you talk about any differences that may exist with regards to the growth prospects between your different segments?
And is
there any difference in profitability?
Yes. So within our emergency preparedness business, not only are there organic growth opportunities, but there's probably much more acquisition or inorganic opportunities, both tuck in opportunities as well as more transformational as we noted with the most recent acquisition of Intermedix and Digitech. Within our acute care business, most of those growth opportunities are going to be organic. However, there are some acquisition opportunities, especially as we look to expand geographically. And those are really the two dynamics for both of the business that we see going forward.
Thank you. Anything on the phone perhaps?
Yes, maybe we have a question over the phone, do we, Evelina? No questions. No? Okay. If you
would like to register, that's
it. Okay. Then I would like to say thank you to Stacy, Michael and Jeff. Thank you so much, the 3 of you, for joining us. And we are now approaching the very end of Investors Capital Markets Day 2020.
And on behalf of investor and all our subsidiaries, would like to thank you for joining us. But before we thank you fully, I would like our CEO, Johan Fuschel, to come up here on stage, and he will wrap up this Capital Markets Day. Thank you.
Thank you, Wiebeke. So we have talked a lot about people today, and I'm sure that after today, you understand why I feel extremely fortunate. I have great people around me here at Investo and at Investo, we have great people running our company. So you have seen a number of them here today. It's Friday afternoon, so I will try to wrap up this as quickly as possible, but let me say a few last words.
First, our strategic priorities, sharpen our role as an engaged owner secondly, always make sure we have an attractive portfolio and finally, make sure we have the financial strings, so we can capture opportunities and also weather tough times. This is an important part. We are very optimistic about the opportunities going forward. We know there will be tough times, but tough time also creates opportunities. And we have a portfolio of market leading companies that are exposed to a number of very attractive trends.
And this is my final slide and summary. We have a proven ownership model. We have a good track record that we have delivered on. We have a portfolio with great companies and great people running them. And we have a strong industrial network, great people that we can populate our Board and we have the financial strings to support our companies on this journey.
So we have a strong platform and we also know that the world is turning faster and faster the whole time. So we will try to work hard and even faster. So with that, I thank you all for participating and wish you all a great weekend. Thank you.