Very warm welcome to Investor's Capital Markets Day, today take place here at Vinterträdgården at Grand Hôtel. My name is Pia Djupmark, and I have the great privilege to work as CEO for the Grand Group, who today have three hotels. This Grand Hôtel, this fantastic, historical, international luxury hotel who has been on the market for nearly 150 years. Next door, we also have the lifestyle hotel, Lydmar Hotel. 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. Another fantastic thing is to work long-term with so fantastic property owners like Vectura.
Thank you, Pia. I would also like to welcome you to this fantastic building, even though it's virtual today. My name is Joel Ambray, and I'm the CEO of Vectura. We own and develop real estate, both commercial and community service properties. 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. We need to provide better indoor spaces and more sustainable properties than ever before. 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 a hotel, is a must to like to meet and work with people. It's the employees, it's the guest, 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, 24/7, 365 days per year. Create people to feel welcome, to be the perfect host. We work and we'll develop for the future. Yes, it's really challenging time for us right now. 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. We also take the opportunity during those times to investigate in the property as well, together with Vectura.
We do big renovations and refurbishment. Just to mention a few, the Bolinder Palace, we are soon ready with 19 new, colorful, well-designed hotel room with many suites. Also on floor 5 and 6 here at the Grand building, we have 75 rooms out of order right now, to open up during next year in full renovated. This is for me, a very good thing to do in times like this. We also do something other.
Yes. Sustainability is the core of what we do. A very basic requirement when it comes to sustainability is that all of our buildings are accessible to all people. 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. 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. 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. Both of us also want to have the opportunity to welcome you to our hotels and buildings in the near future in real life. Thank you.
Thank you.
Thank you, Pia and Joel. I would like to extend a very warm welcome to all of you for participating and joining us today for Investor's Capital Markets Day 2020. It was actually three years ago that Investor hosted its last Capital Markets Day. I think you all agree with me that so much has happened since then. Of course, out in the world, also if we look from the inside out at Investor. Many activities, much has happened out in the companies where we are engaged in. As Pia and Joel were saying, we are here at the fantastic Vinterträdgården at Grand Hôtel today. We meet you virtually. My name is Viveka Hirdman-Ryrberg. I head up corporate communication and sustainability here at Investor. I will be guiding you through this day together with my colleague, Magnus Dalhammar, head of IR.
Yes.
We hope that over the next two and a half to three 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 questions 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 pose your questions over the web. What will we be doing over these two and a half to three next hours? Now let's see. Here's the agenda.
We will start out with our CEO Johan Forssell, followed by our CFO Helena Saxon, and then the two different investment organizations with Daniel Nodhäll from Listed Companies, followed by the Co-Heads of Patricia Industries, Christian Cederholm and Noah Walley. 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 first speaker. It is our CEO Johan Forssell. 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, Viveka. 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 billion. 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. To succeed with that, basically it boils down to two things. Number one, that we are successful in our role as an engaged owner, and secondly, that we make good investments. Let me 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. That's of course always a good base. We have a clear governance model. That is there is a clear division of 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. Especially important is of course the chairpersons and the CEOs of our companies. We have a strong industrial network. 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.
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 Investor. 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 examples, 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 five years ago, we created a company called Combient, 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, is 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. 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 two 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 into Atlas 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 Björn Rosengren. 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. I'm glad to say that you will hear much more today from, for example, Laborie, Permobil, Piab, and Sarnova, 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 over competition also in the long term. This was just a brief overview of some of the things that are important for us as an engaged long-term owner. Once again, you will hear more, both from my management team today, but also, of course, from all the CEOs working in our companies. Let me now turn over to the second 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.
This year we have invested in ABB, Ericsson, and Electrolux Professional. Over the last five plus years, we have invested SEK 20 billion 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 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.
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 five new platforms, investing more than SEK 20 billion, 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 third business area, EQT. Today, we have an investment about SEK 50 billion in EQT, 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 EQT AB, secondly, strong performance in the underlying funds. In terms of cash flow, net cash flow to Investor over these five, six years, we have received SEK 11 billion in cash flow, so roughly SEK 2 billion per year on average, even though of course it fluctuates between the years. Let me now turn over to the future, our priorities going forward. We have three key priorities. First, sharpen our role as an engaged owner. Secondly, make sure we have an attractive portfolio. Thirdly, always make sure we have a strong financial position. Starting with the first one, sharpen our role as an owner. These are the five key pillars. Number one, drive our sustainability agenda to reach our targets and future-proof the portfolio. Number two, 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. In general, our view is we prefer to have focused, decentralized organizations with clear responsibilities and the right incentives tied to those responsibilities. The fourth point, focus on investments and the important part here is continuous efficiency improvements. As a long-term owner, we think it's absolutely of highest importance that our companies invest in R&D, digitalization, automation, sustainability, and geographical expansion to create long-term value. The companies must also, every day, go to work and gradually improve the efficiency because there is a tough competition out there. All this, of course, goes also for Investor.
The fifth 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. 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 EQT funds. Finally, of course, we need also to constantly evaluate the potential in our companies and make sure we are the right owner. Last year, we, for example, came to the conclusion that we were not the right owner of Aleris, and then we did an exit. The third 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 and 2019, over that five-year period, we have generated about SEK 85 billion in cash flow. Roughly half are dividends from our listed companies. About a third is distribution from Patricia Industries companies, and the remaining part is the net cash flow from EQT. How have we used those SEK 85 billion? Half we have given in dividends to our shareholders. More than 40% we have used to invest in the listed companies and to build new platforms within Patricia.
Still, we have had money to reduce the net debt over this period. I think that's a 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 89%, and the blue bar is Investor's return over different periods. 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. We know this is history, and now the clock starts again. We are fully committed and believe that we will continue to generate a strong return also going forward.
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 healthcare 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 5G. We have Nasdaq being a leader within market technology for exchanges. Within the financial sector, with the SEB that should benefit from the increased savings, and we own EQT, which is a leading private equity company that really benefit from a strong trend of alternative investments.
All in all, good growth trajectories, good growth opportunities, and companies with leading positions. 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. We have strengths. We have a strong platform, but we also know that this is the same. We will work according to this model, but we know the world is moving faster and faster. We will try to do the same, but we will try to do it also faster than we have done historically. With that, thank you, and I hand over to you, Viveka.
Yeah. Thank you, Johan. This is really a day for all of you who are joining us virtually, and this is really also time to pose questions. Let's see from Magnus here if we have any questions for you, Johan.
We do, and I can read them back to you.
The first question is from Peter Hemans. He writes, "Sir, Investor has an excellent track record, but some analysts mention 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. I touched upon it in my presentation a bit. It differs, of course. We have some companies that in decades are very much established in emerging markets or markets outside Europe and the U.S. For example, Atlas Copco, ABB, and Ericsson that are truly global companies. We also have a significant part of the portfolio that so far mainly sells in Europe and the U.S. For these companies, for example, some companies within our healthcare portfolio, for this company, we see a great potential to move into new regions. 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.
There is a lot of opportunities to grow in new markets.
Thank you.
Okay. We will have a joint Q&A session once Helena Saxon, Daniel Nodhäll, Christian Cederholm, and Noah Walley has been presenting. We will sum up some of the questions. We will soon meet you again, Johan.
Okay, good.
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.
Questions. We have telephone questions.
Excuse me?
We have telephone questions now.
We have telephone questions now. We will wait a little while, and we will have them for the joint Q&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. Please, Helena, come and join me here up on stage. The floor is yours.
Thank you, Viveka. Hi, everyone. I will speak shortly about our financial flexibility. I will talk about our operating priorities. I will end by actually answering a question that I get quite often. 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. 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%-10%, it's the blue band in the graph, over a business cycle. Of course, this target range is set to allow us to both capture investment opportunities, but also support our companies in tougher times.
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 maturity of our current outstanding debt, the average maturity profile here is almost 11 years. During the last few years, we have been active, as I said, and we have raised three Eurobonds at long tenures, 12, 15 and 20 years, a total of EUR 1.6 billion at very attractive terms. Now over to our operating priorities. For the last decade, we have focused on three things: growing the net asset value, operating efficiently, and paying a steadily rising dividend.
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%. This compares favorably to SIX RX TSR of 11%, and it's also an outperformance of our own return requirement of 8%-9%. Operating efficiently. This is what we do every day. We're very disciplined with our management costs, as this is shareholders' money, and we're very careful about spending it. It amounts to roughly 10 basis points of our net asset value. 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.
We do more with the same resources, but we constantly strive to improve efficiency in everything we do. Dividends, our third operating priority. Of course, it has been a strength for us to deliver a steadily rising dividend. For nine consecutive years, Investor increased the dividend by SEK 1 per year per share. This year, for 2019, the board of directors proposed a lower dividend, a dividend of SEK 9 per share. 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-19. A second dividend was considered during the spring, and we were hoping to come back to the market with a second installment.
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 to the question that we often get, Magnus and I'm looking at Magnus. It regards estimated market values. 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. 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 EBITA multiples. 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. The operating profits are adjusted to reflect, for example, pro forma effects of completed add-on acquisitions or certain non-recurring items. 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. This is how we usually answer this question, and this is the end of my presentation. Viveka?
Yes.
I hand back to you.
Yes. Thank you, Helena. You will be back as well for the joint Q&A session because we thought it's better to sum up some questions at one time, and we will have time for questions then. We will be seeing you soon again.
Okay. Thank you.
Thank you, Helena. Now, Johan Forssell gave a strategic update and also discussed our model for engaged ownership. The two 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 Nodhäll, who will start out. Daniel, please come here and come up to the stage. Followed by Christian Cederholm and Noah Walley. Please welcome Daniel.
Thank you, Viveka. Good afternoon. We're going to spend some time on the listed companies. As Johan mentioned, we split two 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 Stockholm Stock Exchange. Our focus when it comes to engaged ownership is to continuously challenge and support these companies to reach their full potential. When it comes to investments, we try to take advantage of the stock market volatility to selectively strengthen our ownership at attractive prices. 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 chairpersons, 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 and 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. Of course, our target is to make sure that we continue to see a strong operational performance in the companies and build more sustainable best-in-class companies.
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 lawnmowers. Ericsson has delivered a strong, successful turnaround, and recently, through the acquisition of Cradlepoint, they also positioned themselves for the faster-growing enterprise segment.
I think Sobi 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 three 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 company has handled this tough situation, bringing customer relations online, launching e-commerce solutions in markets where traditional distribution shut down, et cetera.
We really need to ensure that we keep this speed and agility going forward to make sure that our companies lead a 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. Here I think the collaboration between Epiroc and Ericsson is a great example of how they bring wireless networks to the mining customers. 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.
We also need to make sure that we upskill and reskill the current people in the organizations. 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. Of course, giving our long-term perspective as an owner, making sure we have the best, right people here and now is extremely important. We also need to make sure that we develop the future leaders, the next generation of leaders that will take over and run these companies over the coming years. 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 two strong internal candidates for all critical roles, but we also need to benchmark these versus external talent. Here we are working proactively to broaden the network even further to be able to attract the next generation leaders. 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. 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 zero tolerance when it comes to ethics and compliance.
We also need to make sure that all companies act very fast and forcefully as soon as they identify any deviations here. 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 zero emissions in 2050. 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 2030. 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 long time. They are, to a large extent, focused on resource efficiency and total cost of ownership for the customers. This is all about reducing water usage, energy usage, et cetera. Let me briefly touch upon the investment part as well. As Johan mentioned, we've been investing around SEK 20 billion over the last five 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&A agendas or strengthening balance sheets when needed. 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. Also you will be back in a little while for our joint Q&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. Now we will be joined by our two co-heads. Please, Christian Cederholm who is here with me in Stockholm. We are also joined by Noah Walley, our co-head back in New York. The two of you will be having a joint presentation now and describe our ownership model in the context of Patricia Industries.
Thank you very much, Viveka. Good afternoon, and good morning to all of you folks in the U.S. As you think about the performance over time of Patricia Industries, it is actually quite simple because it is just the accumulated performance of all the subsidiaries or portfolio companies. I think in that spirit, Noah and I will be pretty brief, and then we leave plenty of time for the respective CEOs to present and discuss their respective businesses. Patricia today, 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 is sales of about SEK 40 billion, an EBITA of SEK 8 billion, and a cash flow of SEK 6 billion.
The cash flow is before any add-on acquisitions, of course, before other M&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. 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 decentral 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 hugely from the Investor and the Wallenberg networks in finding good people 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 the strategy and the targets. Then it's a lot about following up, challenging from time to time, but also importantly, to support the companies in reaching their 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.
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. 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. We certainly remain open for new business as well. 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. Given our long-term investment horizon, over time, profitable growth is really the top priority here.
Organically, of course, investing in R&D, product refinements, but also adding sales force in existing countries or geographies, but also new geographies as both Johan and Daniel alluded to. 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. By using or doing select M&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. 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 billion 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. 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 we 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 really goes back to sustainability. Being too dependent on external recruitment over time is not a sustainable way to build a business and a culture.
With that, I'd like to leave over to you, Noah, and I'm happy to help you with the clicking here.
Thank you. Thank you, Christian. 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. In this area, two weeks ago, we were fortunate enough to close on Advanced Instruments, which is our fifth new platform since starting Patricia. I'm going to briefly try and describe what Advanced Instruments does. It basically provides 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.
The company got its start actually in the milk business, helping verify that farmers were not watering down their milk, and there was actually sufficient milk fat and milk solids in milk. You can see on the chart today that the food business is still a small part of their business today. Over time, they evolved into other markets, the clinical market, and most recently, the bioprocessing market. Those are two really attractive markets. This investment really 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. 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 two, three, but really two 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. The bioprocessing market is really very exciting with the exploding prevalence of new gene and cell therapy drugs. We think growth there 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 two-thirds 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 development process of 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 introducing these new products and them 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. 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. There are lots of inorganic opportunities for this company as well.
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. Our third priority is to realize the value that has 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. When we started in 2015, we had almost 12 billion SEK in that activity. Since then, we've realized SEK 10 billion of that in over 50 exits, including SEK 1 billion this year in four additional exits. I'm happy to say that the value of the portfolio has also grown over that time by about SEK a billion and a half. Today, the residual holdings represent roughly SEK 3 billion.
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 12 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. Really, this is just a summary, and the point here, I think, is that we believe that by pursuing these three priorities that we've detailed with energy and determination over the last five 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 five new platform companies in the portfolio.
We've had 50 exits or more in the old legacy portfolio and freed up SEK 10 billion 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 SEK 10 billion 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. We've done all that while maintaining moderate gearing on the portfolio, which is roughly two and a half to three times leverage. 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. 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 a newly formed company, ChongQing Holdings Networks. This company was eventually sold to Cellnex. For a consideration of SEK 10 billion, of which we will receive 5%. What is this about? The basis of this is to increase focus in our businesses, much like Daniel referred to previously. Three will focus on acquiring customers, providing best-in-class service, building for 5G services, et cetera. Cellnex, who is doing only this, taking care of the passive infrastructure, will do that in a great way. While doing this, we also realize some cash and proceeds from this business, further strengthening our balance sheet.
That's on a happy note, and we end there. Thank you.
Okay. Thank you, Christian. Thank you, Noah. You will be joining us now for a Q&A session. Noah, you will stay with us, and we will interact with you as well. I know we have quite a few questions, and I know 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 or the decision we have taken, we have taken the decision for two main reasons. First of all, we can all see that there is a spread, the second wave of COVID-19, which of course creates uncertainty. The second part is that we said that we should also consider the dividend coming in. That is no secret that we have one company which is normally our biggest dividend giver that have decided not to pay dividend for this year. Those are the two reasons for the decision made. Having said that, I think it's worth remembering that this is a very special year with the coronavirus situation.
Actually, despite this challenging year, we are giving a dividend of SEK 7 billion per year, which is roughly two-thirds of the previous level, in a year where almost half of the companies on the OMX30, the 30 biggest companies on the Stockholm Stock Exchange, actually pays no dividend at all. At the same time, in the beginning of the year, we invested more than SEK 4 billion in Laborie that made a significant add-on acquisition. We have invested more than SEK 3 billion in the listed portfolio in ABB, Ericsson, and Electrolux Professional. 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. 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.
Yeah.
They would be from Johan Sjöberg of Danske Bank. 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?
First of all, is it a change how we invested in all funds historically? No, we have not. There are some credit funds, et cetera, that we did not participate in. From that perspective, it's not a change. In connection with the IPO of EQT 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. 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, EQT has, in a number of their funds, delivered excellent returns. 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 competitive landscape has changed when bidding for new companies? Do you face new competition from new potential buyers? We only hear about completed M&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. I think it is hugely competitive. I would also say that it has been hugely competitive for the last five years at least. As I think Johan mentioned, we are in the business of buying and developing good companies. That means we would always pay a high multiple. 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 they typically aren't in the slightly tougher environments. 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 potential new platform acquisitions as well as on the add-on acquisitions. You just have to be disciplined.
Thank you. To that.
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. Evelina
Thank you.
Yeah.
If you have dialed in and want to ask a telephone question, press 01 on your telephone keypad. We do have a question from Derek Laliberté from ABG. Please go ahead.
Yes, good afternoon. I, and I think everybody else, really appreciate you hosting this capital markets day. 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 Wärtsilä specifically, what's your view on the future of the energy business, given its 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 Wärtsilä. I think for Wärtsilä, we have two 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 Wärtsilä will be the leading player when it comes to becoming fuel compliant on engines in the future.
Also important, of course, will be to be able to migrate the engines from the current ones that might be run on LNG or something else to these clean fuels in the future. On the energy side, there is a steady base business today, which is the base load business, with normally very good service offerings related to that. 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. 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 Wärtsilä, it will be important to create a very strong offering, not only for base load but also for balancing power.
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. Those are top priorities for us in Wärtsilä.
Okay. More questions? Mm-hmm.
We have a question from Per Colleen of Fjärde AP-fonden. Johan, Investor is 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?
Oh, thank you for that question. First of all, maybe Christian and Noah wants to comment here, if I start with Patricia, I hope that I have really showed that we believe it's a key strength to have the three business areas. 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 a good distribution to Investor parent company. For sure, our plan is 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 difficult. 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. Please, Christian and Noah, fill in.
I think it's a comprehensive answer.
Are there any more questions? One more-
I have a few more.
One more question?
Maybe we should check with the phone first.
Yeah. Okay. We'll check. Okay. Evelina?
Please go ahead.
Thank you for that. 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. 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 five years, in the coming five years? Will there be a slight more tilt to either one of the segments?
Thank you. That's a great question. We will continue to invest in all areas. I cannot answer the question. The reason for that is that we are continuously looking for great opportunities. If more opportunities will come in one area, we will probably do more in that area. On the listed side, of course, it also depends, to be honest, on the stock market development. It will be very difficult to say a firm view on that one. Our long-term strategic route is, though, to continue to really develop the platform within Patricia on the unlisted side.
Thank you, Johan. A couple of more questions, one from Derek Laliberté of ABG. What's your view on M&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? Please.
Well, if we start from our perspective, yes, we certainly support in that. I think what is great with add-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. In terms of the execution, certainly over the years we've accumulated some experience within Investor and Patricia as well, so we're happy to help there. The last part of the question I didn't quite understand.
Bolt-ons or larger equity financed deals, basically.
Okay. 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. It's really about add-on acquisitions. That's one of our top priorities.
Does the same go for the listed part? How do we view things there?
Yeah, more or less the same. I think we support and challenge the companies when it comes to M&A through our board representatives. Take Atlas acquisitions into vacuum, for example, that really repositioned the company into a new growth area. That's usually a very long discussion between management and the board, and there we support our board representatives.
Good, thank you.
Okay.
The last thing before we close this, we have a question where we realize 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, three 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 Zlatko Rihter, the incoming CEO of Mölnlycke. See you back in three 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 Mölnlycke CEO, Zlatko Rihter, who is joining us from the south of Sweden, and hello to you, Zlatko. I know everyone is very eager to listen in to you. Welcome to the Investor family.
Thank you very much. Calling in here from partly cloudy Lund this day, this Friday, I got opportunity here to introduce myself shortly and, of course, please next slide. Some of you I met before in my current role, so to speak. Again, next time we meet, I hope that we can discuss Mölnlycke opportunities and strategies and execution of those much more than we do today. I will join November 30th, a little bit more than two weeks from now. Next slide, please. My background is that I spent the last 25 years in the medical device industry in different companies. 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 Gambro and Baxter. Also patient handling, part of the Getinge Group. These days, it's Arjo.
It was their extended care division and also IVF. The last six years in diagnostics trying to digitalize something that's been done manual for many years. I have a pretty broad range of responsibilities. I've been heading primarily, I would say, R&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 six years I've been CEO at CellaVision, which is a listed mid-cap company at Nasdaq Stockholm. 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+ global med tech launches.
I can probably walk into 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. I have been at the Etac board, which is another med tech company the last four years, which is also in the patient handling area. I have one odd off, and that is that I am also board member of Malmö FF, which is a Swedish soccer team. We recently won the Swedish league, it's been a few happy days despite all the COVID issues.
That's a little bit my background that I am bringing into this role the coming years. I think what's key for me when you move into med tech, 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. That's always important. I think what is specific for med tech is that it's a pretty complex setup with a lot of decision makers and stakeholders. That's why it's really important to understand how you make yourself attractive into that call point. Usually in med tech, in the healthcare system, you are 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 a small part of the workflow, but it's always a workflow.
I think the value creation today in med tech lies in the combination. In the old days, if you had a good product that had some kind of clinical benefits, you usually could sell it to a 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. I think customer insights, going back to that, is again to understand the met, unmet, known, and unknown needs of the customer is always key. Then finally, I think, and this is of course a new trend, not unique for med tech, but I think med tech, the business, and I think the healthcare business is a little bit late in this, is the whole digitalization, AI, or the deep learning methodology that is coming in now.
I've been banging my head the last six years in diagnostics trying to transform traditional microscopy into digital microscopy throughout the company that I'm serving at this stage, CEO of CellaVision. That's been a fantastic journey, but also a lot of challenges. 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. Of course, this is something that needs to be mastered, and that will also go for Mölnlycke. I think that is something I hope that I can bring in. By that's a short introduction from me. I hand over back to Viveka.
Thank you so much, Zlatko. 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. Now, we will have Barry McBride, Interim CEO of Mölnlycke, who will go through Mölnlycke's strategy and way forward. Then we will have a brief Q&A with Barry. Welcome, Barry, and thanks for joining us.
Thank you, Viveka. Absolutely delighted to be here. It's been an interesting, and I can't see the slides, by the way, I assume my second slide, please. Next slide. Just a little bit about me. I've been with Mölnlycke for six years. It's been an exciting journey, and I'm looking forward to tell you about 2020 and the journey we've been on. 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. Next slide, please. If you look at our business, really what we're talking about is two main parts of our business. Hold on a second. We've got wound care and surgical. When we look at the both of those franchises, we really are talking about a premium business.
Everything that we do, we are absolutely premium. 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. 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. 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 the wards as well. We're highly diversified across channels and different sectors in that market. Next slide, please.
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 called out actually is advanced wound care dressings. 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. 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 on the total value that we've got. 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.
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 healthcare. They're developing in terms of the number of funds available. That's what's driving it from that perspective. 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. Highest percentage we've seen of diabetes is some of the countries in the Middle East are approaching 30% diabetes total. That drives, unfortunately, a high demand for wound care products and associated comorbidities. Next slide, please. We've really got three aspects to how we're going to grow and maintain our premium. First of all, we are investing in 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. On top of that, we're looking at new geographies and new channels. The 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 will invest in going direct. When we talk about channels, then really what we're talking about is following our customers' purchasing pattern. We're very active in the acute market. Where appropriate, we get into the home care market.
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. In terms of new technologies, we've a number of new platforms coming on board. Two 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 Avance Solo, we've just launched the product in Europe in our target markets. Really a new platform that we see really exciting future growth for.
Just on the slide, I've just called out a few CAGRs that you can see. Some of the markets we've focused on over the last three years. You can see the sort of CAGRs that we're getting in, if you like, the Middle East, Brazil, and China in particular. A little bit getting more into 2020, and our incredible results that we actually had in Q3. First of all, our customers really came to us in a bit of a panic, obviously. When this pandemic happened, we really felt that we needed to help our customers and help society. There was government procurement organizations were not set up to cope with staff protection and all of the requirements that were really required.
What we really did is pivoted, showed agility, started to work with those customers. When we went into Q2, what we've done as Mölnlycke, working with our factories and with our supply partners, we've really actually brought on increased capacity for staff clothing. 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, as we've delivered, we've shown that quality, reliability, and a good company like Mölnlycke is when the going gets tough, we can really help. 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 Mölnlycke, we're a premium player.
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 are medical devices gone through the whole regulation. They're also PPE. We focused on innovation around sustainability as well, as you would expect, as a Patricia company. 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. 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 Mölnlycke is really helping our partners to do that, our customers. Next slide, please.
When we talk about our premium, there are a lot of pressures. Prior to COVID, if we look at our wound 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. 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. What we really do as Mölnlycke is focus on listening to our customers first. We really reach out and look for customers' needs. What are their pain points about solving customers' pain points?
The first one I would point out in this slide is innovation and product pipeline. On our existing products and our new portfolio, we make sure that it solves a customer problem. 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. The next step that we go into is health economics. We take the product innovation, the technical features, the customer's pain point, and actually translate that into an economic message that really resonates with C-suites and also with clinicians as well. We convert that into a commercial language.
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, final slide. Just looking forward. If COVID continues, and 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 wound care coming on stream. We think we're really well-positioned. What makes us comfortable coming out is we had a fantastic Q3.
We saw our core business, in terms of wound care, coming on stream, and Q4 is already starting to look very well, if you like. We obviously have seen October results, and they should also demonstrate the strength. I think the diversification that Mölnlycke 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. Finally, what I would say is our relentless focus on our customer is deep in part of our core values. 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.
Really then it boils down to the team. I said it's like protect and invest in our people. Viveka, that's-
Thank you so much.
my presentation.
The dimension of people comes back over and over again, I think, during the course of this afternoon. Now I know we have one or two questions for you, Barry, from the participants. Let's hear them out, Magnus.
We have a question. Thank you. We have a question from Derek Laliberté of ABG. "Where are you at in your R&D cycle within wound care? Any flavor highly appreciated.
Where we are, and that's obviously my day job, if you like, is R&D. What I would say is we have got the freshest portfolio. If we look at our core, and we see our core as advanced wound care dressings, we refreshed all of our core products within the last five years, so we are really current products. We continue to invest in them. Then, like I said, I actually pointed out that we've brought a new platform, I called out two. I called out our Granulox platform, which is starting to get traction in some markets, and we're investing a lot in clinical evidence in that. Also then our new platform in terms of negative pressure wound therapy, where there's two key players in that market.
Mölnlycke as the main player in skin contact layers, we're known for our Safetac 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. I think we have a good balanced portfolio. If you like the core, we refreshed all of our products in the last planning horizon for the last five years, and we have projects on the way to actually bring more value to them and respond to them. We're diversifying and making sure that we've got some earlier stage technologies coming on as well, I'll call out Granulox, investing in a new platform, the negative pressure. We think we're in very good shape.
One more question?
I think we should check with the phone operator.
Yeah. Evelina, do we have any questions from the ones phoning in questions?
Yeah. We do have a question from Joachim Gunell from DNB Markets. Please go ahead. Your line is open.
Thank you. Zlatko alluded to the digitization of the industry, obviously. As we think of COVID-19, we have seen how, say, virtual care delivery model, et cetera, probably more than any other area, has really been brought to the mainstream. I guess this is not an apples to apples comparison, but how would you say that this is going to change your industry over the coming years?
I think it already has in a little bit, and I'll give one example. It's certainly an area that we're investing in actively. 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. Obviously the clinical education, most of that has been face-to-face. 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. The plan was face-to-face, classroom-style meetings. Actually what we've done from Q1, we pivoted and did that digitally, we've actually put nearly 25,000 healthcare professionals through our accredited training programs. 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-19, 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 healthcare professional is not available and you need a dressing change or you need to treat a wound, without crossing the lines 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. 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. We're going to make the instructions for use, the availability around how to do our products, and how to engage with our customers a part of our standard practice.
One final question. Yeah?
Yes. That one is from Johan Sjöberg of Danske Bank. Apart from product innovation, how else can you accelerate organic growth? How do you think about M&A?
Yeah. 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. 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.
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 speaking to a way that really makes sense. Instead of talking about product benefits, it's really how can the Mölnlycke portfolio really drive forward and help the customer with their total business. From an M&A point of view, we've been doing pretty well organically, and we're very open for that. I think the main focus that we're looking at in terms of Mölnlycke is looking around, looking for new technologies that really make sense with our portfolio. We are focused on driving value and driving growth. We have many discussions with our owner and with the board about should we be consolidating and just getting bigger.
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. It's continually focus on the basics of going in. I think M&A will play a very important point, but we as a management team are equally focused on our normal organic growth.
Thank you.
Thank you so much, Barry, for joining, and thanks also to you, Zlatko, again, and the whole Mölnlycke team. Now, we will be joined by Morten Christiansen, the CEO of 3 Scandinavia, who's joining us from Denmark. Hello, Morten. I hope this works out fine now with the links and so on, and the floor is yours.
Thank you very much indeed. Thanks for having us on board this afternoon. I would say 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. 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. 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. It only goes to prove basically that this is a volume game, it's a numbers game, and that by adding customers in large proportions and not adding cost to the same rate actually became profitable around 2008, 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 all our IT systems. They run our networks. They design our networks. They do obviously vendor contracts and new technology. 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, what projects we prioritize and so forth. Before leaving the numbers, I should say that the growth that you're seeing and that we're demonstrating is completely organic growth. We haven't acquired any companies during our travel. This only goes to 2019, so 2020 is looking okay. Definitely we see in the Danish market we will have a year-over-year growth, however, somewhat smaller than expected due to COVID-19. Sweden has a somewhat larger growth. The impact hasn't been so great there. 2020 definitely for both countries show growth. 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 third position, a number three 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 three brand and also through our second brands. We are very much in a challenger position. We define ourselves as challengers. We work and think like challengers, I like to think that we are very customer-centric. How do we do the growth? 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, 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 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 is 2,500 of them. I don't have time to get too much into that, but I just say here that the average age is, in both companies, up below 30. Next slide, please. We run two second brands, no-frills brands, online only, that are called Oister and Hallon. They are easy, they are simple, they are online, they have no binding. These parts of the markets are taking a very big chunk of the total telco market. On our residential brand, 3, which has the same name in both Denmark and Sweden. For Sweden, the main claim to fame is 3Samla, 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. New handsets with a sharp price and a subscription has been the main driver up until 3Samla actually has taken over. This is supplemented by 3Världen, which is a traveling proposition. In Denmark, it's definitely been our version of that called 3LikeHome. 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. This is at no extra cost. Of course, the 3LikeHome right now is challenged a bit. On the business side of things, 3Business, 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. Also 3Världen is there, basically addressing the SMB market. In Denmark, 3Like Home, simple and easy, generous data bundle. We go very much for both SMB, but recently have picked up the last couple of years, some of the very large accounts, so like Maersk and 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 2000 and 2003 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, that actually drives a lower OpEx spend. It's faster and better IT, time to market. 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. 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 challenger 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-19. It's the next one again, please.
We're seeing a slowdown in the market, actually not very much on usage, that's actually the opposite. The need generally in the market for changing subscription and handsets has been slowed down. People are not traveling, obviously, because of COVID-19. Our travel products do not really function for us that well at the moment. We have shifted focus onto domestic products very fast, very recently. 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-19. 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 took off quite heavily, especially in the spring when the Danish country was in a lockdown and generally people worked 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. When a crisis like this hits, you really see what parts of your organizations hold and which ones do not hold as well. It has also been an inspiration to change 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 5G animal, if you will. We are bidding for a 5G 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 legal issues can be resolved. We will be bidding in Denmark also in March, and this is for the fast 5G spectrum, called 3.5 and 2.3 gigahertz, that we need to put into our network so we can build the fast connections and really give that 5G experience. It's also something else. It really is about growth and seeing opportunity into new areas where we are at this moment, with 5G enabling us to become much more competitive against the fiber providers. We think we can take a big slice of what would have been the fiber market. With our fixed wireless access products, we can tap into that. People can get a mobile, a wireless fiber connection, we call it internally. Thereby get the really fast download speeds and the low latency in a mobile version.
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 be confused. We will focus solidly on the mobile part. I think that focus is going to drive us pretty far. The single-mindedness, the mobile-only, is a good way for us to pull through. We did it with 4G, and I'm sure we will do it even greater in 5G. Next slide, please.
Morten, I think we are a bit short of time, so if you just very quickly wrap up.
Yeah, I just have a few points left, so I will be very quick.
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 5G as a new tool to eat our competitors' lunch. It is expanding a new market for us. We are focused on mobile, simple and easy solutions, and out-of-the-box thinking. That is one of the key driver for us. 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. I think we'll come out stronger and better and even more efficient once COVID-19 is over. Thank you very much.
Thank you so much, Morten. This whole afternoon is about creating value for people and society by building strong and sustainable businesses. Let's tune in to one example of this related to advanced mobility and seating rehab solutions.
Good morning and good afternoon to everyone. My name is Bengt Thorsson . 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 jockey in Japan. He's also diagnosed with ALS. With his Permobil F5 VS, he's able to still continue to entertain his audience. Regardless where you are in the world, or if you have a diagnosis of ALS, spinal cord injury, MS, or CP.
We customize solutions mechanically and digitally to reach the highest possible ability. 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 4.5 billion and one of the largest companies in our industry. More important is we are the global leader in what we define as the most critical advanced segment, complex power wheelchairs and seating and position. We're present in 50 markets. We have our own representation in 17, and we have our headquarter in Timrå, in Sweden, north of Stockholm. We have production sites in Sweden, in the U.S., and in China. We have 1,600 employees in our team, and we have the industry's highest spend on R&D.
The revenue comes from the three regions with a split of two-thirds from Americas, 26% from EMEA, and close to 10% from APAC. Permobil have a strong history of growth. Over the last five years, we have grown 17% per annum. When we look forward, we see following growth drivers in our industry. 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&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 three 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 gets 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 product that they pay for and compensate for. For Permobil, it is, of course, a possibility for us to differentiate our product from our competitors. I would like to give you two 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 many of us experienced over the last six 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 chairs, our users are able to get out and increase their wellbeing. 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 three different perspectives. MyPermobil, we just launched an app where the users can follow the performance of their chair. 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 third side is the data that is gathered for research purposes. It is, of course, made anonymous.
We are in the research using the data to better understand usage pattern and to guide us for further improvement of the product. At Permobil, we always focus on the user. Kjell, he needs his chair for his everyday work in a factory in Sweden. Oren, in an Explorer Mini, is exploring the world around him. Nathalie, one of the best racing car drivers in the U.K. She's using her Permobil TiLite manual chair when she's not in the race car. 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&A session soon, so why don't you take a seat.
Thank you.
Please come and join me here, Clas.
Thank you.
Who is Clas Gunneberg, our next speaker, CEO of Piab. Today we have been, in many ways, touching upon the accelerating trends of digitalization, automation, and sustainability. 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.
It does.
Welcome, Clas.
Thank you. Let me present to you this fantastic company, Piab, 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 1.5 billion. We have 630 employees, and we are divided into three 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 four regional assembly and distribution centers in Europe, outside Frankfurt, in North America, outside Boston, in China, in Shanghai, and for Southeast Asia in Singapore.
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. 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. Interesting in a 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.
Of course, very beneficial to us because there's no focus on the price of our products. Very good for us, our products are not industry or segment specific. They can be used in almost any segment. 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. Of course, some did this many years ago. Some are just starting. 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 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. One example is the e-commerce driving warehouse automation. For us, it's very interesting, mainly for the pick and pack of unstructured objects. An emerging growth driver coming from delivering value from software and products that are connected and can communicate with other products. It's quite hard to estimate or assess how big is the addressable market. As you know, it comes to transform manual handling into automated solutions. We have assessed it to be around SEK 28 billion and growing at a pace of approximately 9% plus every year. Our market share here in the total addressable market is 5%.
In our core areas there, we have our vacuum automation, ergonomic handling, and vacuum conveying, we are around 10%-15%. Our strategy, we have four clear strategic key initiatives which are common to all of our three divisions. The first one being increased segment focus, where in order to secure market-leading position in high potential segments. Second 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. The fourth 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 three 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 four years in doing all, in total, eight acquisitions. The latest one being TAWI, the biggest one, SEK 350 million, and also the acquisition that has been the most successful from an integration point of view. 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 create a solid foundation for continued growth. There's a potential to accelerate growth with add-on acquisitions and to continue building a leading automation provider through acquisitions in adjacent technologies. As explained on the previous slide, our major strategic initiatives are all generating continued profitable growth.
To summarize, the sky is the limit.
Thank you, Clas.
Thank you.
Thank you. Why don't you join us?
Yep. No worries.
also here in these sofas, and we will have a Q&A. Before we kick off this Q&A session, I also want to say that all the presentations are available on our website, investorab.com. 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.
Sorry. I just want to say also, Morten is still with us from Copenhagen, so you are also part of this Q&A session. Sorry. Okay, Magnus.
That's okay.
Permobil, you are a med tech company, and typically quite a non-technical business. How have you been doing under the COVID-19 pandemic, and what's the development been like for you?
Yes. I think in very early in the spring, we thought we had a supply problem only. 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. 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. 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 cycle. The other ones, we have been 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 also a setback, I would say, both in the U.S. and in Europe.
However, it's more of a pent-up demand of postponed replacements that as soon as we have a vaccine or as we are through this
We will expect to see a rebound coming back.
Thank you. Couple of questions for you, Clas, at Piab. The first one is, your products represent a small fraction, well, of the customer's total investment.
Yep.
How dependent are you on the supplier of the main part of the investment? I would like to ask you as well about COVID-19 and the impact on automation and your operations.
Yeah. For us, it is important. We go to markets in different ways, but it is of course very important to have a good relation and sell to the machine builder. For some divisions, we go directly to the machine builder, other divisions, we go to the end user, so it varies, I would say. Then you said about the COVID-19.
Yes, automation and what kind of implications from the pandemic would you see?
Yeah. We believe that this situation will 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. 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. To you, Morten, regarding the divestment of the tower business yesterday, what would you say are the 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 just is a commercial agreement between the operating company and TowerCo. That has to do with how we work together, how we roll out, the number of sites where TowerCo is involved that we have sorted out in commercial agreements. Maybe it's different, but we don't see it as any operational challenge at all, actually.
Okay. Thank you.
Okay.
Anything on the phone?
Yeah. Let's see if we have any questions over the phone. Evelina?
Yeah, as a reminder, if you have dialed in and want to ask a question, press 01 on your telephone keypad. We do have a question from Joachim Gunell from DNB Markets. Please go ahead.
Thank you. A question perhaps for both Piab and Permobil, but in terms of, and in being unable to meet your customers on, say, trade fairs, market, and demo your products, et cetera, how do you believe this will change your go-to-market strategy?
Yeah. I think we have a few good examples, really, because we launched our new tool for connected chairs in the middle of the pandemic, which 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 chair generation, which is a mid-driven power wheelchair. I would say the combination of the digital training and the webinars we have done to train rehabilitation personnel and healthcare personnel, this has been well-perceived. 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. Perhaps even slightly better, because we could really pair it with the training we have in complex rehab questions and long-term solutions.
In a sense, we get a little bit more time to explain all the features and all possibilities. In that sense, it has been a positive experience.
Mm-hmm. What about you, Clas, at Piab?
Yeah. We saw at 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. We are gradually seeing that this is definitely a tool for the future, which will be a complement to also physical-
Yeah
trade shows in the future.
Okay. Let's see. Any more questions?
No other questions registered.
Okay. Thank you. I would like to thank Morten in Denmark, and also Bengt and Clas with us here in Vinterträdgården. We will now take a short mini break of three minutes, after the break, we will listen in to the Patricia North American company's CEO. Welcome back in three minutes. Welcome back, everyone. Now we will have three company presentations. We will start out by Laborie, and the CEO, Michael Frazzette. We are so happy that you are joining us today. Welcome.
Thank you. Hello, everyone. I'm Mike Frazzette, President and CEO of Laborie. I've been at Laborie since September of 2017. I'm coming to you from Boston, Massachusetts. I'm delighted to be with you today to have this opportunity to talk about Laborie. As you'll see, or as I hope you'll see, we're a company with a rich tradition of innovation, a longstanding history of success, and a tremendous runway for growth. Next slide, please. I can't see the slide. 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 Laborie and who we are. We design, develop, manufacture, and market medical technologies. Those technologies include equipment, software, devices, implants, and consumable supplies, both reusables and disposables, in the urology, gastroenterology, labor and delivery, and the neonatology fields. Okay?
We're one global enterprise with three distinct customer-facing business units. We've got nearly 900 employees located in 11 different countries. We have over 10,000 customers in more than 110 countries, and those customers are served by both direct and indirect sales and service organizations, just depending on where we are. We're growing. We're growing both organically and inorganically through significant M&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. Still living our values of quality, perseverance, accountability, and teamwork every single day, and I'm proud to be associated with them. Next slide, please.
I said Laborie is one global enterprise with three 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 Laborie well. They train on Laborie equipment. If they're doing urodynamics today, with very few exceptions, they're using Laborie equipment or one of our legacy companies' equipment. Gastroenterologists know the Unisensor brands, they know the Solar GI brands, especially in the pediatric space. 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, two very large markets in our space. Just last month, we announced a strategic partnership with a company called Urotronic. 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, or 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 U.S. 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-charged catheters. It's a typical razor blade model. 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.
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 and 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. Next slide, please. The Laborie 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 $275 million US with an EBITDA margin of 29%. This compares favorably to 2016, where we had revenues of $123 million 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 Laborie 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. Babies keep coming even in a pandemic.
We've started to see some improvement in the trajectory of the business in the third quarter and a continued improvement into the fourth quarter, as many markets are now trying to recover elective procedures. Still a little choppy, we expect it will continue to be choppy for some time. Next slide, please. From a strategic imperative standpoint, as we build our businesses, we focus on these five 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. 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 harmonize systems and processes, and to continuously improve and upskill all of our group functions. These five strategic imperatives inform our annual operating plan.
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. This includes everything from rooftop consolidations to implementing one piece flow, Lean and Six 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. Let me just sum it up for you.
Laborie 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. 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 Laborie, our customers, and the patients that we ultimately serve. That concludes my remarks.
Thank you very much. I'll look forward to taking some questions at the Q&A.
Thank you so much, Michael. You will remain with us because after we've listened in to Sarnova and also BraunAbility, we'll have a joint Q&A session with you. 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. 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. We're comprised of two businesses, our emergency preparedness business, as well as our acute care business. Sarnova has about 650 employees located across three offices and seven strategically located distribution facilities. In our calendar year 2019, Sarnova sales were about $650 million. We sell products and services across the healthcare continuum. 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 first responders. We go to market through three brands, our Bound Tree Medical, EMP, and Cardio Partners brands. Bound Tree Medical is the leading distributor of emergency medical supplies and equipment to the EMS services in the U.S. EMP is a leading online distributor of health and safety products to lay rescuers and first responders. 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 Tri-anim Health Services, 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. 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. 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. By doing so, that drives the best in class financial operating and 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 capabilities.
We have over 200 sales professionals across the United States, and our emergency preparedness and acute businesses sell health and safety solutions to meet the needs of more than 25,000 customers in multiple market segments. Next slide, please. Sarnova has delivered profitable growth over the past three 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 EBIT growth above market at over 6% organic growth year to date. 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. We have a 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 Cs, and I'd like to take you through those a bit. 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. 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&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. We'll also be transitioning to a more robust ERP system, and we'll expand use of our data analytics and artificial intelligence to better manage our business and improve our operating leverage. The last C is cultural sustainability. People are really our only sustainable competitive advantage. At Sarnova, we put our culture first, and we really believe that an engaged workforce will allow us to reach our goals and build our long-term and sustainable business. 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 1.5x 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 Sarnova'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 30th. Quite a fate 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 a 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. 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 Investor.
Thank you so much, Jeff. You will also be joining us in a little while when we have the joint Q&A. Now it's time for Staci Kroon, the CEO of BraunAbility. Thank you so much, Staci, for joining us today, and please go ahead.
Oh, thanks, Viveka. I'm really happy to be here, and more importantly, I'm really proud to share the BraunAbility story. We can start with the first slide that shows what we do. 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 three-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. It also promotes our continued domain expertise through that direct customer relationship. In addition to our own retail outlets, we continue to partner with independent retailers. 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 $730 million in 2019. 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 Autoadapt business located in Europe. The core legacy business, which you can see on the top dashed 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 dashed 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 second quarter pretty substantially. That was tough. We did rebound quite a bit into the third quarter. Our revenues didn't fully return. They were still more than 20% lower than the same quarter of 2019. Our EBITDA margin nearly matched the prior year. We serve an at-risk demographic. The rate of our recovery and 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. 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. 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, even with that, some customers still don't have easy access to a mobility dealer. Therefore, we're going to be expanding our points of distribution. 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. Digital selling. Click & Drive, that's the name of our new online selling platform. In the U.S. light vehicle market, the % of customers who completed some of their vehicle purchase online tripled during COVID. Certainly, it's critical to have a digital selling platform.
We're approaching this a little bit differently than other manufacturers in 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. There's four 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.
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, they're capturing real-time market feedback. We're positioned to be winners in this space. 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, that's on the Chevrolet Traverse. We'll be following that early next year with our first wheelchair-accessible hybrid electric vehicle on the new Toyota Sienna platform.
We continue to invest in innovation. We're out front. We're confident that we'll continue to be the market leader with advanced technologies, and these trends are sure to be a growth driver. 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. 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, Staci. Now we will have a very brief joint Q&A with Staci, Jeff, and Michael. 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?
Yes.
in profitability? Yeah.
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. Those are really the two dynamics for both of the business that we see going forward.
Thank you. Anything on the phone, perhaps?
Yeah, maybe we have a question over the phone. Do we, Evelina? No questions registered. No? Okay. If you like register, that's okay. Okay.
Thank you.
I would like to say thank you to Staci, Michael, and Jeff. Thank you so much, the three of you, for joining us, and we are now approaching the very end of Investor's Capital Markets Day 2020. On behalf of Investor and all our subsidiaries, I would like to thank you for joining us. Before we thank you fully, I would like our CEO, Johan Forssell, to come up here on stage, and he will wrap up this Capital Markets Day. Thank you.
Thank you, Viveka. 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 Investor. At Investor, we have great people running our companies. You have seen a number of them here today. It's Friday afternoon. I will try to wrap up this as quickly as possible. 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. Finally, make sure we have financial strength. 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. Tough time also creates opportunities.
We have a portfolio of market-leading companies that are exposed to a number of very attractive trends. 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. We have a strong industrial network, great people that we can populate our boards, and we have the financial strengths to support our companies on this journey. We have a strong platform, and we also know that the world is turning faster and faster the whole time. We will try to work hard and even faster. With that, I thank you all for participating and wish you all a great weekend. Thank you