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Vitrolife – investing in future generations

The World Health Organization (WHO) estimates that approximately 10% of all couples of reproductive age have difficulties in having children. According to the NHS (https://www.nhs.uk/conditions/infertility/) it‘s even worse, 1 in 7 couples have difficulty conceiving. The average age of first-time mothers is increasing steadily over the last years contributing to the problem. As adoption is often not the preferred option for couples, in-vitro fertilisation is the only option. An option that only provided a 15% success rate in 1980 and now leads to successful pregnancies in >50% of the cases.

The macro trends are clear, overall decreasing fertility, increasing age of first-time mothers and a growing middle-class in developing countries opens up a market for Vitrolife, a Swedish company specializing in in-vitro fertilisation.

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The customer NPS is > 70 and the employer NPS solid proving a good product and work environment for the industry.

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Looking at the financials you can see a strong growth in sales, a slightly decreasing but healthy gross margin and a strong return on equity rate of nearly 23%. (Source: https://mb.cision.com/Main/1031/3076403/1220582.pdf)

While the company is definitely not cheap anymore with a PE ratio of 56 (2019), it’s covering an upcoming trend that will gain even more traction as the company moves to artificial intelligence-assisted IVF processes. A pretty decent long-term buy with a great mission!

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