Annual Report • Jan 28, 2022
Annual Report
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"The organic order intake increased 6.4% in the fourth quarter following growth in all business areas and regions. Excluding currency effects, our order bookings are more than 20% larger compared with one year ago. As expected, net sales declined compared with Q4 2020, which saw large deliveries of ICU ventilators. Demand for our products for life supporting ECMO therapy and Sterile Transfer remains strong, while other parts of the operations are demonstrating a stable recovery. In particular, this applies to Surgical Workflows, which also displayed robust margin expansion. Sales of products for planned cardiovascular procedures also increased despite continuing challenges related to COVID-19. Global logistics challenges continued to impact the fourth quarter, although we succeeded in managing this well without any major disruptions for our customers.
We are continuing to implement our strategy – focusing on our most attractive growth areas. An example of this is the acquisition of Talis Clinical, a US-based leading innovator of High Acuity cloud-based software solutions. Talis' offering is the perfect complement to our strong offering in surgery, critical care support and ECMO therapy. During the fourth quarter, we entered into the previously communicated settlement agreement regarding surgical mesh implants, which means that we can now look ahead with full force. Improvements to the operations are continuing to generate effects in the form of a high EBITA margin and strong cash flows, meaning that we are consolidating our solid financial position and have plenty of scope for attractive acquisitions. Finally, I would like to thank our customers, suppliers and employees for a tremendous partnership in 2021!"
Organic sales growth is expected to be in the upper part of the range of 4-6% for the full-year 2022.
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
|---|---|---|---|---|
| SEK M | 2021 | 2020 | 2021 | 2020 |
| Order intake | 7,629 | 7,137 | 28,258 | 30,568 |
| Organic change, % | 6.4 | 6.1 | -3.0 | 15.6 |
| Net sales | 7,987 | 8,839 | 27,049 | 29,819 |
| Organic change, % | -9.6 | 11.1 | -4.8 | 14.3 |
| Adjusted gross profit | 4,150 | 4,556 | 14,392 | 15,874 |
| Margin, % | 52.0 | 51.5 | 53.2 | 53.2 |
| Adjusted EBITDA | 2,118 | 2,287 | 6,754 | 7,487 |
| Margin, % | 26.5 | 25.9 | 25.0 | 25.1 |
| Adjusted EBITA | 1,723 | 1,817 | 5,212 | 5,724 |
| Margin, % | 21.6 | 20.6 | 19.3 | 19.2 |
| Adjusted EBIT | 1,652 | 1,724 | 4,939 | 5,261 |
| Margin, % | 20.7 | 19.5 | 18.3 | 17.6 |
| Operating profit (EBIT) | 1,112 | 1,610 | 4,371 | 4,784 |
| Margin, % | 13.9 | 18.2 | 16.2 | 16.0 |
| Profit before tax | 1,075 | 1,541 | 4,188 | 4,485 |
| Net profit for the period | 775 | 1,104 | 3,000 | 3,273 |
| Adjusted net profit for the period | 1,241 | 1,258 | 3,632 | 3,965 |
| Margin, % | 15.5 | 14.2 | 13.4 | 13.3 |
| Adjusted earnings per share, SEK | 4.54 | 4.58 | 13.22 | 14.43 |
| Earnings per share, SEK | 2.83 | 4.02 | 10.90 | 11.89 |
| Cash flow from operating activities | 1,570 | 2,544 | 6,560 | 7,199 |
1) See page 3 for calculations of adjusted performance measures.
October – December 2021
Order intake business areas, SEK M Oct-Dec 2021 Oct-Dec 2020 Org Δ, % Jan-Dec 2021 Jan-Dec 2020 Org Δ, % Acute Care Therapies 3,919 3,704 4.4 15,335 19,208 -15.7 Life Science 1,307 1,235 7.0 4,120 3,413 26.0 Surgical Workflows 2,403 2,198 9.5 8,803 7,948 15.4 Total 7,629 7,137 6.4 28,258 30,568 -3.0
| Order intake regions, SEK M |
Oct-Dec 2021 |
Oct-Dec 2020 |
Org Δ, % | Jan-Dec 2021 |
Jan-Dec 2020 |
Org Δ, % |
|---|---|---|---|---|---|---|
| Americas | 2,768 | 2,627 | 3.3 | 10,527 | 11,601 | -3.1 |
| APAC | 1,671 | 1,529 | 7.3 | 6,919 | 6,603 | 9.5 |
| EMEA | 3,190 | 2,981 | 8.8 | 10,812 | 12,364 | -9.5 |
| Total | 7,629 | 7,137 | 6.4 | 28,258 | 30,568 | -3.0 |
| Net sales business areas, SEK M |
Oct-Dec 2021 |
Oct-Dec 2020 |
Org Δ, % | Jan-Dec 2021 |
Jan-Dec 2020 |
Org Δ, % |
|---|---|---|---|---|---|---|
| Acute Care Therapies | 4,230 | 5,392 | -22.1 | 15,527 | 18,719 | -12.5 |
| Life Science | 1,043 | 806 | 29.1 | 3,558 | 2,854 | 29.8 |
| Surgical Workflows | 2,715 | 2,641 | 4.0 | 7,965 | 8,246 | 0.5 |
| Total | 7,987 | 8,839 | -9.6 | 27,049 | 29,819 | -4.8 |
| Net sales regions, SEK M |
Oct-Dec 2021 |
Oct-Dec 2020 |
Org Δ, % | Jan-Dec 2021 |
Jan-Dec 2020 |
Org Δ, % |
| Americas | 2,698 | 3,238 | -18.4 | 10,249 | 11,394 | -4.0 |
| APAC | 2,153 | 1,951 | 10.6 | 6,632 | 6,329 | 9.3 |
| EMEA | 3,136 | 3,651 | -12.5 | 10,167 | 12,096 | -13.0 |
| Total | 7,987 | 8,839 | -9.6 | 27,049 | 29,819 | -4.8 |
| Net sales specified by capital goods & consumables, SEK M |
Oct-Dec 2021 |
Oct-Dec 2020 |
Org Δ, % | Jan-Dec 2021 |
Jan-Dec 2020 |
Org Δ, % |
|---|---|---|---|---|---|---|
| Capital goods | 3,973 | 5,138 | -22.1 | 12,261 | 15,473 | -17.0 |
| Consumables | 4,014 | 3,702 | 7.7 | 14,787 | 14,346 | 8.3 |
| Total | 7,987 | 8,839 | -9.6 | 27,049 | 29,819 | -4.8 |
Mix, price and mostly volume had an impact of SEK -848 M on sales, corresponding to -9.6%.
Currency effects impacted adjusted gross profit positively by SEK 35 M and adjusted EBITA positively by SEK 163 M.
| 2020 29,819 15,874 53.2 -8,387 7,487 25.1 -1,763 5,724 |
|---|
| 19.2 |
| -463 |
| 5,261 |
| 17.6 |
| -177 |
| -300 |
| 4,784 |
| -299 |
| 4,485 |
| 5,425 |
| 18.2 |
| -1,213 |
| -248 |
| 3,965 |
| 13.3 |
| 3,931 |
| 272,370 |
| 14.43 |
1) Excluding items affecting comparability (see Note 3 for depreciation, amortization and write-downs)
2) See Note 5
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
|---|---|---|---|---|
| SEK M | 2021 | 2020 | 2021 | 2020 |
| Acute Care Therapies | 1,201 | 1,653 | 4,444 | 5,831 |
| Margin, % | 28.4 | 30.7 | 28.6 | 31.1 |
| Life Science | 221 | 112 | 729 | 393 |
| Margin, % | 21.2 | 13.9 | 20.5 | 13.8 |
| Surgical Workflows | 393 | 156 | 390 | -127 |
| Margin, % | 14.5 | 5.9 | 4.9 | -1.5 |
| Group functions and other (incl. eliminations) | -92 | -105 | -351 | -374 |
| Total | 1,723 | 1,817 | 5,212 | 5,724 |
| Margin, % | 21.6 | 20.6 | 19.3 | 19.2 |
1) See Note 3 for depreciation and write-downs and Note 5 for other items affecting comparability
• Acute Care Therapies reduced its adjusted EBITA by SEK 453 M, mainly due to lower volumes related to ventilators. This also contributed to a slightly lower margin compared with Q4 2020.
Surgical Workflows' adjusted EBITA improved by SEK 237 M and the margin improved by 8.6 percentage points, due to higher volumes and increased productivity.
Adjusted operating expenses fell by 10.4% compared with Q4 2020. The difference compared with last year was mainly due to productivity improvements and revaluation of operating receivables and liabilities in foreign currency. Organically the decline was 5.0%.
(excluding depreciation, amortization and write-downs and other items affecting comparability)1) SEK M Oct-Dec 2021 Oct-Dec 2020 Jan-Dec 2021 Jan-Dec 2020 Selling expenses -1,131 -1,222 -4,077 -4,497 Administrative expenses -723 -729 -2,895 -3,048 Research and development costs -222 -182 -804 -770 Other operating income and expenses 44 -136 137 -72 Total -2,032 -2,269 -7,639 -8,387
1) See Note 3 for depreciation and write-downs and Note 5 for other items affecting comparability.
| Oct-Dec | Jan-Dec | |
|---|---|---|
| SEK M | 2021 | 2021 |
| Net sales | -7 | -1,365 |
| Adjusted gross profit | 35 | -800 |
| Adjusted EBITDA | 162 | -289 |
| Adjusted EBITA | 163 | -231 |
| Adjusted EBIT | 162 | -215 |
| SEK M | Oct-Dec 2021 |
Oct-Dec 2020 |
Jan-Dec 2021 |
Jan-Dec 2020 |
|---|---|---|---|---|
| Cash flow before changes in working capital | 1,778 | 1,999 | 5,618 | 6,352 |
| Changes in working capital | -208 | 545 | 942 | 847 |
| Net investments in non-current assets | -257 | -261 | -614 | -993 |
| Cash flow after net investments | 1,313 | 2,283 | 5,946 | 6,207 |
| Net interest-bearing debt | 3,609 | 7,509 | ||
| In relation to adjusted EBITDA1) R12M, multiple |
0.5 | 1.0 | ||
| Net interest-bearing debt, excl. pension provisions |
231 | 4,150 | ||
| In relation to adjusted EBITDA1) R12M, multiple |
0.0 | 0.6 |
1) See Note 5 for items affecting comparability and Note 7 for alternative performance measures.
| SEK M | Oct-Dec 2021 |
Oct-Dec 2020 |
Jan-Dec 2021 |
Jan-Dec 2020 |
|---|---|---|---|---|
| R&D costs, gross | -322 | -385 | -1,197 | -1,462 |
| In relation to net sales, % | 4.0 | 4.4 | 4.4 | 4.9 |
| Capitalized development costs | 89 | 111 | 346 | 429 |
| In relation to net sales, % | 1.1 | 1.3 | 1.3 | 1.4 |
| Research and development costs, net | -233 | -274 | -851 | -1,033 |
| Amortization and write-downs of | ||||
| capitalized R&D | -96 | -240 | -383 | -783 |
| Of which write-downs | -1 | -83 | -6 | -206 |
Acute Care Therapies offers world-leading solutions for life support in acute health conditions. The offering includes solutions for cardiovascular procedures and a broad selection of products and therapies for intensive care.
| Order intake | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |||
|---|---|---|---|---|---|---|---|
| ECMO therapy products. | regions, SEK M | 2021 | 2020 | Org Δ, % | 2021 | 2020 | Org Δ, % |
| Americas | 1,721 | 1,666 | -0.1 | 7,129 | 8,483 | -10.1 | |
| ventilators was negative but | APAC | 885 | 731 | 17.8 | 3,732 | 3,912 | -0.1 |
| recovered toward the end of the | EMEA | 1,314 | 1,307 | 2.6 | 4,474 | 6,814 | -31.5 |
| Net sales | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | ||
|---|---|---|---|---|---|---|
| regions, SEK M | 2021 | 2020 | Org Δ, % | 2021 | 2020 | Org Δ, % |
| Americas | 1,859 | 2,491 | -27.1 | 7,105 | 8,431 | -9.9 |
| APAC | 1,063 | 1,110 | -5.5 | 3,760 | 3,722 | 5.6 |
| EMEA | 1,308 | 1,791 | -25.4 | 4,661 | 6,566 | -26.0 |
| Total | 4,230 | 5,392 | -22.1 | 15,527 | 18,719 | -12.5 |
Total 3,919 3,704 4.4 15,335 19,208 -15.7
| Net sales specified by capital goods & consumables, SEK M |
Oct-Dec 2021 |
Oct-Dec 2020 |
Org Δ, % | Jan-Dec 2021 |
Jan-Dec 2020 |
Org Δ, % |
|---|---|---|---|---|---|---|
| Capital goods | 1,419 | 2,835 | -50.2 | 5,090 | 8,593 | -37.8 |
| Consumables | 2,811 | 2,557 | 9.2 | 10,437 | 10,126 | 9.0 |
| Total | 4,230 | 5,392 | -22.1 | 15,527 | 18,719 | -12.5 |
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
|---|---|---|---|---|
| SEK M | 2021 | 2020 | 2021 | 2020 |
| Net sales | 4,230 | 5,392 | 15,527 | 18,719 |
| Adjusted gross profit | 2,587 | 3,222 | 9,596 | 11,536 |
| Margin, % | 61.2 | 59.8 | 61.8 | 61.6 |
| Adjusted EBITDA | 1,413 | 1,927 | 5,272 | 6,833 |
| Margin, % | 33.4 | 35.7 | 34.0 | 36.5 |
| Depreciation, amortization and write-downs of | ||||
| intangible assets and tangible assets | -212 | -274 | -828 | -1,002 |
| Adjusted EBITA | 1,201 | 1,653 | 4,444 | 5,831 |
| Margin, % | 28.4 | 30.7 | 28.6 | 31.1 |
1) See Note 3 for depreciation and write-downs and Note 5 for other items affecting comparability.
After the end of the quarter, Getinge completed a minor acquisition of Irasun GmbH, which is based in Munich. The company develops products for venous drainage and temperature control, which can be used in combination with heart lung machines and equipment for extracorporeal life support (ECLS). Through the acquisition, Getinge broadens its portfolio with innovative solutions in surgical perfusion.
The order intake remained strong for ECMO therapy products.
Life Science offers a comprehensive range of equipment, technical expertise and consultation to prevent contamination in pharmaceutical and medical device production and with the aim to strengthen integrity of results in biomedical research.
Order intake regions, SEK M Oct-Dec 2021 Oct-Dec 2020 Org Δ, % Jan-Dec 2021 Jan-Dec 2020 Org Δ, % Americas 479 418 16.4 1,406 1,336 11.6 APAC 181 239 -26.5 877 558 63.1 EMEA 647 578 14.1 1,837 1,518 24.9 Total 1,307 1,235 7.0 4,120 3,413 26.0 Net sales regions, SEK M Oct-Dec 2021 Oct-Dec 2020 Org Δ, % Jan-Dec 2021 Jan-Dec
| regions, SEK M | 2021 | 2020 | Org Δ, % | 2021 | 2020 | Org Δ, % |
|---|---|---|---|---|---|---|
| Americas | 345 | 272 | 24.7 | 1,319 | 1,103 | 26.5 |
| APAC | 251 | 132 | 89.6 | 692 | 473 | 51.0 |
| EMEA | 447 | 402 | 12.2 | 1,547 | 1,278 | 24.7 |
| Total | 1,043 | 806 | 29.1 | 3,558 | 2,854 | 29.8 |
| Net sales specified by capital goods & consumables, SEK M |
Oct-Dec 2021 |
Oct-Dec 2020 |
Org Δ, % | Jan-Dec 2021 |
Jan-Dec 2020 |
Org Δ, % |
|---|---|---|---|---|---|---|
| Capital goods | 815 | 595 | 37.0 | 2,696 | 2,029 | 38.1 |
| Consumables | 228 | 211 | 6.7 | 861 | 825 | 9.2 |
| Total | 1,043 | 806 | 29.1 | 3,558 | 2,854 | 29.8 |
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
|---|---|---|---|---|
| SEK M | 2021 | 2020 | 2021 | 2020 |
| Net sales | 1,043 | 806 | 3,558 | 2,854 |
| Adjusted gross profit | 412 | 320 | 1,492 | 1,176 |
| Margin, % | 39.5 | 39.7 | 41.9 | 41.2 |
| Adjusted EBITDA | 260 | 142 | 870 | 522 |
| Margin, % | 24.9 | 17.6 | 24.5 | 18.3 |
| Depreciation, amortization and write-downs of | ||||
| intangible assets and tangible assets | -39 | -30 | -141 | -128 |
| Adjusted EBITA | 221 | 112 | 729 | 393 |
| Margin, % | 21.2 | 13.9 | 20.5 | 13.8 |
1) See Note 3 for depreciation and write-downs and Note 5 for other items affecting comparability.
• In 2021, a project was carried out to expand the production capacity of DPTE BetaBag® in Merrimack, US, to meet the increasing demand in Sterile Transfer. In December, the new production line in Merrimack was in operation. Deliveries will begin in the first quarter of 2022 and volumes are expected to increase gradually during the year.
Surgical Workflows offers products and solutions to serve as an end-to-end partner for optimizing the quality, safety and capacity usage of the sterile supply departments and operating rooms.
| Order intake regions, SEK M |
Oct-Dec 2021 |
Oct-Dec 2020 |
Org Δ, % | Jan-Dec 2021 |
Jan-Dec 2020 |
Org Δ, % |
|---|---|---|---|---|---|---|
| Americas | 569 | 543 | 3.6 | 1,992 | 1,782 | 19.3 |
| APAC | 604 | 559 | 8.0 | 2,311 | 2,134 | 13.2 |
| EMEA | 1,229 | 1,096 | 13.2 | 4,500 | 4,032 | 14.8 |
| Total | 2,403 | 2,198 | 9.5 | 8,803 | 7,948 | 15.4 |
| Net sales regions, SEK M |
Oct-Dec 2021 |
Oct-Dec 2020 |
Org Δ, % | Jan-Dec 2021 |
Jan-Dec 2020 |
Org Δ, % |
| Americas | 493 | 474 | 2.2 | 1,825 | 1,860 | 4.6 |
| APAC | 840 | 709 | 20.9 | 2,180 | 2,133 | 6.6 |
| EMEA | 1,382 | 1,458 | -3.6 | 3,959 | 4,253 | -4.3 |
| Total | 0.5 | |||||
| 2,715 | 2,641 | 4.0 | 7,965 | 8,246 |
| Net sales specified by capital goods & consumables, SEK M |
Oct-Dec 2021 |
Oct-Dec 2020 |
Org Δ, % | Jan-Dec 2021 |
Jan-Dec 2020 |
Org Δ, % |
|---|---|---|---|---|---|---|
| Capital goods | 1,739 | 1,707 | 4.1 | 4,475 | 4,851 | -3.4 |
| Consumables | 975 | 934 | 3.9 | 3,489 | 3,394 | 6.1 |
| Total | 2,715 | 2,641 | 4.0 | 7,965 | 8,246 | 0.5 |
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
|---|---|---|---|---|
| SEK M | 2021 | 2020 | 2021 | 2020 |
| Net sales | 2,715 | 2,641 | 7,965 | 8,246 |
| Adjusted gross profit | 1,151 | 1,014 | 3,304 | 3,163 |
| Margin, % | 42.4 | 38.4 | 41.5 | 38.4 |
| Adjusted EBITDA | 534 | 320 | 949 | 495 |
| Margin, % | 19.7 | 12.1 | 11.9 | 6.0 |
| Depreciation, amortization and write-downs of | ||||
| intangible assets and tangible assets | -140 | -163 | -559 | -622 |
| Adjusted EBITA | 393 | 156 | 390 | -127 |
| Margin, % | 14.5 | 5.9 | 4.9 | -1.5 |
1) See Note 3 for depreciation and write-downs and Note 5 for other items affecting comparability.
During the quarter, Getinge expanded its virtual hospital to include a hybrid operating room (OR) where visitors can interact with products and solutions online. In addition, the virtual hospital is now available in more languages and gives visitors quick access to training information.
Organic order growth in all categories and regions and order bookings at the end of the quarter were more than 30% higher than at the end of Q4 2020.
At the start of December, Getinge's subsidiary Atrium Medical Corporation entered into a settlement agreement with the plaintiff's lead counsel related to the multidistrict litigation (MDL) linked to surgical mesh product liability in the US. An additional provision of SEK 600 M has been made to account for the settlement in addition to litigation expenses incurred to date.
The settlement agreement was executed to resolve matters pending in the District Court of New Hampshire, US. The settlement is subject to certain contingencies, including participation by a certain high level of plaintiffs in the MDL. Getinge expects the settlement to become final and payment to be made during the first half of 2022.
The settlement is not an admission of liability or wrongdoing by the company. Getinge will continue to defend against any litigation that the final agreement does not resolve. Costs for such litigations are not expected to be material. The litigation against the insurers will also continue to obtain rightful compensation.
The surgical mesh implants are manufactured by Getinge's subsidiary Atrium Medical, which was acquired by Getinge in 2011. Getinge made a provision of SEK 1.8 billion in 2018 for expected costs associated with surgical mesh claims, based on information available at the time. The settlement amount will be funded through available funds. The provision will be reported as an item affecting comparability and it will impact the operating result for Q4 2021.
The outbreak of COVID-19 was characterized by the WHO as a pandemic on March 11, 2020 and is continuing to impact people and society on a global scale. In this situation, Getinge is prioritizing the health and safety of its employees and is taking measures to limit the spread of the virus by following the instructions of the relevant authorities. Getinge is also closely following developments regarding the pandemic and is continuously evaluating the operational and financial effects. Some minor measures to adjust costs were carried out and action plans have been made to further adjust costs and the business if necessary.
The order intake for ventilators declined in the fourth quarter despite demand rising at the end of the period due to a higher rate of infection. However, demand for ECMO therapy products remained higher, which contributed to the order intake for the Acute Care Therapies business area increasing organically by 4.4%. The business area's other product segments, which were negatively impacted by the pandemic since non-essential surgeries were postponed, continued to recover and the order intake rose. The new wave of the pandemic caused by the omicron variant meant that demand did not slow in these product segments.
The order intake for the Life Science business area rose organically by 7.0%. This was largely due to higher demand for sterilizers, which was negatively affected by the COVID-19 pandemic. The order intake for Sterile Transfer products used to manufacture vaccines continued to display high growth. Surgical Workflows – the sole business area that was negatively affected by the pandemic – continued its recovery from the third quarter and all product categories reported positive growth. In total, the order intake for the business area increased organically by 9.5%.
It has been possible to continue work on the installation and servicing of products without any major disruptions, and this was not negatively affected by restrictions in key markets. The production operations experienced logistics challenges and problems with deliveries of components, which could be resolved without any significantly negative consequences arising. Challenging comparative figures as a result of large deliveries of ventilators in Q4 2020 contributed to a decline in sales and earnings for Acute Care Therapies. The areas of Acute Care Therapies that are not directly linked to
treating patients with COVID-19, and that were negatively impacted by the pandemic, continued to recover, despite the negative impact of rising rates of infection.
Life Science's sales and earnings were positively impacted by higher sales growth in all product categories and sales of Sterile Transfer products for manufacturing vaccines continued to report a high rate of growth. Sales for Surgical Workflows increased in the fourth quarter despite challenges related to purchasing and logistics, which were managed successfully. Earnings improved due to higher volumes, productivity improvements and cost savings.
As time passes, the situation regarding the pandemic could result in negative financial effects due to lower demand and disruptions to purchasing, logistics and production. It also cannot be ruled out that installation and service of products at hospitals and care facilities could be limited by restrictions to reduce the spread of the virus.
Getinge appointed two new Executive Vice Presidents and members of the Getinge Executive Team: Elin Frostehav and Eric Honroth.
Elin Frostehav has been appointed President Acute Care Therapies and member of the Getinge Executive Team. Elin currently serves as Vice President Critical Care, a product area within Acute Care Therapies. Elin joined Getinge in 2019 and previously held leading global positions within Semcon, an international technology company, in the areas of product development and digitalization. Prior to Semcon, Elin held various positions at FlexLink, a global factory automation company. Elin succeeds Jens Viebke who will take on a new role in Getinge as Executive Vice President Research & Business Development, focusing on Getinge's Research Programs and M&A activities. In this role, Jens Viebke will continue to report to Mattias Perjos, President & CEO.
Eric Honroth has been appointed President Life Science and member of the Getinge Executive Team. Eric is currently President North America Region in Getinge and has been with the company since 2018. He has more than 20 years of extensive experience in global leadership roles in the medical devices industry, including roles at Becton Dickinson, CareFusion and Abbott Vascular. Eric succeeds Harald Castler who after a long and successful career at Getinge has decided to retire. All changes are effective as of April 1, 2022.
After the end of the quarter, Getinge completed a minor acquisition of Irasun GmbH, which is based in Munich. The company develops products for venous drainage and temperature control, which can be used in combination with heart lung machines and equipment for extracorporeal life support (ECLS). Through the acquisition, Getinge broadens its portfolio with innovative solutions in surgical perfusion.
| Description | Potential consequences | Management | |
|---|---|---|---|
| New competitors and new technology |
Certain markets and product segments have niche players who offer solutions outside customary market behavior. |
These competitors could capture market shares from more established companies such as Getinge, resulting in a negative effect on Getinge's sales and earnings. |
Getinge's long-term strategy includes active business intelligence of the competitive landscape to react to this type of competitor. The industry is also considered to have high barriers to entry since medical devices are subject to extensive regulatory requirements. |
| External shocks, such as geopolitical risks, natural disasters, terrorism, pandemics, etc. |
These are often quickly escalating situations that affect large parts of the world, a country, a region or a specific site. |
The primary consequence of this type of risk is that employees could be injured. There is also the risk of business interruptions that could have a negative impact on sales and earnings. |
Active business intelligence can detect some of these risks at an early stage and the Group will then have the chance to adapt to the new situation. A process to further enhance the Group's work on continuity risks was started in 2021. As part of this process, scenarios based on external shocks will also be included in the risks that Getinge proactively works on. |
| Quality risks from a regulatory perspective |
Significant parts of Getinge's product range are covered by legislation stipulating extensive assessments, quality control and documentation. |
It cannot be ruled out that Getinge's operations, financial position and earnings may be negatively impacted in the future by difficulties in complying with current regulations and requirements of authorities and control bodies or changes to such regulations and requirements. |
To limit these risks to the greatest possible extent, Getinge conducts extensive work focused on quality and regulatory issues. The Group-wide Quality & Regulatory Compliance function has a representative in the Getinge Executive Team and also a representative on the management teams of each business area, and the function is represented in all R&D and production units. In addition, Getinge's sales force and service technicians receive relevant quality and regulatory training every other year to renew their certification. This is a requirement for representing Getinge. The majority of the Group's production facilities are certified according to the medical device quality standard ISO 13485 and/or the general quality standard ISO 9001. In total, the Group allocates significant resources to quality and regulatory matters in order to best manage this risk exposure, and quality is the overall priority in the Group's strategy. |
| Product quality from a customer perspective |
In certain cases, Getinge's products do not meet customer expectations. |
Customers experiencing shortcomings in Getinge's product quality could chose other suppliers. This could entail a risk of lower sales and lower profitability over time. |
Getinge applies a far-reaching quality process that aims to ensure a high and even level of quality to meet customers' legitimately high requirements. This is an ongoing process that results in continuous improvements. When quality fails, it is important to rapidly bring the right equipment on site to rectify the fault during the first service visit. Getinge closely monitors the "first time fix" factor of its services operations and works extensively to make improvements related to such faults or shortcomings. |
| Laws and regulations mainly on business ethics |
Contraventions of competition law, anti-corruption, data privacy (GDPR) or trade restrictions. |
Could lead to fines or penalties in one or more markets and have a negative impact on the Getinge brand. |
Getinge has previously provided information about ongoing investigations and agreements with the authorities regarding anti-competitive procedures in the sale of medical devices in Brazil. It cannot be ruled out that any further agreements with authorities may have a material impact on the company's financial earnings and position. Getinge has a zero tolerance policy when it comes to contraventions of these regulations. The Group's Code of Conduct is very clear in this respect. The Ethics & Compliance Group staff function was expanded during the year and the head of the department has been a member of the Getinge Executive Team since 2020 to further demonstrate how highly the organization prioritizes these issues. Getinge has a comprehensive ongoing training program within business ethics and the objective is that all employees should receive such training at least once a year. Getinge's business ethics regulations also apply to external distributors who sell Getinge's products in a large number of countries in which the Group does not have its own presence. |
| Digitization and innovation |
Getinge's future growth depends on the company's ability to develop new and successful products, particularly in the area of digitization. Getinge's ability to innovate is a very important factor in retaining and establishing leading positions for the Group's product segments. |
Innovation efforts are costly and it is not possible to guarantee that developed products will be commercially successful, which could result in impairment. In the long term, the Group's position in the market could be negatively affected if Getinge is unsuccessful in this area. |
As a means of maximizing the return on investments in research and development, the Group applies a structured selection and planning process that includes careful analyses of the market, technological progress, choice of production method and selection of subcontractors. The actual development work is also conducted in a structured manner and each project undergoes a number of fixed control points. The Group is particularly concerned with ensuring access to the right skills, retaining key individuals, being an attractive employer to recruit talent externally, and identifying and developing talent within the organization. |
1) For information regarding risks related to COVID-19 and the ongoing pandemic, refer to the section on "Financial impact of COVID-19" on page 8.
| Description | Potential consequences | Management | |
|---|---|---|---|
| Risks related to health care reimbursement systems |
Political decisions can change the conditions for health care through changed reimbursement models for health care providers. |
Changes to the health care reimbursement system can have a major impact on individual markets by reducing or deferring grants. |
It is difficult to influence this risk since these decisions are outside the Group's control but the risk is limited by Getinge being active in a large number of geographical markets. |
| Product liability risks |
Health care suppliers run a risk, like other players in the health care industry, of being subject to product liability and other legal claims. |
Such claims can involve large amounts and significant legal expenses. Getinge carries the customary indemnity and product liability insurance, but there is a risk that this insurance coverage may not fully cover product liability and other claims. |
The best way of managing these risks is the extensive quality related and regulatory activities performed by the Group. Sources of potential future claims for damages are monitored through active incident reporting. Corrective and protective action (CAPA) is initiated when necessary to investigate the underlying cause, after which the product design may be corrected to remedy the fault. |
| Risks related to intellectual property rights |
Getinge's leading positions in many of the Group's product segments are based on patent and trademark rights. These rights could lead to disputes with competitors. |
Getinge invests significant resources in product development that results in patent rights. There is a risk that the Group will be involved in costly disputes concerning such rights and thus a risk that invested resources will not generate the expected return if such a dispute is lost. |
To secure returns on these investments, Getinge actively upholds its rights and monitors competitors' activities closely. If required, Getinge will protect its intellectual property rights through legal processes. |
| Financial risks | Getinge is exposed to a number of financial risks in its operations. Financial risks principally pertain to currency risks, interest-rate risks, and credit and counterparty risks. |
Fluctuations in exchange rates and interest rates and changes in counterparties' credit profiles could adversely affect the Group's income statement and balance sheet. |
Risk management is regulated by the finance policy adopted by the Board and a Treasury directive decided by the Getinge Executive Team based on the finance policy. The ultimate responsibility for managing the Group's financial risks and developing methods and principles of financial risk management lies with the Getinge Executive Team and the treasury function. For more detailed information concerning these risks, refer to Note 28 of the Annual Report. |
| Information and data security |
Leaks of confidential information or hacking into the Group's IT system resulting in restricted availability or interruptions of business-critical systems. |
Leaks of personal data could lead to high fines. Hacking into IT systems could lead to business interruptions. A loss of sensitive information may adversely affect confidence in the company. |
The Group's IT structure can be considered to be decentralized, which reduces the consequence of any unauthorized access. The Group improved user authentication during the year to prevent hacking. This work will continue in the year ahead. The Group also closely monitors critical systems to prevent hacking. |
| Deficiencies in cyber security |
Security deficiencies in the Group's digital offering, such as connected machines at customer sites and stricter legal requirements for processing personal data. |
Restricted availability of equipment delivered by Getinge to its customers, which could result in interruptions to the hospital operations and it not being possible to offer patients sufficient care in critical situations. |
Getinge works diligently to ensure the integrity of its equipment that is connected to the Internet. In-depth access testing and other measures are carried out before these solutions are offered to the Group's customers. |
| Business interruptions |
Unforeseen and sudden events, such as natural disasters, fires, etc. that result in disruptions to production or the supply chain. |
Potential interruptions and higher costs in the supply chain and production could lead to more costly or delayed deliveries or, in a worst case scenario, non-delivery to Getinge's customers. Such a situation risks negative consequences for the Group's earnings. |
In the first half of 2022, there is a continuing risk of temporary business interruptions linked to a further deterioration in the global availability of electronic components as a result of the ongoing pandemic. The Group continuously works on claims prevention to ensure a high level of availability and delivery reliability. External experts inspect the Group's production units on a regular basis to identify and take action on potential interruption risks, following a Group-wide standard. The process of further improving the Group's business continuity will continue in 2022. |
| Profitability dependent on certain products and markets |
In certain cases, a relatively large share of the total profitability of a product is linked to sales in a certain market. |
The consequence of such a situation is that profitability can be adversely affected if sales volumes were to decline due to a changed competitive situation in the market. |
Getinge works actively to monitor profitability per product and market in order to ensure profitability over time. To reduce the sensitivity of profitability, the Group actively works on ensuring that it has the right cost level in relation to the current price levels in the market. Getinge also works actively to establish itself in new markets. |
| Dependence on external suppliers |
External suppliers that deliver critical components to the Group are a highly important part of Getinge's manufacturing process. Production disruptions may arise if these components are not supplied on schedule. |
One of the potential consequences of this is that life saving equipment may not be delivered to hospitals as required for maintaining critical health care. |
Getinge works actively to monitor critical deliveries. This process is initiated when the partnership is established and is then continuously monitored. The purchasing organization has tools for evaluating risk and for training in this area. The Group also works on ensuring that it has adequate levels of critical components in stock, either in its own operations or with the relevant supplier. Interruptions of critical deliveries are also included in the general activities related to business continuity risks. Refer to "Business interruptions" above. |
Getinge's sales and earnings are affected by seasonal variations. The highest net sales are usually generated in the fourth quarter, followed by the second, third and first quarters. The shares of sales derived from capital goods and consumables also normally changes during the year, with a higher share of sales of capital goods toward the end of the year.
Getinge carried out normal commercial transactions with Arjo (which was distributed to shareholders in December 2017) for the sale and purchase of goods and services. In addition, no other significant transactions with related parties occurred during the period other than transactions with subsidiaries.
This report contains forward-looking information based on the current expectations of company management. Although management deems that the expectations presented by such forwardlooking information are reasonable, no guarantee can be given that these expectations will prove correct. Accordingly, the actual future outcome could vary considerably compared with what is stated in the forward-looking information, due to such factors as changed conditions regarding finances, market and competition, changes in legal and regulatory requirements and other political measures, and fluctuations in exchange rates.
The Board of Directors and CEO propose a dividend for 2021 of SEK 4.00 (3.00) per share, which amounts to SEK 1,089 M (817). The final date for trading including the right to receive dividends is April 26, 2022 and the proposed record date is April 28, 2022. Euroclear expects to distribute the dividend to shareholders on May 3, 2022.
Getinge AB's Annual General Meeting will be held on April 26, 2022 and is planned to take place in Kongresshallen at Hotel Tylösand in Halmstad, Sweden. However, Getinge is monitoring the development of the ongoing pandemic and has made preparations for alternative arrangements, if necessary. Shareholders wishing to have a matter addressed at the Annual General Meeting can submit their proposal to Getinge's Board Chairman by e-mail: [email protected], or by mail: Getinge AB, Att: Bolagsstämmoärenden, Box 8861, SE-402 72 Gothenburg, Sweden. To ensure inclusion in the notice and the agenda, proposals must be received by the company not later than March 8, 2022.
The Board of Directors and CEO assure that the interim report provides a true and fair review of the Parent Company and the Group's operations, position and earnings and describes the material risks and uncertainties faced by the Parent Company and the Group.
Gothenburg, January 28, 2022
Johan Malmquist Chairman, AGM-elected Board member
Carl Bennet Vice Chairman, AGM-elected Board member
Johan Bygge AGM-elected Board member
Cecilia Daun Wennborg AGM-elected Board member
Sofia Hasselberg AGM-elected Board member
Mattias Perjos President & CEO, AGM-elected Board member
Barbro Fridén AGM-elected Board member
Rickard Karlsson Board member
Representative of the Swedish Metalworkers' Union
Malin Persson AGM-elected Board member
Dan Frohm AGM-elected Board member
Åke Larsson Board member Representative of the Swedish Association of Graduate Engineers
Kristian Samuelsson AGM-elected Board member
This interim report is unaudited.
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | ||
|---|---|---|---|---|---|
| SEK M | Note | 2021 | 2020 | 2021 | 2020 |
| Net sales | 2 | 7,987 | 8,839 | 27,049 | 29,819 |
| Cost of goods sold | -4,048 | -4,681 | -13,469 | -15,097 | |
| Gross profit | 2, 3 | 3,939 | 4,158 | 13,580 | 14,722 |
| Selling expenses | -1,264 | -1,402 | -4,590 | -5,285 | |
| Administrative expenses | -834 | -859 | -3,337 | -3,498 | |
| Research and development costs | -233 | -274 | -851 | -1,033 | |
| Acquisition expenses | -19 | -4 | -35 | -8 | |
| Restructuring costs | 24 | -1 | -61 | -169 | |
| Other operating income and expenses | -501 | -8 | -336 | 55 | |
| Operating profit (EBIT) | 2, 3 | 1,112 | 1,610 | 4,371 | 4,784 |
| Net financial items | 2 | -36 | -69 | -183 | -299 |
| Profit after financial items | 2 | 1,075 | 1,541 | 4,188 | 4,485 |
| Taxes | -300 | -437 | -1,187 | -1,213 | |
| Net profit for the period | 775 | 1,104 | 3,000 | 3,273 | |
| Attributable to: | |||||
| Parent Company shareholders | 771 | 1,094 | 2,970 | 3,239 | |
| Non-controlling interests | 4 | 10 | 31 | 34 | |
| Net profit for the period | 775 | 1,104 | 3,000 | 3,273 | |
| Earnings per share, SEK1) | 2.83 | 4.02 | 10.90 | 11.89 | |
| Weighted average number of shares for calculation of earnings per share (000s) |
272,370 | 272,370 | 272,370 | 272,370 |
1) Before and after dilution
| SEK M | Oct-Dec 2021 |
Oct-Dec 2020 |
Jan-Dec 2021 |
Jan-Dec 2020 |
|---|---|---|---|---|
| Net profit for the period | 775 | 1,104 | 3,000 | 3,273 |
| Other comprehensive income | ||||
| Items that cannot be restated in profit for the period | ||||
| Actuarial gains/losses pertaining to defined-benefit pension plans |
-145 | 95 | -5 | -13 |
| Tax attributable to items that cannot be restated in profit | 43 | -25 | 10 | -1 |
| Items that can later be restated in profit for the period | ||||
| Translation differences and hedging of net investments | 490 | -1,704 | 1,614 | -2,319 |
| Cash flow hedges | 4 | 19 | -22 | -16 |
| Tax attributable to items that can be restated in profit | -6 | -2 | -17 | 21 |
| Other comprehensive income for the period, net after tax | 384 | -1,616 | 1,580 | -2,327 |
| Total comprehensive income for the period | 1,159 | -513 | 4,580 | 946 |
| Comprehensive income attributable to: | ||||
| Parent Company shareholders | 1,151 | -500 | 4,543 | 936 |
| Non-controlling interests | 8 | -12 | 37 | 9 |
| Total comprehensive income for the period | 1,159 | -513 | 4,580 | 946 |
| SEK M Note |
December 31 2021 |
December 31 2020 |
|---|---|---|
| Assets | ||
| Intangible assets | 24,148 | 22,085 |
| Tangible assets | 3,060 | 2,956 |
| Right-of-use assets | 1,060 | 1,017 |
| Financial assets | 1,217 | 1,526 |
| Inventories | 4,767 | 4,513 |
| Accounts receivable | 4,695 | 5,338 |
| Other current receivables | 1,532 | 1,524 |
| Cash and cash equivalents 6 |
4,076 | 6,056 |
| Total assets | 44,555 | 45,014 |
| Equity and liabilities | ||
| Equity | 25,176 | 21,486 |
| Provisions for pensions, interest-bearing 6 |
3,378 | 3,359 |
| Lease liabilities 6 |
1,036 | 990 |
| Other interest-bearing liabilities 6 |
3,270 | 9,216 |
| Other provisions | 4,186 | 3,115 |
| Accounts payable | 1,921 | 1,446 |
| Other non-interest-bearing liabilities | 5,587 | 5,402 |
| Total equity and liabilities | 44,555 | 45,014 |
| Other capital |
Retained | Non controlling |
Total | ||||
|---|---|---|---|---|---|---|---|
| SEK M | Share capital | provided | Reserves1) | earnings | Total | interests | equity |
| Opening balance at January 1, 2020 | 136 | 6,789 | 1,965 | 11,606 | 20,496 | 477 | 20,973 |
| Total comprehensive income for the period | - | - | -2,288 | 3,225 | 936 | 9 | 946 |
| Dividend | - | - | - | -409 | -409 | -24 | -433 |
| Closing balance at December 31, 2020 | 136 | 6,789 | -323 | 14,422 | 21,024 | 462 | 21,486 |
| Opening balance at January 1, 2021 | 136 | 6,789 | -323 | 14,422 | 21,024 | 462 | 21,486 |
| Total comprehensive income for the period | - | - | 1,568 | 2,974 | 4,543 | 37 | 4,580 |
| Dividend | - | - | - | -817 | -817 | -41 | -858 |
| Transactions with non-controlling interests | - | - | - | - | - | -32 | -32 |
| controlling interests | |||||||
| Closing balance at December 31, 2021 | 136 | 6,789 | 1,245 | 16,579 | 24,750 | 427 | 25,176 |
1) Reserves pertain to cash flow hedges, hedges of net investments and translation differences.
| SEK M | Note | Oct-Dec 2021 |
Oct-Dec 2020 |
Jan-Dec 2021 |
Jan-Dec 2020 |
|---|---|---|---|---|---|
| Operating activities | |||||
| Operating profit (EBIT) | 1,112 | 1,610 | 4,371 | 4,784 | |
| Add-back of depreciation, amortization and write-downs | 3 | 466 | 637 | 1,814 | 2,467 |
| Other non-cash items | 553 | 44 | 460 | 60 | |
| Add-back of restructuring costs1) | -24 | 1 | 61 | 169 | |
| Paid restructuring costs | -40 | -63 | -203 | -262 | |
| Financial items | -41 | -80 | -192 | -313 | |
| Taxes paid | -249 | -150 | -693 | -553 | |
| Cash flow before changes in working capital | 1,778 | 1,999 | 5,618 | 6,352 | |
| Changes in working capital | |||||
| Inventories | 329 | 631 | -71 | -544 | |
| Operating receivables | -716 | 86 | 805 | 1,121 | |
| Operating liabilities | 179 | -172 | 208 | 270 | |
| Cash flow from operating activities | 1,570 | 2,544 | 6,560 | 7,199 | |
| Investing activities | |||||
| Acquisition of operations | 8 | -596 | -169 | -715 | -999 |
| Investments in intangible assets and tangible assets | -265 | -284 | -930 | -1,045 | |
| Divestment of non-current assets | 8 | 24 | 316 | 53 | |
| Cash flow from investing activities | -853 | -430 | -1,329 | -1,991 | |
| Financing activities | |||||
| Change in interest-bearing liabilities | -1,177 | -1,627 | -5,989 | 543 | |
| Depreciation of lease liabilities | -99 | -115 | -389 | -390 | |
| Change in long-term receivables | -3 | -9 | -1 | -17 | |
| Dividend paid | -17 | -3 | -858 | -433 | |
| Cash flow from financing activities | -1,296 | -1,753 | -7,237 | -297 | |
| Cash flow for the period | -579 | 360 | -2,006 | 4,911 | |
| Cash and cash equivalents at the beginning of the period | 4,654 | 5,716 | 6,056 | 1,254 | |
| Translation differences | 1 | -20 | 26 | -110 | |
| Cash and cash equivalents at the end of the period | 4,076 | 6,056 | 4,076 | 6,056 |
1) Excluding write-downs on non-current assets
The Group's interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. For the Parent Company, the report has been prepared in accordance with the Swedish Annual Accounts Act and RFR 2. The accounting policies adopted are consistent with those applied for the 2020 Annual Report and should be read in conjunction with that Annual Report.
For practical reasons, the figures in this interim report have not been rounded off, which is why notes and tables may not total correct amounts. Unless otherwise specified, all figures pertain to SEK M and figures in parentheses pertain to the year-earlier period. The interim report provides alternative performance measures for monitoring the Group's operations.
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
|---|---|---|---|---|
| Net sales, SEK M | 2021 | 2020 | 2021 | 2020 |
| Acute Care Therapies | 4,230 | 5,392 | 15,527 | 18,719 |
| Life Science | 1,043 | 806 | 3,558 | 2,854 |
| Surgical Workflows | 2,715 | 2,641 | 7,965 | 8,246 |
| Total | 7,987 | 8,839 | 27,049 | 29,819 |
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
| Gross profit, SEK M | 2021 | 2020 | 2021 | 2020 |
| Acute Care Therapies | 2,467 | 3,012 | 9,132 | 10,861 |
| Life Science | 391 | 303 | 1,419 | 1,102 |
| Surgical Workflows | 1,082 | 843 | 3,028 | 2,759 |
| Total | 3,939 | 4,158 | 13,580 | 14,722 |
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
| Operating profit (EBIT), SEK M | 2021 | 2020 | 2021 | 2020 |
| Acute Care Therapies | 559 | 1,640 | 3,685 | 5,312 |
| Life Science | 215 | 76 | 702 | 337 |
| Surgical Workflows | 449 | -3 | 369 | -489 |
| Group functions and other (incl. eliminations)1) | -111 | -103 | -386 | -375 |
| Operating profit (EBIT) | 1,112 | 1,610 | 4,371 | 4,784 |
| Net financial items | -36 | -69 | -183 | -299 |
| Profit after financial items | 1,075 | 1,541 | 4,188 | 4,485 |
1) Group functions and other refer mainly to central functions such as finance, communication, HR and other items, such as eliminations
| SEK M | Oct-Dec 2021 |
Oct-Dec 2020 |
Jan-Dec 2021 |
Jan-Dec 2020 |
|---|---|---|---|---|
| Acquired intangible assets | -71 | -93 | -273 | -494 |
| Intangible assets | -166 | -309 | -661 | -1,069 |
| Right-of-use assets | -99 | -118 | -398 | -405 |
| Tangible assets | -130 | -117 | -483 | -500 |
| Total | -466 | -637 | -1,814 | -2,467 |
| of which write-downs | -1 | -83 | -7 | -257 |
| SEK M | Oct-Dec 2021 |
Oct-Dec 2020 |
Jan-Dec 2021 |
Jan-Dec 2020 |
|---|---|---|---|---|
| Cost of goods sold | -210 | -268 | -813 | -1,017 |
| Selling expenses | -133 | -164 | -513 | -754 |
| Administrative expenses | -111 | -113 | -442 | -433 |
| Research and development costs | -11 | -93 | -47 | -263 |
| Restructuring costs | - | - | - | - |
| Total | -466 | -637 | -1,814 | -2,467 |
| of which write-downs | -1 | -83 | -7 | -257 |
| SEK M | Oct-Dec 2021 |
Jul-Sep 2021 |
Apr-Jun 2021 |
Jan-Mar 2021 |
Oct-Dec 2020 |
Jul-Sep 2020 |
Apr-Jun 2020 |
Jan-Mar 2020 |
|---|---|---|---|---|---|---|---|---|
| Net sales | 7,987 | 6,306 | 6,587 | 6,169 | 8,839 | 7,976 | 6,971 | 6,033 |
| Cost of goods sold | -4,048 | -3,173 | -3,160 | -3,089 | -4,681 | -3,846 | -3,513 | -3,057 |
| Gross profit | 3,939 | 3,133 | 3,427 | 3,080 | 4,158 | 4,130 | 3,458 | 2,976 |
| Operating expenses | -2,828 | -2,038 | -2,222 | -2,120 | -2,548 | -2,217 | -2,701 | -2,470 |
| Operating profit (EBIT) | 1,112 | 1,094 | 1,205 | 960 | 1,610 | 1,913 | 757 | 505 |
| Net financial items | -36 | -43 | -48 | -56 | -69 | -72 | -80 | -78 |
| Profit after financial items | 1,075 | 1,052 | 1,157 | 903 | 1,541 | 1,841 | 677 | 427 |
| Taxes | -300 | -285 | -351 | -251 | -437 | -446 | -179 | -150 |
| Net profit for the period | 775 | 767 | 806 | 652 | 1,104 | 1,395 | 497 | 277 |
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
|---|---|---|---|---|
| Adjusted EBITA, SEK M Acute Care Therapies |
2021 1,201 |
2020 1,653 |
2021 4,444 |
2020 5,831 |
| Life Science | 221 | 112 | 729 | 393 |
| Surgical Workflows | 393 | 156 | 390 | -127 |
| Group functions and other (incl. eliminations) | -92 | -105 | -351 | -374 |
| Total | 1,723 | 1,817 | 5,212 | 5,724 |
| Adjustments of EBITA, SEK M | Oct-Dec 2021 |
Oct-Dec 2020 |
Jan-Dec 2021 |
Jan-Dec 2020 |
| Specification of items affecting comparability that impact EBITA | ||||
| Acquisition and restructuring costs, Acute Care Therapies | 18 | -8 | -1 | -62 |
| Acquisition and restructuring costs, Life Science | 0 | 0 | -2 | 0 |
| Acquisition and restructuring costs, Surgical Workflows | 6 | 2 | -58 | -113 |
| Write-down of R&D, Acute Care Therapies2) | - | - | - | -73 |
| Write-down of R&D, Life Science2) | - | -29 | - | -29 |
| Write-down of R&D, Surgical Workflows 2) | - | -45 | - | -108 |
| Impairment of receivables, Acute Care Therapies3) | - | -47 | - | -47 |
| Impairment of receivables, Acute Care Therapies2) | - | -8 | - | -8 |
| Impairment of receivables, Surgical Workflows2) | - | -7 | - | -7 |
| Write-down of inventories, Acute Care Therapies1) | - | -38 | - | -38 |
| Write-down of inventories, Life Science1) | - | -1 | - | -1 |
| Write-down of inventories, Surgical Workflows1) | - | -92 | - | -92 |
| Restored unutilized provision, Acute Care Therapies3) | - | 183 | - | 183 |
| Capital gain on divestment of properties, Acute Care Therapies3) | - | - | 72 | - |
| Provision related to Mesh, Acute Care Therapies3) | -601 | - | -601 | - |
| Other, Acute Care Therapies1) | - | - | - | -2 |
| Other, Surgical Workflows1) | - | - | - | -3 |
| Other, Acute Care Therapies2) | - | -11 | - | -17 |
| Other, Surgical Workflows2) | - | -7 | - | -18 |
| Other, Surgical Workflows3) | 56 | -8 | 56 | -8 |
| Group functions and other (incl. eliminations) | -19 | 2 | -35 | -2 |
| Total | -540 | -115 | -568 | -446 |
| Items affecting comparability per segment | ||||
| Acute Care Therapies | -583 | 70 | -530 | -65 |
| Life Science | 0 | -30 | -2 | -30 |
| Surgical Workflows | 62 | -157 | -2 | -349 |
| Group functions and other (incl. eliminations) | -19 | 2 | -35 | -2 |
| Total | -540 | -115 | -568 | -446 |
1) Reported in Cost of goods sold
2) Reported in Operating expenses
3) Reported in Other operating income and operating expenses
| EBITA, SEK M | Oct-Dec 2021 |
Oct-Dec 2020 |
Jan-Dec 2021 |
Jan-Dec 2020 |
|---|---|---|---|---|
| Acute Care Therapies | 618 | 1,724 | 3,914 | 5,766 |
| Life Science | 221 | 82 | 727 | 363 |
| Surgical Workflows | 455 | -1 | 388 | -476 |
| Group functions and other (incl. eliminations) | -111 | -103 | -386 | -375 |
| Total | 1,183 | 1,702 | 4,643 | 5,278 |
| Adjustments of EBIT (in addition to the above adjustments of EBITA), SEK M |
Oct-Dec 2021 |
Oct-Dec 2020 |
Jan-Dec 2021 |
Jan-Dec 2020 |
| Specification of items affecting comparability that impact EBIT but not EBITA |
||||
| Write-down of acquired intangible assets, Acute Care Therapies1) |
- | - | - | -31 |
| Total, Group | - | - | - | -31 |
| 1) Reported in Operating expenses | ||||
| Adjustments of EBIT, SEK M | Oct-Dec 2021 |
Oct-Dec 2020 |
Jan-Dec 2021 |
Jan-Dec 2020 |
| Items affecting comparability that impact EBITA (according to above) | -540 | -115 | -568 | -446 |
| Items affecting comparability that impact EBIT but not EBITA (according to above) |
- | - | - | -31 |
| Total | -540 | -115 | -568 | -477 |
| Adjustment of tax, SEK M | Oct-Dec 2021 |
Oct-Dec 2020 |
Jan-Dec 2021 |
Jan-Dec 2020 |
| Amortization and write-down of acquired intangible assets1) | 71 | 93 | 273 | 463 |
| Items affecting comparability | 540 | 115 | 568 | 477 |
| Adjustment items, total | 611 | 207 | 841 | 940 |
| Tax effect on adjustment items2) | -145 | -53 | -209 | -248 |
| Adjustment for tax items affecting comparability | ||||
| - | - | - | - |
1) Excluding write-downs classified as items affecting comparability
2) Tax effect on tax deductible adjustment items
| SEK M | December 31 2021 |
December 31 2020 |
|---|---|---|
| Other interest-bearing liabilities, current | 475 | 2,196 |
| Other interest-bearing liabilities, long-term | 2,795 | 7,020 |
| Provisions for pensions, interest-bearing | 3,378 | 3,359 |
| Lease liabilities | 1,036 | 990 |
| Interest-bearing liabilities | 7,685 | 13,565 |
| Less cash and cash equivalents | -4,076 | -6,056 |
| Net interest-bearing debt | 3,609 | 7,509 |
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
|---|---|---|---|---|
| Financial and operative key figures | 2021 | 2020 | 2021 | 2020 |
| Key figures based on Getinge's financial targets | ||||
| Organic growth in net sales, % | -9.6 | 11.1 | -4.8 | 14.3 |
| Earnings per share1), SEK | 2.83 | 4.02 | 10.90 | 11.89 |
| Other operative and financial key figures | ||||
| Organic growth in order intake, % | 6.4 | 6.1 | -3.0 | 15.6 |
| Gross margin, % | 49.3 | 47.0 | 50.2 | 49.4 |
| Selling expenses, % of net sales | 15.8 | 15.9 | 17.0 | 17.7 |
| Administrative expenses, % of net sales | 10.4 | 9.7 | 12.3 | 11.7 |
| Research and development costs, % of net sales | 4.0 | 4.4 | 4.4 | 4.9 |
| Operating margin, % | 13.9 | 18.2 | 16.2 | 16.0 |
| EBITDA, SEK M | 1,577 | 2,247 | 6,185 | 7,251 |
| Average number of shares, thousands | 272,370 | 272,370 | 272,370 | 272,370 |
| Number of shares at the end of the period, thousands | 272,370 | 272,370 | 272,370 | 272,370 |
| Interest-coverage ratio, multiple | 47.5 | 30.5 | ||
| Net debt/equity ratio, multiple | 0.14 | 0.35 | ||
| Net debt/Rolling 12m adjusted EBITDA, multiple | 0.5 | 1.0 | ||
| Operating capital, SEK M | 28,561 | 32,374 | ||
| Return on operating capital, % | 17.3 | 16.3 | ||
| Return on equity, % | 12.9 | 15.1 | ||
| Equity/assets ratio, % | 56.5 | 47.7 | ||
| Equity per share, SEK | 92.43 | 78.88 | ||
| Number of employees | 10,729 | 10,818 |
1) Before and after dilution
Alternative performance measures refer to financial measures used by the company's management and investors to evaluate the Group's earnings and financial position and that cannot be directly read or derived from the financial statements. These financial measures are intended to facilitate analysis of the Group's performance. Accordingly, the alternative performance measures should be considered a supplement to the financial statements prepared in accordance with IFRS. The financial measures recognized in this report may differ from similar measures used by other companies.
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
|---|---|---|---|---|
| Adjusted gross profit, SEK M | 2021 | 2020 | 2021 | 2020 |
| Gross profit | 3,939 | 4,158 | 13,580 | 14,722 |
| Add-back of: | ||||
| Depreciation, amortization and write-downs of intangible assets | ||||
| and tangible assets | 210 | 268 | 813 | 1,017 |
| Other items affecting comparability | - | 130 | - | 135 |
| Adjustment for write-downs included in other items affecting comparability |
- | - | - | - |
| Adjusted gross profit | 4,150 | 4,556 | 14,392 | 15,874 |
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
| Adjusted EBITDA, SEK M | 2021 | 2020 | 2021 | 2020 |
| Operating profit (EBIT) | 1,112 | 1,610 | 4,371 | 4,784 |
| Add-back of: | ||||
| Depreciation, amortization and write-downs of intangible assets and | ||||
| tangible assets | 395 | 544 | 1,542 | 1,973 |
| Amortization and write-down of acquired intangible assets | 71 | 93 | 273 | 494 |
| Other items affecting comparability | 545 | 36 | 473 | 59 |
| Acquisition and restructuring costs | -5 | 5 | 95 | 177 |
| Adjustment for write-downs included in other items affecting | ||||
| comparability and restructuring costs | - | - | - | - |
| Adjusted EBITDA | 2,118 | 2,287 | 6,754 | 7,487 |
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
|---|---|---|---|---|
| Adjusted EBITA, SEK M | 2021 | 2020 | 2021 | 2020 |
| Operating profit (EBIT) | 1,112 | 1,610 | 4,371 | 4,784 |
| Add-back of: | ||||
| Amortization and write-down of acquired intangible assets | 71 | 93 | 273 | 494 |
| Other items affecting comparability | 545 | 110 | 473 | 269 |
| Acquisition and restructuring costs | -5 | 5 | 95 | 177 |
| Adjustment for write-downs of acquired intangible assets included in | ||||
| other items affecting comparability and restructuring costs | - | - | - | - |
| Adjusted EBITA | 1,723 | 1,817 | 5,212 | 5,724 |
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
| Adjusted EBIT, SEK M | 2021 | 2020 | 2021 | 2020 |
| Operating profit (EBIT) | 1,112 | 1,610 | 4,371 | 4,784 |
| Add-back of: | ||||
| Other items affecting comparability | 545 | 110 | 473 | 300 |
| Acquisition and restructuring costs | -5 | 5 | 95 | 177 |
| Adjusted EBIT | 1,652 | 1,724 | 4,939 | 5,261 |
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
| Adjusted net profit for the period, SEK M | 2021 | 2020 | 2021 | 2020 |
| Net profit for the period | 775 | 1,104 | 3,000 | 3,273 |
| Add-back of: | ||||
| Amortization and write-down of acquired intangible assets | 71 | 93 | 273 | 494 |
| Other items affecting comparability | 545 | 110 | 473 | 300 |
| Acquisition and restructuring costs | -5 | 5 | 95 | 177 |
| Adjustment for write-downs of acquired intangible assets included in | ||||
| other items affecting comparability and restructuring costs | - | - | - | -31 |
| Tax items affecting comparability | - | - | - | - |
| Tax on add-back items | -145 | -53 | -209 | -248 |
| Adjusted net profit for the period | 1,241 | 1,258 | 3,632 | 3,965 |
| Net assets acquired, SEK M | 2021 | 2020 |
|---|---|---|
| Intangible assets | 125 | 418 |
| Tangible assets | 2 | 13 |
| Inventories | 34 | 84 |
| Accounts receivable | 7 | 99 |
| Other current receivables | 3 | 49 |
| Cash and cash equivalents | 1 | 30 |
| Other provisions | -12 | -5 |
| Other interest-bearing liabilities | - | -11 |
| Accounts payable | -5 | -39 |
| Other non-interest-bearing liabilities | -18 | -187 |
| Identifiable net assets | 137 | 451 |
| Goodwill | 909 | 610 |
| Total purchase prices | 1,046 | 1,061 |
| Add/Less | ||
| Additional purchase prices and other adjustments | 2 | 6 |
| Acquisition of shares from non-controlling interests | 32 | - |
| Unpaid purchase prices | -364 | -38 |
| Cash and cash equivalents in the acquired businesses | -1 | -30 |
| Impact on the Group's cash and cash equivalents | 715 | 999 |
Talis Clinical and development activities from Verrix were acquired in 2021. In addition, shares in the subsidiary Pulsion Medical Systems SE were acquired for SEK 32 M and an amount of SEK 2 M was paid due to adjustments of working capital related to the acquisition of Quadralene. The table above presents the fair value of acquired identifiable net assets, recognized goodwill and the impact on the Group's cash and cash equivalents.
In December 2021, 100% of Talis Clinical LLC, a US-based leading innovator of High Acuity cloud-based software solutions, was acquired. The company's offering complements Getinge's existing products for the perioperative care process, critical care support and ECMO therapy. Talis Clinical has 56 employees and generated sales of SEK 57 M in 2021. The purchase price amounted to SEK 844 M, of which SEK 248 M comprised contingent purchase prices that may be paid in 2024 if specific regulatory approval and certificates are obtained. In addition, a maximum of USD 26.5 M may be paid in earn-outs if certain financial targets are met. The costs of the acquisition amounted to SEK 12 M and were charged to earnings for 2021. The goodwill that arose in connection with the acquisition amounted to SEK 782 M, and is primarily attributable to strategic advantages and sales-related synergies. The acquisition has not had any material impact on Getinge's sales and earnings in 2021. At the time of publication of this report, the acquisition analysis was preliminary.
In September 2021, Getinge acquired development activities related to biological indicators from Verrix, an American start-up company. The products are in a development phase and not yet commercially available but in the long term are intended to strengthen the Group's offering in sterile reprocessing. The purchase price amounted to SEK 202 M, of which SEK 127 M pertained to goodwill that is primarily attributable to strategic advantages in the form of growth opportunities and a broader product range. The costs of the acquisition amounted to SEK 3 M and were charged to earnings. At the time of publication of this report, the acquisition analysis was still preliminary.
| SEK M | Oct-Dec 2021 |
Oct-Dec 2020 |
Jan-Dec 2021 |
Jan-Dec 2020 |
|---|---|---|---|---|
| Administrative expenses | -21 | 24 | -31 | -58 |
| Other operating income and expenses | - | - | - | 38 |
| Operating profit | -21 | 24 | -31 | -20 |
| Result from participations in Group companies | -3 | 255 | 1,820 | 308 |
| Interest income and other similar income1) | 0 | 1 | 1 | 1 |
| Interest expenses and other similar expenses1) | -60 | -43 | -263 | -394 |
| Profit after financial items | -84 | 237 | 1,527 | -105 |
| Appropriations | 102 | 243 | 102 | 243 |
| Taxes | -24 | -78 | -29 | -22 |
| Net profit/loss for the period2) | -6 | 402 | 1,600 | 116 |
1) Interest income and other similar income and interest expenses and other similar expenses include exchange-rate gains and losses attributable to the translation of financial receivables and liabilities measured in foreign currencies
2) Comprehensive income for the period corresponds to net profit for the period
| SEK M | December 31 2021 |
December 31 2020 |
|---|---|---|
| Assets | ||
| Intangible assets | 8 | 24 |
| Tangible assets | 4 | 6 |
| Participations in Group companies | 28,795 | 28,090 |
| Deferred tax assets | 94 | 106 |
| Receivables from Group companies | 233 | 295 |
| Current receivables | 36 | 28 |
| Cash and cash equivalents | 1,330 | 950 |
| Total assets | 30,500 | 29,499 |
| Equity and liabilities | ||
| Equity | 21,802 | 21,019 |
| Long-term liabilities | 1,170 | - |
| Other provisions | 15 | 32 |
| Current liabilities to Group companies | 7,238 | 6,932 |
| Current liabilities | 275 | 1,516 |
| Total equity and liabilities | 30,500 | 29,499 |
Operating capital: Average total assets with add-back of cash and cash equivalents, other provisions, accounts payable and other non-interest-bearing liabilities.
Return on operating capital: Rolling 12 months' adjusted EBIT in relation to operating capital.
Return on equity: Rolling 12 months' profit after tax in relation to average equity.
Gross margin: Gross profit in relation to net sales.
Adjusted gross profit: Gross profit with add-back of depreciation, amortization and write-downs and other items affecting comparability.
EBIT: Operating profit.
Adjusted EBIT: Operating profit (EBIT) with add-back of acquisition and restructuring costs and other items affecting comparability.
EBITA: Operating profit (EBIT) before addback of amortization and write-down of acquired intangible assets.
Adjusted EBITA: EBITA with add-back of acquisition and restructuring costs and other items affecting comparability.
EBITA margin: EBITA in relation to net sales.
EBITDA: Operating profit (EBIT) with addback of amortization, depreciation and write-downs.
Adjusted EBITDA: EBITDA with add-back of acquisition and restructuring costs and other items affecting comparability.
EBITDA margin: EBITDA in relation to net sales.
Equity per share: Equity in relation to the number of shares at the end of the period.
Cash flow after net investments: Cash flow from operating activities and investing activities, excluding acquisitions and divestment of operations.
Consumables: Products that are continuously consumed as well as service, spare parts and similar items.
Adjusted earnings per share: Adjusted net profit for the period attributable to Parent Company shareholders in relation to average number of shares.
Items affecting comparability: Comprises acquisition and restructuring costs and other items affecting comparability. Other items affecting comparability are significant revenue/expenses that impact comparability between accounting periods. These items include, but are not limited to, write-downs, disputes and major gains and losses attributable to divestments of assets or businesses.
Capital goods: Durable products that are not consumed when used.
Net debt/equity ratio: Net interestbearing debt in relation to equity.
Organic change: A financial change adjusted for currency, acquisitions and divestments of businesses.
Adjusted net profit for the period: Net profit for the period with add-back of amortization and write-down of acquired intangible assets, acquisition and restructuring costs, other items affecting comparability and tax effect of add-back of income-statement items.
Adjusted profit before tax: Profit before tax for the period with add-back of amortization and write-down of acquired intangible assets, acquisition and restructuring costs and other items affecting comparability.
Earnings per share: Net profit attributable to Parent Company shareholders in relation to average number of shares.
Interest-coverage ratio: Rolling 12 months' adjusted EBITDA in relation to rolling 12 months' net interest.
Operating margin: Operating profit (EBIT) in relation to net sales.
Equity/assets ratio: Equity in relation to total assets.
Currency transaction effect: Exchange of current year's volumes of foreign currency at this year's exchange rates, compared with the exchange rates in the preceding year.
Sterilizer: A device to eliminate microorganisms on surgical instruments, usually by high temperature with steam.
DPTE BetaBag®: Bag that ensures contamination-free transfer of components.
ECMO: Extracorporeal membrane oxygenation, meaning oxygenation outside the body through a membrane. Put simply, a modified cardiac and respiratory machine that exchanges oxygen and carbon dioxide, like an artificial lung.
Endoscope: Equipment for visual examination of the body's cavities, such as the stomach.
Endovascular: Vascular treatment using catheter technologies.
Extracorporeal life support: Oxygenation of the patient's blood outside the body (extracorporeal) using advanced medical technology.
Hemodynamic monitoring: Monitoring the balance between blood pressure and blood flow.
Cardiopulmonary: Pertaining or belonging to both heart and lung.
Cardiovascular: Pertaining or belonging to both heart and blood vessels.
Artificial grafts: Artificial vascular implants.
Low temperature sterilization: A device used to sterilize surgical instruments which cannot be sterilized with high temperature steam. It is mainly used for instruments used in the minimal invasive and robotic surgery.
NAVA: Neurally Adjusted Ventilatory Assist (NAVA) identifies the electric activity that activates the diaphragm and using these signals adapts the ventilation to the patient's respiratory rhythm.
Stent: A tube for endovascular widening of blood vessels.
Vascular intervention: A medical procedure conducted through vascular puncturing instead of using an open surgery method.
Ventilator: Medical device to help patients breath.
Americas: North, South and Central America.
APAC: Asia and Pacific. EMEA: Europe, Middle East and Africa.
Teleconference with President & CEO Mattias Perjos and CFO Lars Sandström on January 28, 2022 at 10:00-11:00 a.m. CET. Please see dial in details below to join the conference:
SE: +46 850 558 357 UK: +44 333 300 92 60 US: +1 646 722 49 03
A presentation will be held during the telephone conference. To access the presentation, please use this link: https://tv.streamfabriken.com/getinge-q4-2021
Alternatively, use the following link to download the presentation: https://www.getinge.com/int/about-us/investors/reports-presentations/
A recording will be available for three years via the following link: https://tv.streamfabriken.com/getinge-q4-2021
Updated information on, for example, the Getinge share and corporate governance is available on Getinge's website www.getinge.com. The Annual Report, year-end report and interim reports are published in Swedish and English and are available for download at www.getinge.com. The preliminary dates for financial communication are provided below:
| March 30, 2022 | 2021 Annual Report |
|---|---|
| April 26, 2022 | Annual General Meeting |
| April 26, 2022 | Q1 Report 2022 |
| July 19, 2022 | Q2 Report 2022 |
| October 19, 2022 | Q3 Report 2022 |
| February 1, 2023 | Q4 Report 2022 |
Lars Mattsson, Head of Investor Relations +46 (0)10 335 0043 [email protected]
Jeanette Hedén Carlsson, Executive Vice President, Communications & Brand Management +46 (0)10 335 1003 [email protected]
This information is such that Getinge AB must disclose in accordance with the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, on January 28, 2022 at 8:00 a.m. CET.
With a firm belief that every person and community should have access to the best possible care, Getinge provides hospitals and life science institutions with products and solutions that aim to improve clinical results and optimize workflows. The offering includes products and solutions for intensive care, cardiovascular procedures, operating rooms, sterile reprocessing and life science. Getinge employs over 10,000 people worldwide and the products are sold in 130 countries. Getinge has been listed on Nasdaq OMX Stockholm, Nordic Large Cap since 1993 and is included in the OMXS30 index of the 30 most actively traded shares.
Getinge AB (publ) │ Lindholmspiren 7a, 417 56 Gothenburg, Sweden │Tel: +46 (0)10 335 0000 │E-mail: [email protected] │ Corp. Reg. No.: 556408-5032 │ www.getinge.com
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