Getinge

Quarterly Report • Apr 22, 2016

Interim Report January – March 2016

FIRST QUARTER OF 2016 IN BRIEF

• Order intake declined by 3.7% to SEK 6,924 M (7,192). The order intake declined organically by 2.0%.
• Net sales fell by 5.0% to SEK 6,377 M (6,712). Net sales fell organically by 3.2%.
• The gross margin increased to 47.2% (46.8).
• EBITA* fell by 13.5% to SEK 620 M (717).
• Restructuring and integration costs amounted to SEK 127 M (183).
• Profit before tax amounted to SEK 157 M (146), corresponding to an increase of 7.5%.
• Earnings per share amounted to SEK 0.46 (0.38).
• Good cost control adjusted for exchange-rate effects, administrative and selling expenses declined by 4.4%.
• Cash conversion from operating activities amounted to 75.5% (69.8).
• The transformation program is progressing according to plan and efficiency initiatives are starting to generate results.
• New reporting structure for the Group with three new reporting segments based on the three Business Category Units Surgical Workflows, Acute Care Therapies and Patient & Post-Acute Care.

FINANCIAL SUMMARY

	Jan-Mar	Jan-Mar
MSEK	2016	2015	Change %	Rolling 12M	FY 2015
Order intake	6 924	7 192	-3.7%	30 163	30 431
Net sales	6 377	6 712	-5.0%	29 900	30 235
Gross Profit	3 011	3 142	-4.2%	14 032	14 163
Gross margin	47.2%	46.8%	0.4%	46.9%	46.8%
EBITA*	620	717	-13.5%	4 082	4 179
EBITA margin*	9.7%	10.7%	-1.0%	13.7%	13.8%
Operating profit	316	335	-5.7%	2 710	2 729
Profit before tax	157	146	7.5%	2 008	1 997
Net profit	115	107	7.5%	1 465	1 457
Earnings per share, SEK	0.46	0.38	21.1%	5.91	5.83
Cash flow from operations	700	654	7.0%	3 504	3 458

* before restructuring, acquisition and integration cost

COMMENTS BY THE CEO

Transformation program underway and cost improvements in first quarter of the year

This is the first quarter of our comprehensive journey of change in which we are working on shaping a more customer-centric and efficient Getinge in the long term. This is a process spanning three to four years and that we are now implementing step by step.

We are maintaining our intense focus on transforming the three independent business areas into One Getinge. At the end of the first quarter, I can see that we have a sales organization in place that can meet customers as One Getinge and leverage the Group's total offering.

Following a strong end to 2015, we see a weaker start to 2016 with order and sales volumes slightly below our expectations. The negative order intake was primarily due to the weak performance of the capital goods segment. However the Group's recurring revenue segment had a very positive development in the quarter. The performance of the geographic markets was varied during the quarter. The Americas region displayed a positive trend with growth reported in the key North American market. Growth in both orders and sales declined in the EMEA region due to the weak performance of the capital goods segment. The APAC region also declined during the quarter.

It is encouraging that despite weaker growth we can see early signs that our efficiency initiatives are starting to generate effects. We had good cost control during the quarter with administrative and selling expenses falling by a total of 4.4%, adjusted for exchange-rate effects. The gross margin increased to 47.2% (46.8) during the quarter, an improvement that was primarily due to positive exchange-rate effects, the reduction of medical device tax in the US and a favorable product mix. The EBITA result declined in the quarter, however we do se an improvement of the Group's profit before tax.

We are continuing our highly intense focus on the remediation program to enhance the quality management system. We saw many positive signs that we were on the right path during the second half of 2015 and a certification inspection was carried out during the quarter at Atrium's production unit in Hudson, New Hampshire, by a third party, with no observations made.

As previously announced, a third-party inspection was carried out in the fourth quarter of 2015 at the production unit in Hechingen in Germany, which indicated that additional measures were required. Following an in-depth analysis, an improvement plan has been developed based on these observations. We are currently engaged in close dialog with the FDA to ensure that our planned measures meet its requirements. It means that we are as yet unable to specify the financial consequences related to Hechingen.

In parallel with this, we are working intensively on improvement measures at the Hechingen plant. These measures have led to adjustments in certain manufacturing processes that have resulted in a lower rate of production. This situation is currently impacting the Group's ability to meet market demand for the cardiopulmonary support products manufactured in Hechingen.

In summary, I can state that it has been a quarter characterized by a high level of activity, in which many important parts of the transformation program have fallen into place. At the same time, we are continuing our work on the innovation process and have strong product launches in the pipeline for the second half of 2016 and 2017. The results that we are starting to see from the transformation program and cost-efficiency enhancements show that we are on the right path.

Alex Myers, CEO & President

NET SALES AND EBITA MARGIN

Getinge Group in brief

As previously announced, Getinge introduced a new organizational structure effective January 1, 2016 that better reflects customer requirements and enables more effective governance of the Group. Consequently, a new financial governance model and reporting structure have been developed to reflect this change. As a result, Getinge has also changed its external reporting structure. This new reporting structure comprises three new reportable operating segments based on the Group's three new Business Category Units: Surgical Workflows, Acute Care Therapies and Patient & Post-Acute Care. Group functions will be reported separately.

ORDER INTAKE

The Group's order intake for the first quarter amounted to SEK 6,924 M (7,192), representing an organic change of -2.0% (2.2). The negative order intake was primarily due to the weak performance of the capital goods segment. However the Group's recurring revenue segment had a very positive development in the quarter.

The order intake in Surgical Workflows declined and the change amounted to -4.7%, with a weak trend mainly in infection control equipment for hospitals and operating room equipment. The Patient & Post-Acute Care Business Category Unit also declined during the quarter, down 4.6%. This decline was primarily attributable to a lower order intake for the product groups of hygiene systems and hospital beds. The rental segment, which has experienced significant challenges in recent quarters, stabilized slightly during the quarter. However, Acute Care Therapies reported an improved order intake with organic growth of 2.0% and a particularly favorable trend in the Cardiovascular segment.

In terms of geographic performance, there were considerable differences between the various regions in the quarter. The Americas region performed positively, posting an organic increase in the order intake of 2.1%. North America performed favorably during the quarter, increasing 3.9% year-on-year. The order intake declined in Latin America, primarily due to the weak trend in Brazil, where the prevailing economic climate continued to have an adverse impact on the order intake. The improvement in the Americas region as a whole was mainly due to the solid performance of the Acute Care Therapies Business Category Unit, while order volumes in Surgical Workflows and Patient & Post-Acute Care were in line with the year-earlier period.

In the EMEA region (Europe, Middle East and Africa), the order intake fell in all Business Category Units year-on-year. Performance was weak in Western Europe (-3.6%), mainly driven by a lower order intake in the capital goods segment. Another contributing factor for the decline was the weak trend in the UK, which was the effect of the continued challenging market situation in the country. Scandinavia also displayed a weak trend during the quarter. However, most of the emerging markets in the EMEA region reported a positive order intake for the quarter, with a strong development in Russia.

The order intake in the APAC region (Asia and the Pacific region) fell and the organic change was -6.1%. The main reason was the weaker order intake in Australia and Hong Kong, which should be compared with the year-earlier period where two large orders had a positive impact on the order intake. China also declined in the quarter. Nevertheless, the trend in several of the region's emerging markets, such as India, Korea and Thailand, was positive.

Order intake regions, MSEK	Jan-Mar 2016	Jan-Mar 2015	Change %*	Rolling 12M	FY 2015
EMEA	2 947	3 164	-4.2%	12 875	13 092
Americas	2 909	2 860	2.1%	12 024	11 975
APAC	1 068	1 168	-6.1%	5 264	5 364
Group total	6 924	7 192	-2.0%	30 163	30 431

* adjusted for currency rates, acquisitions and divestments

RESULTS

The Group's net sales for the quarter amounted to SEK 6,377 M (6,712), entailing an organic change of -3.2% (1.4).

Sales for Surgical Workflows and Patient & Post-Acute Care declined organically and the change amounted to -6.7% and -4.9%, respectively. However, Acute Care Therapies performed slightly positively and reported organic growth of 0.9%.

Sales in the Americas region increased organically by 0.8%. The level of activity was high in the US but lower in Canada and Latin America where sales volumes fell. The sales trend for the EMEA region was weak for all Business Category Units and the total organic change was -5.1%. Sales for the APAC region also declined during the quarter and the organic change was -8.4%. The decline was primarily due to lower sales volumes in Australia and Hong Kong, where two large orders had a positive impact in the year-earlier period. However, the sales trend was positive in China and India and in several of the region's emerging markets.

The gross margin rose to 47.2% (46.8) during the quarter, an improvement that was mainly due to positive exchange-rate effects, the reduction of medical device tax in the US and a favorable product mix.

Cost control in the quarter was good and, adjusted for exchange-rate effects, the Group's administrative and selling expenses fell by 4.4%. The decrease was the result of the Group's ongoing efficiency-enhancement program.

EBITA before restructuring, acquisition and integration costs amounted to SEK 620 M (717) for the first quarter. However, this should be compared with EBITA in the year-earlier period that included a capital gain of SEK 76 M from the divestment of Pulsion's perfusion operations. Exchange rates had a positive impact of about SEK 50 M on EBITA, of which transaction effects accounted for SEK 33 M and translation effects for SEK 17 M.

The quarter was charged with restructuring costs of SEK 127 M (183) that mainly pertain to activities related to the transformation program that is progressing according to plan.

Net financial items improved to an expense of SEK -159 M (-189) due to lower average interest rates on loans. Profit before tax rose to SEK 157 M (146). Net profit for the period amounted to SEK 115 M (107).

Group income statement in brief	Jan-Mar 2016	Jan-Mar 2015	Change %	Rolling 12M	FY 2015
Net sales, MSEK	6 377	6 712	-5.0%	29 900	30 235
Adj. for x-rates, acquisitions and divestments			-3.2%
Gross Profit	3 011	3 142	-4.2%	14 032	14 163
Gross margin, %	47.2%	46.8%	0.4%	46.9%	46.8%
Operating costs, MSEK	-2 564	-2 615	-2.0%	-10 693	-10 744
EBITA before restructuring,
acquisition and integration costs	620	717	-13.5%	4 082	4 179
EBITA margin %	9.7%	10.7%	-1.0%	13.7%	13.8%
Acquisition expenses	-4	-9	-55.6%	-28	-33
Restructuring and integration
costs, MSEK	-127	-183	-30.6%	-601	-657
EBIT	316	335	-5.7%	2 710	2 729
EBIT margin %	5.0%	5.0%	0.0%	9.1%	9.0%

CASH FLOW AND FINANCIAL POSITION

Operating cash flow amounted to SEK 700 M (654), corresponding to a cash conversion of a 75.5% (69.8). Taxes paid for the period amounted to SEK -161 M (-272). The Group's cash and cash equivalents amounted to SEK 2,056 M compared with SEK 2,027 M in the year-earlier period. Interest-bearing net debt at the end of the period amounted to SEK 22,618 M compared with SEK 23,526 M in the year-earlier period. Net investments had a negative effect of SEK -239 M (-257) on cash flow. The equity/assets ratio was 36.5%, compared with 33.4% in the year-earlier period.

RESEARCH AND DEVELOPMENT

The Group's research and development costs for the quarter amounted to SEK 288 M (312), corresponding to 4.5% (4.6) of the Group's net sales.

The new organizational structure is expected to positively contribute to the Group's continued research and development efforts and the new Business Category Units – Surgical Workflows, Acute Care Therapies and Patient & Post-Acute Care – will create new, unique and more focused customer offerings.

EFFICIENCY-ENHANCEMENT PROGRAM - THE BIG 5

The work on the so called Big 5 efficiency-enhancement program, that will improve EBITA by SEK 2.5-3.0 billion by 2019, continued during the quarter. The program comprises five initiatives: lean support and administration, indirect spend optimization, direct spend reduction, portfolio simplification and commercial excellence.

During the quarter, the efficiency-enhancement program generated savings of about SEK 75-80 M and is progressing according to plan.

UPDATE REGARDING CONSENT DECREE WITH THE FDA

As previously announced, a US federal judge approved the terms of a Consent Decree between Getinge Group's former Medical Systems business area and the FDA on February 3, 2015. The Consent Decree encompasses four local legal entities: Atrium Medical Corporation in Hudson (New Hampshire, USA), Wayne (New Jersey, USA) and Rastatt and Hechingen (Germany). Under the terms of the Consent Decree, certain products manufactured by Atrium were temporarily suspended while corrections were being made. Certain products currently manufactured by Atrium have been deemed medically necessary under the Consent Decree with the FDA and will continue to be made available to customers within and outside of the US. During autumn 2015, full-scale production and sales of the biosurgical meshes product group was resumed at Atrium's new production unit in Merrimack, New Hampshire. In line with the Consent Decree, a successful inspection of the new production unit in Merrimack was carried out at the end of 2015 and no observations were noted.

A certification inspection was carried out during the first quarter at Atrium's production unit in Hudson, New Hampshire, by a third party, under the terms of the Consent Decree. No observations were noted during the inspection and the Group is now waiting the FDA's decision of the certification inspection. If and when the FDA approves the certification inspection, the temporary suspension of production of certain products manufactured in Hudson will be lifted and production of these products will resume at full strength at the unit.

Under the terms of the Consent Decree, ongoing third-party inspections are carried out at the production units encompassed by the Decree and, as previously announced, such an inspection was performed in Hechingen, Germany, during the fourth quarter of 2015. The inspection resulted in a number of observations and a detailed analysis was initiated in the fourth quarter of 2015. This analysis revealed that additional investments would be required at the production unit in Hechingen. A remediation plan was developed based on the observations and a close dialog is being maintained with the FDA to ensure that the action plan meets FDA's requirements. The final plan, pending FDA's decision, will in turn impact the financial consequences of the improvement efforts. It means that the financial consequences related to Hechingen can not yet be specified.

Intense focus was directed to improvement measures in Hechingen during the first quarter. These measures also led to adjustments to certain manufacturing processes as required by regulations, and extensive verification and validation of the products manufactured. These expanded verification/validation processes have resulted in a lower rate of production that, in turn, has means that the Group is currently experiencing difficulties in meeting market demand for these products.

Changes were made at management level in Hechingen in the fourth quarter of 2015 and the local quality organization has been strengthened with experts from the Group's other units. To increase the pace of the improvement efforts, two dedicated teams have now been established in Hechingen: one working solely with improvement measures to the quality management system, and one working on the daily operating activities. The aim is to ensure optimal use of internal resources.

Excluding the situation in Hechingen, the overall remediation program to strengthen the quality management system is progressing according to plan and is expected to be completed by mid-2016. The program has already led to major improvements.

Provision, 1st quarter 799 Currency effect, 3rd quarter 21 Additional provision, 4th quarter 175 Total provision 2014 995 Completed remediation activities 2014, provision utilized -470 Closing balance December 31st, 2014 525 FDA 2015 MSEK Completed remediation activities 1st quarter, provision utilized -105 Closing balance March 31st, 2015 420 Completed remediation activities 2nd quarter, provision utilized -101 Closing balance June 30th, 2015 319 Completed remediation activities 3rd quarter, provision utilized -47 Closing balance September 30th, 2015 272 Completed remediation activities 4th quarter, provision utilized -79 Closing balance December 31st, 2015 193 FDA 2016 MSEK	FDA 2014	MSEK
	Completed remediation activities 1st quarter, provision utilized	-64

Financial consequences of the Consent Decree with the FDA

The total financial consequences related to the Consent Decree with the US FDA, excluding the costs for the remediation program, amounted to approximately SEK 35 M for the quarter and are primarily attributable to loss of revenue.

Closing balance March 31st, 2016 129

FDA – 2015	MSEK
EBITA result*	-215
Restructuring charges	-100
TOTAL Operating profit, December 31st 2015	-315
FDA – First quarter, 2016	MSEK
EBITA result*	-35
Restructuring charges	0
Operating profit, March 31st, 2016	-35

* before restructuring, acquisition and integration costs

KEY EVENTS DURING THE QUARTER

Acquisition of production unit for medical textiles in the Dominican Republic

During the quarter, Getinge signed an agreement to acquire a plant for production of medical textiles in the Dominican Republic on a basis of an asset-transfer transaction from the Group's existing supplier AccuMED. The acquisition adds valuable know-how in the production of Getinge's textiles, such as slings in patient lifting systems and mattress covers. The acquisition is well in line with Getinge's supply chain strategy of strengthening the production footprint in low cost countries. With this acquisition, Getinge assumes ownership of a textile production unit located in a free trade zone in the Dominican Republic, where the Group is seeking to create a global Center of Excellence for its textile production.

The acquisition includes manufacturing equipment and stock of raw materials and finished products. In addition, Getinge will also assume responsibility for approximately 400 employees at the plant, and take over the current lease agreement for the production premises. The final stage of the acquisition was completed after the end of the reporting period and the purchase consideration is expected to amount to approximately SEK 66 M. The acquisition is expected to be consolidated in Getinge Group during the second quarter of 2016, and is expected to contribute positively to the Group's operating profit in 2016.

Launch of new improved version of NAVA® technology

During the quarter, a new improved version of the Group's NAVA and NIV NAVA functionality was launched for the SERVO-i ventilator platform. NAVA technology allows the patient's breathing requirements to control the ventilator through the brain's respiratory signals, and the new version can be used for all patients, from adults to premature babies. The new improved version has been specifically developed to handle patients with the most serious lung diseases. The new NAVA functionality will also be implemented in the new SERVO-U and SERVO-n platforms during the year.

Ongoing litigation case in the US

As previously announced, the subsidiary Atrium Medical Corporation is involved in litigation regarding the sale and marketing of certain products. A former employee of Atrium filed a complaint in a US federal court under seal. The complaint concerns alleged violations of the federal False Claims Act and similar state statutes. In August 2015, the court dismissed the relator's claim of fraud on the FDA. During the fourth quarter of 2015, the magistrate judge recommended dismissal of the relator's remaining claims pertaining to Atrium's alleged offlabel marketing. The parties participated in a mediation and have agreed to a preliminary settlement of the remaining claims. Based on this settlement in principle, Getinge Group's fourth quarter of 2015 was charged with an amount of about SEK 110 M. The terms of the settlement remain confidential until a definitive agreement is executed. A settlement is now expected to be finalized by the end of the second quarter of 2016.

Restructuring activities

As previously announced, Getinge decided to relocate the production conducted at the production unit in Rochester, New York, US to the production unit in Poznan, Poland. The relocation was completed during the quarter. The total restructuring costs for these activities are expected to amount to approximately SEK 50 M, of which about SEK 11 M was charged to the first quarter and SEK 33 M was charged to 2015. The relocation is expected to generate annual savings of about SEK 45 M from the second quarter of 2016.

OUTLOOK (UNCHANGED)

In the EMEA region, the Group expects slightly positive growth, which is also our assessment of the Western European market. In the Americas region, the Group also expects slightly positive growth, with demand in the North American market deemed to increase slightly, while challenges in Latin America remain. In the APAC region, growth prospects are expected to be favorable, with a particularly positive outlook for South-East Asia and India, although China remains difficult to assess. All in all, revenue growth is deemed to be positive in 2016.

The financial consequences of the Consent Decree with the FDA are expected to have a negative impact of approximately SEK 130 M on the Group's 2016 operating profit. As previously mentioned, the Group is awaiting the FDA's decision of the remediation plan related to the production unit in Hechingen. Hence, the financial consequences could be adjusted in line with the final plan.

Currency-transaction effects are expected to have a positive impact of approximately SEK 150 M (-273) on the Group's 2016 earnings.

Restructuring costs for the full-year 2016 are expected to amount to approximately SEK 800 M (657).

Surgical Workflows

The Surgical Workflows Business Category Unit develops solutions for infection control, operating rooms and advanced IT systems for traceability and management of the flow of sterile equipment as well as for optimal use of resources. The Group's Life Science segment is also included in this Business Category Unit.

ORDER INTAKE

The order intake for Surgical Workflows declined organically during the first quarter of the year and the change amounted to -4.7%. The decline was primarily attributable to the weaker performance in infection control equipment for hospitals and operating room equipment. The order intake in the Life Science segment remained positive in the quarter and the order intake increased organically by 9.5%. The order intake was also high for IT solutions and service, which reported a year-on-year improvement.

Order intake regions, MSEK	Jan-Mar 2016	Jan-Mar 2015	Change %*	Rolling 12M	FY 2015
EMEA	1 191	1 236	-1.2%	5 667	5 712
Americas	635	638	-0.1%	2 961	2 964
APAC	410	516	-18.6%	2 231	2 337
Surgical Workflows total	2 236	2 390	-4.7%	10 859	11 013

* adjusted for currency rates, acquisitions and divestments

RESULTS

Net sales for Surgical Workflows declined organically during the quarter and the change amounted to -6.7% compared with the year-earlier period. This trend was primarily due to lower sales volumes for operating room equipment, such as surgical tables and surgical lamps. The performance of other segments was stable, except for the Life Science segment, which reported negative growth for the quarter.

The gross margin for Surgical Workflows fell slightly year-on-year to 36.6% (37.0). The lower gross margin was mainly attributable to lower capacity utilization in production and an unfavorable product mix.

Both selling and administrative expenses declined in the quarter as an effect of the Group's ongoing efficiency-enhancement program.

EBITA before restructuring, acquisition and integration costs amounted to SEK 45 M (59) for the first quarter. Changed exchange rates had a positive impact of about SEK 32 M on EBITA, of which transaction effects accounted for SEK 27 M and translation effects for SEK 5 M.

The quarter was charged with restructuring costs amounting to SEK 42 M (24), mainly related to the transformation and efficiency programs.

	Jan-Mar	Jan-Mar		Rolling	FY
Income statement in brief	2016	2015	Change %	12M	2015
Net sales, MSEK	1 943	2 122	-8.4%	10 712	10 891
Adj. for x-rates, acquisitions and divestments			-6.7%
Gross Profit	712	786	-9.4%	4 154	4 228
Gross margin, %	36.6%	37.0%	-0.4%	38.8%	38.8%
Operating costs, MSEK	- 673	- 734	-8.3%	-2 962	-3 023
EBITA before restructuring,
acquisition and integration costs	45	59	-23.7%	1 219	1 233
EBITA margin %	2.3%	2.8%	-0.5%	11.4%	11.3%
Acquisition expenses	0	0	0.0%	-9	- 9
Restructuring and integration
costs, MSEK	-42	-24	75.0%	-160	-142
EBIT	-3	28	-110.7%	1 023	1 054
EBIT margin %	-0.2%	1.3%	-1.5%	9.6%	9.7%

NET SALES AND EBITA MARGIN

Acute Care Therapies

The Acute Care Therapies Business Category Unit offers solutions for life support in acute health conditions. The offering includes solutions for cardiac, pulmonary and vascular therapies and a broad selection of products and therapies for intensive care.

ORDER INTAKE

The order intake for Acute Care Therapies increased during the quarter, with a positive organic increase of 2.0%. The increased order intake primarily related to higher demand in the Cardiovascular segment for which Cardiac Assist and certain product groups within Atrium reported a positive trend. The order intake for Cardiopulmonary products also performed well during the quarter. Demand was weak for the Critical Care segment and the order intake declined organically year-on-year.

Order intake regions, MSEK	Jan-Mar 2016	Jan-Mar 2015	Change %*	Rolling 12M	FY 2015
EMEA	853	949	-7.4%	3 519	3 615
Americas	1 546	1 475	4.5%	6 028	5 957
APAC	482	430	14.0%	2 117	2 065
Acute Care Therapies total	2 881	2 854	2.0%	11 664	11 637

* adjusted for currency rates, acquisitions and divestments

RESULTS

Net sales for Acute Care Therapies increased organically by 0.9% during the quarter, with a robust performance for most product segments. In the US, sales rose organically by 6.9%, with a particularly strong performance in the Cardiovascular segment. The trend in sales volumes remained positive in Asia, while the trend in Europe was weaker, albeit with wide regional differences.

The gross margin was in line with the preceding year and amounted to 55.0% (55.2). Loss of revenue attributable to the Consent Decree with the FDA was offset by higher sales volumes and a favorable product mix.

The cost trend was stable during the quarter and administrative and selling expenses were in line with the first quarter 2015.

EBITA before restructuring, acquisition and integration costs amounted to SEK 371 M (460). This should be compared with EBITA in the year-earlier period that included a capital gain of SEK 76 M from the divestment of Pulsion's perfusion operations.

The quarter was charged with restructuring costs amounting to SEK 58 M (68), mainly related to the transformation and efficiency programs.

Income statement in brief	Jan-Mar 2016	Jan-Mar 2015	Change %	Rolling 12M	FY 2015
Net sales, MSEK	2 611	2 617	-0.2%	11 571	11 577
Adj. for x-rates, acquisitions and divestments			0.9%
Gross Profit	1 436	1 445	-0.6%	6 419	6 428
Gross margin, %	55.0%	55.2%	-0.2%	55.5%	55.5%
Operating costs, MSEK	- 1 202	- 1 133	6.1%	- 4 820	- 4 751
EBITA before restructuring,
acquisition and integration costs	371	460	-19.3%	2 187	2 276
EBITA margin %	14.2%	17.6%	-3.4%	18.9%	19.7%
Acquisition expenses	- 2	- 9	-77.8%	- 11	- 18
Restructuring and integration
costs, MSEK	- 58	- 68	-14.7%	- 303	- 313
EBIT	174	235	-26.0%	1 285	1 346
EBIT margin %	6.7%	9.0%	-2.3%	11.1%	11.6%

Patient & Post-Acute Care

The Patient & Post-Acute Care Business Category Unit offers solutions for daily tasks of lifting and transferring patients. This includes promotion of early mobility and prevention of pressure ulcers and deep vein thrombosis, as well as patient hygiene.

ORDER INTAKE

The total demand for products and services in Patient & Post-Acute Care was weak in most markets, except for the US, and the order intake declined organically by 4.6% in the quarter. The decline was mainly due to lower order volumes in the capital goods segment such as hospital beds and wound care products. Demand in the rental operations for therapeutic mattress stabilized during the quarter and the DVT segment (products for the prevention of deep vein thrombosis) noted a stable trend despite continued price pressure.

Order intake regions, MSEK	Jan-Mar 2016	Jan-Mar 2015	Change %*	Rolling 12M	FY 2015
EMEA	903	979	-5.0%	3 689	3 765
Americas	728	747	-0.8%	3 035	3 054
APAC	176	222	-16.2%	916	962
Patient & Post-Acute Care
total	1 807	1 948	-4.6%	7 640	7 781

* adjusted for currency rates, acquisitions and divestments

RESULTS

Net sales declined during the quarter and the organic change was -4.9%. This negative trend was primarily due to weaker sales of capital goods in Europe and China. The trend in hospital beds, the rental segment and products for bariatric care was positive, while sales fell in the wound care segment.

The gross margin increased year-on-year to 47.3% (46.2). The improvement was mainly due to restructuring of the rental operations in the US in the preceding year, one of the results of which was a lower number of rental depots.

Cost control was good throughout the quarter and both selling and administrative expenses declined, primarily related to measures implemented as part of the ongoing transformation program.

EBITA before restructuring, acquisition and integration costs amounted to SEK 255 M (240) for the first quarter. Changed exchange rates had a positive impact of about SEK 10 M on EBITA, of which transaction effects accounted for SEK 6 M and translation effects for SEK 4 M. The EBITA margin increased to 14.0% (12.2) in the quarter.

The quarter was charged with restructuring costs amounting to SEK 14 M (91), mainly related to the transformation and efficiency programs.

	Jan-Mar	Jan-Mar		Rolling	FY
Income statement in brief	2016	2015	Change %	12M	2015
Net sales, MSEK	1 823	1 973	-7.6%	7 617	7 767
Adj. for x-rates, acquisitions and
divestments			-4.9%
Gross Profit	863	911	-5.3%	3 459	3 507
Gross margin, %	47.3%	46.2%	1.1%	45.4%	45.2%
Operating costs, MSEK	- 638	- 705	-9.5%	- 2 683	- 2 750
EBITA before restructuring,
acquisition and integration costs	255	240	6.3%	904	889
EBITA margin %	14.0%	12.2%	1.8%	11.9%	11.4%
Acquisition expenses	0	0	-	- 4	- 4
Restructuring and integration
costs, MSEK	- 14	- 91	-84.6%	- 103	- 180
EBIT	211	115	83.5%	669	573
EBIT margin %	11.6%	5.8%	5.8%	8.8%	7.4%

Other information

KEY EVENTS AFTER THE END OF THE REPORTING PERIOD

There are no key events to report after the end of the reporting period

RISK MANAGEMENT

Healthcare reimbursement system

Political decisions represent the single greatest market risk to Getinge Group. Changes to the healthcare reimbursement system can have a major impact on individual markets by reducing or deferring grants. Since Getinge is active in a large number of geographical markets, the risk for the Group as a whole is limited.

Customers

Activities conducted by Getinge's customers are generally financed directly or indirectly by public funds and ability to pay is usually very solid, although payment behavior can vary between different countries. All transactions outside the OECD area are covered by payment guarantees, unless the customer's ability to pay is well documented.

Authorities and control bodies

Parts of Getinge's product range are covered by legislation stipulating rigorous 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 has a Group-wide function that is responsible for quality and regulatory issues and coordinates and leads work on developing the quality function and efficient shared processes. 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.

Research and development

To a certain extent, Getinge's future growth depends on the company's ability to develop new and successful products. Research and development efforts are costly and it is impossible to guarantee that developed products will be commercially successful. As a means of maximizing the return on research and development efforts, the Group has a very structured selection and planning process to ensure that the company prioritizes correctly when choosing which potential projects to pursue. This process comprises thorough analysis of the market, technical development and choice of production method and subcontractors. The development work is conducted in a structured manner and each project undergoes a number of fixed control points.

Product liability and damage claims

Healthcare suppliers run a risk, like other players in the healthcare industry, of being subject to claims relating to product liability and other legal claims. Such claims can involve large amounts and significant legal expenses. Getinge cannot provide any guarantees that its operations will not be subject to compensation claims. A comprehensive insurance program is in place to cover any property or liability risks (e.g. product liability) to which the Group is exposed.

Protection of intellectual property

Getinge is a market leader in the areas in which it operates and invests significant amounts in product development. To secure returns on these investments, the Group actively upholds its rights and monitors competitors' activities closely. If required, the company will protect its intellectual property rights through legal processes.

Financial risk management

Getinge is exposed to a number of financial risks in its operations. Financial risks principally pertain to risks related to currency and interest-rate risks, as well as credit risks. Risk management is regulated by the finance policy adopted by the Board. The ultimate responsibility for managing the Group's financial risks and developing methods and principles of financial risk management lies with Group management and the treasury function. The main financial risks to which the Group is exposed are currency risks, interest-rate risks and credit and counterparty risks.

SEASONAL VARIATIONS

Getinge's earnings are affected by seasonal variations. The first quarter is normally weak in relation to the remainder of the fiscal year. The third and particularly fourth quarters are usually the Group's strongest quarters.

TRANSACTIONS WITH RELATED PARTIES

Getinge has no significant transactions with related parties other than transactions with subsidiaries.

ACCOUNTING

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 and RFR 2. The accounting policies adopted are consistent with those applied for the 2015 Annual Report and should be read in conjunction with that Annual Report.

From the first quarter of 2016, the Group's operating segments comprise the new Business Category Units of Surgical Workflows, Acute Care Therapies and Patient & Post Acute Care. These Business Category Units are consolidated according to the same principles as for the Group in its entirety and Group functions are reported separately. The change entails that the previous organizational structure, comprising three independent business areas, has been replaced with a functional structure. The Group has developed a new governance model and reporting structure to reflect this change. As a result, Getinge has also changed its external reporting structure.

FORWARD-LOOKING INFORMATION

This report contains forward-looking information based on the current expectations of Getinge's Group management. Although management deems that the expectations presented by such forward-looking 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 requirements and other political measures, and fluctuations in exchange rates.

ASSURANCE

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, April 22, 2016

Chairman

Carl Bennet Johan Bygge Cecilia Daun Wennborg

Peter Jörmalm Rickard Karlsson Carola Lemne

Johan Malmquist Alex Myers Malin Persson

CEO

Vice Chairman

Johan Stern Maths Wahlström

This interim report is unaudited.

The information stated herein is such that Getinge AB is obligated to publish under the Securities Exchange and Clearing Operations Act and/or the Financial Instruments Trading Act.

Consolidated income statement

	Jan-Mar	Jan-Mar			FY
MSEK	2016	2015	Change %	Rolling 12M	2015
Net sales	6 377	6 712	-5.0%	29 900	30 235
Cost of goods sold	- 3 366	- 3 570	-5.7%	- 15 868	- 16 072
Gross profit	3 011	3 142	-4.2%	14 032	14 163
Selling expenses	- 1 578	- 1 677	-5.9%	- 6 506	- 6 605
Administrative expenses	- 828	- 857	-3.4%	- 3 271	- 3 300
Research & development costs1	- 167	- 158	5.7%	- 607	- 598
Acquisition expenses	- 4	- 9	-55.6%	- 28	- 33
Restructuring and integration costs	- 127	- 183	-30.6%	- 601	- 657
Other operating income and expenses	9	77	-88.3%	- 309	- 241
Operating profit2	316	335	-5.7%	2 710	2 729
Financial net	- 159	- 189	-15.9%	- 702	- 732
Profit before tax	157	146	7.5%	2 008	1 997
Taxes	- 42	- 39	7.7%	- 543	- 540
Net profit	115	107	7.5%	1 465	1 457
Attributable to:
Parent company´s shareholders	110	90	22.2%	1 410	1 390
Non-controlling interest	5	17	-70.6%	55	67
Net profit	115	107	7.5%	1 465	1 457
Earnings per share3	0.46	0.38	21.1%	5.91	5.83
Adjusted earnings per share	1.42	1.62	-12.3%	10.12	10.55
	Jan-Mar	Jan-Mar			FY
Operative key figures %	2016	2015		Rolling 12M	2015
Gross margin	47.2	46.8		46.9	46.8
Selling expenses in % of net sales	24.7	25.0		21.8	21.8
Administrative expenses in % of net sales	13.0	12.8		10.9	10.9
Research & development costs in % of net sales	4.5	4.6		4.3	4.3
Operating margin	5.0	5.0		9.1	9.0
	Jan-Mar	Jan-Mar			FY
MSEK	2016	2015	Change %	Rolling 12M	2015
1 Research & development costs	- 288	- 312	-7.7%	- 1 276	- 1 300
of which has been capitalised	121	154	-21.4%	669	702
	- 167	- 158	5.7%	- 607	- 598

2 Operating profit is charged with depreciations on

intangibles on acquired companies	- 174	- 190	-8.4%	- 745	- 761
intangibles	- 201	- 168	19.6%	- 743	- 710
other fixed assets	- 237	- 244	-2.9%	- 980	- 987
	- 612	- 602	1.7%	-2 468	-2 458

3 There are no dilutions

Comprehensive earnings statement

	Jan-Mar	Jan-Mar
MSEK	2016	2015	Rolling 12M	FY 2015
Net profit for the period	115	107	1 465	1 457
Items that cannot be restated in profit for the period
Actuarial gains/losses pertaining to defined benefit pension plans	26	-	3	- 23
Income tax attributable to components in other comprehensive income	- 5	-	1	6
Items that can later be restated in profit for the period
Translation differences	- 576	847	- 1 538	- 115
Cash-flow hedges	- 52	- 519	807	340
Income tax attributable to components in other comprehensive income	11	115	- 179	-75
Other comprehensive income/loss for he period, net after tax	- 596	443	- 906	133
Total comprehensive income for the period	- 481	550	559	1 590
Comprehensive income attributable to
Parent company´s shareholders	- 482	533	513	1 528
Non-controlling interest	1	17	46	62

Quarterly results

	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1
MSEK	2014	2014	2014	2015	2015	2015	2015	2016
Net sales	6 327	6 225	8 458	6 712	7 181	6 925	9 417	6 377
Cost of goods sold	- 3 244	- 3 179	- 4 279	- 3 570	- 3 850	- 3 685	- 4 968	- 3 366
Gross profit	3 083	3 046	4 179	3 142	3 331	3 240	4 449	3 011
Operating costs	- 2 370	- 2 371	- 2 641	- 2 807	- 2 903	- 2 819	- 2 904	- 2 695
Operating profit	713	675	1 538	335	428	421	1 545	316
Financial Net	- 164	- 170	- 167	- 189	- 185	- 183	- 174	- 159
Profit before tax	549	505	1 371	146	243	238	1 371	157
Taxes	- 148	- 137	- 376	- 39	- 66	- 64	- 372	- 42
Net profit	401	368	995	107	177	174	999	115

Segment overview

Jan-Mar	Jan-Mar
2016	2015	Change %	Rolling 12M	FY 2015
1 943	2 122	-8.4%	10 712	10 891
2 611	2 617	-0.2%	11 571	11 577
1 823	1 973	-7.6%	7 617	7 767
6 377	6 712	-5.0%	29 900	30 235

	Jan-Mar	Jan-Mar
Operating profit, MSEK	2016	2015	Change %	Rolling 12M	FY 2015
Surgical Workflows	- 3	28	-110.7%	1 023	1 054
Acute Care Therapies	174	235	-26.0%	1 285	1 346
Patient & Post-Acute Care	211	115	83.5%	669	573
Group functions*	- 66	- 43	53.5%	- 267	- 244
Operating profit	316	335	-5.7%	2 710	2 729
Financial net	- 159	- 189	-15.9%	- 702	- 732
Profit before tax for the group	157	146	7.5%	2 008	1 997

* Group functions refer mainly to central functions such as finance, communication, human resources and administration

Consolidated balance sheet

Assets, MSEK	31-Mar 2016	31- Mar 2015	31- Dec 2015
Intangible assets	26 171	27 989	26 704
Capitalised Development Projects	3 805	3 589	3 839
Tangible fixed assets	4 497	5 047	4 699
Financial fixed assets	1 469	1 662	1 374
Stock-in-trade	5 570	5 868	5 409
Accounts receivable	6 302	6 695	7 470
Other current receivables	2 516	2 680	2 272
Cash and cash equivalents	2 056	2 027	1 468
Total assets	52 386	55 557	53 235
	31-Mar	31-Mar	31-Dec
Shareholders' equity & Liabilities, MSEK	2016	2015	2015
Shareholders' equity	19 112	18 577	19 593
Provisions for pensions, interest-bearing	2 944	3 276	3 052
Other interest bearing liabilities	21 730	22 277	21 283
Other Provisions	2 149	2 570	2 243
Accounts Payable - trade	1 728	1 999	1 986
Other non interest-bearing liabilities	4 723	6 858	5 078
Total Equity & Liabilities	52 386	55 557	53 235

Consolidated net interest-bearing debt

	31-Mar	31-Mar	31-Dec
MSEK	2016	2015	2015
Debt to credit institutions	21 730	22 277	21 283
Provisions for pensions, interest-bearing	2 944	3 276	3 052
Interest-bearing liabilities	24 674	25 553	24 335
Less liquid funds	-2 056	-2 027	-1 468
Net interest-bearing debt	22 618	23 526	22 867

Consolidated cash-flow statement

MSEK	Jan-Mar 2016	Jan-Mar 2015	Rolling 12M	FY 2015
Current activities
EBITDA	928	937	5 178	5 187
Restructuring Cost expenses	127	183	601	657
Restructuring costs paid	- 199	- 267	- 850	- 918
Adjustment for items not included in cash flow	4	4	230	230
Financial items	- 159	- 189	- 702	- 732
Taxes paid	- 161	- 272	- 747	- 858
Cash flow before changes in working capital	540	396	3 710	3 566
Changes in working capital
Stock-in-trade	- 354	- 365	- 160	- 171
Current receivables	922	711	181	- 30
Current operating liabilities	- 408	- 88	- 227	93
Cash flow from operations	700	654	3 504	3 458
Investments
Acquisitions and divestments of business	0	0	261	261
Capitalized development costs	- 121	- 154	- 669	- 702
Rental equipment	- 34	- 69	- 271	- 306
Investments in fixed assets	- 205	- 188	- 1 063	-1 046
Cash flow from investments	- 360	- 411	- 1 742	-1 793
Financial activities
Change in interest-bearing debt	339	1 529	- 895	295
Change in long-term receivables	- 20	- 15	- 31	- 26
Dividend paid	0	0	- 691	- 691
Cash flow from financial activities	319	1 514	- 1 617	- 422
Cash flow for the period	659	1 757	145	1 243
Cash and cash equivalents at the beginning of the period	1 468	1 482	2 027	1 482
Translation differences	- 71	-1 212	-116	-1 257
Cash and cash equivalents at the end of the period	2 056	2 027	2 056	1 468

Changes in shareholders' equity

MSEK	Share capital	Other Capital provided	Reserves	Retained earnings	Total	Non-controlling interest	Total equity
Opening balance on 1 January 2015	119	5 960	- 153	12 416	18 342	352	18 694
Total comprehensive earnings for the period	-	-	156	1 372	1 528	62	1 590
Dividend	-	-	-	- 667	- 667	- 24	- 691
Closing balance on 31 December 2015	119	5 960	3	13 121	19 203	390	19 593
Opening balance on 1 January 2016	119	5 960	3	13 121	19 203	390	19 593
Total comprehensive earnings for the period	-	-	- 613	131	- 482	1	- 481
Dividend	-	-	-	-	-	-	-
Closing balance on 31 March 2016	119	5 960	- 610	13 252	18 721	391	19 112

Key figures for the Group

	Jan-Mar	Jan-Mar			FY
	2016	2015	Change %	Rolling 12M	2015
Order intake, MSEK	6 924	7 192	-3.7%	30 163	30 431
Adj. for x-rates, acquisitions and divestments			-2.0%
Net sales, MSEK	6 377	6 712	-5.0%	29 900	30 235
Adj. for x-rates, acquisitions and divestments			-3.2%
Gross margin	47.2%	46.8%	0.4%	46.9%	46.8%
EBITA before restructuring-, integration- and acquisition costs	620	717	-13.5%	4 082	4 179
EBITA margin before restructuring-, integration- and acquisition
costs	9.7%	10.7%	-1.0%	13.7%	13.8%
Restructuring and integration costs	- 127	- 183	-30.6%	- 601	- 657
Acquisition costs	- 4	- 9	-55.6%	- 28	- 33
EBITA	489	525	-6.9%	3 454	3 490
EBITA margin	7.7%	7.8%	-0.1%	11.5%	11.5%
Earnings per share, SEK	0.46	0.38	21.1%	5.91	5.83
Adjusted earnings per share, SEK	1.42	1.62	-12.3%	10.12	10.55
Number of shares, thousands	238 323	238 323	-	238 323	238 323
Interest cover, multiple	4.7	5.5	-0.8		4.6
Operating capital, MSEK	41 917	38 093	10.0%		40 771
Return on operating capital, per cent	8.0%	10.4%	-2.4%		8.6%
Return on equity, per cent	7.8%	14.9%	-7.1%		8.5%
Net debt/equity ratio, multiple	1.18	1.27	-0.1		1.17
Cash Conversion, per cent	75.5%	69.8%	5.7%	67.7%	66.7%
Equity/assets ratio, per cent	36.5%	33.4%	3.1%		36.8%
Equity per share, SEK	80.20	77.95	2.9%		82.21
Number of employees	15 276	15 742	-3.0%		15 424

Five-year review

	Jan-Mar	Jan-Mar	Jan-Mar	Jan-Mar	Jan-Mar
MSEK	2016	2015	2014	2013	2012
Net sales	6 377	6 712	5 632	5 664	5 246
Net profit	115	107	- 330	184	422
Earnings per share	0.46	0.38	-1.39	0.76	1.76

Income statement for the Parent Company

MSEK	Jan-Mar 2016	Jan-Mar 2015	FY 2015
Administrative expenses	-127	-51	-261
Operating profit	-127	- 51	- 261
Financial net	91	-1 564	2 420
Profit after financial items	-36	-1 615	2 159
Taxes	-1	- 1	- 74
Net profit	-37	-1 616	2 085

Receivables and liabilities in foreign currencies were measured at the closing day rate, which resulted in an exchange gain of MSEK 261 (loss 1 241) recognized in net financial items for the period January-March.

Balance sheet for the Parent Company

	31-Mar	31-Mar	31-Dec
Assets, MSEK	2016	2015	2015
Tangible fixed assets	108	51	104
Shares in group companies	25 126	25 081	25 112
Deferred tax assets	55	-	54
Receivables from group companies	8 473	6 070	8 333
Current receivables	127	110	70
Total assets	33 889	31 312	33 673
	31-Mar	31-Mar	31-Dec
Shareholders' equity & Liabilities, MSEK	2016	2015	2015
Shareholders' equity	9 962	6 968	10 000
Long-term liabilities	15 719	15 515	15 929
Liabilities to group companies	2 288	2 201	2 396
Current liabilities	5 920	6 628	5 348
Total Equity & Liabilities	33 889	31 312	33 673

Acquisitions in 2016

No acquisitions took place in the first quarter of 2016.

TELECONFERENCE

Teleconference with CEO Alex Myers and CFO Pernille Fabricius on April 22, 2016 at 2.30 pm CET

Sweden: +46 (0) 8 5033 6539 UK: +44 (0)20 3427 1911 US: +1 212 444 0895

Code: 2466675

During the telephone conference, a presentation will be held. To access the presentation, please use this link: http://www.livemeeting.com/cc/premconfeurope/join?id=2466675a&role=attend&pw=pw5431

NEXT REPORT

The next report from the Getinge Group will be published on July 14, 2016.

DEFINITIONS

EBIT EBITA	Operating profit Operating profit before amortization of intangible assets identified in conjunc tion with corporate acquisitions
EBITDA	Operating profit before depreciation and amortization
Cash conversion	Cash flow from operating activities as a percentage of EBITDA.
Adjusted earnings per share	Net profit for the year adjusted for acquisition, restructuring and integra tion costs, and amortization of intangi ble assets on acquired companies di vided by number of shares (average number).
Interest-coverage ratio	Profit after net financial items plus interest expenses and reversal of re structuring costs, as a percentage of interest expenses.

MEDICAL TERMS

Biosurgical mesh	Tissue-friendly products used for surgical treatment of hernias.
Cardiovascular	Pertaining or belonging to both heart and blood vessels.
Cardiopulmonary	Pertaining or belonging to both heart and lungs
Deep vein thrombosis (DVT)	Formation of a blood clot in a deep leg vein.

CONTACT

Kornelia Rasmussen, Executive Vice President, Communications & Brand Management +46 10 335 5810 kornelia.rasmussen@getinge.com

Getinge AB

Theres Svenssons gata 7 Box 8861, SE-402 72 Gothenburg, Sweden Tel: +46 (0) 10 335 00 00 E-mail: info@getinge.com Corporate registration number 556408-5032 www.getingegroup.com

ABOUT GETINGE

Getinge Group is a leading global provider of innovative solutions for operating rooms, intensive-care units, hospital wards, sterilization departments, elderly care and for life science companies and institutions. Getinge's unique customer offering mirrors the hospital's organization and value chain, and the solutions are used before, during and after the patients' hospital stay. Based on first-hand experience and close partnerships, Getinge provides innovative healthcare solutions that improve every-day life for people, today and tomorrow.