Quarterly Report • Oct 15, 2015
Quarterly Report
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| MSEK | Q3 2015 |
Q3 2014 |
Change % | Jan-Sep 2015 |
Jan-Sep 2014 |
Change % | Rolling 12M | FY 2014 |
|---|---|---|---|---|---|---|---|---|
| Order intake | 7 398 | 6 414 | 15.3% | 22 105 | 19 042 | 16.1% | 29 880 | 26 817 |
| Net sales | 6 925 | 6 225 | 11.2% | 20 818 | 18 184 | 14.5% | 29 303 | 26 669 |
| Gross profit | 3 240 | 3 046 | 6.4% | 9 713 | 8 907 | 9.0% | 13 916 | 13 110 |
| Gross margin | 46.8% | 48.9% | -2.1% | 46.7% | 49.0% | -2.3% | 47.5% | 49.2% |
| EBITA* | 828 | 920 | -10.0% | 2 260 | 2 496 | -9.5% | 4 265 | 4 501 |
| EBITA margin* | 12.0% | 14.8% | -2.8% | 10.9% | 13.7% | -2.8% | 14.6% | 16.9% |
| Operating profit | 421 | 675 | -37.6% | 1 184 | 1 094 | 8.2% | 2 736 | 2 646 |
| Profit before tax | 238 | 505 | -52.9% | 626 | 602 | 4.0% | 2 011 | 1 987 |
| Net profit | 174 | 368 | -52.7% | 457 | 439 | 4.1% | 1 466 | 1 448 |
| Earnings per share, SEK | 0.73 | 1.54 | -52.6% | 1.81 | 1.83 | -1.1% | 5.99 | 6.01 |
| Cash flow from operations | 724 | 742 | -2.4% | 1 974 | 2 081 | -5.1% | 3 366 | 3 473 |
* before restructuring, acquisition and integration cost
During the quarter we have had focus on both the short term agenda and the long term plan. The order intake saw a positive trend during the third quarter, growing organically by 5.2%. We saw, for example, continued increased demand on the North American market during the quarter, which is gratifying since it is one of our most important markets. Both Medical Systems and Infection Control performed well, while Extended Care experienced a more challenging quarter with a declining order intake in several of the business area's largest markets. The Group's earnings performance was negative, primarily due to low organic sales growth and lower gross margin.
We are continuing our highly intense focus on the remediation program for Medical Systems' quality management system and this work is progressing according to plan. Full-scale production of the surgical meshes product group was resumed during the quarter at Atrium's production unit in Merrimack, New Hampshire in the US. It is very pleasing to see yet more evidence that the organization's focus on quality processes is yielding results.
New products and solutions were launched during the quarter, including new extended functionality for our popular FLOW-i anesthesia device, and Flowtron ACS900, which is a new system that helps enhance the circulation of blood in the legs of patients in bed. We also continued to develop our offering for emerging markets with products with simpler functionality at a lower price, for example by launching an attractively priced range of medical beds. Our investments in innovation and product development are generating results and I hope to announce more such ventures going forward.
At the Capital Markets Day on September 2, we presented a comprehensive transformation program that will lead Getinge toward improved profitability and increased growth. Both the internal and external response was very positive, and I am very confident of the work that is currently being carried out in the organization. We are working at a high rate of activity to get the new organization in place and thus conduct efficient change work going forward and delivering on the targets presented. The next level of employees in the organization, meaning personnel who report to Group management, was appointed during the quarter. We have already begun the implementation of several key functions, such as shared services and a Group-wide organization for indirect purchasing. These are important areas in which we have already made considerable progress. From 2016, these areas will be included and followed up as part of the transformation program.
During the quarter, we initiated a number of restructuring activities to adapt the operations ahead of the forthcoming changes, and we have decided to accelerate some of the restructuring activities communicated for 2016-2019 at the Capital Markets Day. We also completed the relocation of vascular implants to La Ciotat, France, and made a number of efficiency enhancements within Infection Control.
We have an important quarter ahead of us and we are maintaining our focus on delivering according to plan for the remainder of the year.
Alex Myers, CEO & President
The Group expects volumes in the Western European market to remain weak, while the North American market is expected to display a cautiously positive trend. The markets outside Western Europe and North America face challenges related to the BRIC countries that will negatively impact volumes, but in other markets growth prospects are deemed positive. Overall, sales growth is expected to improve in 2015.
The total financial consequences related to the Consent Decree with the US FDA, excluding the costs for the remediation program, are now estimated to amount to approximately SEK 375 M (previously SEK 500 M) and will impact the Group's operating profit for 2015.
The net effect of exchange-rate fluctuations in 2015 is expected to have a negative impact of approximately SEK 50 M (previously SEK - 10 M) on the Group's profit before tax, of which currencytransaction effects amount to negative SEK 270 M (previously SEK - 240 M) and exchange-rate translation effects to approximately positive SEK 220 M (previously SEK 230 M), based on the prevailing exchange rate scenario.
Restructuring costs for the full-year 2015 are expected to amount to SEK 630 M, a change compared with the previously announced SEK 540 M. The increased restructuring costs primarily derive from optimization of Medical Systems' research and development department and the acceleration of ongoing restructuring efforts and a number of larger activities initiated as part of the comprehensive transformation program presented at the Capital Markets Day.
NETSALES AND EBITA MARGIN
The Group's order intake increased organically by 5.2% (-0.2) during the quarter. Medical Systems reported an organic increase of 5.9% (1.6) and Infection Control also noted a very strong quarter with an organic increase of 14.8% (0.8). Extended Care's organic order intake decreased by -3.2% (-4.1).
| Q3 | Q3 | Change | Jan-Sep | Jan-Sep | Change | Rolling | FY | |
|---|---|---|---|---|---|---|---|---|
| Order Intake, MSEK | 2015 | 2014 | %* | 2015 | 2014 | %* | 12M | 2014 |
| Western Europe | 2 469 | 2 332 | 1.3% | 7 618 | 7 137 | -0.1% | 10 422 | 9 941 |
| USA and Canada | 2 742 | 2 213 | 4.4% | 8 185 | 6 487 | 2.5% | 10 805 | 9 107 |
| Rest of the world | 2 187 | 1 869 | 10.9% | 6 302 | 5 418 | 4.8% | 8 653 | 7 769 |
| Group total | 7 398 | 6 414 | 5.2% | 22 105 | 19 042 | 2.2% | 29 880 | 26 817 |
* adjusted for currency rates, acquisitions and divestments
The Group's net sales increased organically by 1.1% (-0.8). The Medical Systems business area's net sales rose organically by 2.0% (-1.3) and Infection Control's net sales increased organically by a healthy 6.0% (0.0). However, Extended Care's net sales fell year-on-year to -3.9% (-0.5%).
The gross margin of 46.8% (48.9) was impacted by, for example low sales volumes, lower utilization at some of the Group's capital goods plants and negative currency transaction effects of SEK 93 M, which corresponds to 1,3 percentage points.
Adjusted for exchange-rate effects, selling expenses were in line with the year-earlier period, while administrative expenses rose by 5.5%. The change was mainly due to higher expenses related to the consolidation of the Group's IT system, legal costs and investments in Group-wide functions.
Exchange-rate effects had a positive impact of SEK 13 M on EBITA, of which transaction effects accounted for SEK -93 M and translation effects for SEK 80 M.
EBITA before restructuring, acquisition and integration costs amounted to SEK 828 M (920).
The quarter was charged with restructuring costs of SEK 213 M (62) that mainly pertain to activities related to the comprehensive transformation program presented at the Capital Markets Day, a payment to the US Government as part of the Consent Decree with the FDA and optimization measures within Medical Systems' research and development function.
Consolidated cash flow from operating activities totaled SEK 724 M (742) for the quarter, corresponding to a cash conversion of 69.0% (60.7).
A comprehensive transformation program was presented at Getinge's Capital Markets Day on September 2 that will ensure a customer-focused organization, while positioning Getinge for improved profitability and increased growth. The transformation program comprises three building blocks aimed at reigniting growth, restoring profit margins and establishing a new functional organizational structure to implement the program. To restore profit, the Group will leverage scale to a greater extent by reorganizing the company from three independent business areas to a shared organizational structure. Five focus areas have been identified to effectively drive the cost agenda, for example direct and indirect purchasing and shared services. Overall, the program is expected to achieve an EBITA improvement of SEK 2.5-3.0 billion by 2019.
During the quarter, intense focus was directed to organizational design and establishing the functional structure. Work has been carried out in parallel at a high level of activity to continue to make efficiency enhancements, primarily in purchasing and shared services. In addition, a number of restructuring activities have been accelerated to adapt the business to future changes.
The Getinge Group's new financial targets were also presented at the Capital Markets Day. The targets are related to the transformation program and evolution that Getinge will undergo over the next three to four years. The financial targets apply for the 2016-2019 period and are as follows:
15%* return on shareholders' equity
(* excluding acquisitions)
It was also announced at the Capital Markets Day that the Board of Getinge had adopted a dividend policy based on the principle that future dividends will be adjusted in line with Getinge's profit level, financial position and future development opportunities. The aim is for the dividend to correspond to 30-50% of net income.
The current organizational structure, comprising three independent business areas, will be replaced with a functional structure. This will entail better opportunities for focusing on the needs of each individual customer, the harmonization of processes, and a significantly more efficient and focused management of the Group.
The new organization will consist of a Group-wide Supply Chain function to deliver a high level of customer service and simultaneously drive cost synergies, and three Business Category Units structured to further develop world-class technologies and products that offer solutions to healthcare challenges throughout the continuum of care. The composition of the new Business Category Units - Surgical Workflows, Acute CareTherapies and Patient & Post-Acute Care – will create new, unique and more focused customer offerings. To strengthen our market positions and better reflect customer needs and requirements, three new sales regions are also established; Europe, Middle East and Africa, Asia/Pacific as well as Americas, which all will promote the total Group offering.
As a result of the new organizational structure, a new Group management team has been formed comprising the following people:
The new organization will be effective from January 1, 2016.
As a result of new organizational structure, Harald Stock, currently President & CEO ArjoHuntleigh and Executive Vice President Extended Care, decided to leave Getinge to pursue a career outside the Group. Paul Lyon, currently President International Emerging Markets at Extended Care, was appointed interim Executive Vice President Extended Care for the remainder of 2015.
As previously announced, Getinge commenced the establishment of Shared Services with a focus on financial and administrative support functions in 2014. The establishment process continued in
the EMEA region during the quarter and encompassed a total of 23 of the Group's units in a total of 11 countries by the end of the third quarter. The expected savings are included in the profitability program presented at the Capital Markets Day on September 2 and will be followed up as a part of the program from 2016.
Operating cash flow amounted to SEK 1,974 M (2,081) for the first nine months of the year. Taxes paid for the first three quarters of the year amounted to SEK -650 M (-599). The Group's cash and cash equivalents amounted to SEK 1,544 M compared with SEK 1,482 M in December 2014. Interest-bearing net debt at the end of the period amounted to SEK 23,525 M compared with SEK 22,541 M in December 2014. Cash flow was impacted by dividends to shareholders, including minority shareholders, amounting to SEK -682 M (-989) and by net investments of SEK -720 M (- 906). The equity/assets ratio amounted to 35.2%, compared with 35.4% in December 2014.
NET SALES AND EBITA MARGIN
The Medical Systems product range includes operating room equipment, intensive care units and cath labs, instruments and implants for cardiovascular surgery, anesthesia equipment and ventilators, as well as advanced products for the minimally invasive treatment of cardiovascular diseases.
The order intake increased organically by 5.9% (1.6), primarily driven by the positive performance of the Cardiovascular and Surgical Workplaces divisions.
The order intake continued to improve in the important North American market, with a positive performance in the US. The trend in the Western European market was also favorable, with an organic year-on-year increase of 4.1%. Germany, the UK and France performed particularly well during the quarter, as did Turkey which continued to report a positive order intake.
In the markets outside Western Europe and North America, the order intake was strong. Japan and Australia performed well during the quarter, with the order intake in Australia largely due to a large capital goods order for the Surgical Workplaces division. In the BRIC countries, the trend was favorable in India and China, but weak in Brazil and Russia.
| Order Intake, MSEK | Q3 2015 |
Q3 2014 |
Change %* |
Jan-Sep 2015 |
Jan-Sep 2014 |
Change %* |
Rolling 12M |
FY 2014 |
|---|---|---|---|---|---|---|---|---|
| Western Europe | 1 065 | 995 | 4.1% | 3 198 | 2 971 | 1.2% | 4 486 | 4 259 |
| USA and Canada | 1 461 | 1 167 | 4.3% | 4 435 | 3 348 | 6.4% | 5 828 | 4 741 |
| Rest of the world | 1 420 | 1 226 | 8.8% | 3 938 | 3 426 | 3.1% | 5 573 | 5 061 |
| Business Area total | 3 946 | 3 388 | 5.9% | 11 571 | 9 745 | 3.6% | 15 887 | 14 061 |
* adjusted for currency rates, acquisitions and divestments
Medical Systems' net sales increased organically by 2.0% (-1.3). The positive performance was mainly due to healthy sales in the Surgical Workplaces and Cardiovascular divisions, while Critical Care declined slightly compared with an unusually strong year-earlier period.
The lower gross margin of 52.6% (55.2) was primarily due to increased effects related to the remediation program to strengthen the quality management system, lower capacity utilization in the business area's capital goods plants and negative currency-transaction effects of SEK 49 M, which corresponds to 1,3 percentage points.
Adjusted for exchange-rate effects, selling expenses were in line with the year-earlier period, while administrative expenses increased. The higher administrative expenses were primarily the result of effects related to investments in the quality organization and costs related to the ongoing litigation case in the US.
Exchange-rate effects had a positive impact of SEK 31 M on EBITA, of which transaction effects accounted for SEK -49 M and translation effects for SEK 80 M.
EBITA was charged with SEK 50 M attributable to the loss of revenue and increased costs attributable to the Consent Decree with the FDA. The EBITA margin amounted to 14.9% (18.1).
The quarter was charged with restructuring costs of SEK 160 M (27), mainly attributable to a payment of SEK 50 M to the US Government as part of the Consent Decree with the FDA, the continued integration of Pulsion, optimization measures at the business area's research and development function and activities to adapt the operations ahead of the comprehensive transformation program presented at the Capital Markets Day.
| Q3 | Q3 | Change | Jan-Sep | Jan-Sep | Change | Rolling | FY | |
|---|---|---|---|---|---|---|---|---|
| 2015 | 2014 | % | 2015 | 2014 | % | 12M | 2014 | |
| Net sales, MSEK | 3 675 | 3 258 | 12.8% | 10 887 | 9 376 | 16.1% | 15 616 | 14 105 |
| Adj. for x-rates, acquisi | ||||||||
| tions and divestments | 2.0% | 1.2% | ||||||
| Gross Profit | 1 933 | 1 798 | 7.5% | 5 658 | 5 175 | 9.3% | 8 239 | 7 756 |
| Gross margin, % | 52.6% | 55.2% | -2.6% | 52.0% | 55.2% | -3.2% | 52.8% | 55.0% |
| Operating costs, MSEK | -1 538 | -1 340 | 14.8% | -4 637 | -3 995 | 16.1% | -6 032 | -5 390 |
| EBITA before restructur ing and integration costs |
547 | 589 | -7.1% | 1 475 | 1 549 | -4.8% | 2 794 | 2 868 |
| EBITA margin % | 14.9% | 18.1% | -3.2% | 13.6% | 16.5% | -2.9% | 17.9% | 20.3% |
| Acquisition expenses | - 2 | - 5 | -60.0% | - 20 | - 14 | 42.9% | - 37 | - 31 |
| Restructuring and inte | ||||||||
| gration costs, MSEK | - 160 | - 27 | - 258 | - 846 | -69.5% | - 455 | -1 043 | |
| EBIT | 233 | 424 | -45.0% | 743 | 320 | 132.2% | 1 716 | 1 293 |
| EBIT margin % | 6.3% | 13.0% | -6.7% | 6.8% | 3.4% | 3.4% | 11.0% | 9.2% |
As previously announced, a US federal judge approved the terms of a Consent Decree between Medical Systems and the FDA on February 3, 2015. Under the terms of the Consent Decree, certain products manufactured at Medical Systems' Atrium Medical Corporation business unit based in Hudson, New Hampshire were temporarily suspended while corrections are being made. During the quarter, full-scale production and sales of the surgical meshes product group was resumed at Atrium's new production unit in Merrimack, New Hampshire, which is where all of Atrium's production is planned to be relocated.
In line with the Consent Decree with the FDA, a third-party inspection was carried out at Medical Systems' production unit in Wayne, New Jersey. An additional inspection at the Hechingen production unit in Germany was initiated during the quarter.
The remediation program for strengthening quality management system within Medical Systems is progressing according to plan and has already led to major improvements. The total remediation program is expected to be completed by mid-2016.
| FDA - 2014 | SEK million |
|---|---|
| Provision, 1st quarter | 799 |
| Currency effect, 3rd quarter | 21 |
| Additional provision, 4th quarter | 175 |
| Total | 995 |
| Completed remediation activities 2014, provision utilized | -470 |
| Closing balance, December 31st, 2014 | 525 |
| FDA - 2015 | SEK million |
| 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 |
The total financial consequences related to the Consent Decree with the US FDA, excluding the costs for the remediation program, are now estimated to amount to approximately SEK 375 M (previously SEK 500 M) and will impact the Group's operating profit for 2015.
Of the SEK 375 M stated above, SEK 275 M was charged to the first three quarters of the year.
| FDA - First quarter, 2015 | SEK million |
|---|---|
| EBITA result* | -50 |
| Restructuring charges (payment to the US Government) | -50 |
| Operating profit | -100 |
| FDA - Second quarter, 2015 | SEK million |
| EBITA result* | -75 |
| Restructuring charges | 0 |
| Operating profit | -75 |
| FDA - Third quarter, 2015 | SEK million |
| EBITA result* | -50 |
| Restructuring charges (payment to the US Government) | -50 |
| Operating profit | -100 |
| TOTAL Operating profit, September 30th 2015 | -275 |
* before restructuring, acquisition and integration cost
As previously announced, Medical Systems' 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 US federal court under seal. The complaint concerns alleged violations of the federal False Claims Act and similar state statutes.
A discovery phase is now ongoing. Given the nature of the complaint, an adverse outcome of the process may affect the Group's earnings and cash flow. It is, however, too early to assess whether, when and the extent to which any such effect may occur and be accounted for. The trial date is currently scheduled for November 7, 2016.
Medical Systems' total restructuring costs amounted to SEK 160 M (27) for the quarter, of which SEK 50 M was related to the payment to the US Government as part of the Consent Decree with the FDA.
Measures were undertaken to enhance the efficiency of the research and development function at Medical Systems. The business area has decided to discontinue the operations currently being conducted at the research and development unit in San Jose, California in the US. Restructuring costs for these activities amounted to approximately SEK 40 M and were charged to the quarter in their entirety. The restructuring is expected to generate annual savings of about SEK 31 M from 2016.
Efforts were undertaken related to the integration of Pulsion during the quarter. Restructuring costs for these activities amounted to approximately SEK 20 M for the quarter.
The business area also conducted a reorganization within the Cardiovascular division during the quarter to enhance competitiveness and efficiency. Restructuring costs amounted to about SEK 20 M and these activities are fully in line with the transformation program.
In addition, activities were commenced as part of the establishment of the new functional organizational structure that will enable the implementation of the comprehensive transformation program presented at the Capital Markets Day. The quarter was charged with restructuring costs of approximately SEK 20 M pertaining to these activities, which are expected to be included in the restructuring costs previously announced for the period 2016-2019.
As previously reported, Medical Systems implemented a restructuring program with the aim of enhancing the production of vascular implants and thus concentrating all production of textile-based vascular implants to La Ciotat in France. The completion of the program resulted in an additional restructuring cost of SEK 10 M, which was charged to the quarter.
Predicted Body Weight (PBW*) was launched during the quarter as extension to the functionality for FLOW-i. PBW supports lung-protective ventilation by identifying patient needs and acting accordingly. When caregivers enters the patient's age, weight, length and gender, PBW and the suggested parameters are then proposed on screen and can be easily followed and trended. *Not for sale in the US.
NET SALES AND EBITA MARGIN
The Extended Care business area offers products and services geared toward the hospital and elderly care markets. The product range includes solutions for preventing the risk of pressure ulcers and deep-vein thrombosis. The business area also features a vast selection of ergonomically designed products to solve daily work in lifting, transferring and patient hygiene.
Extended Care's order intake fell organically by 3.2% (-4.1) during the quarter, with a weak performance in all geographic regions. The order intake in the North American market remained weak. This trend was mainly attributable to the weak performance in the US related to the rental operations for therapeutic mattress. The order intake was also weak in Western Europe, primarily due to a negative trend in the UK and Ireland. In the markets outside Western Europe and North America, Asia performed weakly. The BRIC countries declined, mainly driven by China and Russia, while Brazil and India reported a positive trend.
| Order Intake, MSEK | Q3 2015 |
Q3 2014 |
Change %* |
Jan-Sep 2015 |
Jan-Sep 2014 |
Change %* |
Rolling 12M |
FY 2014 |
|---|---|---|---|---|---|---|---|---|
| Western Europe | 838 | 816 | -3.4% | 2 585 | 2 479 | -3.5% | 3 497 | 3 391 |
| USA and Canada | 720 | 647 | -3.0% | 2 183 | 1 950 | -6.7% | 2 922 | 2 689 |
| Rest of the world | 291 | 293 | -3.3% | 1 010 | 854 | 5.9% | 1 293 | 1 137 |
| Business Area total | 1 849 | 1 756 | -3.2% | 5 778 | 5 283 | -3.1% | 7 712 | 7 217 |
*adjusted for currency rates, acquisitions and divestments
Extended Care's net sales declined organically by 3.9% (-0.5), a trend that was largely attributable to lower sales volumes in rental operations in the US and Western Europe as well as increased price pressure in the product segment for prevention of deep-vein thrombosis, DVT.
The gross margin fell to 43.2% (46.0), mainly due to lower sales volumes and an unfavorable product mix. The increased price pressure in the so called DVT segment and lower sales volumes in the rental segment also had an adverse impact on gross margin. In addition, currency transaction effects have had a negative impact of SEK 34 M, which corresponds to 1,8 percentage points.
Cost control for the quarter was favorable and, adjusted for exchange-rate effects, selling expenses declined while administrative expenses rose slightly. The increase was mainly due to higher expenses related to the consolidation of the business area's IT system.
Exchange-rate effects had a negative impact of SEK 46 M on EBITA, of which transaction effects accounted for SEK -34 M and translation effects for SEK -12 M.
The EBITA margin amounted to 8.7% (12.9).
Restructuring costs of SEK 48 M (25) were charged to the quarter, primarily related to activities under the comprehensive transformation program presented at the Capital Markets Day, and activities to strengthen the business area's global market organization.
| Q3 | Q3 | Change | Jan-Sep | Jan-Sep | Change | Rolling | FY | |
|---|---|---|---|---|---|---|---|---|
| 2015 | 2014 | % | 2015 | 2014 | % | 12M | 2014 | |
| Net sales, MSEK | 1 841 | 1 758 | 4.7% | 5 734 | 5 162 | 11.1% | 7 736 | 7 164 |
| Adj. for x-rates, acquisi | ||||||||
| tions and divestments | -3.9% | -1.7% | ||||||
| Gross Profit | 796 | 809 | -1.6% | 2 584 | 2 415 | 7.0% | 3 567 | 3 398 |
| Gross margin, % | 43.2% | 46.0% | -2.8% | 45.1% | 46.8% | -1.7% | 46.1% | 47.4% |
| Operating costs, MSEK | - 670 | - 622 | 7.7% | -2 183 | -1 878 | 16.3% | -2 799 | -2 494 |
| EBITA before restructur ing and integration costs |
160 | 227 | -29.5% | 501 | 638 | -21.5% | 904 | 1 041 |
| EBITA margin % | 8.7% | 12.9% | -4.2% | 8.7% | 12.4% | -3.7% | 11.7% | 14.5% |
| Acquisition expenses | 0 | 0 | - 1 | 0 | -2 | - 1 | ||
| Restructuring and inte | ||||||||
| gration costs, MSEK | - 48 | - 25 | 92.0% | - 152 | - 31 | - 207 | - 86 | |
| EBIT | 78 | 162 | -51.9% | 248 | 506 | -51.0% | 560 | 817 |
| EBIT margin % | 4.2% | 9.2% | -5.0% | 4.3% | 9.8% | -5.5% | 7.2% | 11.4% |
As previously announced, the weak performance of the rental market led to the business area extensively restructuring its rental operations in the US. During the first quarter of the year, the number of rental depots was reduced from 86 to 58 and the number of employees in the sales organization was reduced by about 85 individuals. The restructuring of the sales organization resulted in more efficient processes that are better adapted to the competitive market. Restructuring costs for the first quarter related to the remediation program amounted to about SEK 77 M. Activities are proceeding according to plan and no restructuring costs for activities were charged to the third quarter. The restructuring of the rental operations is expected to generate savings of about SEK 106 M for the full-year 2015 and about SEK 123 M for the full-year 2016. At the end of the third quarter, savings for 2015 totaled SEK 71 M.
Activities were conducted during the quarter to strengthen the business area's global market organization. The quarter was charged with restructuring costs of approximately SEK 13 M pertaining to these activities.
During the quarter, activities were commenced as part of the establishment of the new functional organizational structure presented at the Capital Markets Day. The activities mainly relates to organizational changes on management levels as well as within the marketing and R&D organization. The quarter was charged with restructuring costs of about SEK 40 M pertaining to these activities, which are expected to be included in the previously announced restructuring costs for the period 2016-2019.
During the quarter, the business area launched a new active compression system in its product portfolio for the prevention of deep-vein thrombosis, Flowtron® ACS900. The new Active Compression System delivers a simple, easy to use method of enhancing the circulation of blood in the deep veins of the legs, reducing venous stasis and helping to prevent the formation of deep-vein thrombosis (DVT). The system delivers both uniform and sequential compression therapy from a single pump, which in turn aids asset management by reducing the need for multiple pumps in the healthcare facility.
During the quarter, Extended Care launched a new platform for medical beds named Essence. Essence beds have been specifically developed to meet emerging markets' needs for products with simpler functionality at a lower price.
NET SALES AND EBITA MARGIN
The Infection Control business area offers an expansive range of disinfection and sterilization equipment, designed to suit the needs of hospitals, clinics, and within the life science industry. The business area also features a full range of accessories to ensure a consistent, secure, ergonomic and economic flow and storage of sterile goods.
The order intake grew organically by 14.8% (0.8) during the quarter. The life science segment generally performed positively during the quarter. The business area's focus on recurring revenue also performed well and generally made a positive contribution to the quarter's order intake. The trend in the North American market remained favorable, particularly in the US, and was primarily related to the strong performance of the life science segment and in consumables. The order intake was robust in markets outside North America and Western Europe, with the hospital segment reporting a favorable trend. Japan and Australia in particular noted a strong order intake during the quarter. Of the BRIC countries, Russia and India posted a healthy order intake during the quarter, while the order intake in Brazil remained weak. Performance in China was in line with the preceding year. The order intake in Western Europe was favorable, compared with a strong year-earlier period. Germany, Switzerland, Benelux and the Nordic countries reported strong order intake, while performance was slightly weaker in markets in southern Europe, except for Italy.
| Order Intake, MSEK | Q3 2015 |
Q3 2014 |
Change %* |
Jan-Sep 2015 |
Jan-Sep 2014 |
Change %* |
Rolling 12M |
FY 2014 |
|---|---|---|---|---|---|---|---|---|
| Western Europe | 566 | 522 | 3.5% | 1 835 | 1 687 | 2.8% | 2 439 | 2 291 |
| USA and Canada | 561 | 398 | 16.5% | 1 567 | 1 189 | 5.9% | 2 055 | 1 677 |
| Rest of the world | 476 | 350 | 29.9% | 1 355 | 1 138 | 9.3% | 1 788 | 1 571 |
| Business Area total | 1 603 | 1 270 | 14.8% | 4 757 | 4 014 | 5.6% | 6 282 | 5 539 |
*adjusted for currency rates, acquisitions and divestments
Net sales increased organically by 6.0% (0.0), primarily driven by the strong positive performance of Western Europe, with the Nordic countries and the UK performing particularly well. North America also had a positive sales trend during the quarter, while the markets outside Western Europe and North America performed in line with the preceding year. Sales of consumables made a positive contribution to the volume trend in all three regions during the quarter.
The gross margin of 36.3% remained unchanged year-on-year despite negative currency transaction effects of SEK 10 M which corresponds to 0,7 percentage points.
Cost control in the quarter was solid. Adjusted for exchange-rate effects, administrative expenses declined during the quarter. Selling expenses rose slightly, mainly due to previously completed acquisitions.
Exchange-rate effects had a positive impact of SEK 2 M on EBITA, of which transaction effects accounted for SEK -10 M and translation effects for SEK 12 M.
The EBITA margin remained unchanged year-on-year at 8.6% (8.6).
The quarter was charged with restructuring costs of approximately SEK 5 M (10) regarding the business area's ongoing efficiency-enhancement program.
| Q3 2015 |
Q3 2014 |
Change % |
Jan-Sep 2015 |
Jan-Sep 2014 |
Change % |
Rolling 12M |
FY 2014 |
|
|---|---|---|---|---|---|---|---|---|
| Net sales, MSEK | 1 409 | 1 209 | 16.5% | 4 197 | 3 646 | 15.1% | 5 951 | 5 400 |
| Adj. for x-rates, acquisi tions and divestments |
6.0% | 2.4% | ||||||
| Gross Profit | 512 | 439 | 16.6% | 1 472 | 1 317 | 11.8% | 2 111 | 1 956 |
| Gross margin, % | 36.3% | 36.3% | 0.0% | 35.1% | 36.1% | -1.0% | 35.5% | 36.2% |
| Operating costs, MSEK | - 397 | - 339 | 17.1% | -1 205 | -1 019 | 18.2% | -1 566 | -1 380 |
| EBITA before restructur ing and integration costs |
121 | 104 | 16.3% | 284 | 309 | -8.1% | 567 | 592 |
| EBITA margin % | 8.6% | 8.6% | 0.0% | 6.8% | 8.5% | -1.7% | 9.5% | 11.0% |
| Acquisition expenses | 0 | - 1 | -100.0% | - 1 | - 2 | -50.0% | - 5 | - 6 |
| Restructuring and inte gration costs, MSEK |
- 5 | - 10 | -50.0% | - 73 | - 27 | - 80 | - 34 | |
| EBIT | 110 | 89 | 23.6% | 193 | 269 | -28.3% | 460 | 536 |
| EBIT margin % | 7.8% | 7.4% | 0.4% | 4.6% | 7.4% | -2.8% | 7.7% | 9.9% |
Within the framework of the ongoing efficiency-enhancement program, the following activities were implemented during the third quarter.
During the quarter work continued to further strengthen the Group's expansion in emerging markets. With the three business areas merging to form one single Group-wide unit per country new growth opportunities as well as economies of scale are created. The new emerging markets structure, which was effective in the second quarter 2015, is well in line with the comprehensive transformation program announced in the quarter. The quarter was charged with restructuring costs of approximately SEK 3 M pertaining to these activities.
As previously announced, the business area decided to relocate the production conducted at the production unit in Rochester, New York, US to the production unit in Poznan, Poland. This work is ongoing and the relocation is expected to be completed in the first quarter of 2016. Restructuring costs are expected to total approximately SEK 50 M for 2015, of which SEK 33 M was charged to the first two quarters of the year. No restructuring costs related to this activity were charged to the third quarter of the year. The relocation is expected to generate annual savings of about SEK 45 M from the second quarter of 2016.
The previously announced relocation of production of flusher-disinfectors from Växjö, Sweden, to Poznan, Poland, was completed during the quarter. The quarter was not charged with any restructuring costs for this activity. SEK 7 M has already been charged to the first two quarters of the year. This activity is expected to lead to annual savings of approximately SEK 12 M from the fourth quarter of 2015.
There are no key events to report after the end of the reporting period
Political decisions represent the single greatest market risk to the 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.
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.
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. Each business area has an appointed person with overall responsibility for quality and regulatory matters (QRM). In addition, the Group has a Group-wide function for quality and regulatory issues that coordinates and leads work on developing efficient shared processes for the Group as a whole. 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.
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.
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.
The Getinge Group 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.
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.
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 quarter are usually the Group's strongest quarters.
Getinge had no significant transactions with related parties other than transactions with subsidiaries.
This interim report has been prepared for the Group 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 2014 Annual Report and should be read in conjunction with that Annual Report.
Pursuant to a resolution by Getinge AB's 2005 General Meeting, the Nomination Committee comprises Getinge's Chairman and representatives for the five largest shareholders at 31 August 2015, as well as a representative for minority shareholders. Ahead of the 2016 Annual General Meeting, Getinge's Nomination Committee thus comprises a representative from each of the following: Carl Bennet AB, Första AP-fonden, Swedbank Robur AB, AMF, Fjärde AP-fonden and a representative for minority shareholders.
Shareholders who would like to submit proposals to Getinge's 2016 Nomination Committee, can contact the Nomination Committee by e-mail at [email protected] or by traditional mail: Getinge AB, Att: Annual General Meeting, Box 8861, SE-402 72 Gothenburg, Sweden.
Getinge AB's Annual General Meeting will be held on March 30, 2016 at 2:00 p.m. in Kongresshallen at Hotel Tylösand in Halmstad, Sweden. Shareholders wishing to have a matter addressed at the Annual General Meeting on March 30, 2016 can submit their proposal to Getinge's Chairman by e-mail: [email protected], or by traditional mail to: Getinge AB, Att: Bolagsstämmoärenden, Box 8861, SE-402 72 Gothenburg, Sweden. To ensure inclusion in the notice and thus in the Annual General Meeting's agenda, proposals must be received by the company not later than February 10, 2016.
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.
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.
Carl Bennet Johan Bygge Cecilia Daun Wennborg Chairman
Peter Jörmalm Rickard Karlsson Carola Lemne
CEO
Alex Myers Malin Persson Johan Stern
Maths Wahlström
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.
We have reviewed this report for the period 1 of January 2015 to 30 of September 2015 for Getinge AB. The board of directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Malmö, 15 October 2015
Öhrlings PricewaterhouseCoopers AB
Johan Rippe
Authorized Public Accountant Auditor in charge
Eric Salander
Authorized Public Accountant
| Q3 | Q3 | Jan-Sep | Jan-Sep | Rolling | FY | |||
|---|---|---|---|---|---|---|---|---|
| MSEK | 2015 | 2014 | Change % | 2015 | 2014 | Change % | 12M | 2014 |
| Net sales | 6 925 | 6 225 | 11.2% | 20 818 | 18 184 | 14.5% | 29 303 | 26 669 |
| Cost of goods sold | -3 685 | -3 179 | 15.9% | -11 105 | -9 277 | 19.7% | -15 387 | -13 559 |
| Gross profit | 3 240 | 3 046 | 6.4% | 9 713 | 8 907 | 9.0% | 13 916 | 13 110 |
| Selling expenses | -1 620 | -1 470 | 10.2% | -4 980 | -4 303 | 15.7% | -6 449 | -5 772 |
| Administrative expenses Research & development costs1 |
- 802 | - 699 | 14.7% | -2 533 | -2 084 | 21.5% | -3 273 | -2 824 |
| - 137 - 2 |
- 138 | -0.7% | - 438 - 23 |
- 461 | -5,0% | - 574 | - 597 | |
| Acquisition expenses Restructuring and integration costs |
- 213 | - 6 - 62 |
-66.7% | - 483 | - 16 - 903 |
43.8% -46.5% |
- 45 - 742 |
- 38 -1 162 |
| - 45 | - 72 | |||||||
| Other operating income and expenses | 4 | - 46 | 56.5% | - 97 | - 71 | |||
| Operating profit2 | 421 | 675 | -37.6% | 1 184 | 1 094 | 8.2% | 2 736 | 2 646 |
| Financial Net | - 183 | - 170 | 7.6% | - 558 | - 492 | 13.4% | - 725 | - 659 |
| Profit before tax | 238 | 505 | -52.9% | 626 | 602 | 4.0% | 2 011 | 1 987 |
| Taxes | - 64 | - 137 | -53.3% | - 169 | - 163 | 3.7% | - 545 | - 539 |
| Net profit | 174 | 368 | -52.7% | 457 | 439 | 4.1% | 1 466 | 1 448 |
| Attributable to: | ||||||||
| Parent company's shareholders | 173 | 366 | 432 | 436 | 1 429 | 1 433 | ||
| Non-controlling interest | 1 | 2 | 25 | 3 | 37 | 15 | ||
| Net profit | 174 | 368 | 457 | 439 | 1 466 | 1 448 | ||
| Earnings per share3 | 0.73 | 1.54 | -52.6% | 1.81 | 1.83 | -1.1% | 5.99 | 6.01 |
| Adjusted Earnings per share | 1.98 | 2.29 | -13.5% | 5.21 | 6.13 | -15.0% | 10.83 | 11.75 |
| Q3 | Q3 | Jan-Sep | Jan-Sep | Rolling | FY | |||
| Operative key figures % | 2015 | 2014 | 2015 | 2014 | 12M | 2014 | ||
| Gross margin | 46.8 | 48.9 | 46.7 | 49.0 | 47.5 | 49.2 | ||
| Selling expenses in % of net sales | 23.4 | 23.6 | 23.9 | 23.7 | 22.0 | 21.6 | ||
| Administrative expenses in % of net sales | 11.6 | 11.2 | 12.2 | 11.5 | 11.2 | 10.6 | ||
| Research & development costs in % of net sales | 4.4 | 4.8 | 4.6 | 5.1 | 4.4 | 4.8 | ||
| Operating margin | 6.1 | 10.8 | 5.7 | 6.0 | 9.3 | 9.9 | ||
| Q3 | Q3 | Jan-Sep | Jan-Sep | Rolling | FY | |||
| MSEK | 2015 | 2014 | Change % | 2015 | 2014 | Change % | 12M | 2014 |
| 1 Research & development costs | - 305 | - 300 | 1.7% | - 952 | - 935 | 1.8% | -1 287 | -1 270 |
| of which has been capitalised | 168 | 162 | 3.7% | 514 | 474 | 8.4% | 713 | 673 |
| - 137 | - 138 | -0.7% | - 438 | - 461 | -5.0% | - 574 | - 597 | |
| 2 Operating profit is charged with depreciations on |
| intangibles on acquired companies | - 191 | - 177 | 7.9% | - 570 | - 483 | 18.0% | - 742 | - 655 |
|---|---|---|---|---|---|---|---|---|
| intangibles | - 180 | - 150 | 20.0% | - 523 | - 431 | 21.3% | - 684 | - 592 |
| on other fixed assets | - 254 | - 221 | 14.9% | - 743 | - 642 | 15.7% | - 973 | - 872 |
| - 625 | - 548 | 14.1% | -1 836 | -1 556 | 18.0% | -2 399 | -2 119 | |
3 There are no dilutions
| Q3 | Q3 | Rolling | FY | |||
|---|---|---|---|---|---|---|
| MSEK | 2015 | 2014 | Jan-Sep 2015 | Jan-Sep 2014 | 12M | 2014 |
| Net profit for the period | 174 | 368 | 457 | 439 | 1 466 | 1 448 |
| Items that cannot be restated in profit for the period | ||||||
| Actuarial gains/losses pertaining to defined-benefit pen | ||||||
| sion plans | 22 | - | 89 | - | -577 | -666 |
| Income tax attributable to components in other compre | ||||||
| hensive income | -5 | -18 | - | 175 | 193 | |
| Items that can later be restated in profit for the period | ||||||
| Translation differences | -205 | 475 | 299 | 1 186 | 1 043 | 1 930 |
| Cash-flow hedges | 57 | -455 | 21 | -932 | 841 | -112 |
| Income tax attributable to components in other compre | ||||||
| hensive income | -13 | 123 | -5 | 252 | -227 | 30 |
| Other comprehensive income/loss for the period, net | ||||||
| after tax | -144 | 143 | 386 | 506 | 1 255 | 1 375 |
| Total comprehensive income for the period | 30 | 511 | 843 | 945 | 2 721 | 2 823 |
| Comprehensive income attributable to | ||||||
| Parent Company's shareholders | 29 | 509 | 818 | 942 | 2 676 | 2 800 |
| Non-controlling interest | 1 | 2 | 25 | 3 | 45 | 23 |
| Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | |
|---|---|---|---|---|---|---|---|---|
| MSEK | 2013 | 2014 | 2014 | 2014 | 2014 | 2015 | 2015 | 2015 |
| Net sales | 7 757 | 5 632 | 6 327 | 6 225 | 8 458 | 6 712 | 7 181 | 6 925 |
| Cost of goods sold | -3 764 | -2 854 | -3 244 | -3 179 | -4 279 | -3 570 | -3 850 | -3 685 |
| Gross profit | 3 993 | 2 778 | 3 083 | 3 046 | 4 179 | 3 142 | 3 331 | 3 240 |
| Operating costs | -2 134 | -3 072 | -2 370 | -2 371 | -2 641 | -2 807 | -2 903 | -2 819 |
| Operating profit | 1 859 | - 294 | 713 | 675 | 1 538 | 335 | 428 | 421 |
| Financial Net | - 150 | - 158 | - 164 | - 170 | - 167 | - 189 | - 185 | - 183 |
| Profit before tax | 1 709 | - 452 | 549 | 505 | 1 371 | 146 | 243 | 238 |
| Taxes | - 468 | 122 | - 148 | - 137 | - 376 | - 39 | - 66 | - 64 |
| Net profit | 1 241 | - 330 | 401 | 368 | 995 | 107 | 177 | 174 |
| Q3 | Q3 | Jan-Sep | Jan-Sep | Rolling | FY | |||
|---|---|---|---|---|---|---|---|---|
| Net Sales, MSEK | 2015 | 2014 | Change % | 2015 | 2014 | Change % | 12M | 2014 |
| Medical Systems | 3 675 | 3 258 | 12.8% | 10 887 | 9 376 | 16.1% | 15 616 | 14 105 |
| Extended Care | 1 841 | 1 758 | 4.7% | 5 734 | 5 162 | 11.1% | 7 736 | 7 164 |
| Infection Control | 1 409 | 1 209 | 16.5% | 4 197 | 3 646 | 15.1% | 5 951 | 5 400 |
| Total net sales for the group | 6 925 | 6 225 | 11.2% | 20 818 | 18 184 | 14.5% | 29 303 | 26 669 |
| Q3 | Q3 | Jan-Sep | Jan-Sep | Rolling | FY | |||
| Operating profit, MSEK | 2015 | 2014 | Change % | 2015 | 2014 | Change % | 12M | 2014 |
| Medical Systems | 233 | 424 | -45.0% | 743 | 320 | 132.2% | 1 716 | 1 293 |
| Extended Care | 78 | 162 | -51.9% | 248 | 506 | -51.0% | 560 | 817 |
| Infection Control | 110 | 89 | 23.6% | 193 | 269 | -28.3% | 460 | 536 |
| Operating profit | 421 | 675 | -37.6% | 1 184 | 1 094 | 8.2% | 2 736 | 2 646 |
| Financial Net | - 183 | - 170 | 7.6% | - 558 | - 492 | 13.4% | - 725 | - 659 |
| Profit before tax for the group | 238 | 505 | -52.9% | 626 | 602 | 4.0% | 2 011 | 1 987 |
| 2015 | 2014 | 2014 | |
|---|---|---|---|
| Assets, MSEK | 30-Sep | 30-Sep | 31-Dec |
| Intangible assets | 27 143 | 25 019 | 26 561 |
| Capitalised Development Projects | 3 689 | 3 352 | 3 503 |
| Tangible fixed assets | 4 846 | 4 737 | 4 971 |
| Financial fixed assets | 1 552 | 927 | 1 410 |
| Stock-in-trade | 6 182 | 5 449 | 5 245 |
| Accounts receivable | 5 858 | 5 727 | 7 362 |
| Other current receivables | 2 742 | 2 419 | 2 284 |
| Cash and cash equivalents | 1 544 | 1 064 | 1 482 |
| Total assets | 53 556 | 48 694 | 52 818 |
| 2015 | 2014 | 2014 | |
| Shareholders' equity & Liabilities, MSEK | 30-Sep | 30-Sep | 31-Dec |
| Shareholders' equity | 18 855 | 16 787 | 18 694 |
| Pension Provision | 3 171 | 2 427 | 3 271 |
| Other interest bearing liabilities | 21 898 | 19 997 | 20 752 |
| Other Provisions | 2 402 | 2 547 | 2 578 |
| Accounts Payable - trade | 1 935 | 1 851 | 2 083 |
| Other non interets-bearing liabilities | 5 295 | 5 085 | 5 440 |
| Total Equity & Liabilities | 53 556 | 48 694 | 52 818 |
| MSEK | 2015 30-Sep |
2014 30-Sep |
2014 31-Dec |
|---|---|---|---|
| Debt to credit institutions | 21 898 | 19 997 | 20 752 |
| Provisions for pensions, interest-bearing | 3 171 | 2 427 | 3 271 |
| Interest bearing liabilities | 25 069 | 22 424 | 24 023 |
| Less liquid funds | -1 544 | -1 064 | -1 482 |
| Net interest-bearing debt | 23 525 | 21 360 | 22 541 |
| Q3 | Q3 | Jan-Sep | Jan-Sep | Rolling | FY | |
|---|---|---|---|---|---|---|
| MSEK | 2015 | 2014 | 2015 | 2014 | 12M | 2014 |
| Current activities | ||||||
| EBITDA | 1 046 | 1 223 | 3 019 | 2 650 | 5 134 | 4 765 |
| Restructuring Cost expenses | 213 | 62 | 483 | 903 | 742 | 1 162 |
| Restructuring costs paid | - 235 | - 196 | - 682 | - 604 | - 829 | - 751 |
| Adjustment for items not included in cash flow | 27 | 2 | 42 | 35 | 54 | 47 |
| Financial items | - 184 | - 170 | - 558 | - 492 | - 725 | - 659 |
| Taxes paid | - 124 | - 141 | - 650 | - 599 | - 841 | - 790 |
| Cash flow before changes in working capital | 743 | 780 | 1 654 | 1 893 | 3 535 | 3 774 |
| Changes in working capital | ||||||
| Stock-in-trade | - 255 | - 248 | - 792 | - 797 | - 416 | - 421 |
| Current receivables | 505 | 299 | 1 432 | 945 | 445 | - 42 |
| Current operating liabilities | - 269 | - 89 | - 320 | 40 | - 198 | 162 |
| Cash flow from operations | 724 | 742 | 1 974 | 2 081 | 3 366 | 3 473 |
| Investments | ||||||
| Acquisitions and divestments of business | - | - 213 | 297 | -1 236 | 297 | -1 236 |
| Capitalized development costs | - 168 | - 205 | - 514 | - 515 | - 672 | - 673 |
| Rental equipment | - 83 | - 59 | - 215 | - 169 | - 267 | - 221 |
| Investments in tangible fixed assets | - 127 | - 250 | - 505 | - 737 | - 713 | - 945 |
| Cash flow from investments | - 378 | - 727 | - 937 | -2 657 | -1 355 | -3 075 |
| Financial activities | ||||||
| Change in interest-bearing debt | 331 | 945 | 1 046 | 2 957 | 2 172 | 4 083 |
| Change in long-term receivables | 21 | - 131 | 21 | - 83 | 25 | - 79 |
| Dividend paid | - | - | - 682 | - 989 | - 686 | - 993 |
| Cash flow from financial activities | 352 | 814 | 385 | 1 885 | 1 511 | 3 011 |
| Cash flow for the period | 698 | 829 | 1 422 | 1 309 | 3 522 | 3 409 |
| Cash and cash equivalents at the beginning of the period | 1 392 | 1 064 | 1 482 | 1 148 | 1 064 | 1 148 |
| Translation differences | - 546 | - 829 | -1 360 | -1 393 | -3 042 | -3 075 |
| Cash and cash equivalents at the end of the period | 1 544 | 1 064 | 1 544 | 1 064 | 1 544 | 1 482 |
| Other Capital |
Retained | Non-controlling | |||||
|---|---|---|---|---|---|---|---|
| MSEK | Share capital | provided | Reserves | earnings | Total | interest | Total equity |
| Opening balance on 1 January 2014 | 119 | 5 960 | -1 993 | 12 445 | 16 531 | 29 | 16 560 |
| Total comprehensive earnings for the period | - | - | 1 840 | 960 | 2 800 | 23 | 2 823 |
| Arising in connection with acqusitions | - | - | - | - | - | 304 | 304 |
| Dividend | - | - | - | -989 | -989 | -4 | -993 |
| Closing balance on 31 December 2014 | 119 | 5 960 | -153 | 12 416 | 18 342 | 352 | 18 694 |
| Opening balance on 1 January 2015 | 119 | 5 960 | - 153 | 12 416 | 18 342 | 352 | 18 694 |
| Total comprehensive earnings for the period | - | - | 315 | 503 | 818 | 25 | 843 |
| Dividend | - | - | - | - 667 | - 667 | - 15 | - 682 |
| Closing balance on 30 September 2015 | 119 | 5 960 | 162 | 12 252 | 18 493 | 362 | 18 855 |
| Q3 | Q3 | Jan-Sep | Jan-Sep | Rolling | FY | |||
|---|---|---|---|---|---|---|---|---|
| 2015 | 2014 | Change % | 2015 | 2014 | Change % | 12M | 2014 | |
| Order intake, MSEK | 7 398 | 6 414 | 15.3% | 22 105 | 19 042 | 16.1% | 29 880 | 26 817 |
| Adj. for x-rates, acquisitions and divestments | 5.2% | 2.2% | ||||||
| Net sales, MSEK | 6 925 | 6 225 | 11.2% | 20 818 | 18 184 | 14.5% | 29 303 | 26 669 |
| Adj. for x-rates, acquisitions and divestments | 1.1% | 0.7% | ||||||
| Gross margin | 46.8% | 48.9% | -2.1% | 46.7% | 49.0% | -2.3% | 47.5% | 49.2% |
| EBITA before restructuring-, integration- and | ||||||||
| acquisition costs | 828 | 920 | -10.0% | 2 260 | 2 496 | -9.5% | 4 265 | 4 501 |
| EBITA margin before restructuring-, integration | ||||||||
| and acquisition costs | 12.0% | 14.8% | -2.8% | 10.9% | 13.7% | -2.8% | 14.6% | 16.9% |
| Restructuring and integration costs | - 213 | - 62 | - 483 | - 903 | -46.5% | - 742 | -1 162 | |
| Acquisition costs | - 2 | - 6 | -66.7% | - 23 | - 16 | 43.8% | - 45 | - 38 |
| EBITA | 612 | 852 | -28.2% | 1 755 | 1 577 | 11.3% | 3 479 | 3 301 |
| EBITA margin | 8.8% | 13.7% | -4.9% | 8.4% | 8.7% | -0.3% | 11.9% | 12.4% |
| Earnings per share after full tax, SEK | 0.73 | 1.54 | -52.6% | 1.81 | 1.83 | -1.1% | 5.99 | 6.01 |
| Adjusted earnings per share, SEK | 1.98 | 2.29 | -13.5% | 5.21 | 6.13 | -15.0% | 10.83 | 11.75 |
| Number of shares, thousands | 238 323 | 238 323 | 238 323 | 238 323 | 238 323 | 238 323 | ||
| Interest cover, multiple | 4.8 | 6.0 | -1.2 | 5.7 | ||||
| Operating capital, MSEK | 40 465 | 35 025 | 15.5% | 36 529 | ||||
| Return on operating capital, per cent | 8.7% | 11.2% | -2.5% | 8.2% | ||||
| Return on equity, per cent | 6.1% | 10.1% | -4.0% | 10.4% | ||||
| Net debt/equity ratio, multiple | 1.25 | 1.27 | -0.02 | 1.21 | ||||
| Cash Conversion | 69.0% | 60.7% | 8.3% | 65.4% | 78.5% | -13.1% | 65.6% | 72.9% |
| Equity/assets ratio, per cent | 35.2% | 34.5% | 0.7% | 35.4% | ||||
| Equity per share, SEK | 79.12 | 70.30 | 12.5% | 78.44 | ||||
| Number of employees | 15 779 | 15 655 | 0.8% | 15 747 |
| 2015 | 2014 | 2013 | 2012 | 2011 | |
|---|---|---|---|---|---|
| MSEK | Sep 30 | Sep 30 | Sep 30 | Sep 30 | Sep 30 |
| Net Sales | 20 818 | 18 184 | 17 530 | 16 433 | 14 500 |
| Net profit | 457 | 439 | 1 055 | 1 472 | 1 416 |
| Earnings per share | 1.81 | 1.83 | 4.40 | 6.15 | 5.92 |
| MSEK | Q3 2015 |
Q3 2014 |
Jan-Sep 2015 |
Jan-Sep 2014 |
FY 2014 |
|---|---|---|---|---|---|
| Administrative expenses | - 55 | - 34 | - 179 | - 120 | - 164 |
| Operating profit | - 55 | - 34 | - 179 | - 120 | - 164 |
| Financial net | 630 | - 984 | - 189 | -1 399 | 679 |
| Profit after financial items | 575 | -1 018 | - 368 | -1 519 | 515 |
| Profit before tax | 575 | -1 018 | - 368 | -1 519 | 515 |
| Taxes | - 2 | 0 | - 8 | - 2 | - 12 |
| Net profit | 573 | -1 018 | - 376 | -1 521 | 503 |
Receivables and liabilities in foreign currencies were measured at the closing day rate, and a loss of SEK 668 M (loss: 1,643) is included in net financial items for the period January-September.
| Assets, MSEK | 2015 30-Sep |
2014 30-Sep |
2014 31-Dec |
|---|---|---|---|
| Tangible fixed assets | 77 | 50 | 45 |
| Shares in group companies | 25 082 | 24 830 | 24 869 |
| Deferred tax assets | 43 | 28 | 43 |
| Receivable from group companies | 6 312 | 3 471 | 5 716 |
| Short-term receivables | 113 | 111 | 49 |
| Liquid funds | - | - | 801 |
| Total assets | 31 627 | 28 490 | 31 523 |
| 2015 | 2014 | 2014 | |
| Shareholders' equity & Liabilities, MSEK | 30-Sep | 30-Sep | 31-Dec |
| Shareholders' equity | 7 541 | 6 565 | 8 582 |
| Long-term liabilities | 16 627 | 13 003 | 14 282 |
| Liabilities to group companies | 2 296 | 2 172 | 2 309 |
| Current liabilities | 5 163 | 6 750 | 6 350 |
| Total Equity & Liabilities | 31 627 | 28 490 | 31 523 |
No acquisitions has taken place in 2015.
Teleconference with CEO Alex Myers and CFO Ulf Grunander on October 15, 2015 at 3.00 pm CET
Sweden: +46 (0) 8 5033 6539 UK: +44 (0)20 3427 1904 US: +1 212 444 0481 Code: 4417648
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=4417648&role=attend&pw=pw4273
The next report from the Getinge Group (fourth quarter of 2015) will be published on January 28, 2016.
| EBIT | Operating profit | Biosurgical mesh | Tissue-friendly products used for |
|---|---|---|---|
| EBITA | Operating profit before amortization of intangible assets identified in conjunc |
Cardiovascular | surgical treatment of hernias. Pertaining or belonging to both heart |
| EBITDA | tion with corporate acquisitions Operating profit before depreciation and amortization |
Cath lab | and blood vessels. Abbreviation of "catheter laboratory" a laboratory or small operating |
| Cash conversion | Cash flow from operating activities as a percentage of EBITDA. |
room equipped for interventional cardiology/minimally invasive |
|
| Adjusted earnings | cardiovascular procedures | ||
| per share | Net profit for the year adjusted for acquisition, restructuring and integra |
Cardiopulmonary | Pertaining or belonging to both heart and lungs |
| tion costs, and amortization of intangi ble assets on acquired companies di vided by number of shares (average number). |
Deep-vein Thrombosis | Formation of a blood clot in a deep leg vein |
Kornelia Rasmussen, Head of Group Communications +46 10 335 5810 [email protected]
Getinge AB Box 8861, SE-402 72 Gothenburg, Sweden Tel: +46 (0) 10 335 00 00 E-mail: [email protected] Corporate registration number 556408-5032 www.getingegroup.com
Getinge is a globally leading medical technology company that operates in the areas of surgery, intensive care, infection control, care ergonomics and wound care. Getinge has nearly 16,000 employees in over 40 countries and generates sales of about SEK 27 billion (2014). The Group is divided into three business areas: Medical Systems, Extended Care and Infection Control, and operates under the brands of Maquet, ArjoHuntleigh and Getinge.
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