Annual Report • Mar 8, 2017
Annual Report
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Every care has been taken in the translation of this Annual Report. In the event of discrepancies, the Swedish original will supersede the English translation.
| 2016 | 2015 | |
|---|---|---|
| Order intake, SEK M | 30,142 | 30,431 |
| Growth in order intake, adjusted for exchange-rate effects and acquisitions, % | –0.8 | 1.9 |
| Net sales, SEK M | 29,756 | 30,235 |
| Net sales, adjusted for exchange-rate effects and acquisitions, % | –1.5 | 1.8 |
| Restructuring and integration costs, SEK M | –1,313 | –657 |
| Acquisition expenses, SEK M | –21 | –33 |
| EBITA before restructuring, acquisition and integration costs, % | 4,341 | 4,179 |
| EBITA margin before restructuring, acquisition and integration costs, % | 14.6 | 13.8 |
| Earnings per share after comprehensive tax, SEK | 4.98 | 5.83 |
| No. of shares, thousand | 238,323 | 238,323 |
| Interest-coverage ratio, multiple | 5.6 | 4.6 |
| Working capital, SEK M | 43,383 | 40,771 |
| Return on working capital, % | 8.3 | 8.6 |
| Return on shareholders' equity, % | 6.0 | 8.5 |
| Net debt/equity ratio, multiple | 1.12 | 1.17 |
| Cash conversion, % | 73.6 | 66.7 |
| Equity/assets ratio, % | 37.9 | 36.8 |
| Equity per share, SEK | 87.76 | 82.21 |
* EBITA-margin before reconstructuring, acquisition and integration costs.
Getinge is built on a genuine compassion for people's health, safety and well-being. Based on long experience and in close cooperation with the healthcare industry, Getinge develops innovative solutions that improve people's lives, today and tomorrow – which is in line with the brand promise, Passion for life.
Getinge provides products and services for surgery, intensive-care, long-term care, infection control and sterilization. Founded in 1904 on the Swedish west coast, the company has grown to become a global market leader in many segments.
Today, Getinge generates sales of close to SEK 30 billion and conducts sales via proprietary companies throughout the world. The production is conducted at facilities in Brazil, Dominican Republic, France, Canada, China, Germany, Poland, Sweden, Turkey, the UK and the US. In total, Getinge has over 15,500 employees in more than 40 countries.
EMEA is the largest region with 42% of sales, closely followed by the Americas with 40%, and APAC with 18%. 85% of sales are to hospitals, while elderly care accounts for 8% and the life science industry for 7%.
»… the company has grown to become a global market leader in many segments. «
To become the world's most desired medtech company
Getinge's cultural values are based on a strong sense of a shared commitment with people in mind.
Getinge's offering is mainly targeted at care providers, care givers and care receivers. The offering is organized in three areas: Acute Care Therapies, Surgical Workflows and Patient & Post-Acute Care.
Offers pioneering technologies and solutions for intensivecare, surgery and cardiology.
11.8
SEK billion
Among the global leaders in all product segments.
Offers efficient solutions for infection control and operating rooms.
SEK billion
10.5
Among the global leaders in all product segments.
Offers solutions for daily tasks of lifting and transferring patients, as well as wound care and prevention of deep vein thrombosis.
7.5 SEK billion
Global leader within Safe Patient Handling and strong contender in the other segments, such as Pressure Injury Prevention.
2016 was yet another year of change and key decisions for the future, based on an additional review of the strategy that was launched in the autumn of 2015. This has resulted in adjustments to create increased focus, which will strengthen us.
» During the year, we intensified our focus on quality, which resulted in the strengthening of our quality control. «
When summarizing the past year, I see several areas that were particularly positive. I am very pleased with the achievements made in the Big 5 efficiency enhancement program. In total, the program generated savings of approximately SEK 400 M, which contributed to an increase in profitability before restructuring costs, despite lower sales. Streamlining the operations in this manner means that we can expect high leverage on profitability when sales turn around.
We also saw cash flow strengthen toward the end of the year, yet another sign of our efficiency enhancements.
During the year, we developed and prepared the brand transformation that we are now executing. This change will reduce the complexity of our brand portfolio and clearly position Getinge as a supplier and a partner of integrated medical-device solutions for the healthcare sector.
Both the organic order intake and net sales performed slightly negatively during the year, which obviously is not satisfactory. The development was challenging in several important growth markets, regarding capital goods. In addition, our focus has been too internally oriented during the year. We launched plans to turn this trend around in terms of both our regional sales organizations and our product offering.
In 2016, we have upgraded our product portfolio, for example in the area for advanced operating tables, lights and pendants, but also in the growing area of low temperature sterilization. This is followed up with a large number of product updates and launches of several new products in all business areas during 2017.
All in all, we expect moderate organic growth in net sales for 2017.
A strategic review was completed in the autumn to enhance the effects of the ongoing change process and also clarify Getinge's long-term strategy. The review resulted in a need to intensify focus to better capture growth opportunities for all of the business areas. To achieve this, a decision was made to prepare for a listing and distribution of Patient & Post-Acute Care to shareholders. The final proposal is subject to a decision by the shareholders at an Extraordinary General Meeting during autumn 2017. Should the Meeting approve the Board's coming proposal, the aim is to complete the distribution not later than the first quarter of 2018.
The distribution will increase the ability of both companies to successfully realize their strategies and to best continue to enhance customer benefits and shareholder value. The work on preparing for this structural change will continue in 2017.
Quality and patient safety are the foundation of our business and a prerequisite for our future development. During the year, we intensified our focus on quality, which resulted in the strengthening of our quality control.
The remediation activities linked to the Consent Decree with the FDA continued at a rapid pace and an additional SEK 400 M was reserved for these measures in the autumn. A new governance model was introduced at the end of the year for the units under the Consent Decree. In brief, the model will create greater control and clarity in order to meet established time frames.
In conclusion, I can state that it has been a year that has demanded considerable effort and hard work from Getinge's employees and I would like to take this opportunity to express my thanks for their tremendous performance during the year. More hard work lies ahead of us, but we are maintaining the pace of our activities to enhance our competitiveness and thereby ensuring future profitable growth. We are increasing our investments in research and development to ensure new products and solutions. We are continuing our work to create a streamlined organization and to focus on continuous improvements and efficiency enhancements in the operations.
2017 will be an eventful year for Getinge, which will be managed by the new CEO, Mattias Perjos, who will take office March 27 and I give him a warm welcome to Getinge. I myself will take on the role of CEO for Patient & Post-Acute Care, which also has a very exciting future ahead. All in all, I look forward to being part of a successful 2017.
Joacim Lindoff Acting President and CEO
Mattias Perjos was appointed President and CEO of Getinge Group in autumn 2016. He will take office on March 27, 2017. Mattias Perjos most recently held the role of CEO of Coesia Industrial Process Solutions (IPS) as well as serving as Managing Director of Coesia International. Mattias Perjos has an extensive industrial background and international experience, and also an impressive track record of consistently achieving improved business results.
Several different business drivers affect the market conditions of the global healthcare industry. Getinge is working to meet each and every one of them in a structured and sustainable manner.
The global healthcare industry has undergone many changes since the financial crisis in 2009, including declining reimbursement rates and greater consolidation. This has resulted in fewer and larger players, which in turn has led to increased price pressure. Purchasing is now increasingly centralized and conducted higher up in the decision-making hierarchy. This means that central purchasing departments are usually responsible for purchasing, rather than physicians or healthcare professionals.
Due to demographic changes, primarily in Europe and the US, the need for qualified healthcare and elderly care is continuing to grow. Today, these markets are characterized by a growing number of elderly people who need healthcare, and an increased incidence of lifestyle-related diseases, particularly various types of cardiovascular diseases. In these markets, there is a need to provide better care for more people without increasing the cost to society. Accordingly, it must be possible to demonstrate that products and solutions can provide both documented clinical results and deliver economic benefits.
The economic performance of emerging markets is enabling more countries to develop advanced healthcare. Due to greater prosperity and a growing middle class, many of these countries are investing heavily in the expansion of both private and public healthcare. Products with simpler functionality and a lower price that accelerate the expansion of healthcare are in demand predominately in public healthcare. However, the purchasing power in these markets is generally lower than in mature markets.
The overall business drivers, as described on the opposite page, bring several opportunities for Getinge. The most important ones are presented below.
Getinge can offer complete and integrated solutions tailored to customer needs and challenges.
Getinge's focus on customer-driven innovation means a product development process that involves the customer from concept to finished product. The aim is to deliver solutions that meet customers' actual needs, rather than solutions driven solely by technological innovations.
Getinge is expanding its offering to include products with simpler functionality at a lower price in order to capitalize on the rapid growth and align with the lower purchasing power of emerging countries.
Getinge's offering includes IT systems for medical processes and real-time resource planning for hospitals, technology that helps to optimize work processes and the flow of patients. Accordingly, maximum utilization of operating rooms for instance is guaranteed, which contributes to increased efficiency enhancements of healthcare in general.
Getinge provides professional complete solutions for service and support. In addition, training is offered to support users, which ensures that the products are used properly and effectively, all to guarantee the best possible results in healthcare.
Getinge's transformation program, which was launched during the autumn of 2015, includes initiatives to reposition the company for higher organic growth as well as increased competitiveness.
A key success factor for Getinge is the company's solid platform: dedicated and passionate employees, values based on entrepreneurship and efficient corporate governance. In all medical device companies, quality is a vital aspect and must permeate the entire operations in order to meet the safety requirements that are a prerequisite for players in the medical device industry.
The goal is for Getinge to be a successful company in several perspectives, in order to reach the vision of becoming the most desired medtech company in the world. In order to accomplish this there is a need for an efficient and competitive organization that produces more value for a lower cost. At the same time, it is important to continue developing products and services corresponding to the customers' needs.
As a consequence, Getinge launched a transformation program in autumn 2015 aimed at enabling realizing the company's full potential.
In order to improve the Group's profitability, an efficiency enhancement program was initiated with five focus areas, Big 5. The savings from Big 5 amounted to approximately SEK 400 M in 2016.
| Focus Area | Examples of activities in 2016 |
|---|---|
| Lean support and administration | Enhanced coordination and efficiency, primarily in finance, sales, service, marketing and HR. In 2016, a Shared Service unit was established in San José, Costa Rica, serving the Americas. Since 2014, there has been a Shared Services unit in Cracow, Poland, serving EMEA. |
| Indirect spend optimization | Activities to reduce costs of indirect purchasing through consolidation of the supplier base and coordinated negotiations. |
| Direct spend optimization | A global structure was designed for lower costs via direct purchases of input goods linked to Getinge production. |
| Portfolio simplification | Streamline and optimize the product portfolio and remove unprofitable products. A new brand strategy was developed to clarify the offering and further strengthen Getinge's leading positions. |
| Commercial excellence | A shared CRM system was established to support collaboration between sales teams. The plat form has been rolled out in Australia, France, India, the Nordic region and New Zealand. The roll out will continue in the rest of the world in 2017–2018. |
To generate growth, the sales organization will offer the complete product portfolio under one brand, Getinge. Focus is targeted to delivering documented clinical and economic benefits. This is summarized under the name of Customer Centricity, which comprises the following five focus areas:
| Focus Area | Examples of activities in 2016 |
|---|---|
| Customer-centric business model |
Change processes initiated, targeting the offering to even more clearly reflect customer needs for integrated solutions that enhance quality and productivity and the efficiency of patient flows. |
| Focus on entire product offering | Established joint market organizations offering Getinge's complete product portfolio. |
| Innovation based on customer value |
A process established for customer-driven innovation focusing on documented clinical and economic benefits for customers. This will be implemented in the product development process from 2017. |
| Increased exposure in the US and emerging markets |
The ambition going forward is to better match regional exposure, taking into account growth poten tial and size. For example, Getinge has prepared a product development plan for the value segment in emerging markets. The target is to develop products in 2017–2018 with launch scheduled for 2019–2020. |
| Continued focus on acquisitions | Getinge continuously identifies acquisition candidates based on the criteria of generating growth and strengthening leadership in priority segments. |
In order to achieve the activities within Big 5 and Customer Centricity, a organizational structure suited for this is needed.
| Focus Area | Examples of activities in 2016 |
|---|---|
| Establish a suitable organization | Implementation of the new organization valid as of January 1, 2016. |
An additional strategic review was completed in autumn 2016 to enhance the effects of the ongoing change process and also clarify the Group's long-term strategy that better captures growth opportunities for all three businesses.
As a result of the review, Getinge has decided to focus on two business areas – Acute Care Therapies and Surgical Workflows.
Based on this long-term strategic direction, the Board tasked the Getinge Executive Team to prepare for a potential distribution and listing of Patient & Post-Acute Care, formerly Extended Care, in accordance with the Lex ASEA* rules.
» Following a potential split, both companies will have a more concentrated focus, with more opportunities… «
The preparation activities are based on a carefully managed project plan to ensure a controlled process and thus a well-worked through proposal.
The final proposal is planned to be presented to the shareholders for decision at an Extraordinary General Meeting in the autumn 2017. The aim is to complete the listing not later than during the first quarter of 2018.
Following a split, both companies will have a more concentrated focus, with more opportunities to continue to develop products and solutions to meet customer needs and thereby help solve healthcare challenges.
For Patient & Post-Acute Care this will, for example, create greater opportunities to capture the possibilities from the growing market within longterm care.
The financial targets for both companies will be determined and presented in the autumn of 2017 as part of the preparation work.
* Lex ASEA means, in brief, that a parent company can, under certain circumstances, distribute the company's shares in a subsidiary to its shareholders without any immediate Swedish taxation arising on the distribution for the shareholders.
On October 18, 2016, the Board of Directors announced that the Excecutive Team had been given the task of preparing for a proposal of a potential distribution and listing of Patient & Post-Acute Care. The preparations for this have started, and a new management team has been appointed, with Joacim Lindoff as CEO. Getinge's former CEO, Johan Malmquist, is proposed for the position as Chairman of the Board.
From spring 2017, Getinge will group all of its brands under a single name to simplify its customer offering and to further clarify Getinge's position as a world-leading medical device company. Preparations have been under way for much of 2016.
Over the years, Getinge has grown as a company and so has its brand portfolio. Getinge has created a fairly complex brand structure with over 70 brands, which has sometimes been difficult for the sales force to convey to customers. Continuing to use all these brands would also prevent the company from acting efficiently and building strong brand equity.
The task of creating the new brand was conducted over the course of 2016 and was based on extensive research. Interviews were carried out with customers from the largest markets and with Getinge employees. Discussions with other players in the med-tech industry also provided information about market trends.
The result is that Getinge is now unifying all former brands under the Getinge name – with a new company logo and graphic identity which will reinforce the customer centric face of Getinge.
To safeguard the brand equity built over the years in the other brands, for example Maquet, they will be transformed into product family names under the Getinge master brand.
Unifying the company under one brand is in line with the on going transformation program and aims at positioning Getinge better toward the customers and further strengthening its position as a global leading med-tech company.
In the autumn 2015, the financial targets stated below were established for 2016–2019. The targets will be reviewed and presented during the autumn of 2017 as the preparation of the proposal for a potential listing and distribution of Patient & Post-Acute Care is finalized.
to weaker sales in Surgical Workflows and Patient & Post-Acute Care during the two final quarters. Measures are being taken to reverse the trend, including extensive product launches in 2017.
10%
The efficiency program, Big 5, resulted in extensive savings during 2016. The savings, however, could not offset the full effects of declining sales. As a consequence, EBITA*-growth amounted to 3.9%.
*Before restructuring, integration and acquisition costs.
15%
Return on equity fell short of the target of 15%, as a result of reduced net profit. Net profit was negatively affected by this year's restructuring and integration costs, which amounted to SEK 1,313 M.
Cash conversion
70%
Getinge's cash conversion was strengthened gradually during the autumn of 2016 and amounted to 80.4% in the last quarter, which contributed to reaching the target for the full year.
Acute Care Therapies develops pioneering technologies and products for intensive-care, surgery and catheter-based interventions. The offering also includes equipment for treating patients while in transport.
Acute Care Therapies 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 units (ICU).
ICU products and solutions, together with equipment and disposables for cardiac, pulmonary and vascular therapies, create a broader selection for patient care in acute health conditions. Furthermore, revolutionary solutions are offered for mobile ventilation and portable heart-lung therapies.
By focusing on future-oriented technology that makes daily operations easier and improves patient care, Acute Care Therapies follows the patient throughout the continuum of care for surgeries and cardiac, pulmonary and vascular therapies.
In 2016, the new range of ventilators, SERVO-U, SERVO-n and SERVO-air, captured market shares. With CARDIOHELP, which is targeting the extracorporeal life support segment, Acute Care Therapies has continued to build a world-leading position.
Acute Care Therapies continued to perform well despite intense activities associated with the quality management system and the Consent Decree with the FDA.
The net sales totaled SEK 11.8 billion (11.6) in 2016. The order intake increased by 3.1% organically and net sales grew organically by 1.4% during the year, mainly related to higher demand in the Cardiovascular segment. Growth was evenly distributed geographically. Organic net sales increased by 1.5% in EMEA, by 1.4% in the Americas and 1.3% in APAC.
Acute Care Therapies reached a gross margin of 55.5% (55.5%) for the full year, which is in line with the previous year. The EBITAmargin before restructuring, integration and acquisition costs was also unchanged (19.7%). EBITA amounted to SEK 2.3 billion (2.3).
Non-recurring costs, amounting to SEK 751 M, had a negative impact on EBIT, which decreased by 25.7% to SEK 1.0 billion (1.3). These non-recurring costs are related to such matters as the Consent Decree with the FDA.
Loss of revenue attributable to the Consent Decree with the FDA was offset by higher sales volumes and a favorable product mix.
Among the global leaders in all product segments.
BD, Dräger, Edwards Lifesciences., GE, Gore, Hamilton, LivaNova, Medtronic, Teleflex, Terumo.*
| Anesthesia Premium anesthe sia systems |
Acute Care Ventilation Ventilators for the premium and value segment |
Hemodynamic Monitoring Disposables and monitors |
Surgical Perfusion Heart-lung machines and dis posables |
Extracorporeal Life Support Portable devices and disposables |
Counterpulsa tion therapy Pumps and dis posables |
|---|---|---|---|---|---|
| 4 | 2 | 2 | 2 | 1 | 1 |
| EVH Systems for endo scopic vessel har vesting |
Beating Heart Surgery Heart stabilizers & devices for con necting vessels |
Aortic Surgical Grafts Grafts for abdomi nal aortic and tho racic aortic |
Peripheral Vascular Grafts Grafts in polyester and polytetrafluo reten (PTFE) |
Covered Stents Balloon expand able covered stents |
Thoracic Drainage Chest drains and thoracic catheters |
|---|---|---|---|---|---|
| 1 | 2 | 1 | 2 | 2 | 1 |
*Getinge research.
** EBITA margin before restructuring, acquisition and integration cost.
Getinge has been working intensively to ensure the procedures and processes in the company's quality management system in accordance with the remediation program launched in 2013.
The FDA, the US Food and Drug Administration, inspected several Medical Systems' (now Acute Care Therapies) manufacturing units in 2013, which led to observations about procedures and processes in the quality management system. Extensive internal work began immediately to strengthen the quality management system, while at the same time dialog began with the FDA.
This resulted in a Consent Decree that was formally approved by the FDA in February 2015. The contents of the Decree are aimed primarily at raising the level of the quality management system and the FDA will then be shown confirmation that this level has been maintained. The Decree encompasses the manufacturing units in Hudson, New Hampshire and Wayne, New Jersey in the US, as well as Rastatt and Hechingen in Germany, under which the FDA will monitor developments for a certain period of time, for example, by performing third-party inspections of the production units under the Decree.
Since 2013, Getinge has increased its focus on enhancing the level of the quality management system. During 2015, efforts in quality and regulatory compliance intensified, with the establishment of a new global function, reporting directly to the CEO.
In 2016, a new system for quality, environmental and operational control was launched called GetAligned that gathers documentation and shared processes for the Group. During the autumn a new governance and organization model was introduced for the units
under the Consent Decree. The change will further clarify responsibilities and authorities that will enhance the level of control in the ongoing change process in order to established time frames.
The Consent Decree consists of three phases and work will continue for many years. All of Getinge's entities are in the first phase and the Group will continue its intensive efforts with improvements to the quality system in the coming years.
The total costs for the improvement activities since 2014 amount to SEK 1,495 M of which SEK 995 M were reserved in 2014. An additional SEK 400 M was reserved in the autumn 2016 for improvement activities. In addition, to this the financial consequences for loss of revenue are estimated to SEK 130 M on Getinge's operating profit in 2016.
» Extensive internal work began immediately to strengthen the quality management system. «
The SERVO-n neonatal ventilator provides vulnerable newborn babies with the breathing support they need, while at the same time protecting the lungs, brain and other developing organs. The product is developed and designed to help neonatal intensive-care units (NICU) create ideal environments for newborns to breathe, sleep and grow.
More comfortable breathing means reducing sedation and a better chance of sleep. Improved comfort and reduced work on breathing may also allow the baby to focus energy on growth and maturation of lungs and brain.
The technology behind the product is called NAVA, short for Neurally Adjusted Ventilatory Assist, a unique approach to mechanical ventilation based on neural respiratory output. With NAVA, the electrical activity of the diaphragm (Edi) is captured, fed to the ventilator and used to assist the patient's breathing both in synchrony with and in proportion to the patient's own efforts. Since the ventilator and the diaphragm are controlled by
the same signal, coupling between the diaphragm and the SERVO ventilators are synchronized virtually simultaneously.
The uniqueness of this product lies in the combination of the ultimate physiological trigger with the Edi signal together with the SERVO gas modules that allows babies as small as 300 grams to be ventilated.
The NAVA technology works regardless of patient size and is used in most of the SERVO ventilators to support all kinds of patient categories. Unique to Getinge, NAVA is available for both invasive and non-invasive ventilation, assuring effective patient-ventilator synchrony independent of patient interface.
» A unique approach to mechanical ventilation based on neural respiratory output. «
Photo: US Rowing
When the American rower Blake Haxton finished in fourth place in the single sculls in the 2016 Rio Paralympics, his parents Steve and Heather paid an extraordinary tribute to Getinge: "Without your technology, our son wouldn't be alive."
Blake Haxton has a succesful rowing carrer. Photo: US Rowing
The story about how Getinge's brand promise, Passion for life, helped pave the way for high school rower Blake Haxton's international career started in 2009 as an ordinary Saturday evening in suburban Columbus, Ohio. In the Haxton home, Blake complained of a sore calf after a high school basketball game and then went to bed.
However, what seemed to be a harmless sports injury quickly developed into something far more lethal: necrotizing fasciitis, more commonly known as flesh-eating disease. Within 72 hours, Blake endured his first amputation and he would eventually lose his left leg up to the hip and his right leg to above the knee. As the infections spread, his heart, lungs, kidneys and liver began to shut down. Doctors would not even put a percentage on Blake's survival chances.
"It was simply because they thought there was no hope," recalls Dr. Michael Firstenberg, Assistant Professor of Surgery and Integrative Medicine at Northeast Ohio Medical University.
Dr. Firstenberg, an adult cardiac surgeon, helped coordinate and manage the solutions that oxygenated Blake Haxton's blood outside of the body after his multiple organ failure seven years ago.
A SERVO-i ventilator and a Quadrox-D (a temporary extra-corporeal support technology, similar to currently available CARDIO-HELP, the world's smallest portable heart-lung support system), are two other Getinge technologies involved in bringing Blake back to life. In all, the young athlete endured more than a month
in a coma, 100 days in hospital and no less than 20 surgeries. After the ordeal, it took four years before Blake picked up his rowing career again. He returned to the boat to take up arms and shoulders singles sculls. Different from traditional leg-driven rowing, the Paralympic version requires athletes to have a different type of balance and focus more on upper-body strength.
Blake has quickly reached world class level by taking fourth and fifth place at the last two world championships before finishing fourth in Rio de Janeiro this year.
On land, the 25-year old has just completed his law school finals, with his eyes set on moving into the investment sphere.
"I am amazed by what people have been willing to do for me," Blake says. "And believe it or not, I'm as healthy as a horse. I don't have a single prescription in my name. There could have been so many complications from all I went through. Although I don't have my legs anymore, I have been told I have above average health."
Surgical Workflows 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. Getinge's Life Science segment is also included in this business.
The Surgical Workflows offering includes equipment, consumables and services for cleaning, disinfection and sterilization of instruments, as well as equipment for complete surgical workplaces. The products promote efficient and secure hospital workflows.
The IT solutions contribute to optimized patient and workflows, minimized risks and create better compliance. In turn, this offers greater patient safety and efficient utilization of resources, staff and equipment.
In addition, the offering includes products and solutions for the Life Science segment. A comprehensive range of products and full project planning is offered in this segment through customized solutions for contamination prevention operations.
Surgical Workflows' net sales amounted to SEK 10.5 billion (10.9). The organic order intake and net sales decreased by 3.1% and 3.4% during the year.
The Gross margin decreased by 1.1 percentage points to 37.7% (38.8%), as a consequence of lower sales.
Operating expenses decreased by 10.5%, mainly due to the efficiency program, Big 5. The savings helped to increase EBITA before restructuring, acquisition and integration costs by 4.1% to approximately SEK 1.3 billion (1.2).
Among the global leaders in all product segments.
Belimed, Dräger, Hill-Rom, Miele, Steris, Stryker.*
| Infection Prevention Cleaning, disinfection and sterilization |
Enabling Surgery Operating Room (OR) tables and lights and ceiling service units for an improved work ing environment |
Integrated Workflow Solutions Patient OR Sterile flow integration supply management management |
Service & Consumables Service and disposables |
|---|---|---|---|
| 1 | 1, 3** | 1*** 5 1 |
1 |
| Sterilizers Sterilizers for drug and medical device companies, products that suits both research and production |
Washers Washers for laboratory and vivar ium applications and cGMP washers for drug manufacturers |
Isolation Equipment for protecting drugs or humans from the surrounding environment |
Sterile Transfer Transfer containers and isolators. |
|---|---|---|---|
| 1 | 2 | 2 | 1 |
* Getinge research.
** 1 in OR tables and lights, 3 in ceiling service units.
*** Only available in Denmark to date.
**** EBITA margin before restructuring, acquisition and integration cost.
Getinge's Integrated Workflow Solutions focuses on enhancing the clinical quality, patient safety and efficiency by utilizing workflow and logistic information-based systems. Furthermore, they contribute to a better working environment, with benefits for both healthcare staff and patients.
With Integrated Workflow Solutions, part of the Surgical Workflows' offering, Getinge brings together a portfolio of excellent IT solutions . This includes the INSIGHT Patient Flow Management System, the TEGRIS Operation Room Integration System, and the T-DOC Sterile Supply Management System, as well as several other solutions for specific markets around the world.
The long-term prospects are positive for Integrated Workflow Solutions, as hospitals strive to boost higher quality, productivity and cost efficiency.
An independent study funded by the Danish Welfare Technology Foundation showed that productivity enhancement, in terms of patient throughput, increased by 19% in the emergency department at the regional hospital of Horsens, Denmark, thanks to Getinge's INSIGHT solution for secure and efficient clinical logistics. Another survey, performed by the central region of Denmark, revealed outcomes with 15% higher utilization of operating rooms and a 66% reduction in the number of canceled operations – which is a common problem leading to a stressful work environment, disturbances and time-wasting and resources that otherwise could have been used for treating patients.
The benefits from the TEGRIS Operation Room Integration (ORI) System are just as clear. It delivers full control over the information and equipment in the operating room, ensuring an efficient workflow in surgery and thereby also optimizing patient safety and medical quality. There are proven effects in terms of reduced errors, reduced risk of infection due to less equipment being needed in the theater, as well as higher productivity and cost efficiency.
The T-DOC Sterile Supply Management System is a best-in-class sterile and supply management solution, providing complete traceability of surgical instruments and endoscopes, all the way to the patient. This leads to a higher level of patient safety, efficiency and control – ensuring that all equipment is available at the right place, at the right time, at the right cost and with the right quality.
Getinge is currently delivering the largest project in this business area in the world so far, to hospitals in the capital region of Copenhagen, Denmark. The installation includes two major sterile supply units servicing eight hospitals with 220 operating theaters, performing over 600 surgeries. This is done with using a never-before seen level of automation using robot technology and self-driving vehicles, all managed by T-DOC.
Patient & Post-Acute Care offers solutions that improve the lives of people affected by reduced mobility and wellness challenges. This is achieved by providing integrated solutions for both acute and long-term healthcare settings.
Patient & Post-Acute Care is well positioned in a global market with recurring revenue and underlying growth driven by an ageing population and increase of chronical diseases.
The product portfolio consists of several products and solutions, creating a strong position in relation to competitors. The solutions help improve patient and resident outcomes while increasing healthcare practitioner safety and productivity. The offering encompasses a broad number of products and solutions for Safe Patient Handling, Prevention of Venous Thromboembolism, Medical Beds, Critical Care Units, Early Mobility, Hygiene Systems, Bariatric Care and Pressure Injury Prevention.
The net sales for Patient & Post-Acute Care amounted to SEK 7.5 billion (7.8). The organic order intake and organic net sales growth declined by 3.4% and 3.0%. However, in the fourth quarter the business showed positive growth in organic order intake.
The gross margin declined by 0.6 percentage points to 44.6% (45.2%) during the year. The operating expenses decreased by 9.2% during, where cost control contributed to significant declines of both selling and administrative expenses, primarily related to measures implemented as part of the ongoing corporate transformation program. This contributed to EBITA before restructuring, acquisition and integration costs increasing by 7.5% to approximately SEK 1.0 billion (0.9).
Global leader within Safe Patient Handling and Diagnostics and strong contender in the other segments, such as Pressure Injury Prevention.
Hill-Rom, Joerns, Linet, Medtronic, Natus Medical, Paramount Beds, Stryker.*
| Safe Patient Handling Patient lifts, slide sheets, slings and flites. |
Patient Hygiene Bathing and showering systems, chemicals and special ized liquids. |
Critical Care Kinetic ther apy systems, prone posi tioning, inte grated thera peutic beds. |
Diagnos tics Cardiovascu lar and obstretic dopplers and blood flow diagnostics. |
DVT Prevention Active com pression sys tems, pumps and gar ments. |
Bariatric Care Patient han dling equip ment and medical beds. |
Pressure Injury Pre vention Alternating and low pres sure sys tems. |
Medical Beds Acute care and long term care medical beds. |
|---|---|---|---|---|---|---|---|
| 1 | 1 | 1** | 1,3*** | 2 | 3 | 3 | 5 |
*Getinge research.
** 1 in USA in Prone Positioning.
*** 1 Cardiovascular and 3 in Obstretic.
**** EBITA margin before restructuring, acquisition and integration cost.
The New Royal Adelaide Hospital project in Australia is a prime example of how Getinge can offer integrated, comprehensive solutions including consultancy, planning, design, products and installation.
Close cooperation and a clear focus on the customer has led to the most successful hospital development project ever for Getinge in Australia. When it officially opens in 2018, the New Royal Adelaide Hospital will be the most advanced hospital in the Southern Hemisphere.
"Working with customers intimately from the early stages, and leveraging the Group's capabilities through collaboration, underpinned our success in securing our largest ever win, and gave our competitors no chance to match the solution offered," says Michael Luxton, President of Getinge Australia and New Zealand.
"What works for us is good product knowledge in front of the customer and taking care of sales and service relationships. Customer see a holistic view of the way we run our business, and that makes them feel comfortable," continues Michael.
In addition to the major capital purchases throughout the hospital, the order includes consumables and service which generate recurring revenue for the business.
Under the contract, Getinge will have at least one full-time engineer on site at the hospital to provide service and on-thespot customer care.
Getinge delivers products to the advanced New Royal Adelaide Hospital which will open in 2018.
As a global manufacturer of medical devices and services, Getinge has operations in many locations across the world, and its employees represent a variety of cultures and backgrounds. With this comes responsibility – both locally and globally.
Getinge feels a considerable sense of responsibility to contribute to sustainable development in terms of both lower environmental impact from production and finished products, as well as social responsibility in the markets in which the company operates.
Getinge's sustainability efforts also aim to ensure the long-term earnings capacity and strengthen the company's competitiveness. The sustainability efforts have a favorable impact on the Group's ability to attract and retain both customers and employees, which is crucial for the continued development of Getinge.
Quarterly environmental reporting from the Group's production units provides good opportunities for follow-ups and comprises the basis for decisions concerning environmental goals and activities in the environmental area.
Getinge has signed the UN's Global Compact and supports the ten principles on human rights, labor, environment and anti-corruption. In addition, Getinge's sustainability work is governed by the Group's Code of Conduct and a number of policies on, for example, the environment and anti-corruption.
During the year, work began on defining the issues that are the most essential for Getinge to work in the future, aided by a materiality analysis. This analysis, in conjunction with in-depth dialog with stakeholders, will be the foundation on which the Group will continue its efforts in sustainable development.
A global organization for Ethics & Compliance was established during the year. To support this work, there is also a global Compliance Committee, which will contribute to ensuring that laws and regulations, as well as ethical guidelines are followed throughout the company. Next year, regional committees will be added to the organization, in order to increase focus on specific geographical areas.
Getinge's Code of Conduct stipulates how the company does business and describes the company's and employees' responsibilities to stakeholders. The Code of Conduct expresses how the company and its employees must conduct operations in a sustainable manner pursuant to ethical principles and in accordance with the applicable laws and regulations. All employees are to follow the values and principles set out in the Code of Conduct, and everyone is responsible for personifying Getinge's responsibilities in the day-to-day operations. In 2016, a revised version of the Code of Conduct, in accordance with the Group's values and updated policies, was launched.
The Group has begun the process of implementing a global whistle-blowing system under which employees have the opportunity to report any improprieties or deviations from the Code of Conduct.
In addition, a Code of Conduct for suppliers has also been compiled, which will be implemented during the coming year.
Getinge has a global policy for anti-corruption to group together the company's shared standpoints in this area.
Getinge creates value for its shareholders through annual dividend payments and the share's longterm development. The dividend policy states 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 the company's shareholders, as a return on capital invested, to correspond to 30–50% of net profit. The remaining portion is reinvested in the company. For 2016, the proposed dividend is SEK 2.00 (2.80) per share, which is 40% of the net profit.
Getinge Group's customers are found in the healthcare sector. Through its operations, Getinge contributes to enhancing care and making it more efficient, which ultimately leads to the release of resources for additional care production. The Group has long been a major player in the European healthcare market. The expansion of recent years means that Getinge's customers are currently found in all corners of the world.
Over the past 20 years, Getinge has grown from approximately 900 employees to more than 15,500 employees. The Group values healthy relationships with trade unions throughout the world and pays
salaries and remuneration that exceed minimum levels and according to practice in all countries. Under the Group's policy, no minors are employed.
In 2016, salary costs and other remuneration amounted to SEK 8,198 million (8,122). In many countries, the Group's employees are covered by defined-contribution pension plans, primarily retirement pensions. The premiums are paid continuously throughout the year by each Group company to separate legal entities, such as insurance companies. Certain employees pay a portion of the premium themselves. The size of the premium paid, by the employees and Getinge, is normally based on a set proportion of the employee's salary. In 2016, the total net cost for pensions amounted to SEK 490 million (504). For further information regarding the Group's pension commitments, see Note 22 of the consolidated financial statements.
In recent years, Getinge has completed a number of investments in production facilities and sales companies in several emerging markets. New plants have been established in, for example, China and Poland. Accordingly, new employment opportunities have been created, and Getinge endeavors to ensure adjustments to favorable working conditions for employees in these countries.
Getinge places high demands on all its operations in terms of health, safety, discrimination and ethics, regardless of where in the world operations are conducted.
In many of the countries where Getinge is active, health and safety in the workplace is regulated by stringent national legislation. However, the Group is also active in countries where this legislation is significantly weaker. Nonetheless, the Group places high demands on all its operations in terms of health, safety, discrimination and ethics regardless of where in the world operations are conducted.
During the year Getinge launched a revised Code of Conduct, which is the foundation for all operations and it describes how the company and employees are to act in relation to each other and other stakeholders. A number of global policies support the Code and are supplemented with local policies where necessary.
To ensure that the Group's Code of Conduct is also upheld in the supply chain, in 2012, the Group decided that all supplier agreements must be supplemented with an agreement under which the supplier pledges to comply with the requirements in Getinge's Code of Conduct, which is an ongoing process. In addition, a Code of Conduct for suppliers has been compiled during 2016, which will be implemented over the coming years.
For operations in countries with weaker legislation, the company's Code of Conduct and policies are of the utmost importance and govern activities in the absence of legislation. In recent years, Getinge has worked on extended risk analyses of high-risk countries, which has resulted in more extensive efforts, for example in the form of training, in identified high-risk countries.
Getinge strives to make a positive and sustainable contribution to the communities in which the Group is active. Such efforts primarily take the form of projects linked to the company's operations.
Ethics and morals are the basis of all of the company's operations and are reflected in all relationships, both internally and externally. A global anti-corruption policy has been adopted to group
together the company's shared standpoints in this area. The policy is based on Getinge's shared values and aims to ensure ethical behavior in all business.
Gifts, corporate representation, compensation and personal benefits may only be offered to outside parties if they are of minor value and associated with the prevailing norms. No gifts, corporate representation or personal benefits may be given if they contravene the applicable legislation or prevailing norms. When Getinge's policy contains stricter requirements than current practice or applicable legislation, then the Group's policy takes precedence.
Gifts that do not meet these requirements must be reported to management, which will determine what action is to be taken. Getinge's employees are not permitted to strive for or accept gifts or benefits that can be presumed to impact their business decisions. Gifts that can be presumed to impact business decisions must be reported to the company's management, which will decide how the matter is to be handled.
Combating corruption is highly important to Getinge. In addition to global anti-corruption and whistle-blowing policies, there are local additions (appendices) relating to specific legislation in various countries, wherever applicable. Getinge has also set up a whistle-blowing hot line, a telephone number to which employees can call around-the-clock to report on events that cannot be reported according to internal procedures for various reasons.
During the year, the Code of Conduct, the anti-corruption policy and the whistle-blowing system continued to be rolled out across the company, by means of an extensive training program, for which global trainers have been appointed, who then in turn instruct the rest of the organization. Using tools such as dilemma scenarios, information videos and online tests helps ensure employees' understanding of the content of these policies, as well as regulatory compliance.
Getinge contributes to a sustainable society through active work in the environment. The aim is to reduce the environmental impact of products over their entire life cycle.
All manufacturing units will implement and certify management systems that meet the ISO 14001 standard. New operations must have certified management systems in place within two years of being acquired or established. This ensures structured environmental efforts through requirements for follow-up of the environmental impact of own operations and the preparation of goals, actions and procedures for significant areas.
The aim for 2017 is to ensure that all major production sites, except the ones included in the agreement with the FDA, are certified according to ISO 14001. To support this, global routines concerning environmental management were approved during 2016, and will now be implemented.
Goals and actions are focused on the elements that comprise the most significant environmental impact for each facility. Regular external and internal audits ensure that the management system develops continuously and contributes to an effective environmental effort. A summary of the Group's certifications can be found on page 96. Getinge's environmental goals include greater responsibility in the areas of energy, climate and waste and are based on the analysis of the most important environmental aspects that are carried out at each production facility.
The Group's production facilities prepare quarterly reports on their environmental performance regarding consumption of fuel and electricity, quantities of waste and recycling as well as emissions of solvents. The reporting is integrated with the Group's financial reporting and enables excellent opportunities to follow up the progress of the work with the Group's environmental goals. The information is regularly updated on the Group's intranet. Getinge also reports annually to the Carbon Disclosure Project (CDP), for which continuous improvements have been made in recent years.
Reducing the climate impact of the operations constitutes a key element of environmental efforts. The Group has a number of targets to reduce CO2 emissions and energy consumption. During the year both energy consumption and CO2 emissions have continued to decrease, partly as a result of optimization of lighting and conversion to green electricity and biogas at several facilities.
Efforts to enhance energy efficiency continued during the year, for example, by continuing to upgrade lighting and heating in manufacturing and warehouse premises. In order to decrease the company's energy consumption further, the work with energy audits at the Swedish and Polish production units will continue. Based on these, and the previously conducted audits in Germany and France, further reductions will hopefully be achieved.
Direct and indirect emissions, tons per SEK M of internal sales.
Target: –5% in 2018 with 2015 as base year.
Neoomsäning Quantity of hazardous waste, kg per SEK M of internal sales.
Target: –10% 2018 with 2015 as base year.
Neoomsäning CO2 emission g/km for company vehicles (excluding trucks).
Energy consumption in production, MWh per SEK M of internal sales.
Target: –10% in 2018 with 2015 as base year.
To further reduce the Group's climate impact, several production facilities only use green electricity. Other facilities have the ambition to actively choose suppliers with a favorable electricity production mix. In combination with rationalisations in the production, this has made it possible to decrease indirect emissions in a number of countries. A challenge for Getinge is that in many cases the production facilities are in countries in which is it difficult to find suitable electricity suppliers. Traditionally, emerging markets have higher emissions from electricity generation, which means that emissions in these markets rise with increased production. To improve this situation, Getinge is striving as far as possible, to identify other ways of reducing emissions, for example, by solutions to use solar energy or encouraging local electricity suppliers to reduce emissions from their electricity production.
A key component of Getinge's climate endeavors relates to emissions from transportation. This applies to transportation with the Group's own vehicles, such as service visits, and to freight transportation. Getinge's car policy imposes far-reaching demands on CO2 emissions, which has started to show a postivite impact. In 2016, a system for reporting CO2 emissions from the main part of the (leased) vehicle fleet has been established. The reporting and follow-up is done partly as average emissions of g/ CO2 per 100 km for cars, and partly as estimated total emissions based on reported or estimated mileage. Getinge's CO2 emissions from air travel decreased by 6% in 2016 compared to the year before.
Together with the main supplier of freight transports, Getinge has chosen a system for reporting future CO2 emissions from these transports. Today, only a small part of Getinge's freight transports are included in this, but this is expected to increase in 2017.
Methodical work has resulted in the proportion of waste being sent to recycling gradually increasing year-by-year. This year the amount of hazardous waste has decreased while the amount of recycled waste was unchanged compared to 2015.
Optimization of raw materials for production is part of the development process, and is further enhanced through EcoDesign. In 2016, a few new opportunities for further optimization have been identified, and will be further investigated. Environmental goals
Waste to material or energy recycling, %. Target: all waste shall be recycled.
Getinge's environmental goals include energy, climate and waste. They are based on the analysis of the most important environmental aspects that is carried out at each production facility.
A major part of Getinge's development efforts are carried out pursuant to the EcoDesign principles, which allows the provision of products and services for a more sustainable society. During all the product development phases, from feasibility studies to implementation, the project team involved must determine the product's environmental performance.
The environmental impact over the entire product life cycle is taken into account during development. Environmental aspects are included when selecting materials and other input components, on choosing manufacturing methods and during design to ensure low resource consumption. In addition, within the framework of EcoDesign efforts, guarantees are in place to ensure that prohibited substances are not used and that the use of environmentally hazardous substances in products and in manufacturing is minimized.
Getinge has a culture characterized by professionalism and entrepreneurship. The values are based on a strong sense of a shared commitment with people in mind.
»Passion is the willingness to improve results for others. «
It is important that shared values anchored throughout the organization permeate the operations in order to realize the Group's strategy and achieve the set targets.
Getinge's cultural core values combine Passion with Collaboration, Openness, Excellence and Ownership. These values are needed to meet future challenges and requirements and to grow in new markets, among new customer groups and through new business models. Possibly the strongest feedback from employees in the organization is the passion for their work and the company. For this reason, passion is at the very core of the values.
A commitment to people is central to all Getinge's operations and also to the core values. Getinge is an authority in the specialist field of medical devices and is committed to helping its customers save lives and guarantee excellent care.
The strong culture, values with people in mind, and Getinge's operational results attract employees and contribute to the Group retaining the best talent in all specialist areas.
During the year, Getinge's approximately 90 cultural core values ambassadors have continued to implement these values throughout the organization. Internal surveys show that these efforts have increased awareness of the values within the Group. Using this as a foundation, work is now continuing on putting the values into practice in order to further develop employees as well as the company.
Passion is central to Getinge's core values. Employees of Getinge truly care for customers and the patients that they serve. Our passion is rooted in a desire to improve the health and wellbeing of others. Getinge makes a natural contribution by offering products and services that save lives, and also through its commitment to sustainability.
Open communication and shared best practices enhance collaboration. By sharing successful models, bridges are created between departments that unify internal work flows and reduce the number of times that the wheel has to be reinvented. Collaboration-oriented and considerate feedback from colleagues helps remove obstacles, enhances the efficiency of work and improves the outcome for customers and their patients.
Getinge strives to establish a culture of openness and feedback in which we listen to and respect each other's contributions. The Group supports transparent and honest communication from everyone, from new employees to the very highest management level. Confidence is created throughout the organization by being open to and providing feedback, thus fostering an environment of collaboration.
Excellence is a cultural phenomenon based on leadership, mentorship, teamwork and processes that set the foundation for high quality, best-in-class products and services. It is based on a joint effort that cannot be achieved individually. Getinge welcomes new ideas and encourages mentoring and coaching for new employees. The Group invests in innovation, clinical evidence and strong relationships with key opinion-makers to identify as yet unsatisfied clinical requirements. To earn customer confidence as a market leader, Getinge must continuously strive to identify and invest in best practice in these areas.
A chain is only as strong as its weakest link. Getinge nurtures a culture based on collaboration and openness. To succeed, every individual must take ownership of important decisions. Personal integrity, ethics and morale are important factors in all decisions that we make. Assuming responsibility ensures the best results for our customers and builds a strong culture.
Shared values and a focus on shaping the new organization have become the foundation for Getinge's continuous development during the year.
Getinge aims to be an attractive employer and offer a work environment that is based on collaboration, responsibility and transparency. All employees are to be treated equally and Getinge does not accept any form of discrimination due to, for example, religion, age, ethnicity, national identity, gender, sexual orientation, political view or similar.
During the year, focus was primarily directed to establishing the new organization presented during the second half of 2015 and which was put into effect on January 1, 2016. In conjunction with this process, a continuous strategic review was conducted. In October 2016, this resulted in Getinge's Board of Directors tasking management to prepare a potential proposal to an Extraordinary General Meeting to distribute Patient & Post-Acute Care to shareholders, with the aim of listing the company in the first quarter of 2018. From past experience, structural and organizational changes bring challenges with them as regards creating a balance between internal and external focus, similar to what Getinge is currently experiencing. One of the key elements of this process was to lead change efforts based on business strategy objectives and a focus on customers, toward both managers and employees.
Part of the company's long-term strategy is to increase harmonization within the Group. Efforts in this area were initiated through strategic HR processes and investments in a new HR system during the year. This system supports both short and long-term staff planning, but is also a crucial tool for steering the organization toward the Group's long-term strategic HR goals.
A significant measure in conjunction with the change process was to ensure that everyone in the company has the required information and knowledge about what the change process is expected to lead to, in the form of actions and results for the entire organization, but also for the individual work teams and employees. In addition to detailed information on the intranet and other standard communication channels, workshops were conducted to address any questions, increase understanding of and identify areas of improvement and solutions, in a structured and efficient manner.
Change processes, such as those that Getinge is currently experiencing, usually entail that some managers and employees chose to leave the company for various reasons. The objective is to manage these situations in a professional and considerate manner. During the year, several other key positions were filled through internal recruitment and many employees were given the opportunity to grow with new and increased areas of responsibility.
Employee health and safety is of the utmost importance, and a safe and secure work environment is a priority. Considerable emphasis is placed on the employees' well-being and Getinge must provide safe and sound work environments in line with best practices.
The Group's work on health and safety matters is based on national legislation, international regulations and own requirements and policies. Getinge strives to offer a safe and non-discriminatory work environment for the company's employees worldwide and conducts a continuous, long-term health and safety effort at all facilities.
Sickness absence during 2016 totaled 3.4% (2.9) for the entire company. The number of accidents per 100 employees increased during the year to 2.9 (2.5). No serious accidents were reported during the year.
To continue to expand Getinge's business at a fast pace, the Group must attract, recruit, develop and retain employees with the appropriate expertise and right values. The Group has thus pursued a long-term HR effort that supports the company's strategic and financial goals. This includes structured succession planning that is reviewed annually.
Every year, a number of training courses are held for the Group's executives, and customized training programs are offered at university level for future leadership talents. These programs are organized in close cooperation with some of the most distinguished universities in the world.
Furthermore, managers are continuously trained in managing change efforts and in the implementation of Getinge's strategy, such as in the form of challenges and opportunities associated with the prioritized activities established for achieving the targets.
Getinge endeavors to create a business with extensive overall expertise and a wide range of experience to create a dynamic organization that can continue to advance the company in line with its strategic objectives. Accordingly, Getinge actively works on diversity issues, which are a key element of the Group's Code of Conduct.
Getinge has also had a policy for a number of years to ensure that all employees - regardless of gender, ethnicity, religion and other irrelevant contextual factors - are given equal opportunity to develop and receive equal wages for equal work in due consideration of local conditions.
Diversity is becoming increasingly important to success in a global environment in which customers represent diversified groups from different cultures and ages, a factor that must be reflected in our own management structures. Diversity is a key competitive advantage and the new management team will continue to pursue this work in their respective functions.
Gender distribution, management
5 Sickness absence in the Group %
1 2
4 3
Getinge's Class B share has been listed on Nasdaq Stockholm AB since 1993. The share is included in the Nasdaq Nordic Large Cap segment and the OMXS30 index. At December 31, 2016, the number of shareholders was 38,720 and the percentage of foreign-owned shares amounted to 49.1% (48.7). Swedish institutional ownership was 19.7% (24.3), of which equity funds constituted 7.6% (8.1).
At year-end, Getinge's share was listed at SEK 146.10, which was a decrease of 34.3% during the year. The highest price paid in 2016 was SEK 218.70 on January 4 and the lowest was SEK 136.90 on December 2. At year-end, market capitalization amounted to SEK 34.8 billion, compared with SEK 53.0 billion at the end of the preceding year. The turnover of shares during the year totaled 173,080,592 (211,007,531).
At year-end 2016, share capital in Getinge totaled SEK 119,161,689 distributed among 238,323,377 shares. All shares carry the same dividend entitlement. One Class A share carries ten votes and one Class B share carries one vote.
The Board of Directors of Getinge has adopted a dividend policy entailing that future dividends will be adjusted in line with Getinge's profit level, financial position and future development potential. The aim is for the dividend to correspond to 30–50% of net income.
Financial information about Getinge is available on the Group's website. Questions can also be put directly to the investor relations function of the company. Annual reports, interim reports and other information can be requested from the Group's head office by telephone, from the website or by e-mail.
Lars Mattsson, Head of Investor Relations E-mail: [email protected] Tel: +46 (0) 10 335 00 43 Website: getinge.com
Getinge Group's management works continuously to develop and improve the financial information relating to Getinge to provide current and future shareholders with favorable conditions to evaluate the company in as fair a manner as possible. This includes active participation at meetings with analysts, shareholders and the media.
ABG Sundal Collier, Bank of America Merrill Lynch, Berenberg Bank, Carnegie, Danske Bank, DNB Markets, Handelsbanken, HSBC, Jefferies International Ltd, J.P. Morgan, Kepler Cheuvreux, Morgan Stanley, Nordea, Pareto Securities, SEB Enskilda and Swedbank.
| 2012 | 2013 | 2014 | 2015 | 2016 | |
|---|---|---|---|---|---|
| Amounts in SEK per share unless otherwise stated | |||||
| Earnings per share after tax | 10.58 | 9.59 | 6.01 | 5.83 | 4.98 |
| Market price at December 31 | 220.00 | 220.00 | 177.80 | 222.50 | 146.1 |
| Cash flow | 11.45 | 10.66 | 10.61 | 10.12 | 11.92 |
| Dividend | 4.15 | 4.15 | 2.80 | 2.80 | 2.00* |
| Dividend growth, % | 10.67 | 0.00 | –32.50 | 0.00 | –28.6 |
| Dividend yield, % | 1.89 | 1.89 | 1.57 | 1.26 | 1.37 |
| Price/earnings ratio | 20.79 | 22.94 | 29.58 | 38.16 | 29.34 |
| Dividend as profit percentage, % | 39.22 | 43.27 | 46.59 | 48.03 | 40.15 |
| Shareholders' equity | 63.66 | 69.58 | 78.45 | 82.21 | 87.76 |
| Average number of shares (million) | 238.3 | 238.3 | 238.3 | 238.3 | 238.3 |
| Number of shares, December 31, (million) |
238.3 | 238.3 | 238.3 | 238.3 | 238.3 |
*Proposed dividend for the financial year 2016.
| Transaction | Number of shares after transaction |
Share capital after transaction, SEK |
|
|---|---|---|---|
| 1990 | Formation | 500 | 50,000 |
| 1992 | Split 50:1, par value SEK 100 to SEK 2.0 |
25,000 | 50,000 |
| 1992 | Private placement | 5,088,400 | 10,176,800 |
| 1993 | Private placement | 6,928,400 | 13,856,800 |
| 1995 | Non-cash issue | 15,140,544 | 30,281,088 |
| 1996 | Bonus issue 2:1 | 45,421,632 | 90,843,264 |
| 2001 | New issue 1:9 at SEK 100 | 50,468,480 | 100,936,960 |
| 2003 | Split 4:1, par value SEK 2 to SEK 0.50 |
201,873,920 | 100,936,960 |
| 2008 | New issue 1:16 at SEK 120 | 214,491,040 | 107,245,520 |
| 2009 | New issue 1:9 at SEK 83.5 | 238,323,377 | 119,161,689 |
| Shares | Capital % | Votes % | Share holder |
Share holder % |
|---|---|---|---|---|
| 1–100 | 0.3 | 0.2 | 13,165 | 34.0 |
| 101–200 | 0.4 | 0.2 | 5,618 | 14.4 |
| 201–500 | 1.2 | 0.8 | 8,157 | 21.1 |
| 501–1,000 | 1.8 | 1.1 | 5,262 | 13.6 |
| 1,001–2,000 | 1.9 | 1.2 | 3,124 | 8.1 |
| 2,001–5,000 | 2.8 | 1.7 | 2,059 | 5.3 |
| 5,001–10,000 | 1.9 | 1.2 | 611 | 1.6 |
| 10,001–20,000 | 1.7 | 1.0 | 273 | 0.7 |
| 20,001–50,000 | 2.5 | 1.6 | 190 | 0.5 |
| 50,001–100,000 | 2.5 | 1.6 | 81 | 0.2 |
| 100,001–500,000 | 10.7 | 6.7 | 114 | 0.3 |
| 500,001–2,000,000 | 20.6 | 12.9 | 49 | 0.2 |
| 2,000,001–5,000,000 | 12.5 | 7.8 | 10 | 0.0 |
| 5,000,001–10,000,000 | 16.8 | 10.5 | 5 | 0.0 |
| 10,000,001–20,000,000 | 4.3 | 2.7 | 1 | 0.0 |
| 20,000,001– | 18.1 | 48.8 | 1 | 0.0 |
| Total | 100.0 | 100.0 | 38,720 | 100.0 |
| Class A shares |
Class B shares |
% of capital |
% of votes |
|
|---|---|---|---|---|
| Carl Bennet AB | 15,940,050 | 27,153,848 | 18.1 | 48.9 |
| Franklin Templeton | 20,752,171 | 8.7 | 5.4 | |
| Invesco | 12,101,465 | 5.1 | 3.2 | |
| ADIA | 9,418,867 | 4.0 | 2.5 | |
| Fjärde AP-fonden | 7,773,796 | 3.3 | 2.0 | |
| Första AP-fonden | 5,084,509 | 2.1 | 1.3 | |
| Vanguard | 4,104,881 | 1.7 | 1.1 | |
| Nordea funds | 4,027,946 | 1.7 | 1.1 | |
| Folksam | 4,021,743 | 1.7 | 1.1 | |
| Black Rock | 3,873,030 | 1.6 | 1.0 | |
| Other | 124,071,071 | 52.0 | 32.4 | |
| Total | 15,940,050 222,383,327 | 100.0 | 100.0 |
The table shows the largest identified shareholders in terms of capital ranked by number of votes. There may be major individual shareholders who are listed in the share registry and included among other shareholders.
| Class A | Class B | Total | |
|---|---|---|---|
| No. of shares | 15,940,050 | 222,383,327 | 238,323,377 |
| No. of votes | 159,400,500 | 222,383,327 | 381,783,827 |
| % of capital | 6,7 | 93,3 | 100 |
| % of votes | 41,8 | 58,2 | 100 |
| Sweden | 50.9 |
|---|---|
| USA | 20.2 |
| UK | 14.1 |
| United Arab Emirates | 4.0 |
| Luxembourg | 3.0 |
| Swedish owners | 50.9 |
|---|---|
| Foreign owners | 49.1 |
| Swedish individuals | 10.5 |
| Swedish institutions | 12.1 |
| Swedish mutual funds | 7.6 |
| Swedish owners, other | 20.7 |
| Foreign institutions | 7.0 |
| Foreign mutual funds | 28.2 |
| Foreign owners, other | 13.9 |
Getinge is a global company with operations in 44 countries and proprietary production in 11 countries. The pace of change and growth since the stockmarket listing has been high. Every day, Getinge's products contribute to saving lives and ensuring excellent care. The Group operates in the areas of surgery, intensive care, infection control, care ergonomics and wound care.
Organization. From January 1, 2016, Getinge Group has been organized in three business areas — Surgical Workflows, Acute Care Therapies and Patient & Post-Acute Care. Approximately 75% of sales are conducted through the Group's proprietary sales companies and the remaining 25% are sold by agents and distributors in markets for which Getinge Group lacks proprietary representation. Production is conducted at a total of 26 facilities in Brazil, the Dominican Republic, France, Canada, China, Poland, the UK, Sweden, Turkey, Germany and the US.
Revenues. Consolidated net sales decreased 1.6% to SEK 29,756 M (30,235). Adjusted for corporate acquisitions, divestments and exchange-rate fluctuations, net sales decreased 1.5%.
EBITA. EBITA before restructuring, acquisition and integration costs improved to SEK 4,341 M (4,179).
Operating profit. The Group's operating profit declined 16.2% to SEK 2,287 M (2,729), which corresponds to 7.7% (9.0) of net sales.
Net financial items. Net financial items amounted to an expense of SEK 637 M (expense: 732), of which net interest items comprised an expense of SEK 600 M (expense: 696).
Profit before tax. The Group's profit before tax declined 17.4% to SEK 1,650 M (1,997), which corresponds to 5.5% (6.6) of net sales.
Taxes. The Group's total tax expense amounted to SEK 437 M (540), corresponding to 26.5% (27.0) of profit before tax (see Note 9).
Tied-up capital. Inventories amounted to SEK 5,431 M (5,409) and accounts receivable to SEK 8,159 M (7,470).
The average consolidated working capital was SEK 43,383 M (40,771). Return on working capital was 8.3% (8.6). Goodwill totaled SEK 22,992 M (21,798) at the end of the financial year.
Investments. Net investments in rental equipment and other fixed assets amounted to SEK 991 M (1,352). Investments primarily pertained to production facilities, production tools and IT projects.
ratio. The Group's net debt totaled SEK 23,389 M (22,867), corresponding to a net debt/equity ratio of 1.12 (1.17). Shareholders' equity at year-end amounted to SEK 20,916 M (19,593), corresponding to an equity/assets ratio of 37.9% (36.8).
Cash flow. Cash flow from operating activities amounted to SEK 3,671 M (3,458). The cash conversion was 73.6% (66.7).
Shareholders' equity. For information regarding trading of shares in the company, the number of shares, the classes of shares and the rights associated with these in the company, see the Getinge Share section on pages 40–41.
In the year, net sales decreased 1.6% to SEK 29,756 M (30,235). Net sales fell organically by 1.5%. In 2016, Surgical Workflows' sales amounted to SEK 10,496 M (10,891). Sales fell organically by 3.4%. In Acute Care Therapies, sales amounted to SEK 11,804 M (11,577), corresponding to an organic increase of 1.4%. In Patient & Post-Acute Care, sales amounted to SEK 7,456 M (7,767), corresponding to organic growth of negative 3.0%. The EMEA represented the Group's largest market, accounting for 42% (43) of sales, followed by the Americas at 40% (40). APAC accounted for 18% (17) of sales. The hospital segment accounted for 85% (84) of sales. The elderly care sector comprised 8% (8), while the life science industry represented 7% (8).
Changes to Getinge Executive Team. The Board of Directors of Getinge AB decided during the year to make a change to the position of President of Getinge, which meant that Getinge's President and CEO Alex Myers left his position and stepped down from the Board in August. The Board appointed Joacim Lindoff as Acting President and CEO. In November, the Board of Getinge AB announced the appointment of Mattias Perjos as President and CEO of Getinge. Mattias currently joins Getinge from his position as CEO of Coesia Industrial Process Solutions (IPS) and Head of Coesia International. Mattias will take office on March 27, 2017.
In the third quarter, Getinge Group appointed Reinhard Mayer as the new CFO and Magnus Lundbäck as the new Executive Vice President Human Resources & Sustainability.
Reinhard Mayer succeeds Pernille Fabricius who left the Group in September. Magnus Lundbäck succeeds Andreas Quist. During the year, Getinge Group also appointed Jens Viebke as the new President of Acute Care Therapies, which means he also joins the Getinge Executive Team.
Settlement in US litigation case. As previously announced, the subsidiary Atrium Medical Corporation was involved in litigation regarding the sale and marketing of certain products. In August 2015, the court dismissed the relator's claim and during the fourth quarter of 2015, the magistrate judge recommended dismissal of the relator's remaining claims pertaining. The parties agreed to a preliminary settlement of the remaining claims. Based on this preliminary settlement, the Group's fourth quarter of 2015 was charged an amount of about SEK 110 M. A settlement in line with the preliminary agreement was reached in the second quarter of 2016, resulting in no additional costs. The settlement does not constitute an admission from any of the parties or an acknowledgment that any of the parties' claims are unfounded.
Restructuring activities — production unit transfer completed. As previously announced, Getinge decided to relocate the production conducted at the unit in Rochester, New York, US to the production unit in Poznan, Poland. The relocation was completed in the second quarter of 2016 and comprises part of the Group's
efficiency-enhancement program, and is expected to generate annual savings of about SEK 45 M.
The acquisition of AccuMed was completed in April 2016. Through the acquisition, Getinge obtains a manufacturing unit for the production of medical textiles in the Dominican Republic. The operations have about 400 employees and the total purchase consideration amounted to SEK 66 M. The goodwill arising in connection with the acquisition amounted to SEK 29 M and is attributable to future integration synergies for production. Acquisition expenses of SEK 1.0 M were charged to earnings.
All of the shares in the UK company 1st Call Mobility Limited were acquired during the second quarter. The company is specialized in medical-device solutions for bariatric patients, and generates sales of approximately SEK 100 M and has 48 employees. The total purchase consideration amounted to SEK 233 M and the goodwill arising in connection with the acquisition amounted to SEK 133 M and is primarily attributable to geographical spread. Acquisition expenses of SEK 1.6 M were charged to earnings.
Innovation and product development are a cornerstone of the Group's strategy to strengthen the customer offering and thereby ensure future organic growth. The Group uses innovation and product renewal to manufacture products, systems and solutions with a documented ability to deliver excellent clinical results and economic benefits. In 2016, the Group's research and development expenditure amounted to SEK 1,265 M (1,300). Of this amount, SEK 594 M (702) was capitalized as intangible assets, as it was deemed that these will generate future financial benefits.
At December 31, 2016, there were 15,582 (15,424) employees, of whom 1,236 (1,271) were employed in Sweden. In 2016, Getinge continued its extensive efforts to strengthen the Group's personnel and
management development. The work is based on an analysis of the company's needs for specialist and management competence and the company's demographic structure. In 2016, Getinge has also continued long-term efforts to increase diversity. Getinge has a previously implemented policy to ensure that all employees — regardless of gender, ethnicity, creed and other irrelevant factors — are given equal opportunity to develop and receive equal pay for equal work.
The 2016 AGM established guidelines for remuneration to senior executives, primarily entailing the following: Remuneration and other employment terms and conditions for senior executives is to be market-based and competitive in every market where Getinge is active so as to attract, motivate and retain skilled and competent employees. The total remuneration package to senior executives is to comprise basic pay, variable remuneration, pension and other benefits. The allocation between basic pay and variable remuneration should be proportionate to the executive's responsibility and authority. Variable remuneration is limited to a maximum amount and linked to predetermined and measurable criteria, designed with the aim of promoting the company's long-term value creation. No variable remuneration will be paid if profit before tax is negative. For the CEO, variable remuneration is limited to a maximum of 80% of basic pay. Variable remuneration is based on the individual goals set by the Board. Examples of such goals include earnings, volume growth, working capital and cash flow. For other senior executives, variable remuneration is based on the outcome in the executive's personal area of responsibility and individually set targets. In addition to the aforementioned variable remuneration, adopted share or share-related incentive programs may be included. The Board is entitled to deviate from these guidelines if warranted in individual cases. Total remuneration to senior executives amounted to SEK 146 M (82) in 2016. Refer to Note 27 for further information. The Board proposes unchanged guidelines for remuneration to senior executives to the 2017 AGM.
The company's environmental policy, the established environmental goals and the international environmental standard ISO 14001 form the basis of Getinge's environmental work. All manufacturing units will implement and certify environmental management systems that meet the ISO 14001 standard. For acquisitions, the management system is to be introduced and certified within 24 months. The management system ensures structured environmental work and provides a basis for the reporting of environmental performance that Getinge's manufacturing units submit every quarter.
Through the targeted activities on environmentally compatible product development, EcoDesign, the aim is to reduce the environmental impact from manufacturing and product usage. Recycling of input substances and components is also facilitated.
One facilities in Sweden conducts operations requiring permits or declaration under the Swedish Environmental Code. This facility holds the necessary permits. Most of the impact on the environment comprises emissions to water and air, and the environmental effects from energy consumption and waste production. The operations were conducted in accordance with applicable permits and conditions during the year. Further information concerning Getinge's environmental work is presented on pages 34–35.
Healthcare reimbursement system. Political decisions represent the single greatest market risk to Getinge. 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. The 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. Each business area has an appointed person with overall responsibility for quality and regulatory matters (QRM). 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. Getinge's future growth also 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 actual development work is also 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.
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, Getinge 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 the Getinge Executive Team 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. For more detailed information concerning these risks, refer to Note 26 "Financial risk management." The Group has a number of participations in foreign operations whose net assets are exposed to currency risks. Currency exposure that arises from net assets in the Group's foreign operations is primarily managed by borrowing in said foreign currency.
Currency. The effect of exchange-rate movements on earnings and equity is calculated using forecast volumes and earnings in foreign currency, taking into consideration currency hedging that has been conducted. In addition, there is the exchange-rate impact on net financial items related to interest expenses in foreign currencies. Currency transaction effects are expected to have a positive impact of approximately SEK 200 M on the Group's 2017 earnings. For a rate movement of 5%, the impact on equity of a remeasurement of the Group's portfolio of currency derivatives held for hedging purposes is about SEK 185 M. At a 5% rate movement, the impact of other translation effects on equity is approximately SEK 1,185 M. Sensitivity to exchange-rate fluctuations on earnings is detailed in the following table, based on the exchange rates specified in the table.
| Currency: estimated rate in 2017 |
Estimated net volume in 2017, millions |
Impact in SEK M of 5% rate movement |
|---|---|---|
| JPY: 8.25 | 2,210 | +/– 10 |
| EUR: 9.65 | –10 | +/– 5 |
| GBP: 11.00 | 90 | +/– 50 |
| USD: 8.75 | 30 | +/– 15 |
Sensitivity analysis. Getinge's earnings are affected by a series of external factors. The table below shows how changes to some of the key factors that are important to Getinge could have affected the Group's profit before tax in 2016.
| Change in profit before tax | SEK M | |
|---|---|---|
| Price change | +/– 1% +/– 298 | |
| Cost of goods sold | +/– 1% +/– 159 | |
| Salary costs | +/– 1% | +/– 101 |
| Interest rates | +/– 1 percent age point |
+/– 66 |
The effect of a +/– 1 percentage point change in interest rates on the Group's profit before tax was calculated based on the Group's interest-bearing liabilities, excluding pension liabilities, at year-end 2016. The impact of a +/– 1 percentage point change in interest rates on equity is about SEK 315 M. Consideration was given to the effect of the various risk management measures that Getinge applies in accordance with its approved policy.
Organic sales growth is deemed to be slightly positive in 2017.
Currency transaction effects are expected to have a positive impact of approximately SEK 200 M on the Group's 2017 earnings.
The financial consequences of the Consent Decree with the FDA, excluding reconstruction costs, are related to loss of revenue and are expected to have a negative impact of approximately SEK 50 M on the Group's 2017 operating profit. As previously mentioned, the Group is still awaiting the FDA's decision on the action plan related to the production unit in Hechingen. The financial consequences could be adjusted in line with the final plan in the future.
Getinge AB (publ) is a Swedish public limited liability company listed on Nasdaq Stockholm, Large Cap segment. Getinge applies the Swedish Corporate Governance Code and hereby presents the Corporate Governance Report for 2016.
Getinge Group is a global company in the medical device field with operations in 44 countries and proprietary production in 11 countries.
The Group's customers are found primarily in the healthcare, elderly care and life science areas, and the Group's products are often pivotal to the quality and efficiency of customers' businesses. Accordingly, confidence in Getinge and its products is entirely decisive for continued sales successes.
Corporate governance is aimed at ensuring the continued strong development of the company and, consequently, that the Group fulfills its obligations to shareholders, customers, employees, suppliers, creditors and society.
Getinge's corporate governance and internal regulations are consistently geared toward business objectives and strategies. The Group's risks are well-analyzed and risk management is integrated in the work of the Board and in operational activities.
Getinge's organization is designed to be able to react promptly to market changes. Accordingly, operational decisions are taken at a decentralized level, while overriding decisions concerning strategy and direction are made by Getinge's Board and the Getinge Executive Team.
Getinge's corporate governance is based on Swedish legislation, as well as on the Swedish Corporate Governance Code ("the Code"), Nasdaq Stockholm AB's Rulebook for Issuers and also the Swedish Securities Council's opinions on good practice on the Swedish stock market. This report summarizes how corporate governance is structured and how it has been carried out and developed in the Group during the 2016 financial year. Getinge complies with the Code's regulations and presents an explanation below for any deviation from the Code's regulations in 2016.
The internal steering documents relating to Getinge's corporate governance
include Getinge AB's Articles of Association, instructions and formal work plan for the Board of Directors, Board committees and CEO, various policies and guidelines as well and the Group's Code of Conduct. The company's Articles of Association are available on the Group's website: www.getinge.com.
For information about shareholders and the Getinge share, see pages 40–41 and www.getinge.com.
Shareholders can exert their influence at the Annual General Meeting (AGM) and, when applicable, at an Extraordinary General Meeting, which are Getinge's highest decision-making bodies.
All shareholders registered in the shareholders' register at a certain time before the Meeting and who have notified their attendance to the Meeting before the time given in the notice are entitled to participate in the Meeting and exercise their voting rights in full. Shareholders who are not able to personally attend can be represented by proxy. A shareholder who wishes to have a matter put forward at the General Meeting of Shareholders must submit a written proposal to the Board in a timely manner so that the proposal can be included in the notice of the AGM.
The 2016 Annual General Meeting was held on March 30 the Kongresshallen at Hotel Tylösand, in Halmstad, Sweden. A total of 1,005 shareholders, representing 61.3% of the number of shares and 75.9% of the total number of votes in the company attended the AGM. Board Chairman Carl Bennet was elected Chairman of the Meeting. All Board members elected by the AGM were present. The minutes from the AGM are available at: www.getinge. com. The decisions made by the AGM include:
Board members as well as the auditor's term of office
The Nomination Committee's task is to put forward proposals ahead of the AGM, regarding the election of the Chairman of the AGM, the Chairman of the Board and other members of the Board, election of auditors, as well as fees for Board members and auditors. Pursuant to a resolution by Getinge AB's 2005 AGM, the Nomination Committee comprises Getinge's Chairman and representatives of the five largest shareholders at August 31, 2016, as well as a representative for minority shareholders. Ahead of the 2017 AGM, this means that Getinge's Nomination Committee comprises:
The Nomination Committee conducts an evaluation of the Board and its work. A
proposal for the new Board is subsequently drawn up by the Nomination Committee together with a proposal on remuneration to the Board of Directors and is submitted with the notice of the forthcoming AGM. Shareholders who would like to submit proposals to Getinge's 2017 Nomination Committee, can contact the Nomination Committee by e-mail at [email protected] or by mail: Getinge AB, Att: Nomination Committee, Box 8861, SE-402 72 Gothenburg, Sweden.
Chairman of the Board Carl Bennet was appointed Chairman of the Nomination Committee ahead of the 2017 AGM, which deviates from the rules of the Code. The reason for this is the Chairman of the Board is very well suited to lead the Nomination Committee in an effective manner to achieve the best results for the company's shareholders.
Primarily, the Board is responsible for the organization of the company and the management of its affairs. In carrying out its duties, the Board must safeguard the interest of all its shareholders. It is also the Board's duty and responsibility to ensure that this Corporate Governance Report is prepared. According to the Articles of Association, Getinge's Board of Directors is to comprise not fewer than three and not more than nine members, with not more than nine deputy members. The Board members are elected annually at the AGM to serve for the period up to and including the next AGM. Employees have the right to appoint two representatives and two deputy members to the Board. In 2016, Getinge's Board comprised nine members elected at the AGM up until August when Alex Myers left his position as CEO and Board member of Getinge AB. Alex Myers was not replaced on the Board during the year.
The Group's President & CEO and CFO participate at the Board meetings, with the latter also serving as Secretary. Other senior executives also participate when needed. The work of the Board is governed mainly by the Swedish Companies Act, the Code and the Board's formal work plan. The Board's formal work plan is approved each year at the statutory Board meeting. According to the current applicable formal work plan, the Board will have approximately seven scheduled meetings during the financial year. In addition, the formal work plan will also determine the distribution of work and responsibility between the Board, the Chairman, Board committees and the CEO.
The Board held its statutory meeting on March 30, 2016 and convened nine times during the year, with an average attendance rate of 95% of the elected members. At its scheduled meetings, the Board addresses fixed agenda items in accordance with the Board's formal work plan, including the business situation, budget, annual accounts and interim reports. The board has addressed as well comprehensive issues related to the economy and associated cost issues, corporate acquisitions and other investments, long-term strategies, financial matters, and structural and organizational changes.
Carl Bennet was reelected Chairman of the Board at the 2016 AGM. The Chairman's role is to lead and manage the Board's work and to ensure that this is conducted in an organized and efficient manner. It involves ensuring that the Board fulfills its responsibilities and monitors the development of the company, and ensuring that the Board continuously receives the information required for the Board to perform its work while maintaining the same level of quality in accordance with applicable regulations. The Chairman of the Board does not participate in the operational management of the company. According to the Code, the majority of
| Committees | Attendance | ||||||
|---|---|---|---|---|---|---|---|
| Board members elected by the AGM | Year elected |
Dependent1 | Auditing Committee |
Remune ration Committee |
Board meetings |
Auditing Committee |
Remune ration Committee |
| Carl Bennet, Chairman | 1989 | ■ | Chairman | 9/9 | 3/3 | ||
| Johan Bygge | 2007 | Chairman | 8/9 | 5/5 | |||
| Cecilia Daun Wennborg | 2010 | Member | 9/9 | 5/5 | |||
| Carola Lemne | 2003 | Member | 8/9 | 5/5 | |||
| Joacim Lindoff* | 2016 | ▲ | 3/4 | ||||
| Johan Malmquist** | 2016 | ▲ | Member | 7/7 | 2/2 | ||
| Alex Myers*** | 2015 | ▲ | 4/4 | ||||
| Malin Persson | 2014 | Member | 9/9 | 3/3 | |||
| Johan Stern, Vice Chairman | 2004 | ● | Member | Member | 9/9 | 5/5 | 3/3 |
| Maths Wahlström | 2012 | Member | 8/9 | 3/3 | |||
| Board members appointed by employees | |||||||
| Peter Jörmalm (deputy) | 2012 | 8/9 | |||||
| Rickard Karlsson | 2013 | 9/9 | |||||
| Åke Larsson | 2014 | 9/9 | |||||
| Maria Grehagen-Hedberg (deputy member) | 2014 | 8/9 |
Joacim Lindoff participated in his capacity as Acting CEO from August.
** Johan Malmquist, former CEO, was elected member at the AGM held on March 30 and participated at all subsequent Board meetings.
▲ President and CEO
● Board member of Getinge's principal owner Carl Bennet AB
*** Alex Myers stepped down as CEO in August. the elected Board members are to be independent in relation to the company and its management and at least two of these members are also to be independent in relation to the Group's largest shareholders. The Nomination Committee believes that the Board's composition in Getinge meets the requirements for independent members as stipulated by the Code. The Nomination Committee has observed that Alex Myers (up until August), in his capacity as CEO, and Johan Malmquist, in his capacity as former CEO, are to be regarded as dependent in relation to the company and executive management, and that Carl Bennet and Johan Stern, as representatives and Board members of Getinge's principal owner Carl Bennet AB, are to be regarded as dependent in relation to the largest shareholders. Other Board members are deemed to be independent in relation to the company, executive management and the largest shareholders.
The Board members' individual shareholdings, their independence in relation to the company, executive management and the largest shareholders as well as their other assignments in other companies are presented in the table on page 46 and in the presentation of Board members on pages 50–51.
In 2016, Getinge's Remuneration Committee comprised Board members Carl Bennet (Chairman), Johan Stern, Maths Wahlström, Malin Persson and Johan Malmquist. Except for Johan Malmquist, who is to be regarded as dependent in his capacity as former CEO, all other members of the Remuneration Committee are to be regarded as independent in relation to the company and the executive management. The fact that Johan Malmquist is a member of the Remuneration Committee even though he is not considered as independent in relation to the company and the company's management constitutes a deviation from the rules of the Code. The reason for this deviation is that Johan Malmquist, having been the company's CEO and board member for many years, is well acquainted with the company's conditions in terms of, amongst other things, employee situation, supply of competence and remuneration structures.
In 2016, the Committee held three minuted meetings, including informal contact when necessary. The attendance of members at the Committee meetings are presented in the table on page 46.
Following written instructions, the Remuneration Committee's duties include preparing questions concerning remuneration principles and remuneration and other employment terms and conditions for the CEO and other members of the Getinge Executive Team. The Committee also prepares proposals to the Board on the guidelines for the remuneration to senior executives, which the Board submits for decision at General Meetings. In addition, the Committee follows and evaluates ongoing and completed variable remuneration programs for the Getinge Executive Team during the year and the application of the guidelines for remuneration to senior executives resolved at the AGM.
In 2016, Getinge's Auditing Committee comprised Board members Johan Bygge (Chairman), Cecilia Daun Wennborg, Carola Lemne and Johan Stern. All members of the Auditing Committee are independent in relation to the company, executive management and the company's largest shareholders, with the exception of Johan Stern, who is not considered to be independent in relation to the company's largest shareholders. In 2016, the Committee held five minuted meetings, including informal contact when neces-
sary. The attendance of members at the Committee meetings are presented in the table on page 46.
The company's auditors participated in all meetings convened by the Auditing Committee. Jointly with the auditors, the Committee discussed and established the scope of the audit.
The Auditing Committee is a standing committee in the contact between the Board and the auditors, and continuously reports on its work to the Board. The Auditing Committee follows written instructions and its activities are to meet the requirements of the Swedish Companies Act and the EU Audit Regulation. The Committee's tasks include assisting the Nomination Committee with preparing proposals for resolutions by the General Meeting on election of auditors and fees to auditors, for which the Committee is to monitor that the auditor's mandate period does not exceed applicable rules, procure the audit and present a recommendation in accordance with the EU Audit Regulation. The Auditing Committee is also to examine and monitor the independence of the auditors and pay particular attention to whether the auditors provide other non-audit services. The Auditing Committee is also to publish guidelines on non-audit services provided by the auditors and, in applicable cases, approve the provision of such services in accordance with these guidelines. The Auditing Committee is to examine and monitor the consolidated financial statements and provide recommendations and proposals on ensuring the reliability of the financial reporting and monitor the efficiency of the company's internal control and risk management. In addition, the Auditing Committee is involved in planning the external audits
and continuously consults and confers with the external auditors.
Getinge's auditors are elected at the AGM. The auditors will review the Annual report, financial statements and the consolidated financial statements as well as the management by the Board and CEO in accordance with generally accepted auditing standards. After every financial year an auditor's report is presented to the Parent Company and a Group auditor's report is presented to the General Meeting. At the 2016 AGM, the registered accounting firm Öhrlings PricewaterhouseCoopers AB was elected auditor with the authorized public accountant Johan Rippe as the Auditor in Charge. The current mandate period expires at the 2017 AGM. The auditors report to the Auditing Committee and the Board on their findings. In addition to standard audit assignments, Öhrlings PricewaterhouseCoopers AB provides advisory services and performs investigations. Such assignments take place in accordance with the regulations determined by the Auditing Committee for approval of the nature and scope of the services and the fees for such services. The performed assignments are not deemed to have given rise to a conflict of interest. Details about the amounts of remuneration paid to auditors are presented in Note 5.
Alex Myers left his position as President & CEO of Getinge in August 2016, and Joacim Lindoff has served as Acting President and CEO of Getinge since August 22, 2016 and leads Getinge's ongoing operations. On 3 November 2016, the Board
announced the appointment of Mattias Perjos as President & CEO. He will take office on March 27, 2017. It is the CEO's responsibility to implement and ensure that the strategies, business plans and operational objectives agreed on by the Board are carried out. It is also the CEO's responsibility to keep the Board up to date with information and essential management information, to submit reports at the Board meetings while keeping the Board and Chairman continually updated about the Group's and company's financial position and future development opportunities. The CEO is supported by the Getinge Executive Team comprising presidents of the regions, Business Category Units, supply chain and Group-wide support functions. At year-end 2016, Getinge Executive Team comprised 12 individuals. These are presented on pages 52–53 in this Annual report. The Getinge Executive Team met 12 times in 2016. The focus of the meetings was mainly the Group's strategic and operational performance and on monitoring results.
Getinge's business operations comprise the EMEA, APAC and the Americas sales regions with sales companies, the Business Category Units Surgical Workflows, Acute Care Therapies and Patient & Post Acute Care Business Category Units, whose main task is to develop world leading technologies and products within their respective fields, as well as the group function supply chain. Each unit is headed by an operational management team responsible for the business activities of each unit. The operational management team is the function below the Getinge
| Name | Board fee | Committee fee | Total |
|---|---|---|---|
| Carl Bennet | 1,150,000 | 125,000 | 1,275,000 |
| Johan Bygge | 575,000 | 240,000 | 815,000 |
| Cecilia Daun Wennborg | 575,000 | 120,000 | 695,000 |
| Carola Lemne | 575,000 | 120,000 | 695,000 |
| Johan Malmquist | 575,000 | 92,000 | 667,000 |
| Malin Persson | 575,000 | 92,000 | 667,000 |
| Johan Stern | 575,000 | 212,000 | 787,000 |
| Maths Wahlström | 575,000 | 92,000 | 667,000 |
| Total | 5,175,000 | 1,093,000 | 6,268,000 |
Executive Team that is responsible for ensuring and monitoring that the decisions made are carried out.
Getinge's Group functions are located centrally to coordinate finance, IT, legal, human resources, communication and marketing, group operations (project management, shared services and indirect spend) as well as quality control and regulatory compliance. These functions are responsible for creating applicable Groupwide strategies and activity plans within their respective areas of responsibility and driving, supporting and monitoring the development of the company based on their specific skills.
Description: At Getinge Group, internal control over the financial reporting is an integral part of corporate governance. It comprises processes and methods to safeguard the Group's assets and accuracy in the financial reporting, and in this manner, protects the shareholders' investment in the company.
Control environment: Getinge Group's organization is designed to quickly respond to changes in the market. Operational decisions are thus made at decentralized level, while decisions on strategy, focus, acquisitions and overall financial issues are made by Getinge Group's Board and the Getinge Executive Team. The internal control over the financial reporting at Getinge is designed to manage these conditions. The basis of the internal control over the financial reporting comprises the control environment, including the organization, decision-making channels, authorities and the responsibilities that are documented and communicated in steering documents. Each year, the Board adopts a formal work plan that regulates the duties of the Chairman and the CEO. The Board has established an Auditing Committee to increase knowledge of the level of transparency and control of the company's accounts, financial reporting and risk management, and a Remuneration Committee to manage remuneration to CEO and the Getinge Executive Team. Each sales region and supply chain has one or more administrative centers that are responsible for the day-to-day handling of transactions and accounting. Each sales region and supply chain has a
financial manager, who is responsible for the financial control of the business unit and for ensuring that the financial statements are accurate, complete and submitted in good time prior to consolidated reporting.
Risk assessment. Risk assessment is based on the Group's financial targets. The overall financial risks have been defined and are mostly industry specific. By conducting quantitative and qualitative risk analyses based on the consolidated balance sheet and income statement, Getinge can identify the key risks that could threaten the achievement of business and financial targets. In addition, several units in each sales region and supply chain are analyzed to gain a more detailed understanding of the actual application of the existing rules and regulations. Accordingly, measures to minimize identified risks are formulated centrally within the Group.
Control activities: The identified risks related to financial reporting are handled by the company's control activities. For example, there are automated controls in IT-based systems that manage authority levels and rights to authorization, as well as manual controls, such as duality in the day-to-day recording of transactions and closing entries. Detailed financial analyses of results and follow-ups against budgets and forecasts supplement the operation-specific controls and provide overall confirmation of the quality of the financial reporting. The Group follows standardized templates and models to identify and document processes and controls.
Information and communication: The Group has information and communication procedures to promote completeness and accuracy in the financial reporting. Policies, manuals and work descriptions are available on the company's intranet and/or in printed form. Information channels to monitor the efficiency of the internal controls in the Group is regularly reported to the relevant parties within the organization via implemented reporting tools.
Follow-up and monitoring: The finance department and management perform monthly analyses of the financial reporting at a detailed level. The Auditing Committee follows up the financial reporting at its meetings and the company's auditors report on their observations and provide recommendations. The Board receives
financial reports on a monthly basis and the company's financial position is discussed at every Board meeting. The efficiency of the internal control activities is regularly followed up at different levels in the Group and comprises an assessment of the formulation and operative function of key control elements that have been identified and documented.
Self-assessment and validation: Since 2006, Getinge Group works with a formalized process for the follow-up and evaluation of the effectiveness of documentation and control activities. The control consists of both a Group-wide IT-based tool for self-assessment and validation of the self-assessments. The validations are carried out by controllers from another business category unit. Self-assessments were conducted at all of the most important operating units within the Group in 2016. In conjunction with the standard audits, the auditors conducted a validation of the internal control. The self-assessment and validation function encompass the processes relating to financial reporting, production, inventories, sourcing and revenues from products and services. The system of self-assessment and validation provides the Board with a proper overview of how the Group manages different flows of information, how the Group reacts to new information and how the various control systems function.
Outcome 2016: The follow-up of the internal control in 2016 indicated that documentation and control activities were, in all material respects, established at the validated companies. Based on the internal control that was conducted, the Board has decided that there is no need to introduce a separate audit function (internal audit function).
Follow-on work: Over the next year, the continuing work related to internal control in Getinge Group will principally focus on risk assessment, control activities and follow-up/monitoring. An update of the risk analysis as regards relevant control processes and risk areas is conducted as a recurring annual activity. In the Control activities area, resources will be used to document additional processes resulting from the annual risk analysis. Depending on the outcome of the implemented self-assessment, it may be necessary to address reported shortcomings.
M.Sc. (Economics), Dr. Tech. h.c.
Assignments on Getinge's Board: Chairman of the Board since 1997. Chairman of the Nomination Committee. Chairman of the Remuneration Committee. Board member since 1989.
Current assignments: CEO of Carl Bennet AB, Chairman of the Board of Elanders and Lifco. Board member of Holmen and L E Lundbergsföretagen.
Previous assignments: President and CEO of Getinge.
Shareholding: Holds 15,940,050 Class A shares and 27,153,848 Class B shares through companies.
Johan Bygge (1956) Board member elected by AGM
M.Sc. (Economics)
Assignments on Getinge's Board: Chairman of the Auditing Committee. Board member since 2007.
Current assignments: Chairman of EQT Asia Pacific and member of the Executive Team, Vice Chairman of Swiss Smile AG, Board member of Anticimex International AB, Chairman of PSM International, China, and Board member of I-Med Radiology Network, Australia.
Previous assignments: CFO of Investor AB, Executive Vice President of Electrolux and CFO of Electrolux.
Shareholding: Holds 5,000 Class B shares.
Cecilia Daun Wennborg (1963)
Board member elected by AGM
M.Sc. (Economics)
Assignments on Getinge's Board: Member of the Auditing Committee. Board member since 2010.
Current assignments: Board member of companies including ICA Gruppen AB, Loomis AB, Bravida Holding AB, Hotell Diplomat AB, Atvexa AB and Sophiahemmet.
Previous assignments: Vice President of Ambea AB, President of Carema Vård och Omsorg AB, acting President of Skandiabanken, Head of Swedish Operations at Skandia and President of Skandia Link.
Shareholding: Holds 750 Class B shares.
Åke Larsson (1966) Board member, representative of Swedish Association of Graduate Engineers Engineer, Research & Development Assignments on Getinge's Board: Deputy representative since 2014. Employed by Maquet Critical Care AB. Shareholding: Holds no shares.
Carola Lemne (1958)
Board member elected by AGM
M.D, Ph.D., associate professor
Assignments on Getinge's Board: Member of the Auditing Committee. Board member since 2003.
Current Assignments: CEO of the Confederation of Swedish Enterprise. Associate professor at Karolinska Institute. Chairman of Uppsala University. Board member of AFA Försäkringar. Co-owner of CALGO holding company.
Previous assignments: President and CEO of Praktikertjänst AB, Board member of the Confederation of Swedish Enterprise, Investor AB, MEDA AB, the Swedish Foundation for Strategic Research and Apoteket AB. CEO of Danderyds Sjukhus AB. Clinical Research Manager at Pharmacia & Upjohn AB. Shareholding: Holds 2,300 Class B shares.
Johan Malmquist (1961)
Board member elected by AGM
M.Sc. (Economics)
Assignments on Getinge's Board: Member of the Remuneration Committee. Board member since 2016.
Current assignments: Chairman of Tingstad Pappers AB. Board member of Elekta AB (publ.), Mölnlycke Health Care AB, the Dunker Foundations, SCA AB and Trelleborg AB. Board member of Chalmers University of Technology Foundation.
Previous assignments: President and CEO of Getinge Group from 1997 to 2015, Business Area Director within Getinge Group, President of Getinge Group's French subsidiary, President of subsidiaries in the Electrolux Group.
Shareholding: Holds 55,555 Class B shares.
Peter Jörmalm (1959) Deputy representative of Unionen Service Product Specialist. BCU Service Excellence Surgical Workflow.
Assignments on Getinge's Board: Deputy 2012–2013. Board member 2014–2015. Deputy 2016–2017.
Employed by Getinge Infection Control AB. Shareholding: Holds no shares.
Rickard Karlsson (1970) Board member, representative of the Swedish Metalworkers' Union Assembly Assignments on Getinge's Board: Board member since 2014. Deputy 2013–2014. Employed by Getinge Sterilization AB. Shareholding: Holds no shares.
Board member elected by AGM
M.Sc. in Industrial Engineering & Management Assignments on Getinge's Board: Member of the Remuneration Committee. Board member elected by AGM since 2014.
Current assignments: CEO and owner of Accuracy AB, Board member of companies including Mekonomen, Hexatronic, Hexpol AB, Konecranes Plc and Peab.
Previous assignments: CEO of the Chalmers University of Technology Foundation, many years' experience in major Swedish industrial enterprises such as the Volvo Group.
Shareholding: Holds 2,000 Class B shares.
Johan Stern (1951)
Board member elected by AGM, Vice Chairman of the Board
M.Sc. (Economics)
Assignments on Getinge's Board: Member of the Auditing Committee. Member of the Remuneration Committee. Board member since 2004.
Current assignments: Chairman of Healthinvest Partners AB, Rolling Optics AB, Fädriften Invest AB, Skanör Falsterbo Kallbadhus AB and Harry Cullberg's Fund Foundation. Board member of Carl Bennet AB, Elanders AB, Lifco AB, RP Ventures AB, Swedish-American Chamber of Commerce, Inc. and Estea AB.
Previous assignments: Active within SEB's operations in Sweden and the US. Shareholding: Holds 30,104 Class B shares.
Maths Wahlström (1954)
Board member elected by AGM
M.Sc. (Economics)
Assignments on Getinge's Board: Member of the Remuneration Committee. Board member since 2012.
Current assignments: Chairman of KMG Capital Partners, LLC, Surefire Medical, Inc. and in Triomed AB. Board member and independent lead director of Coherus Biosciences Inc, Board member of Alteco Medical AB, PCI HealthDev, LLC and Circuit Clinical, Inc.
Previous assignments: More than 30 years' international experience in preventive care and healthcare from such positions as CFO of the Gambro Group and as CEO of Gambro Healthcare Inc. He has also served as CEO of Fresenius Medical Services and was a member of the Group management for Fresenius Medical Care AG & Co KGaA.
Shareholding: Holds 9,000 Class B shares.
Joacim Lindoff (1973) Acting President & CEO
Previous experience: Executive Vice President of Getinge's former Infection Control business area. He has previously held senior positions at NIBE and was Chairman of the medical technology industry organization, Swedish Medtech, from 2010 to 2014.
Reinhard Mayer (1967) CFO Diploma in Business Engineering and
Previous experience: CFO of Getinge's former Medical Systems business area. He has previously held senior positions in the finance function of companies including Lexware GmbH & Co. and Dow Chemical.
Carsten Blecker (1966) President EMEA
Previous experience: President WEMEA in Medical Systems and President Middle East & Africa for Getinge. Carsten's previous experience includes positions at Biomet, McKinsey & Company, Kimberly-Clark, Medtronic and Palex Medical.
Previous experience: Acting Executive Vice President for Getinge's former Extended Care business area. He has more than 20 years of international experience from many different markets and has previously held senior positions at listed companies in both South-East Asia and Australia.
Markus Medart (1970) Acting President Supply Chain and Chief Purchasing Officer
Previous experience: Chief Operating Officer at Getinge's former Medical Systems until yearend 2015/2016. Prior to that, he held senior positions in Medical Systems, including President Surgical Workplaces and Purchasing Manager.
Raoul Quintero (1956)
Previous experience: President Maquet North America at Getinge. Raoul's previous experience from the medical technology industry including leading positions at Boston Scientific and Guidant Corporation.
Compliance
Previous experience: Until year-end 2015, Lena Hagman was Senior Vice President, Group Quality & Regulatory Compliance for Getinge Group. Lena has a broad background from the field of quality and her experience includes working at companies including Capio, Neoventa Medical AB and Mölnlycke Healthcare.
Felix Lara (1969)
President Patient & Post-Acute Care
Previous experience: Senior Vice President Marketing and Business Development at Getinge's Extended Care business area. He has more than 15 years of experience from the heathcare industry and has held senior positions in marketing and business development at companies including Grünenthal Group and Bristol-Myers Squibb.
Previous experience: SVP Human Resources & Sustainability at Gunnebo Group. He has previously served as Executive Vice President Human Resources and Sustainability at Getinge and as Vice President of Human Resources at Volvo Car Corporation.
Previous experience: Frédéric Pette served as Chief Strategy Officer of Surgical Workflows at Getinge until August 2016. He has previously held senior positions at companies including Zimmer, Stryker and American Medical Systems.
Kornelia Rasmussen (1977)
Executive Vice President Communications & Brand Management
Previous experience: Head of Group Communications for Getinge Group. Prior to joining Getinge in 2012, she held several senior positions in communications at Volvo Car Corporation, including responsibility for global internal and external communication.
Jens Viebke (1967)
Previous experience: Jens Viebke served as Chief Technology Officer of Acute Care Therapies at Getinge until June 2016. He had previously held positions at GE Healthcare Life Sciences.
Getinge AB (publ), Corp. Reg. No. 556408-5032
| Share premium reserve | 3,435 |
|---|---|
| Retained earnings | 3,259 |
| Net profit for the year | 222 |
| Total | 6,916 |
| The Board and Chief Executive Officer propose that a dividend of SEK 2.00 per share shall be distributed to shareholders | 477 |
| to be carried forward | 6,439 |
| Total | 6,916 |
The Board of Directors deems the proposed dividend to be justified in relation to requirements that the Group's nature of business, scope and risks impose on consolidated shareholders' equity and the Group's consolidation requirements, liquidity and financial position.
The Board of Directors and CEO affirm that the consolidated financial statements have been prepared in accordance with international financial reporting standards IFRS, which have been adopted by the EU, and provide a fair and accurate account of the Group's financial position and profit. This Annual Report was prepared in accordance with generally accepted accounting policies and provides a fair and accurate account of the Parent Company's financial position and profit.
The Administration Report for the Group and Parent Company provides a fair and accurate overview of the performance of the Parent Company and the Group's operations, financial position and earnings and describes the material risks and uncertainties faced by the Parent Company and companies belonging to the Group.
Carl Bennet Johan Bygge Carola Lemne Johan Malmquist
Chairman AGM-elected Board member AGM-elected Board member AGM-elected Board member
AGM-elected Board member AGM-elected Board member AGM-elected Board member AGM-elected Board member
Vice Chairman
Malin Persson Johan Stern Maths Wahlström Cecilia Daun Wennborg
Rickard Karlsson Åke Larsson Joacim Lindoff Board member, Board member, CEO Representative of the Swedish Representative of the Swedish Metalworkers' Union Association of Graduate Engineers
Our auditor's report was submitted on March 1, 2017 Öhrlings PricewaterhouseCoopers AB
Authorized Public Accountant Authorized Public Accountant Auditor in Charge
Johan Rippe Eric Salander
| SEK M | Note | 2016 | 2015 |
|---|---|---|---|
| Net sales | 2, 3 | 29,756 | 30,235 |
| Cost of goods sold | 4 | –15,916 | –16,072 |
| Gross profit | 13,840 | 14,163 | |
| Selling expenses | 4 | –6,250 | –6,605 |
| Administrative expenses | 4 | –3,359 | –3,300 |
| Research and development costs | 32, 4 | –671 | –598 |
| Acquisition expenses | 4 | –21 | –33 |
| Restructuring and integration costs | 4 | –1,313 | –657 |
| Other operating income | 288 | 222 | |
| Other operating expenses | –227 | –463 | |
| Operating profit | 3, 4, 5, 6 | 2,287 | 2,729 |
| Interest income and other similar income | 7 | 25 | 26 |
| Interest expenses and other similar expenses | 8 | –662 | –758 |
| Profit after financial items | 1,650 | 1,997 | |
| Taxes | 9 | –437 | –540 |
| Net profit for the year | 1,213 | 1,457 | |
| Attributable to: | |||
| Parent Company's shareholders | 1,188 | 1,390 | |
| Non-controlling interests | 25 | 67 | |
| 1,213 | 1,457 | ||
| Earnings per share, SEK* | 11 | 4.98 | 5.83 |
| – weighted average number of shares for calculation of earnings per share (thousands) | 11 | 238,323 | 238,323 |
* Before and after dilution
| SEK M | Note | 2016 | 2015 |
|---|---|---|---|
| Net profit for the year | 1,213 | 1,457 | |
| Other comprehensive income | |||
| Items that cannot be restated in profit for the period | |||
| Actuarial gains/losses pertaining to defined-benefit pension plans | –280 | –23 | |
| Tax attributable to items that cannot be restated in profit | 104 | 6 | |
| Items that can later be restated in profit for the period | |||
| Translation differences and hedging of net investments | 551 | –115 | |
| Cash-flow hedges | 26 | 86 | 340 |
| Tax attributable to items that can be restated in profit | 326 | –75 | |
| Other comprehensive income for the period, net after tax | 787 | 133 | |
| Total comprehensive income for the period | 2,000 | 1,590 | |
| Comprehensive income attributable to | |||
| Parent Company's shareholders | 1,964 | 1,528 | |
| Non-controlling interests | 36 | 62 |
| SEK M | Note | 2016 | 2015 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 3, 4, 12 | 32,004 | 30,543 |
| Tangible assets | 3, 4, 12, 19 | 4,313 | 4,699 |
| Financial instruments, long-term | 26 | 25 | 80 |
| Financial receivables, long-term | 71 | 69 | |
| Deferred tax assets | 9 | 1,233 | 1,225 |
| Total non-current assets | 37,646 | 36,616 | |
| Current assets | |||
| Inventory | 13 | 5,431 | 5,409 |
| Accounts receivable | 14 | 8,159 | 7,470 |
| Current tax assets | 442 | 604 | |
| Financial instruments, current | 26 | 166 | 158 |
| Other receivables | 738 | 716 | |
| Prepaid expenses and accrued income | 15 | 949 | 794 |
| Cash and cash equivalents | 17 | 1,680 | 1,468 |
| Total current assets | 17,565 | 16,619 | |
| TOTAL ASSETS | 55,211 | 53,235 | |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Share capital | 16 | 119 | 119 |
| Other capital provided | 5,960 | 5,960 | |
| Other reserves | 955 | 3 | |
| Retained earnings | 10 | 13,474 | 13,121 |
| Shareholders' equity attributable to the Parent Company's shareholders | 20,508 | 19,203 | |
| Non-controlling interests | 408 | 390 | |
| Total shareholders' equity | 20,916 | 19,593 | |
| Long-term liabilities | |||
| Interest-bearing long-term loans | 18, 19 | 15,914 | 16,006 |
| Other long-term liabilities | 182 | 170 | |
| Provisions for pensions, interest-bearing | 18, 22 | 3,368 | 3,052 |
| Provisions for pensions, non-interest-bearing | 22 | 51 | 65 |
| Deferred tax liabilities | 9 | 599 | 1,074 |
| Restructuring reserves, long-term | 20 | 153 | 159 |
| Other provisions, long-term | 21 | 359 | 377 |
| Total long-term liabilities | 20,626 | 20,903 | |
| Current liabilities | |||
| Restructuring reserves, current | 20 | 378 | 230 |
| Other provisions, current | 21 | 316 | 338 |
| Interest-bearing current loans | 18, 19 | 5,787 | 5,277 |
| Advance payments from customers | 514 | 475 | |
| Accounts payable | 2,201 | 1,986 | |
| Current tax liabilities | 112 | 63 | |
| Financial instruments, current | 26 | 800 | 931 |
| Other liabilities | 565 | 552 | |
| Accrued expenses and deferred income | 23 | 2,996 | 2,887 |
| Total current liabilities | 13,669 | 12,739 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 55,211 | 53,235 |
Refer to Note 24 for information concerning Getinge Group's pledged assets and contingent liabilities.
| SEK M | Share capital |
Other capital provided |
Reserves1 | Retained earnings |
Total | Non controlling interests |
Total share holders' equity |
|---|---|---|---|---|---|---|---|
| Opening balance at January 1, 2015 | 119 | 5,960 | –153 | 12,416 | 18,342 | 352 | 18,694 |
| Total comprehensive income for the period | – | – | 156 | 1,372 | 1,528 | 62 | 1,590 |
| Dividend | – | – | – | –667 | –667 | –24 | –691 |
| Closing balance at December 31, 2015 | 119 | 5,960 | 3 | 13,121 | 19,203 | 390 | 19,593 |
| Opening balance at January 1, 2016 | 119 | 5,960 | 3 | 13,121 | 19,203 | 390 | 19,593 |
| Total comprehensive income for the period | – | – | 952 | 1,012 | 1,964 | 36 | 2,000 |
| Share-based remuneration | – | – | – | 8 | 8 | – | 8 |
| Dividend | – | – | – | –667 | –667 | –18 | –685 |
| Closing balance at December 31, 2016 | 119 | 5,960 | 955 | 13,474 | 20,508 | 408 | 20,916 |
1) Reserves pertain to cash-flow hedges, hedges of net investments and translation differences.
| SEK M | Note | 2016 | 2015 |
|---|---|---|---|
| Operating activities | |||
| EBITDA | 4,990 | 5,187 | |
| Expensed restructuring and integration costs* | 20 | 1,015 | 657 |
| Paid restructuring and integration costs | 20 | –872 | –918 |
| Other non-cash items | 31 | 85 | 230 |
| Interest paid | –617 | –719 | |
| Other financial items | –20 | –13 | |
| Taxes paid | –332 | –858 | |
| Cash flow before changes to working capital | 4,249 | 3,566 | |
| Changes in working capital | |||
| Inventory | –234 | –171 | |
| Current receivables | –252 | –30 | |
| Current liabilities | –92 | 93 | |
| Cash flow from operating activities | 3,671 | 3,458 | |
| Investing activities | |||
| Acquired operations | 25 | –212 | –41 |
| Divested operations | – | 302 | |
| Capitalized development costs | –594 | –702 | |
| Equipment for rental | –160 | –306 | |
| Investments and divestments of fixed assets | –831 | –1,046 | |
| Cash flow from investing activities | –1,797 | –1,793 | |
| Financing activities | |||
| Raising of loans | 1,822 | 1,907 | |
| Repayment of loans | –2,928 | –1,612 | |
| Change in long-term receivables | 42 | –26 | |
| Dividend paid | –685 | –691 | |
| Cash flow from financing activities | –1,749 | –422 | |
| Cash flow for the year | 125 | 1,243 | |
| Cash and cash equivalents at the beginning of the period | 1,468 | 1,482 | |
| Cash flow for the year | 125 | 1,243 | |
| Translation differences | 87 | –1,257 | |
| Cash and cash equivalents at year-end | 31 | 1,680 | 1,468 |
* Excluding write-downs of fixed assets
Getinge AB, which is the Parent Company of Getinge Group, is a limited liability company with its registered offices in Gothenburg, Sweden. A description of the company's operations is included in the Administration Report on page 42.
The consolidated financial statements for the financial year that ends at 31 December, 2016 have been approved by the Board at 1 March, 2017 and will be presented to the AGM at 29 March, 2017 for adoption.
Getinge's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB), including interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) as adopted by the EU. In addition, the Swedish Financial Reporting Board's recommendation RFR 1 has been applied. The consolidated financial statements include the financial statements for Getinge AB and its subsidiaries and were prepared in accordance with the cost method. The Parent Company applies the same accounting policies as the Group, except in the instances stated below in the section "Parent Company's accounting policies." The differences that arise between the Parent Company and the Group's accounting policies are attributable to the limited opportunities for the application of IFRS in the Parent Company, as a result of the Swedish Annual Accounts Act and the Swedish Pension Obligations Vesting Act. The Parent Company's functional currency is Swedish kronor (SEK), which is also the Parent Company's and Group's presentation currency. This means that the financial statements are presented in Swedish kronor (SEK). Unless otherwise stated, all amounts are given in millions of Swedish kronor (SEK M).
To prepare the financial statements in accordance with IFRS, the company management is required to make assessments and assumptions that affect the recognized amounts of assets and liabilities and other information in the financial statements and for revenues and expenses recognized during the period. Assumptions, assessments and estimates are reviewed on a regular basis. The actual outcome may diverge from these assumptions, assessments and estimates. The Board of Directors and Getinge Executive Team have deemed that the following areas may have a significant impact on Getinge's earnings and financial position:
Measurement of identifiable assets and liabilities in connection with acquisitions. In conjunction with acquisitions, all identifiable assets and liabilities in the acquired company are identified and measured at fair value, including the value of assets and liabilities in the previously owned share as well as the share attributable to non-controlling interests.
Goodwill and intangible assets with an indefinite useful life. The impairment requirement for goodwill and other intangible assets with an indefinite useful life is tested annually by Getinge in accordance with the accounting policy described here in Note 1. The recoverable amount for cash generating units (CGUs) has been established through the measurement of value in use. For these calculations, certain estimations must be made (see Note 12).
Pension commitments. Recognition of the costs of defined-benefit pensions and other applicable retirement benefits is based on actuarial valuations, relying on key assumptions for discount rates, future salary increases, expected inflation. In turn, the discount rate assumptions are based on rates for high-quality fixed-interest investments with durations similar to the pension plans (see Note 22).
Obsolescence reserve. Inventories are recognized at the lower of cost according to the first in/first out principle, and net realizable value. The value of inventories is adjusted for the estimated decrease in value attributable to products no longer sold, surplus inventories, physical damage, lead times for inventories, and handling and sales overheads. If the net realizable value is lower than the cost, a valuation reserve is established for inventory obsolescence (see Note 13).
Deferred tax. The measurement of loss carryforwards and the company's ability to utilize unutilized loss carryforwards is based on the company's assessments of future taxable income in various tax jurisdictions and includes assumptions regarding whether expenses that have not yet been subject to taxation are tax deductible. Deferred tax is recognized in profit and loss unless the deferred tax is attributable to items recognized in other
Subsidiaries are all companies (including structured entities) over which the Group exercises a controlling influence. The Group controls a company when it is exposed to or has the right to variability of returns from its holding in the company and can affect these returns through its influence over the company. The controlling influence is usually transferred at the acquisition date. Acquired companies are consolidated into the consolidated financial statements in accordance with the purchase method, which means that the cost of the shares in subsidiaries is eliminated against their shareholders' equity at the acquisition date. Accordingly, only the portion of the subsidiary's shareholders' equity that has arisen after the acquisition is included in consolidated shareholders' equity. Getinge applies IFRS 3 Business Combinations for acquisitions after January 1, 2004, in accordance with the interim regulations in IFRS 1. Getinge has chosen not to restate earlier acquisitions. –Shareholders' equity in the subsidiaries is thus determined on a market-based value of identifiable assets, liabilities, provisions and contingent liabilities on the date of the acquisition. If the cost of the shares in the subsidiaries exceeds the value of the acquired net assets, calculated as described above, the difference is assigned to goodwill. If the acquisition cost falls below the fair value of the acquired subsidiary's net assets, the negative goodwill is recognized directly in profit and loss as other operating income. If assets are included in the subsidiary at the time of acquisition – for example, property, participations or other operations – that will not be retained but sold in the near future, these assets are recognized in the acquisition analysis at the amount expected to be received. Deferred tax is calculated on the difference between the calculated market values of assets and liabilities and the fiscal residual values. Intra-Group transactions and unrealized inter-company profits are eliminated in the consolidated financial statements, except with respect of shares in non-controlling interests. The fiscal effect is also calculated when eliminating internal transactions, based on the nominal tax rate. In profit and loss, net profit/loss is recognized without deductions for non-controlling interests in net profit/loss for the year. Non-controlling interests are recognized as a separate item in consolidated shareholders' equity in the balance sheet. The Group applies IFRS 3 Business Combinations to all acquisitions made after January 1, 2010, whereby the most significant change entails expensing transaction costs in conjunction with an acquisition.
Functional currency. Transactions in foreign currencies are translated to the functional currency of the financial statements according to the exchange rate on the date of the transaction. Receivables and liabilities in foreign currencies are measured at the closing day rate, and unrealized currency gains and losses are included in profit and loss. Exchange-rate differences attributable to operating receivables and liabilities are recognized as other operating income (operating expenses). Exchange-rate differences regarding financial assets and liabilities are recognized under "Other financial items." When preparing the consolidated financial statements, the balance sheets of the Group's foreign operations are translated from their functional currency to SEK, based on the closing day rate.
Translation of foreign operations. Getinge applies the current method for translation of foreign subsidiaries' balance sheets and income statements. This means that all assets and liabilities in subsidiaries are translated at the closing day rate, and all income statement items are translated at average annual exchange rates. Translation differences arising in this context are due to the difference between the income statement's average exchange rates and closing day rates, and to the net assets being translated at a different exchange rate at year-end than at the beginning of the year. Translation differences are recognized under other comprehensive income. The total translation differences in conjunction with divestments are recognized together with the gains/losses arising from the transaction. Hedge accounting is applied to external loans raised in order to reduce translation effects in exposed currencies to match the net assets in foreign subsidiaries. Exchange-rate differences for these loans are recognized directly in other comprehensive income for the Group.
Sales include products, services and rents, excluding indirect sales tax and discounts provided. Income is recognized when, essentially, all risks and rights connected with ownership have been transferred to the buyer. This usually occurs in connection with delivery, after the price has been determined and collection of the receivable is appropriately secured. If delivery of finished products is postponed at the buyer's request, but the buyer assumes the proprietary rights and accepts the invoice (a "bill and hold" sale), income is recognized when the proprietary rights are transferred. Income is normally recognized once the buyer has accepted delivery and after installation and final inspection. However, income is recognized immediately after delivery if the installation and final inspection are of a simple nature, and after establishing provisions for estimated residual expenses. Income recognition for services takes place as and when the services are performed. Income from rental is allocated to a particular period over the term of the rental agreement. Interest income is recognized continuously and dividends received are recognized after the right to the dividend is deemed secure. In the consolidated financial statements, intra-Group sales are eliminated. For larger assignments extending over more than one accounting period, where outcome can be measured in a reliable manner, income and expenses are recognized in relation to the degree of completion of the assignment on the closing date. The degree of completion of an assignment is established in a ratio between accrued assignment costs for work completed on the closing date and the calculated total assignment costs, except in those instances this does not correspond to the degree of completion. Changes in the scope and claims of the assignment are included only if there is an agreement with the customer. When the outcome of an assignment cannot be calculated in a reliable manner, only the amount corresponding to the accrued assignment costs that will probably be paid by the client is recognized as revenue. Other accrued assignment costs are recognized as costs in the period in which they occur. If it is probable that the total amount of accrued assignment costs will exceed total revenue from the assignment, the expected loss is promptly recognized as a cost in its entirety.
Government grants are measured at fair value when it is probable that the terms associated with the grants will be met and that the grants will be received. Government grants relating to costs are recognized in profit and loss. The income is recognized in the same period as the cost that grants are intended to compensate. Government grants relating to the acquisition of assets reduce the assets' carrying amounts. Grants affect recognized earnings over the assets' useful life by reducing depreciation.
Financial income and expenses include interest income on bank deposits and receivables, interest expenses on loans, income from dividends, unrealized and realized profits and losses on financial investments, exchange-rate differences, and the change in value of derivative instruments used in financial activities. Borrowing costs in conjunction with the raising of loans are recognized as part of the loan to which they pertain and are charged to profit during the term of the loan.
Goodwill. Goodwill comprises the portion of a purchase price for an acquisition that exceeds the market value of the identifiable assets, with deductions for liabilities and contingent liabilities, calculated on the acquisition date, on the share of the acquired company's assets acquired by the Group. In a business acquisition whereby the acquisition costs are less than the net value of acquired assets, assumed liabilities and contingent liabilities, the difference is recognized directly in profit and loss. Goodwill arising in conjunction with the acquisition of a foreign entity is treated as an asset in the foreign entity and translated at the exchange rate on the closing date. Goodwill arising from the acquisition of associated companies is included in the value of the holdings in the associated company. An impairment test of goodwill is conducted once per year or more often if there is an indication that there could have been a decrease in value. Impairment of goodwill is recognized in profit and loss. The gain or loss in connection with the divestment of an entity includes the residual carrying amount of goodwill that pertains to the divested unit.
Other intangible assets. Other intangible assets comprise capitalized development costs, customer relations, technical know-how, trademarks, agreements and other assets. Intangible assets are recognized at cost with deductions for accumulated amortization and any impairment losses. Amortization is applied proportionally over the asset's anticipated useful life, which usually varies between three and 15 years. Acquired intangible assets are recognized separately from goodwill if they fulfill the criteria for qualifying as an asset, implying they can be separated or they are based on contractual or other legal rights and that their market value can be established in a reliable manner. Intangible assets that are recognized separately from goodwill in acquisitions of operations include customer relations, technical know-how, trademarks, agreements, etc. Acquired intangible assets are measured at market value and amortized on a straight-line basis over their anticipated useful life. The useful life can, in certain cases, be indefinite. These intangible assets are not amortized, instead they are subject to an impairment test every year or more often if there is an indication that there could have been a decrease in value. Costs for development, whereby research results or other knowledge is applied to produce new products, are recognized as an asset in the balance sheet to the extent that these products are expected to generate future financial benefits. These costs are capitalized when management deems that the product is technically and financially viable, which is usually when a product development project has reached a defined milestone in accordance with an established project model. The capitalized value includes expenses for material, direct expenses for salaries and indirect expenses that can be assigned to the asset in a reasonable and consistent manner. In other cases, development costs are expensed as they arise. Research costs are charged to earnings as they arise. Capitalized expenses are amortized on a straight-line basis from the point in time at which the asset is put into commercial operation and during the asset's estimated useful life. The amortization period is between three and 15 years.
Properties, machinery, equipment and other tangible assets are recognized at cost, with deductions for accumulated depreciation and any impairment losses. The cost includes the purchase price and expenses directly attributable to the asset to bring the asset to the site and in the working condition for its intended use. Examples of directly attributable expenses included in the cost are delivery and handling costs, installation, legal services and consultancy services. Assets provided to the company in conjunction with the acquisition of new subsidiaries are recognized at market value on the acquisition date. Depreciation is conducted straight line. The value in the balance sheet represents acquisition costs with deduction for accumulated depreciation and any impairment losses. Land is not depreciated since it is deemed to have an infinite economic life, however, the depreciation of other assets is based on the following anticipated useful lives:
| Class of assets | Depreciation, number of years |
|---|---|
| Land | 40 – 50 |
| Buildings | 10 – 50 |
| Machinery | 5 – 25 |
| Equipment | 10 |
| Production tools | 5 |
| Equipment for rental | 5 |
| Cars | 4 |
| Computer equipment | 3 |
Tangible assets comprising parts with different useful lives are treated as separate components of tangible assets. Standard maintenance and repair costs are expensed during the periods in which they arise. More extensive repair and upgrading costs are capitalized and depreciated over the item's remaining anticipated useful life. Capital gains/losses are recognized under "Other operating income/ expenses."
Financial leasing. Leasing of properties, machines and equipment, whereby the Group essentially assumes the same rights as for direct ownership of the asset, is classified as financial leasing. Financial leasing is capitalized from the date on which the lease agreement is entered into, at the lower amount of the assets' market value or the calculated present value of the underlying leasing payments. Each leasing payment is divided between liabilities and financial expenses so that interest payments on outstanding liabilities are proportional. The corresponding rental liability, after deduction for financing costs, is attributed to interest-bearing liabilities, while the interest portion of leasing costs is recognized in revenue during the lease period. Properties, machines and equipment acquired by leasing are depreciated over their anticipated useful lives.
Operational leasing. Leasing of assets whereby the lessor essentially remains the owner of the asset is classified as operational leasing, and payments made according to operational leasing contracts or rental agreements are expensed proportionally during the lease or rental period, respectively. Any compensation, according to agreement, that the lessee is obliged to pay to the lessor if the leasing contract is terminated prematurely is expensed during the period in which the contract is terminated.
Leasing agreements are defined in two categories, operational and financial, depending on the financial significance of the agreement. Operational leasing agreements are recognized as non-current assets. Revenues from operational leasing are recognized evenly over the lease period. Straight-line depreciation is applied to these assets in accordance with the undertakings and the depreciation amount is adjusted to correspond with the estimated realizable value when the undertaking expires. The estimated impairment requirement is immediately charged to profit and loss. The products' estimated realizable value at the expiration of the undertaking is continuously followed up on an individual basis. Financial leasing agreements are recognized as long-term and current receivables. Payments received from financial leasing agreements are divided between interest income and depreciation of receivables.
At the end of each accounting period, the carrying amount of the assets is assessed to determine whether there is any indication that impairment is required. If there is such an indication, the asset's recoverable amount is established. The recoverable amount is deemed to be the higher of the asset's net realizable value and its value in use, for which the impairment loss is recognized as soon as the carrying amount exceeds the recoverable amount. Earlier recognized impairment losses on machines and equipment are reversed if the recoverable amount is deemed to have increased, although the impairment losses are not reversed to an amount greater than what the carrying amount would have been if no impairment losses had been recognized in earlier years. Recognized impairments of goodwill are not reversed.
Inventories are measured at the lower of cost and production value, according to the first in/first out (FIFO) principle, and net realizable value. Inventories include a share of indirect costs related to this. The value of finished products includes raw materials, direct work, other direct costs and production-related expenses including depreciation. The net realizable value is calculated as the estimated sales price less estimated completion and selling expenses. An assessment of obsolescence in inventories is conducted on an ongoing basis during the year. The value of inventories is adjusted for the estimated decrease in value attributable to products no longer sold, surplus inventories, physical damage, lead times for inventories, and handling and sales overheads. If the net realizable value is lower than the cost, a valuation reserve is established for inventory obsolescence.
A financial asset or financial liability is recognized in the balance sheet when the company is party to the contractual conditions of the instrument. A financial asset is derecognized from the balance sheet when the contractual rights to the asset are realized, extinguished or the company loses control over them. A financial liability is derecognized from the balance sheet when the contractual obligation has been fulfilled or in some other manner extinguished. Acquisitions and sales of financial assets are recognized on the transaction date, which is the date on which the company commits to acquire or sell the assets, apart from cases in which the company acquires or sells listed securities, when liquidity-date reporting is applied.
Financial instruments are recognized at amortized cost or fair value, depending on the initial classification according to IAS 39 (see below). At the end of each accounting period, the company assesses whether there are objective indications that a financial asset or group of financial assets requires impairment.
Further information about financial instruments can be found in Note 14 Accounts receivable, Note 18 The Group's interest-bearing net debt and Note 26 Financial risk management.
Financial assets measured at fair value in profit and loss. Financial assets in this category comprise derivatives. They are included in current assets if they are expected to be settled within 12 months of the end of the reporting period, otherwise, they are classified as non-current assets. All derivatives are measured at fair value in the balance sheet. Changes in fair value are recognized as a component of other comprehensive income insofar as they are part of a hedging relationship that qualifies as hedge accounting. They are reversed to profit and loss when the hedged transaction occurs at which point they are recognized as part of gross profit.
Loan receivables and accounts receivable. Assets in this category comprise long-term financial receivables, accounts receivable and other current receivables. They are included in current assets with the exception of items that fall due more than 12 months after the end of the reporting period, which are classified as non-current assets. Assets in this category are initially measured at fair value including transaction costs. After the acquisition date, they are recognized at amortized cost using the effective interest method. Accounts receivable are recognized in the amounts that are expected to be received after deductions for doubtful receivables, which are assessed on a case-by-case basis. The expected term of accounts receivable is short, which is why amounts are recognized at nominal values without discounting. Any impairment of accounts receivable is recognized in operating expenses. Other financial liabilities. This category includes liabilities to credit institutions, issued bonds, accounts payable and other current liabilities. Longterm liabilities have an expected term longer than one year while current liabilities have a term of less than one year. Items in this category are initially measured at fair value and in the subsequent periods at amortized cost using the effective interest method.
Hedge accounting. For derivative instruments or other financial instruments that meet hedge-accounting requirements under the cash-flow hedging method or hedging of net investments in foreign operations method, the effective component of the value change is recognized in other comprehensive income. Accumulated value changes from cash-flow hedges are reversed from shareholders' equity to profit and loss at the same time as the hedged item impacts profit and loss. Accumulated value changes from the hedging of net investments in foreign operations are reversed from shareholders' equity to profit and loss when the foreign operation is divested in full or in part. Interest-bearing liabilities to which hedge accounting has been applied in accordance with the method for fair-value hedging are measured at fair value regarding the hedged risk. The effect of the hedge is recognized on the same line as the hedged item.
Fair value. The fair value of derivative instruments was calculated using the most reliable market prices available. This requires all instruments that are traded in an effective market, such as currency forward contracts, to be measured at marked-to-market. In terms of instruments for which no reliable prices were available, such as interest-rate swaps, cash flows were discounted using deposit and interest-rate swaps for the currency in question. Translation to SEK is conducted at the closing day rate.
Recognition to pensions. Getinge has both defined-contribution and defined-benefit pension plans, of which some have assets in special funds or similar securities. The plans are usually financed by payments from the respective Group companies and the employees. The Group's Swedish companies are generally covered by the ITP plan, which does not require any payments from employees.
Defined-benefit plans. Pension expenses for defined-benefit plans are calculated using the Projected Unit Credit Method in a manner that distributes expenses over the employee's working life. The calculation is performed annually by independent actuaries. These commitments are measured at the present value of expected future payments, with consideration for calculated future salary increases, utilizing a discount rate corresponding to the interest rate of first-class company or government bonds with a remaining term that is almost equivalent to the actual commitments. The Group's net liabilities for each defined-benefit plan (which is also recognized in the balance sheet), comprises the present value of the obligation less the fair value of the plan assets. If the value of the plan assets exceeds the value of the obligation, a surplus arises, which is recognized as an asset. The recognized asset value is limited to the total of costs related to services rendered during previous periods and the present value of future repayments from the plan, or reductions in future contributions to the plan. The actuarial assumptions constitute the company's best assessment of the different variables that determine the costs of providing the benefits. When actuarial assumptions are used, the actual results could differ from the estimated results, and actuarial assumptions change from one period to another. These differences are recognized as actuarial gains and losses. Actuarial gains and losses are recognized in other comprehensive income for the period in which they are incurred.
Costs for defined-benefit pension plans in profit and loss comprise the total costs for service during the current and earlier years, interest on commitments and the expected return on plan assets. Costs for service during the current period and previous periods are recognized as employee costs. The interest component of pension expenses is recognized under financial expenses.
Defined-contribution plans. These are plans in which the company pays fixed fees to a separate legal entity and does not have any legal or informal obligation to pay additional fees. The Group's payments for defined-contribution plans are recognized as expenses during the period in which the employees perform the services that the fee covers. The part of the Swedish ITP plan concerning family pension, disability pension, and employment group life insurance financed by insurance with Alecta is a defined-benefit pension multi-employer plan. For this pension scheme, according to IAS 19, a company is primarily to recognize its proportionate share of the defined-benefit pension commitment and the plan assets and expenses associated with the pension plan. The financial statements are also to include disclosure required for defined-benefit pension plans. Alecta is currently unable to provide the necessary information and therefore the above pension plans are recognized as defined-contribution plans in accordance with item 30 of IAS 19. This means that premiums paid to Alecta will also be recognized on an ongoing basis as expenses in the period to which they pertain.
The Group has a long-term incentive program for senior executives for which remuneration is paid in shares. The value of the remuneration for services provided corresponds to the fair value of the shares on the allotment date. The remuneration is recognized as an expense over the three-year vesting period, with a corresponding increase in shareholders' equity. Since the allotment of shares is conditional on certain vesting conditions being met, no accumulated expense is recognized for services provided if no shares are ultimately earned. Additional social security contributions are expensed and recognized as liabilities in accordance with UFR 7 (Statement from the Swedish Financial Reporting Board).
Provisions are recognized when the Group has a legal or informal obligation as a result of past events and it is probable that payment will be required to fulfill the commitment and if a reliable estimation can be made of the amount to be paid. Pensions, deferred tax liabilities, restructuring measures, guarantee commitments and similar items are recognized as provisions in the balance sheet. Provisions are reviewed at the end of each accounting period.
Contingent liabilities are commitments not recognized as liabilities/provisions either because it is not certain that an outflow of resources will be required to regulate the commitment or because it is not possible to make a reliable estimate of the amount.
Getinge's income taxes include taxes on Group companies' profits recognized during the accounting period and tax adjustments attributable to earlier periods and changes in deferred taxes. Measurement of all tax liabilities/ receivables is conducted at nominal amounts and in accordance with enacted tax regulations and tax rates or those that have been announced and will almost certainly be adopted. Tax is recognized directly in shareholders' equity if the tax is attributable to items that are recognized directly in shareholders' equity. Deferred tax is calculated to correspond to the tax effect arising when final tax is determined. Deferred tax corresponds to the net effect of tax on all existing differences between fiscal and carrying amounts of assets and liabilities by applying applicable tax rates. Temporary differences primarily arise from the depreciation of properties, machines and equipment, the market valuations of identifiable assets, liabilities and contingent liabilities in acquired companies, the market valuation of investments classified as available-for-sale and financial derivatives, gains from intra-Group inventory transactions, untaxed reserves and tax loss carryforwards, of which the latter is recognized as an asset only to the extent that it is probable that these loss carryforwards will be matched by future taxable profits. Deferred tax liabilities pertaining to temporary differences that are attributable to investments in subsidiaries and affiliates are not recognized, since the Parent Company, in each instance, can control the point in time of reversal of the temporary differences and a reversal in the foreseeable future has been deemed improbable.
Getinge's operations are controlled and reported primarily by business area. Each segment is consolidated according to the same policies as for the Group in its entirety. The earnings of the segments represent their contribution to the Group's earnings. Assets in a segment include all operating assets used by the segment and primarily comprise intangible assets, tangible assets, inventories, external accounts receivable, other receivables and prepaid expenses and accrued income. Liabilities in a segment include all operating liabilities utilized by the segment and primarily comprise provisions excluding interest-bearing pension provisions and deferred tax liabilities, external accounts payable, other current liabilities and accrued expenses and deferred income. Non-distributed assets and liabilities include all tax items and all items of a financial, interest-bearing nature.
Cash flow statements are prepared in accordance with IAS 7 Statement of Cash Flows, indirect method. The cash flows of foreign Group companies are translated at average exchange rates. Changes in the Group structure, acquisitions and divestments, are recognized net, excluding cash and cash equivalents, under Acquired operations and Divested operations and are included in cash flow from investing activities.
Earnings per share before dilution are calculated by dividing net profit for the year attributable to the Parent Company's shareholders by the weighted average number of shares outstanding during the period.
Dividends proposed by the Board of Directors are not deducted from distributable earnings until the dividend has been approved by the Annual General Meeting (AGM).
In the annual report alternative performance measures are used to facilitate analyses of the Group's performance. The primary alternative performance measures that are presented are EBITA, Cash conversion and Net debt/ Equity ratio. Definitions and reconciliation of the alternative performance measures see page 95.
No standards, amendments or interpretations effective from the financial year beginning January 1, 2016 had a material impact on the consolidated financial statements.
A number of new standards and interpretations will come into effect for financial years beginning on or after January 1, 2016 and were not applied when preparing these financial statements. None of these are expected to have any material impact on the consolidated financial statements with the exception of the following:
IFRS 9 Financial Instruments addresses the classification, measurement and recognition of financial assets and liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the elements of IAS 39 related to the classification and measurement of financial instruments. IFRS 9 retains a mix valuation approach but simplifies the approach in certain respects. There will be three measurement categories for financial assets: amortized cost, fair value through other comprehensive income and fair value through profit and loss. The classification of an instrument is to be based on the company's business model and the characteristics of the instrument. Investments in equity instruments are to be measured at fair value through profit and loss, although there is also the option of measuring the instrument at fair value through other comprehensive income at initial recognition. The instrument will then not be reclassified to profit and loss when divested. IFRS 9 also introduced a new model for calculating a reserve based on expected credit losses. Classification and measurement are not changed for financial liabilities except in cases when a liability is measured at fair value through profit and loss based on the fair value option. Changes in value attributable to changes in own risk are then to be recognized in other comprehensive income. IFRS 9 reduces requirements for applying hedge accounting by replacing the 80–125 criterion with requirements for an economic relationship between the hedging instrument and the hedged item, and that the hedge ratio is the same as that actually used in risk management. Hedging documentation requirements have also been changed compared with the documentation required under IAS 39. The standard has been adopted by EU and is to be applied to the financial year beginning January 1, 2018. The Group is currently assessing the impact of implementation of the standard. The Group will apply the standard as from 1 January, 2018.
IFRS 15 Revenue from Contracts with Customers regulates recognition of revenue. The principles on which IFRS 15 is based provide users of financial statements with more informative information about a company's revenue. The expanded disclosure requirements entail that information is to be provided on the nature, timing and uncertainty of revenue, and cash flows arising from a contract with a customer. Under IFRS 15, revenue is to be recognized when the customer passes control of the sold good of service and is able to use or benefit from the good or service. IFRS 15 replaces IAS 18 Revenue and IAS 11 Construction Contracts and associated SIC and IFRIC. IFRS 15 comes into effect on January 1, 2018. Early adoption is permitted. The standard has been adopted by the EU but the EU has not yet adopted the clarification of the standard. The Group is currently assessing the impact of the implementation of the standard. The Group will apply the standard as from 1 January, 2018.
IFRS 16 Leases was published by the IASB in January 2016. The standard regulates recognition of leasing and will replace the IAS 17 Leasing agreements along with the accompanying interpretations IFRIC 4, SIC–15 and SIC–27. The standard requires assets and liabilities attributable to all leasing agreements, with a few exceptions, to be recognized in the balance sheet. This recognition is based on the view that the lessee is entitled to use an asset
| SEK M | 2016 | 2015 |
|---|---|---|
| Product sales, capital goods | 14,283 | 13,229 |
| Recurring revenue | ||
| Product sales | 10,352 | 9,398 |
| Spare parts | 1,513 | 2,234 |
| Service assignments | 2,250 | 3,361 |
| Leasing | 1,358 | 2,013 |
| Total recurring revenue | 15,473 | 17,006 |
| Total | 29,756 | 30,235 |
Segment reporting is prepared in accordance with the same policies as for the Group in its entirety. Getinge's operations worldwide are organized into three business areas: Acute Care Therapies, Patient & Post-Acute Care and Surgical Workflows. These business areas form the basis for the Group's segment information. Business terms and conditions as well as market-regulated pricing apply for delivery of products and services between Group companies and no sales are conducted between the various business areas. The Group has no single customer that accounts for 10% or more of the Group's sales.
Acute Care Therapies: Acute Care Therapies offers solutions for life support in acute health conditions. The offering includes solutions for cardiac, over a specific time period, while also having a duty to pay for this entitlement. Recognition for the lessor will for the most part be unchanged. The standard is applicable to financial years beginning on or after January 1, 2019. Early adoption is permitted. The EU has not yet adopted the standard. The Group is yet to assess IFRS 16's full impact, that will be applied as from 1 January, 2019.
None of the other IFRS or IFRIC interpretations that have yet to come into legal effect are expected to have any significant impact on the Group.
pulmonary and vascular therapies and a broad selection of products and therapies for intensive care.
Patient & Post-Acute Care: Patient & Post-Acute Care 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.
Surgical Workflows: Surgical Workflows 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 area.
| Net sales | Operating profit* | Depreciation, amortization and impairment |
||||
|---|---|---|---|---|---|---|
| SEK M | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 |
| Acute Care Therapies | 11,804 | 11,577 | 1,000 | 1,346 | –1,430 | –1,473 |
| Patient & Post-Acute Care | 7,456 | 7,767 | 665 | 573 | –714 | –721 |
| Surgical Workflows | 10,496 | 10,891 | 1,001 | 1,054 | –558 | –264 |
| Group functions | – | – | –379 | –244 | –1 | – |
| Total | 29,756 | 30,235 | 2,287 | 2,729 | –2,703 | –2,458 |
| Interest income and other similar income | 25 | 26 | ||||
| Interest expenses and other similar expenses | –662 | –758 | ||||
| Tax on profit for the year | –437 | –540 | ||||
| Net profit for the year | 1,213 | 1,457 |
* Restructuring and integration costs affected the Group´s operating profit with negative SEK 1,313 M (neg. 657). Acute Care Therapies was charged with SEK 751 M (313), Patient & Post-Acute Care with SEK 156 M (180), Surgical Workflows with SEK 253 M (142) and Group functions with SEK 153 M (22).
| Assets | Liabilities | Investments | ||||
|---|---|---|---|---|---|---|
| SEK M | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 |
| Acute Care Therapies | 27,590 | 26,895 | 2,936 | 2,677 | 975 | 1,185 |
| Patient & Post-Acute Care | 12,006 | 10,982 | 1,743 | 1,747 | 325 | 556 |
| Surgical Workflows | 12,607 | 11,913 | 3,146 | 3,562 | 281 | 253 |
| Total per business area | 52,203 | 49,790 | 7,825 | 7,986 | 1,581 | 1,994 |
| Undistributed | 3,008 | 3,445 | 26,470 | 25,656 | 26 | 122 |
| Total | 55,211 | 53,235 | 34,295 | 33,642 | 1,607 | 2,116 |
| Net sales | Intangible and tangible assets |
|||
|---|---|---|---|---|
| Geographic area, SEK M | 2016 | 2015 | 2016 | 2015 |
| EMEA | 12,552 | 12,935 | 15,539 | 15,642 |
| of which, Sweden | 549 | 595 | 2,902 | 3,025 |
| Americas | 11,820 | 11,925 | 19,698 | 18,559 |
| APAC | 5,384 | 5,375 | 1,080 | 1,041 |
| Total | 29,756 | 30,235 | 36,317 | 35,242 |
Getinge's operations are secondarily reported by geographic area. Refer also to page 92 for a list of the Group's 20 largest markets. The geographic areas' consolidation is conducted in accordance with the same policies as for the Group in its entirety.
| Costs by cost category, SEK M | 2016 | 2015 |
|---|---|---|
| Salaries and remuneration | –8,198 | –8,122 |
| Social security expenses | –1,411 | –1,375 |
| Pension expenses | –490 | –504 |
| Amortization and impairment of intangible assets |
–1,889 | –1,471 |
| Depreciation of tangible assets | –814 | –987 |
| Goods and services | –14,728 | –14,806 |
| Total | –27,530 | –27,265 |
| Exchange-rate differences were recognized in profit and loss as follows, SEK M: |
2016 | 2015 |
|---|---|---|
| Other operating income and operating expenses |
31 | –21 |
| Fincancial items | 5 | –3 |
| Total | 36 | –24 |
| SEK M | 2016 | 2015 |
|---|---|---|
| Cost of goods sold | –1,140 | –1,092 |
| Selling expenses | –807 | –810 |
| Administrative expenses | –428 | –465 |
| Research and development costs | –30 | –91 |
| Restructuring and integration costs | –298 | – |
| Total | –2,703 | –2,458 |
income
| SEK M | 2016 | 2015 |
|---|---|---|
| Interest income | 17 | 23 |
| Currency gains | 5 | – |
| Other | 3 | 3 |
| Total | 25 | 26 |
| Fee to PwC, SEK M | 2016 | 2015 |
|---|---|---|
| Fee and expense reimbursement: | ||
| Auditing assignments | –26 | –25 |
| Auditing activities other than auditing assignments |
–1 | –1 |
| Tax consultancy services | –9 | –5 |
| Other services | –2 | –9 |
| Total | –38 | –40 |
Öhrlings PricewaterhouseCoopers (PwC) is the entire Group's auditor. Auditing assignments refer to statutory auditing, meaning assignments required to issue the auditor's report. Auditing activities other than auditing assignments include the review of interim reports and services in conjunction with the issuance of certificates and audit certificates. Tax consultancy services primarily pertain to general tax matters concerning corporate tax. Other services pertain to consultancy regarding financial accounting and services in conjunction with acquisitions.
| SEK M | 2016 | 2015 |
|---|---|---|
| Interest expenses | –617 | –719 |
| Currency losses | – | –3 |
| Other | –45 | –36 |
| Total | –662 | –758 |
| Taxes, SEK M | 2016 | 2015 |
|---|---|---|
| Current tax | –545 | –793 |
| Deferred tax | 108 | 253 |
| Total | –437 | –540 |
| The relationship between the year's tax expense and the recognized profit before tax, SEK M |
2016 | 2015 |
|---|---|---|
| Recognized profit before tax | 1,650 | 1,997 |
| Tax according to current tax rate in Sweden (22%) |
–363 | –439 |
| Adjustment of tax expenses from earlier years | 52 | 73 |
| Effects of non-deductible costs | –68 | –254 |
| Effects of non-taxable income | 413 | 384 |
| Utilized loss carryforwards not previously capitalized |
– | 10 |
| Changed value of temporary differences | –296 | 1 |
| Adjustment for tax rates in foreign subsidiaries | –175 | –315 |
| Recognized tax expense | –437 | –540 |
| SEK M | 2016 | 2015 |
|---|---|---|
| Deferred tax assets relating to: | ||
| Non-current assets | 382 | 135 |
| Financial receivables and derivatives | 300 | 123 |
| Current assets | 228 | 192 |
| Provisions | 711 | 509 |
| Loss carryforwards | 1,554 | 1,245 |
| Other | 389 | 424 |
| Offsetting | –2,331 | –1,403 |
| Deferred tax assets | 1,233 | 1,225 |
| Deferred tax liabilities relate to the following temporary differences, SEK M |
2016 | 2015 |
|---|---|---|
| Deferred tax liabilities relating to: | ||
| Non-current assets | –2,373 | –1,924 |
| Current assets | –3 | –2 |
| Provisions | –3 | –2 |
| Other | –551 | –549 |
| Offsetting | 2,331 | 1,403 |
| Deferred tax liabilities | –599 | –1,074 |
| SEK M | 2016 | 2015 |
|---|---|---|
| Due within 1 year | 2 | – |
| Due within 2 years | – | – |
| Due within 3 years | – | – |
| Due within 4 years | – | – |
| Due within 5 years | 7 | 18 |
| Due in more than 5 years | 23 | – |
| No due date | 7,401 | 5,509 |
| Total | 7,433 | 5,527 |
At year-end 2016, there were unrecognized tax assets in an amount of SEK 299 M (46) pertaining to loss carryforwards and temporary differences.
On April 6, 2016, shareholders were paid a dividend of SEK 2.80 per share (SEK 667 M in total) relating to 2015.
The Board and the CEO propose to the Annual General Meeting that a dividend of SEK 2.00, which amounts to SEK 477 M. The proposed record date is March 31, 2017. Euroclear expects to be able to forward the dividend to shareholders on April 5, 2017.
Earnings per share, before and after dillution, amounted to SEK 4.98 (5.83).
The calculation of earnings per share relating to the Parent Company's shareholders is based on the following information:
| Earnings (numerator) | 2016 | 2015 |
|---|---|---|
| Earnings relating to the Parent Compa ny's shareholders, which form the basis for calculation of earnings per share |
1,188 | 1,390 |
| Number of shares (denominator) | 2016 | 2015 |
| Weighted average number of ordinary shares for calculation of earnings per share |
238,323,377 | 238,323,377 |
| INTANGIBLE ASSETS |
Goodwill | Trade marks |
Capitalized develop ment costs |
Patents | Customer relations |
Technical know– how |
Agree ments |
Intangible assets, other* |
|---|---|---|---|---|---|---|---|---|
| Cost, Jan 1, 2016 | 22,562 | 1,379 | 6,182 | 762 | 3,430 | 1,418 | 70 | 4,127 |
| Investments | – | – | 594 | – | – | – | – | 325 |
| Acquisition/divestment of operations | 162 | – | – | – | 39 | – | – | – |
| Sales/disposals | – | – | –243 | – | – | – | – | –4 |
| Reclassifications | – | – | –118 | 3 | –4 | 118 | 111 | 1,164 |
| Translation differences | 1,064 | –20 | 173 | 61 | 206 | 92 | 5 | 257 |
| Accumulated cost, Dec 31, 2016 | 23,788 | 1,359 | 6,588 | 826 | 3,671 | 1,628 | 186 | 5,869 |
| Amortization and impairment, Jan 1, 2016 | –764 | –746 | –2,343 | –604 | –2,011 | –986 | –62 | –1,871 |
| Amortization for the year | – | –94 | –530 | –69 | –244 | –104 | –20 | –530 |
| Sales/disposals | – | – | 194 | – | – | – | – | 1 |
| Impairment | – | – | –181 | – | – | – | – | –117 |
| Reclassifications | – | – | 21 | –2 | 1 | –22 | –6 | –383 |
| Translation differences | –32 | 11 | –43 | –54 | –115 | –65 | – | –141 |
| Accumulated amortization and impairment, Dec 31, 2016 |
–796 | –829 | –2,882 | –729 | –2,369 | –1,177 | –88 | –3,041 |
| Closing carrying amount, Dec 31, 2016 | 22,992 | 530 | 3,706 | 97 | 1,302 | 451 | 98 | 2,828 |
| Cost, Jan 1, 2015 | 21,836 | 1,360 | 5,358 | 814 | 3,291 | 1,370 | 214 | 3,659 |
| Investments | – | 1 | 702 | 21 | 29 | – | – | 278 |
| Acquisition/divestment of operations | –28 | – | – | 9 | – | –11 | –141 | –23 |
| Sales/disposals | – | – | –81 | – | – | – | – | –34 |
| Reclassifications | – | –22 | 163 | –127 | –94 | – | – | 80 |
| Translation differences | 754 | 40 | 40 | 45 | 204 | 59 | –3 | 167 |
| Accumulated cost, Dec 31, 2015 | 22,562 | 1,379 | 6,182 | 762 | 3,430 | 1,418 | 70 | 4,127 |
| Amortization and impairment, Jan 1, 2015 Amortization for the year |
–718 – |
–644 –100 |
–1,855 –523 |
–547 –69 |
–1,681 –251 |
–839 –118 |
–57 –5 |
–1,497 –405 |
| Acquisition/divestment of operations | – | – | – | – | – | – | – | 17 |
| Sales/disposals | – | – | 22 | – | –2 | – | – | 34 |
| Reclassifications | – | 22 | 5 | 39 | –39 | – | – | –27 |
| Translation differences | –46 | –24 | 8 | –27 | –38 | –29 | – | 7 |
| Accumulated amortization and impairment, Dec 31, 2015 |
–764 | –746 | –2,343 | –604 | –2,011 | –986 | –62 | –1,871 |
| Closing carrying amount, Dec 31, 2015 | 21,798 | 633 | 3,839 | 158 | 1,419 | 432 | 8 | 2,256 |
* During the year some IT-related tangible assets have been reclassified to intangible assets with a retroactive effect from January 1, 2016. Corresponding figures for 2015 have not been reclassified.
| TANGIBLE ASSETS | Buildings and land* |
Plant and machinery |
Equipment, tools, fixtures and fittings** |
Equipment for lease |
Construction in progress |
|---|---|---|---|---|---|
| Cost, Jan 1, 2016 | 3,102 | 1,594 | 3,847 | 4,255 | 464 |
| Investments | 44 | 42 | 191 | 172 | 239 |
| Acquisition/divestment of operations | – | 15 | 13 | 12 | – |
| Sales/disposals | –4 | –71 | –94 | –442 | –1 |
| Reclassifications | 52 | 64 | –1,038 | 468 | –318 |
| Translation differences | 177 | 78 | 75 | 186 | 24 |
| Accumulated cost, Dec 31, 2016 | 3,371 | 1,722 | 2,994 | 4,651 | 408 |
| Depreciation and impairment, Jan 1, 2016 | –1,389 | –1,234 | –2,314 | –3,626 | – |
| Depreciation for the year | –114 | –96 | –271 | –333 | – |
| Acquisition/divestment of operations | – | –1 | –6 | – | – |
| Sales/disposals | 3 | 64 | 86 | 404 | – |
| Reclassifications | –5 | 3 | 380 | –16 | – |
| Translation differences | –80 | –63 | –82 | –143 | – |
| Accumulated depreciation and impairment, Dec 31, 2016 | –1,585 | –1,327 | –2,207 | –3,714 | – |
| Closing carrying amount, Dec 31, 2016 | 1,786 | 395 | 787 | 937 | 408 |
| Cost, Jan 1, 2015 | 2,958 | 1,894 | 3,604 | 4,564 | 668 |
| Investments | 89 | 48 | 369 | 306 | 273 |
| Acquisition/divestment of operations | –6 | – | –76 | – | – |
| Sales/disposals | –94 | –398 | –172 | –693 | – |
| Reclassifications | 122 | 46 | 114 | 12 | –489 |
| Translation differences | 33 | 4 | 8 | 66 | 12 |
| Accumulated cost, Dec 31, 2015 | 3,102 | 1,594 | 3,847 | 4,255 | 464 |
| Depreciation and impairment, Jan 1, 2015 | –1,316 | –1,443 | –2,103 | –3,855 | – |
| Depreciation for the year | –117 | –111 | –413 | –346 | – |
| Sales/disposals | 50 | 324 | 205 | 560 | – |
| Reclassifications | 5 | 1 | –6 | 42 | – |
| Translation differences | –11 | –5 | 3 | –27 | – |
| Accumulated depreciation and impairment, Dec 31, 2015 | –1,389 | –1,234 | –2,314 | –3,626 | – |
| Closing carrying amount, Dec 31, 2015 | 1,713 | 360 | 1,533 | 629 | 464 |
* Closing carrying amount for land amounts to SEK 233 M (191)
** During the year some IT-related tangible assets have been reclassified to intangible assets with a retroactive effect from January 1, 2016. Corresponding figures for 2015 have not been reclassified.
| indefinite useful life. | 2016 | 2015 |
|---|---|---|
| Surgical Workflows | 3,845 | 2,612 |
| Patient & Post-Acute Care | 5,063 | 5,023 |
| Acute Care Therapies | 14,129 | 14,203 |
| Total | 23,037 | 21,838 |
Goodwill and intangible assets with an indefinite useful life are distributed among the cash generating units (CGUs), which are identified per business area.
Goodwill and other net assets are tested for impairment annually and whenever conditions indicate that impairment may be necessary. The recoverable amount for CGUs is based on the calculated value in use. For impairment-testing purposes, goodwill relating to acquisitions is allocated to the various business areas that are defined as separate CGUs.
The value in use of goodwill and other net assets attributable to Surgical Workflows, Patient & Post-Acute Care, and Acute Care Therapies was calculated based on discounted cash flows. For the first year, the cash flow is based on the budget determined by the Board, or in certain instances, a
GETINGE ANNUAL REPORT 2016 67
forecast, if the budget is out of date. Future cash flow has been assumed to have a growth rate corresponding to 2%. This growth is based on reasonable prudence and does not exceed long-term growth for the industry as a whole. A discount rate of 9.3% (9.6) before tax was applied when calculating the value in use for all business areas. With the assumptions described above, value in use exceeds the carrying value for all cash generating units.
In connection to the impairment test, sensitivity analyses have been performed regarding changes in growth rate and discount interest rate, which have a significant impact on the calculation of the discounted cash flows. The sensitivity analyses showed that the below negative changes one and each would not generate any need for impairment in any business area:
There are a limited number of intangible assets, in the form of trademarks with a carrying amount of SEK 45 M (40), for which the useful life has been assessed as indeterminable. For these trademarks, there is no foreseeable limit for the time period during which the trademarks are expected to generate net revenue for Getinge. The useful life for other intangible assets is 3 to 15 years. For strategic acquisitions, the useful life exceeds five years.
| SEK M | 2016 | 2015 |
|---|---|---|
| Raw materials | 1,538 | 1,999 |
| Work in progress | 473 | 406 |
| Finished products | 3,420 | 3,004 |
| Total | 5,431 | 5,409 |
Out of the inventory SEK 5,336 M (5,326) is measured at cost and SEK 95 M (83) is measured at fair value less realizable value. At December 31, 2016, the Group's provisions for obsolescence totaled SEK 982 M (864).
| SEK M | 2016 | 2015 |
|---|---|---|
| Accounts receivable before provisions | 8,450 | 7,711 |
| Provisions for doubtful receivables | –291 | –241 |
| Total | 8,159 | 7,470 |
Accounts receivable net, after provisions for doubtful receivables, theoretically constitutes maximum exposure for the calculated risk of losses. Accordingly, the carrying amount of accounts receivable represents the fair value. It is the Group's opinion that there is no significant concentration of accounts receivable to any single client. Letters of credit or the equivalent normally cover sales to countries outside the OECD.
A maturity analysis of these accounts receivable is presented below:
| SEK M | 2016 | 2015 |
|---|---|---|
| Not fallen due | 5,185 | 4,885 |
| Fallen due 1–5 days | 523 | 418 |
| Fallen due 6–30 days | 609 | 643 |
| Fallen due 31–60 days | 455 | 400 |
| Fallen due 61–90 days | 218 | 210 |
| Fallen due, more than 90 days | 1,460 | 1,155 |
| Total | 8,450 | 7,711 |
At December 31, 2016, the Group's provisions for doubtful receivables totaled SEK 291 M (241). A maturity analysis of these accounts receivable is presented below:
| SEK M | 2016 | 2015 |
|---|---|---|
| Not fallen due | –11 | –8 |
| Fallen due 1–5 days | –1 | – |
| Fallen due 6–30 days | –1 | –1 |
| Fallen due 31–60 days | –2 | –3 |
| Fallen due 61–90 days | –1 | –5 |
| Fallen due, more than 90 days | –275 | –224 |
| Total | –291 | –241 |
Recognized amounts, by currency, for the Group's accounts receivable are as follows:
| SEK M | 2016 | 2015 |
|---|---|---|
| EUR | 2,335 | 2,241 |
| USD | 2,918 | 2,724 |
| GBP | 508 | 464 |
| CAD | 275 | 207 |
| SEK | 163 | 170 |
| Other currencies | 2,251 | 1,905 |
| Total | 8,450 | 7,711 |
Changes in provisions for doubtful receivables are as follows:
| SEK M | 2016 | 2015 |
|---|---|---|
| At January 1 | –241 | –241 |
| Provision for doubtful accounts | –85 | –45 |
| Receivables written off during the year that cannot be recovered |
22 | 11 |
| Recovered doubtful receivables | 45 | 30 |
| In new companies at acquisition date | –12 | –1 |
| Translation differences | –20 | 5 |
| At December 31 | –291 | –241 |
| SEK M | 2016 | 2015 |
|---|---|---|
| Accrued income | 429 | 421 |
| Prepaid rental expenses | 28 | 28 |
| Prepaid insurance expenses | 36 | 51 |
| Prepaid commissions | 5 | 7 |
| Other | 451 | 287 |
| Total | 949 | 794 |
| Class of shares | A | B | Total |
|---|---|---|---|
| Quotient value per share, SEK | 0.50 | 0.50 | |
| Number of shares outstanding: |
|||
| December 31, 2015 | 15,940,050 | 222,383,327 | 238,323,377 |
| December 31, 2016 | 15,940,050 | 222,383,327 | 238,323,377 |
| Shares' voting rights in % | 41.8 | 58.2 | 100.0 |
In accordance with the Articles of Association, the company's share capital amounts to not less than SEK 75 M and not more than SEK 300 M. Within these limits, the share capital can be raised or lowered without requiring an amendment to the Articles of Association. The maximum number of shares is 600 million. One Class A share carries ten votes and one Class B share carries one vote. Both classes of share have the same quotient value, which is SEK 0.50. At December 31, 2016, the company's share capital totaled SEK 119 M (119).
At December 31, 2016, the total granted, unutilized overdraft facilities were SEK 1,177 M (801). In addition, there were unutilized short-term credit facilities of SEK 2,003 M (1,655) and committed, unutilized facilities for medium and long-term credit of SEK 5,567 M (3,837), which may be utilized without qualification.
| SEK M | 2016 | Change | 2015 |
|---|---|---|---|
| Interest-bearing current loans | 5,787 | 510 | 5,277 |
| Interest-bearing long-term loans | 15,914 | –92 | 16,006 |
| Provision for pensions, interest-bearing | 3,368 | 316 | 3,052 |
| Less, cash and cash equivalents | –1,680 | –212 | –1,468 |
| Total | 23,389 | 522 | 22,867 |
Liquidity risk. At December 31, 2016, the Group's long-term interest-bearing loans amounted to SEK 15,914 M. Net debt is recognized with basis adjustments of negative SEK 728 M (neg: 504). The Group's current interest-bearing loans totaled SEK 5,787 M and are covered by unutilized committed credit facilities of SEK 8,567 M. The average interest expense in terms of the Group's liabilities to credit institutions amounts to approximately 2.5%.
The table below analyzes the Group's financial liabilities and net-settled derivative instruments that comprise financial liabilities, subdivided into the periods remaining on the closing date until the contractual agreed date of maturity. The amounts stated in the table comprise contractual, undiscounted cash flows.
| At December 31, 2016, SEK M | < 1 year | 1–2 years | 2–5 years | > 5 years |
|---|---|---|---|---|
| Bank loans and bond loans (including interest) | –6,068 | –9,052 | –7,192 | –193 |
| Derivative instruments (net flows) | –214 | –247 | –102 | – |
| Accounts payable | –2,201 | – | – | – |
| Total | –8,483 | –9,299 | –7,294 | –193 |
| Operational leasing, SEK M | 2016 | 2015 |
|---|---|---|
| Costs relating to operating leases | –496 | –497 |
Leasing costs for assets held via operating leases, such as leased premises, machinery, mainframe computers and office equipment, are recognized among operating expenses.
| for non-cancellable leasing agreements amounted to the following: |
2016 | 2015 |
|---|---|---|
| Due within 1 year | –374 | –426 |
| Due within 2 to 5 years | –753 | –602 |
| Due in more than 5 years | –125 | –109 |
| Total | –1,252 | –1,137 |
| Getinge as a lessor under operating leases: | 2016 | 2015 |
| Due within 1 year | 10 | 11 |
| Due within 2 to 5 years | 2 | 11 |
| Total | 12 | 22 |
| SEK M | FDA Personnel | Other | Total | |
|---|---|---|---|---|
| Value according to opening balance 2015 |
525 | 85 | 39 | 649 |
| Provisions | – | 171 | 487 | 658 |
| Utilized funds | –332 | –81 | –504 | –917 |
| Unutilized funds restored |
– | –1 | – | –1 |
| Translation differences | – | 2 | –2 | – |
| Value according to closing balance 2015 |
193 | 176 | 20 | 389 |
| Of which: | ||||
| Short-term | 230 | |||
| Long-term | 159 | |||
| Value according to opening balance 2016 |
193 | 176 | 20 | 389 |
| Provisions | 400 | 75 | 54 | 529 |
| Utilized funds | –235 | –161 | –20 | –416 |
| Unutilized funds restored |
– | – | – | – |
| Translation differences | 13 | 12 | 4 | 29 |
| Value according to closing balance 2016 |
371 | 102 | 58 | 531 |
| Of which: | ||||
| Short-term | 378 | |||
| Long-term | 153 |
| SEK M | Guarantees | Personnel | Other | Total |
|---|---|---|---|---|
| Value according to opening balance 2015 | 180 | 61 | 308 | 549 |
| Provisions | 109 | 22 | 209 | 340 |
| Utilized funds | –74 | –25 | –39 | –138 |
| Unutilized funds restored | –28 | –4 | –6 | –38 |
| Translation differences | –2 | –2 | 6 | 2 |
| Value according to closing balance 2015 | 185 | 52 | 478 | 715 |
| Of which: | ||||
| Short-term | 338 | |||
| Long-term | 377 | |||
| Value according to opening balance 2016 | 185 | 52 | 478 | 715 |
| Provisions | 50 | 34 | 235 | 319 |
| Utilized funds | –105 | –35 | –198 | –338 |
| Unutilized funds restored | –7 | – | –55 | –62 |
| Translation differences | 4 | 2 | 35 | 41 |
| Value according to closing balance 2016 | 127 | 53 | 495 | 675 |
| Of which: | ||||
| Short-term | 316 | |||
| Long-term | 359 |
| Expected timing of outflow, SEK M | Total |
|---|---|
| Within 1 year | 316 |
| Within 3 years | 299 |
| Within 5 years | 14 |
| > 5 years | 46 |
| Value according to closing balance 2016 | 675 |
Defined-contribution plans. In many countries, the Group's employees are covered by defined-contribution pension plans. The pension plans primarily include retirement pensions. The premiums are paid continuously throughout the year by each Group company to separate legal entities, such as insurance companies. The size of the premium paid by the company is normally based on a set proportion of the employee's salary.
Defined-benefit plans. Getinge has defined-benefit pension plans in a number of countries, such as Sweden, Germany, the UK and the US. The pension plans primarily comprise retirement pensions. Each employer normally has an obligation to pay a lifelong pension, earned according to the number of employment years. The employee must be affiliated with the plan for a certain number of years to achieve full retirement pension entitlement. The pension is financed through payments from the company and, in some cases, the employees. Pension commitments are usually calculated at yearend in line with actuarial methods. New calculations are made if substantial changes occur during the year. Gains and losses on changed actuarial assumptions are recognized as part of comprehensive income.
| Dec 31, 2016 | Funded pension plans |
Unfunded pension plans |
Total |
|---|---|---|---|
| Present value of commitments | –3,443 | –2,746 | –6,189 |
| Fair value of plan assets | 2,770 | – | 2,770 |
| Net liability in the balance sheet | –673 | –2,746 | –3,419 |
| Dec 31, 2015 | Funded pension plans |
Unfunded pension plans |
Total |
|---|---|---|---|
| Present value of commitments | –3,321 | –2,331 | –5,652 |
| Fair value of plan assets | 2,535 | – | 2,535 |
| Net liability in the balance sheet | –786 | –2,331 | –3,117 |
| Group, SEK M | 2016 | 2015 |
|---|---|---|
| Pension commitments | ||
| Opening balance | –3,117 | –3,333 |
| Costs for service in the current year | –59 | –61 |
| Net interest expenses | –82 | –102 |
| Costs for service in previous years | – | – |
| Administrative costs pertaining to plan assets | –1 | – |
| Gains and losses from settlements | 8 | 167 |
| Return on plan assets | 298 | 13 |
| Gain/(loss) attributable to changed demographic assumptions | 22 | 160 |
| Gain/(loss) attributable to changed financial assumptions | –615 | –232 |
| Experience-based gains/(losses) | 2 | 26 |
| Special salary tax on actuarial assumptions | –16 | 10 |
| Restriction in plan surpluses with regard to asset ceilings | 29 | – |
| Exchange-rate differences | –171 | 17 |
| Fees paid by employer | 186 | 160 |
| Fees paid by employees covered under the plan | – | –6 |
| Paid benefits | 97 | 64 |
| Closing balance | –3,419 | –3,117 |
| The defined-benefit pension commitment and composition of plan assets |
Present value of commitment |
Fair value of plan assets |
Net pension liability |
|---|---|---|---|
| Sweden | –569 | 76 | –493 |
| Germany | –2,117 | 4 | –2,113 |
| UK | –1,850 | 1,899 | 49 |
| USA | –1,545 | 788 | –757 |
| Other countries | –108 | 3 | –105 |
| Total | –6,189 | 2,770 | –3,419 |
Note 22, continued from preceding page
| Significant actuarial assumptions | 2016 | 2015 |
|---|---|---|
| Weighted average, % | ||
| Discount rate | 2.5 | 3.1 |
| Expected salary increase rate | 2.5 | 2.8 |
| Expected inflation | 3.0 | 2.2 |
| Significant actuarial assumptions 2016 Germany |
UK | Other countries |
| Weighted average, % | ||
| Discount rate 1.6 |
3.0 | 3.0 |
| Expected salary increase rate 2.5 |
2.0 | 2.9 |
| Expected inflation 1.2 |
3.7 | 4.0 |
| Sensitivity of defined-benefit commitments to changes in the significant weighted assumptions for 2016 |
Expected value for pension commitment |
Change com pared to used assumptions in valuation |
|---|---|---|
| Pension commitment originally used in valuation | –6,189 | |
| Discount rate +1 percentage points | –5,296 | 893 |
| Inflation +1 percentage points | –6,845 | –656 |
| Salary increases +1 percentage points | –6,310 | –121 |
The sensitivity analyses above are based on a change in an assumption, while all other assumptions remain constant. It is unlikely that this will happen in practice, and changes in some of the assumptions may correlate. The calculation of sensitivity in the defined-benefit commitments for material actuarial assumptions uses the same method (the present value of defined-benefit commitments by applying the Projected Unit Credit Method at the end of the reporting period) as that used in the calculation of pension liabilities.
| Composition of plan assets | 2016 | 2015 |
|---|---|---|
| Equities | 1,897 | 1,595 |
| Financial instruments | 237 | 193 |
| Properties | 34 | 48 |
| Cash and cash equivalents and similar assets | 76 | 105 |
| Other | 526 | 594 |
| Total | 2,770 | 2,535 |
All plan assets are listed. The weighted average term of the pension commitments is 18 years.
The commitment for retirement pensions and family pensions for salaried employees in Sweden is safeguarded through insurance with Alecta. According to a statement from the Swedish Financial Reporting Board, UFR 10, this is a multi-employer defined-benefit plan. For the 2016 financial year, the company did not have access to such information that makes it possible to recognize this plan as a defined-benefit plan. The pension plan in accordance with ITP, which is safeguarded through insurance with Alecta, is thus recognized as a defined-contribution plan.
During the year, fees for pension insurance covered by Alecta amounted to SEK 29 M (21). Alecta's surplus can be distributed to the insurers and/or the insured. At year-end 2016, Alecta's surplus in the form of the collective consolidation level was approximately 149% (153). The collective consolidation level comprises the market value of Alecta's assets as a percentage of the insurance commitment calculated in accordance with Alecta's actuarial calculation assumption, which does not correspond with IAS 19.
deferred income
| NOTE 24 Pledged assets and |
|---|
| contingent liabilities |
| SEK M | 2016 | 2015 |
|---|---|---|
| Salaries | 1,199 | 1,157 |
| Social security expenses | 305 | 289 |
| Commissions | 187 | 139 |
| Interest expenses | 51 | 61 |
| Consultancy fees | 23 | 31 |
| Other deferred income | 295 | 334 |
| Other | 936 | 876 |
| Total | 2,996 | 2,887 |
The Group has no pledged assets.
| Contingent liabilities, SEK M | 2016 | 2015 |
|---|---|---|
| Guarantees | 146 | 255 |
| Other | 57 | 5 |
| Total | 203 | 260 |
| Net assets acquired, SEK M | 2016 | 2015 |
|---|---|---|
| Intangible assets | 39 | 9 |
| Tangible assets | 33 | – |
| Inventory | 27 | 2 |
| Other current assets | 14 | 7 |
| Cash and cash equivalents | 47 | 3 |
| Deferred tax liabilities | –7 | –9 |
| Other current liabilities | –16 | –6 |
| Identifiable net assets | 137 | 6 |
| Goodwill | 162 | 38 |
| Total purchase consideration | 299 | 44 |
| Less: | ||
| Unpaid purchase considerations | –40 | – |
| Cash and cash equivalents in the acquired companies | –47 | –3 |
| Impact on the Group's cash and cash equivalents | 212 | 41 |
The acquisition of AccuMed was completed in April 2016. Under the acquisition, Getinge will obtain a manufacturing unit for the production of medical textiles in the Dominican Republic. The operations have about 400 employees and the total purchase consideration amounted to SEK 66 M. The goodwill arising in connection with the acquisition amounted to SEK 29 M and was attributable to future integration synergies for production. Acquisition expenses of SEK 1.0 M were charged to earnings.
| Net assets acquired, SEK M | Carrying amount |
|---|---|
| Tangible assets | 16 |
| Inventory | 22 |
| Other current liabilities | –1 |
| Identifiable net assets | 37 |
| Goodwill | 29 |
| Total purchase consideration | 66 |
| Less: | |
| Cash and cash equivalents in the acquired company | 0 |
| Impact on the Group's cash and cash equivalents | 66 |
The operation was included in Getinge's consolidated financial statements on April 1, 2016.
All of the shares in the UK company 1st Call Mobility Limited were acquired during the second quarter. The company is specialized in medical-device solutions for bariatric patients, generates sales of approximately SEK 100 M and has 48 employees. The total purchase consideration amounted to SEK 233 M and the goodwill arising in connection with the acquisition amounted to SEK 133 M and was primarily attributable to geographical spread. Acquisition expenses of SEK 1.6 M were charged to earnings.
| Net assets, SEK M | Carrying amount |
|---|---|
| Intangible assets | 39 |
| Tangible assets | 17 |
| Inventory | 5 |
| Other current assets | 14 |
| Cash and cash equivalents | 47 |
| Deferred tax liabilities | –7 |
| Other current liabilities | –15 |
| Identifiable net assets | 100 |
| Goodwill | 133 |
| Total purchase consideration | 233 |
| Less: | |
| Unpaid purchase considerations | –40 |
| Cash and cash equivalents in the acquired company | –47 |
| Impact on the Group's cash and cash equivalents | 146 |
The operation was included in Getinge's consolidated financial statements on June 10, 2016.
Most of Getinge's operations are located outside Sweden. This situation entails exposure to different types of financial risks that may cause fluctuations in net profit for the year, cash flow and shareholders' equity due to changes in exchange rates and interest rates. In addition, the Group is exposed to refinancing and counterparty risks. The primary role of the Parent Company's treasury function is to support business activities and to identify and in the best way manage the Group's financial risks in line with the Board's established finance policy. Getinge's financial activities are centralized to benefit from economies of scale, to ensure good internal control and to facilitate monitoring of risk.
Currency risks comprise exchange-rate fluctuations, which have an impact on the Group's earnings and shareholders' equity. Currency exposure occurs in connection with payments in foreign currency (transaction exposure) and when translating foreign subsidiaries' balance sheets and income statements into SEK (translation exposure). For a sensitivity analysis, see page 44 in the Administration Report. The effect of exchange-rate fluctuations on earnings calculated using forecast volumes and earnings in foreign currencies is presented on page 44 of the Administration Report.
Transaction exposure. Payment flows as a result of sales income and cost of goods sold in foreign currencies cause currency exposure that affects Group earnings in the event of exchange-rate fluctuations. The Group's payment flows in foreign currencies consists mainly of the income generated by export sales. The most important currencies are USD, EUR, GBP, PLN and JPY. In line with Getinge's finance policy, the forecast flows in foreign currency are hedged up to 90% for the next financial year. Getinge has the right to hedge for up to 42 months. Hedging is conducted using currency futures, currency swaps and currency options. The market value of financial currency derivatives that meet cash-flow hedging requirements, which are recognized in other comprehensive income (OCI), amounted to a negative SEK 186 M (neg: 206) at December 31, 2016.
Translation exposure — income statement. When translating the results of foreign subsidiaries into SEK, currency exposure occurs, which affects the Group's earnings when exchange rates fluctuate.
Translation exposure — balance sheet. Currency exposure occurs when translating net assets of foreign subsidiaries into SEK, which affect the consolidated OCI. In accordance with the Group's finance policy, to minimize the effects of this translation, the exposure arising is hedged using loans or currency derivatives in the subsidiary's local currency. The market value of financial derivatives that meet hedge-accounting requirements, which are recognized in OCI, amounted to a negative SEK 728 M (neg: 504) at December 31, 2016.
Interest-rate risks are the changes in market interest rates that affect the Group's net interest. How quickly interest-rate changes impact net interest depends on the fixed-interest term of the loans. At December 31, 2016, the average fixed-interest term in the loan portfolio was about 18 months. Interest-rate derivatives, such as interest-rate swaps, are used to achieve the desired fixed-interest term for borrowings. If the average interest rate for currencies represented in the Group's loan portfolio at the end of the year changed instantaneously by 1 percentage point, this would affect profits by +/- SEK 66 M on an annual basis. The market value of financial interest-rate derivative instruments that meet cash-flow hedging requirements, which are recognized in OCI, amounted to a negative SEK 423 M (neg: 487) at December 31, 2016. For further information on liquidity flows attributable to interest-bearing liabilities, refer to Note 18.
Financing risk is defined as the risk of the cost being higher and financing opportunities limited as the loan is renegotiated and that the ability to pay cannot be met as a result of insufficient liquidity or difficulties in securing funding. The Group's cash and cash equivalents are invested short-term with the aim that any excess cash balances are to be used for amortizing loans. The finance policy of the Group states that refinancing risks are managed by signing long-term committed credit agreements. The single largest loan is a syndicated loan agreement of EUR 1,062 M with nine banks. A minor portion of this loan agreement falls due in July 2017, and the major portion in July 2018. In 2012, the Group established an MTN program with the aim of issuing bonds in the Swedish market. At year-end 2016, SEK 2,000 M was outstanding under this loan program. The Group signed a bilateral loan agreement with Intesa Sanpaolo during the year. The loan volume is EUR 100 M and the loan expires in 2019. The Group also refinanced and extended loans of USD 200 M and EUR 140 M with existing lenders during the year.
In addition to these credit facilities, the Group has short-term uncommitted credit lines. For further information on credit lines, refer to Note 17.
At December 31, 2016, the Group's borrowings were well in line with the requirements under Getinge's finance policy pertaining to diversification of lenders and maturity dates.
The Group's financial transactions cause credit risks with regard to financial counterparties. Credit risks or counterparty risks constitute the risk of losses if the counterparties do not fully meet their commitments. Getinge's finance policy states that the credit risk must be limited through accepting only creditworthy counterparties and fixed limits. At December 31, 2016, the total counterparty exposure in derivative instruments was SEK 0 M (2). Credit risks in outstanding derivatives are limited by the offset rules agreed with the respective counterparty. The Group's liquidity is placed in bank accounts with negligible credit risks. Commercial credit risks are limited by a diverse customer base with a high credit rating. A provision was made for the part of accounts receivable considered to be at risk and this affected operating profit.
Financial derivatives. Getinge uses financial derivatives to manage interest and currency exposure arising in its business. At December 31, 2016, all financial instruments outstanding were held for hedging purposes and were deemed to be efficient. Consequently, hedge accounting was applied for these. All recognized derivatives are classified under level 2 of the value hierarchy. Fair value measurements for currency forward contracts are based on published forward rates in an active market. The measurement of interest-rate swaps is based on forward rates as expressed in market yield curves.
Fair value disclosures pertaining to borrowing and other financial instruments. Essentially, all loans have floating interest rates and, accordingly, the fair value is assessed as corresponding to the carrying amount. For other financial assets and liabilities, fair value is assessed as corresponding to the carrying amount due to the short expected maturity in time.
Offsetting of financial derivatives. The Group has ISDA agreements for all of its significant counterparties for raising funds and trading in financial instruments. For the financial assets and liabilities that are subject to legally binding offset agreements or similar, each agreement between the company and its counterparties permits the relevant financial assets and liabilities to be offset.
The Group has netted the value of the Group's basis swaps against loans in the balance sheet.
| 2016 | 2015 | |||||
|---|---|---|---|---|---|---|
| Outstanding derivative instruments, SEK M | Nominal amount |
Fair value | Nominal amount |
Fair value | ||
| Interest/currency derivatives* | 2,000 | –728 | 2,000 | –504 | ||
| Interest-rate derivatives | 16,656 | –423 | 15,730 | –487 | ||
| Currency derivatives | 6,077 | –186 | 7,901 | –206 | ||
| Total | 24,733 | –1,337 | 25,631 | –1,197 |
*Combined instruments
| 2016 | 2015 | ||||
|---|---|---|---|---|---|
| SEK M | Asset | Liability | Asset | Liability | |
| Interest-rate derivatives – cash-flow hedges | – | 423 | – | 487 | |
| Interest-rate derivatives – fair-value hedges* | – | 728 | – | 504 | |
| Currency derivatives – cash-flow hedges | 191 | 377 | 238 | 444 | |
| Total | 191 | 1,528 | 238 | 1,435 | |
| Of which, short-term | 166 | 800 | 158 | 931 | |
| Of which, long-term | 25 | 728 | 80 | 504 |
* Combined instruments are recognized in the company's net liabilities.
The fair value of derivative instruments is established using valuation techniques. For this purpose, observable market information is used. All derivatives are classified under level 2 of the value hierarchy.
| Financial instruments by category | Loan and accounts receivable |
Assets at fair value through profit and loss |
Derivatives used for hedging purposes |
Available-for-sale financial assets |
Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Financial assets | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 |
| Available-for-sale financial assets | – | – | – | – | – | – | – | – | – | – |
| Derivative instruments | – | – | – | – | 191 | 238 | – | – | 191 | 238 |
| Accounts receivable and other receivables |
8,159 | 7,470 | – | – | – | – | – | – | 8,159 | 7,470 |
| Financial assets at fair value through profit and loss |
– | – | – | – | – | – | – | – | – | – |
| Cash and cash equivalents | 1,680 | 1,468 | – | – | – | – | – | – | 1,680 | 1,468 |
| Total | 9,839 | 8,938 | – | – | 191 | 238 | – | – | 10,030 | 9,176 |
| Liabilities at fair value through profit and loss |
Derivatives used for hedging purposes |
Other financial liabilities |
Total | |||||
|---|---|---|---|---|---|---|---|---|
| Financial liabilities | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 |
| Borrowing | – | – | 728 | 504 | 20,973 | 20,779 | 21,701 | 21,283 |
| Derivative instruments | – | – | 800 | 931 | – | – | 800 | 931 |
| Accounts payable and other financial liabilities | – | – | – | – | 2,201 | 1,986 | 2,201 | 1,986 |
| Total | – | – | 1,528 | 1,435 | 23,174 | 22,765 | 24,702 | 24,200 |
| Distribution of currency for outstanding derivative instruments in 2016 | |||||
|---|---|---|---|---|---|
| AUD | 545 | GBP | 97 | SEK | 3,800 |
| CAD | 361 | HKD | 4 | SGD | 2 |
| CHF | 17 | JPY | 430 | THB | 3 |
| CNY | 264 | MXN | 1 | TRY | 10 |
| CZK | 2 | NOK | 3 | USD | 13,937 |
| DKK | 10 | NZD | 1 | ZAR | 4 |
| EUR | 4,527 | PLN | 715 | ||
| Total, SEK M | 24,733 | ||||
| Total, SEK M | 25,631 | ||||
|---|---|---|---|---|---|
| EUR | 4,001 | PLN | 1,536 | ||
| DKK | – | NZD | – | ZAR | – |
| CZK | – | NOK | – | USD | 13,282 |
| CNY | – | MXN | – | TRY | – |
| CHF | 139 | JPY | 450 | THB | – |
| CAD | 669 | HKD | 8 | SGD | – |
| AUD | 862 | GBP | 1,184 | SEK | 3,500 |
Distribution of currency for outstanding derivative instruments in 2015
Maturity structure of outstanding derivative instruments (SEK M) in 2016
| 2017 | 2018 | 2019 | 2020 | 2021 | Total | |
|---|---|---|---|---|---|---|
| Interest/currency derivatives* |
– | 2,000 | – | – | – | 2,000 |
| Interest-rate derivatives |
300 | 12,237 | 4,119 | – | – 16,656 | |
| Currency derivatives | 4,086 | 1,716 | 275 | – | – | 6,077 |
| Total | 4,386 15,953 | 4,394 | – | – 24,733 |
The table refers to net flows
*Combined instruments
Maturity structure of outstanding derivative instruments (SEK M) in 2015
| 2016 | 2017 | 2018 | 2019 | 2020 | Total | |
|---|---|---|---|---|---|---|
| Interest/currency derivatives* |
– | – | 2,000 | – | – | 2,000 |
| Interest-rate derivatives |
124 | 371 | 11,270 | 3,965 | – | 15,730 |
| Currency derivatives | 5,118 | 2,643 | 140 | – | – | 7,901 |
| Total | 5,242 | 3,014 13,410 | 3,965 | – 25,631 |
The table refers to net flows
*Combined instruments
| 2015 | ||||||
|---|---|---|---|---|---|---|
| Group, SEK M | Board and CEO |
Other | Total | Board and CEO |
Other | Total |
| Salaries and remuneration | 287 | 7,911 | 8,198 | 385 | 7,737 | 8,122 |
| Social security expenses | 55 | 1,356 | 1,411 | 55 | 1,320 | 1,375 |
| Pension expenses | 31 | 459 | 490 | 31 | 473 | 504 |
| Total | 373 | 9,726 | 10,099 | 471 | 9,530 | 10,001 |
| Salaries and remuneration per country | 2016 | 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Group, SEK M | Board and CEO |
of which, bonus |
Other | Total | Board and CEO |
of which, bonus |
Other | Total | ||
| Australia | 6 | 1 | 225 | 231 | 11 | 2 | 231 | 242 | ||
| Belgium | 1 | – | 70 | 71 | 3 | 1 | 75 | 78 | ||
| Brazil | 5 | 2 | 30 | 35 | 14 | 5 | 29 | 43 | ||
| Colombia | – | – | 11 | 11 | 4 | 1 | 5 | 9 | ||
| Costa Rica | – | – | 14 | 14 | – | – | – | – | ||
| Denmark | 6 | 1 | 140 | 146 | 13 | 1 | 103 | 116 | ||
| Dominican Republic | – | – | 1 | 1 | – | – | – | – | ||
| Finland | – | – | 18 | 18 | 1 | – | 17 | 18 | ||
| France | 29 | 6 | 565 | 594 | 28 | 5 | 491 | 519 | ||
| United Arab Emirates | 4 | 1 | 40 | 44 | 7 | 1 | 39 | 46 | ||
| Netherlands | 6 | 1 | 121 | 127 | 9 | 1 | 117 | 126 | ||
| Hong Kong | 10 | 3 | 31 | 41 | 11 | 5 | 24 | 35 | ||
| India | 3 | 1 | 31 | 34 | 6 | 2 | 32 | 38 | ||
| Ireland | – | – | 19 | 19 | – | – | 37 | 37 | ||
| Italy | 3 | 1 | 121 | 124 | 4 | 1 | 121 | 125 | ||
| Japan | 7 | 2 | 135 | 142 | 13 | 5 | 119 | 132 | ||
| Canada | 16 | 4 | 197 | 213 | 17 | 4 | 171 | 188 | ||
| China | 6 | 1 | 155 | 161 | 9 | 1 | 158 | 167 | ||
| Mexico | 2 | – | 8 | 10 | – | – | 10 | 10 | ||
| Norway | – | – | 24 | 24 | 1 | – | 23 | 24 | ||
| New Zealand | 1 | – | 12 | 13 | 1 | – | 16 | 17 | ||
| Poland | 10 | 1 | 135 | 145 | 8 | 1 | 119 | 127 | ||
| Portugal | – | – | 12 | 12 | 1 | – | 9 | 10 | ||
| Russia | 1 | – | 12 | 13 | 1 | – | 12 | 13 | ||
| Switzerland | 5 | 1 | 73 | 78 | – | – | 65 | 65 | ||
| Serbia | 3 | 1 | 3 | 6 | 3 | – | 3 | 6 | ||
| Singapore | 4 | 1 | 43 | 47 | 7 | 2 | 35 | 42 | ||
| Slovakia | – | – | 1 | 1 | 1 | – | – | 1 | ||
| Spain | 2 | 1 | 54 | 56 | 3 | 1 | 42 | 45 | ||
| UK | 14 | 3 | 580 | 594 | 40 | 8 | 520 | 560 | ||
| Sweden | 72 | 4 | 768 | 840 | 63 | 6 | 708 | 771 | ||
| South Africa | 2 | 1 | 15 | 17 | 2 | 1 | 4 | 6 | ||
| South Korea | 1 | – | 6 | 7 | – | – | 8 | 8 | ||
| Taiwan | 1 | – | 7 | 8 | 1 | – | 7 | 8 | ||
| Thailand | 2 | – | 14 | 16 | 1 | – | 15 | 16 | ||
| Czech Republic | 4 | 1 | 7 | 11 | 2 | – | 8 | 10 | ||
| Turkey | 8 | 2 | 66 | 74 | 7 | 2 | 62 | 69 | ||
| Germany | 32 | 8 | 1,200 | 1,232 | 32 | 8 | 1,285 | 1,317 | ||
| USA | 14 | 3 | 2,891 | 2,905 | 53 | 16 | 2,950 | 3,003 | ||
| Austria | 7 | 2 | 56 | 63 | 8 | 2 | 67 | 75 | ||
| Total | 287 | 53 | 7,911 | 8,198 | 385 | 82 | 7,737 | 8,122 |
| Remuneration and other benefits during 2016, SEK 000s |
Board fee* | Basic pay | Variable remune ration |
Other benefits |
Pension expenses |
Other remune ration |
Total |
|---|---|---|---|---|---|---|---|
| Chairman of the Board | 1,275 | – | – | – | – | – | 1,275 |
| Board members | 4,993 | – | – | – | – | – | 4,993 |
| Joacim Lindoff, Acting CEO (from 22 August 2016) | – | 2,681 | – | 77 | 434 | – | 3,192 |
| Alex Myers, former CEO (until 22 August 2016) | – | 14,000 | – | 126 | 5,600 | 45,150 | 64,876 |
| Other senior executives | – | 37,010 | 15,985 | 2,560 | 6,053 | 16,780 | 78,388 |
| Total | 6,268 | 53,691 | 15,985 | 2,763 | 12,087 | 61,930 | 152,724 |
* Also includes fees for work on Board Committees
• Other senior executives pertains remunerations to members in the Getinge Executive Team, other than the acting CEO and the former CEO (11 individuals). Only remunerations that have been received as a member of the executive team are included in the amounts, which comprises persons that has joined and left the executive team during the year.
| Remuneration and other benefits during 2015, SEK 000s |
Board fee* | Basic pay | Variable remune ration |
Other benefits |
Pension expenses |
Total |
|---|---|---|---|---|---|---|
| Chairman of the Board | 1,225 | – | – | – | – | 1,225 |
| Board members | 4,176 | – | – | – | – | 4,176 |
| Johan Malmquist, CEO (until March 25, 2015) | – | 5,500 | – | 25 | 8,230 | 13,755 |
| Alex Myers, CEO (from March 25, 2015) | – | 15,493 | – | 88 | 6,194 | 21,775 |
| Other senior executives ** | – | 18,868 | 17,961 | 838 | 8,490 | 46,157 |
| Total | 5,401 | 39,861 | 17,961 | 951 | 22,914 | 87,088 |
* Also includes fees for work on Board Committees
** Five individuals
Principles: The Annual General Meeting decides on remuneration to the Chairman of the Board and Board members. Employee representatives do not receive Board remuneration. Remuneration to the CEO and other senior executives comprises basic pay, variable remuneration, other benefits as well as pensions. Other senior executives comprise the individuals, who together with the CEO, comprise the Getinge Executive Team. For the Getinge Executive Team structure, see pages 52–53. The allocation between basic pay and variable remuneration should be proportionate to the executive's responsibility and authority. The CEO's variable remuneration is a maximum of 80% of basic pay. Other senior executives' variable remuneration is based on results in relation to individually set targets.
Bonus: The acting CEO's bonus for 2016 was based on the individual goals set by the Board. For other senior executives, bonuses for 2016 were based on a combination of the result of the individual's area of responsibility and individual goals.
Pensions: The acting CEO is entitled to a pension from the age of 65. The pension is premium based and pension expenses amount to 16% of basic pay. For other senior executives, pension ages vary between the ages of 62 and 65. Pension agreements have been signed in accordance with local legislation in the country where the executive resides. All pension benefits are transferable, i.e. not conditional on future employment.
Severance pay:The period of notice for the acting CEO is a minimum of six months. If termination of employment is initiated by the company then severance pay of 12 months' pay will be awarded. Severance pay is not offset against any other income. Upon termination of employment of any other senior executives, they have the right to severance pay of a minimum of six months and a maximum of one year.
Drafting and decision-making process: During the year, the Remuneration Committee gave the Board its recommendations concerning policies for the remuneration to senior executives. The recommendations included the proportion between fixed and variable remuneration and the size of possible pay increases. The Remuneration Committee also proposed criteria for determining bonuses, allotment and the size of the pension conditions and severance pay. The Board discussed the Remuneration Committee's proposals and decided in line with the Remuneration Committee's recommendations.
Remuneration to the CEO for the 2016 financial year was decided by the Board taking into account the Remuneration Committee's recommendations.
Remuneration to other senior executives was decided by the CEO in consultation with the Chairman of the Board. During 2016, the Remuneration Committee was convened on three occasions. The committee's work was conducted with the support of external experts in issues concerning remuneration levels and structures.
The 2016 AGM resolved to implement a long-term incentive program (LTIP 2016). The program includes the CEO and the Getinge Executive Team comprising 11 individuals, as well as maximum 75 additional senior executives and key individuals in Getinge Group. LTIP 2016 means that the participants are entitled to receive performance shares, free of charge, if the performance target has been achieved during the performance period (2016– 2018). The allocation of performance shares is based on minimum and ceiling target levels respectively, as set by the Board, with regard to the accumulated development of earnings per share during the performance period. The accumulated earnings per share during the performance period must reach SEK 33 per share. The minimum level for allocation of performance shares is a minimum of 90% fulfillment of the performance target and the ceiling for allocation is if the performance target is exceeded by 10% or more.
Should the maximum number of performance shares be allocated, the total number of shares in LTIP 2016 will amount to 439,390 Class B Getinge shares. The total cost for LTIP 2016, including social security contributions, under the three-year program period, is estimated at SEK 94 M, if the performance target is met in full. The impact on earnings in 2016 was SEK 9 M including social security contributions.
| 2016 | 2015 | |||||
|---|---|---|---|---|---|---|
| Men Women | Total | Men Women | Total | |||
| Australia | 283 | 128 | 411 | 275 | 122 | 397 |
| Belgium | 100 | 33 | 133 | 105 | 32 | 137 |
| Brazil | 62 | 53 | 115 | 83 | 41 | 124 |
| Colombia | 17 | 10 | 27 | 17 | 9 | 26 |
| Costa Rica | 40 | 29 | 69 | – | – | – |
| Denmark | 143 | 49 | 192 | 121 | 56 | 177 |
| Dominican Republic |
99 | 353 | 452 | – | – | – |
| Finland | 21 | 9 | 30 | 23 | 10 | 33 |
| France | 911 | 488 | 1,399 | 856 | 434 | 1,290 |
| United Arab Emirates |
52 | 24 | 76 | 43 | 18 | 61 |
| Netherlands | 162 | 79 | 241 | 174 | 77 | 251 |
| Hong Kong | 37 | 22 | 59 | 37 | 23 | 60 |
| India | 224 | 57 | 281 | 358 | 57 | 415 |
| Ireland | 78 | 21 | 99 | 76 | 20 | 96 |
| Italy | 184 | 84 | 268 | 189 | 85 | 274 |
| Japan | 173 | 44 | 217 | 209 | 55 | 264 |
| Canada | 293 | 139 | 432 | 307 | 164 | 471 |
| China | 561 | 271 | 832 | 666 | 300 | 966 |
| Mexico | 28 | 13 | 41 | 23 | 10 | 33 |
| Norway | 32 | 6 | 38 | 30 | 8 | 38 |
| New Zealand | 25 | 5 | 30 | 25 | 7 | 32 |
| Poland | 428 | 651 | 1,079 | 416 | 581 | 997 |
| Portugal | 16 | 6 | 22 | 16 | 6 | 22 |
| Russia | 31 | 16 | 47 | 29 | 16 | 45 |
| Switzerland | 74 | 23 | 97 | 71 | 21 | 92 |
| Serbia | 12 | 6 | 18 | 8 | 6 | 14 |
| Singapore | 64 | 33 | 97 | 50 | 28 | 78 |
| Slovakia | 2 | 1 | 3 | 2 | 1 | 3 |
| Spain | 60 | 31 | 91 | 51 | 32 | 83 |
| UK | 907 | 377 | 1,284 | 910 | 362 | 1,272 |
| Sweden | 856 | 405 | 1,261 | 973 | 367 | 1,340 |
| South Africa | 61 | 42 | 103 | 79 | 43 | 122 |
| South Korea | 8 | 6 | 14 | 9 | 7 | 16 |
| Taiwan | 17 | 11 | 28 | 19 | 10 | 29 |
| Thailand | 43 | 34 | 77 | 40 | 36 | 76 |
| Czech Republic |
18 | 22 | 40 | 28 | 9 | 37 |
| Turkey | 231 | 237 | 468 | 213 | 239 | 452 |
| Germany | 1,388 | 666 | 2,054 | 1,529 | 726 | 2,255 |
| USA | 2,144 | 1,028 | 3,172 | 2,269 | 1,079 | 3,348 |
| Austria | 127 | 19 | 146 | 114 | 25 | 139 |
| Total | 10,012 | 5,531 | 15,543 | 10,443 | 5,122 | 15,565 |
| Distribution of senior executives and Board members at the closing date, % |
2016 | 2015 |
|---|---|---|
| Women: | ||
| Board members | 30% | 30% |
| Other members of the company's management, incl. CEO |
25% | 25% |
| Men: | ||
| Board members | 70% | 70% |
| Other members of the company's management, incl. CEO |
75% | 75% |
Transactions between Getinge AB and its subsidiaries, which are related companies to Getinge AB, were eliminated in the consolidated financial statements.
Business terms and conditions as well as market-regulated pricing apply for delivery of products and services between Group companies.
In 2016, intra-Group sales amounted to SEK 19,332 M (19,554). No Board member or senior executive has, or has had, any direct or indirect participation in any business transactions, between themselves and the company, that are or were unusual in character, regarding terms or conditions.
From Carl Bennet AB SEK 671 T (986) has been invoiced in respect of costs for Carl Bennet related to the assignment as Chairman of the Board.
During the year, the pension plan for Johan Malmquist, Board member and former CEO, was changed to be premium-based instead of defined benefit-based. The change has not resulted in any costs for the Group.
In addition, no other transactions with related parties occurred. For remuneration and benefits to individuals in management positions and on the Board of Directors, see Note 27.
On February 22 it was announced that Barbro Fridén, Dan Frohm and Sofia Hasselberg are proposed, together with the incoming President and CEO Mattias Perjos, to be elected to the board at the Annual General Meeting on March 29. Carola Lemne and Maths Wahlström have declined reelection.
| Cash and cash equivalents, SEK M | 2016 | 2015 |
|---|---|---|
| Investments | 15 | 10 |
| Cash and bank | 1,665 | 1,458 |
| Total | 1,680 | 1,468 |
| cash flow, SEK M | 2016 | 2015 |
|---|---|---|
| Gain from divestment/disposal of non-current assets |
85 | 198 |
| Gain from divestment of operations | – | 32 |
| Total | 85 | 230 |
| SEK M | 2016 | 2015 |
|---|---|---|
| Development costs, gross | –1,265 | –1,300 |
| Capitalized development costs | 594 | 702 |
| Development costs, net | –671 | –598 |
| SEK M Note |
2016 | 2015 | |
|---|---|---|---|
| Administrative expenses | 2 | –164 | –261 |
| Operating result 16, 17 |
–164 | –261 | |
| Result from participations in Group companies | 5 | 2,514 | 3,459 |
| Interest income and other similar income | 6 | 164 | 248 |
| Interest expenses and other similar expenses | 7 | –2,370 | –1,287 |
| Profit after financial items | 144 | 2,159 | |
| Taxes | 8 | 78 | –74 |
| Net profit for the year | 222 | 2,085 |
| SEK M Note |
2016 | 2015 |
|---|---|---|
| Net profit for the year | 222 | 2,085 |
| Other comprehensive income | ||
| Cash-flow hedges | –4 | – |
| Tax attributable to cash-flow hedges | 1 | – |
| Other comprehensive loss for the period, net after tax | –3 | – |
| Total comprehensive income for the period | 219 | 2,085 |
| SEK M Note |
2016 | 2015 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Intangible assets 2, 3 |
104 | 101 |
| Tangible assets 2, 4 |
3 | 3 |
| Participations in Group companies 9 |
25,024 | 25,112 |
| Deferred tax assets | 222 | 54 |
| Total non-current assets | 25,353 | 25,270 |
| Current assets | ||
| Receivables from Group companies | 7,160 | 8,333 |
| Current tax assets | 1 | 22 |
| Other receivables | 75 | – |
| Prepaid expenses and accrued income 12 |
64 | 48 |
| Cash and cash equivalents | 0 | 0 |
| Total current assets | 7,300 | 8,403 |
| TOTAL ASSETS | 32,653 | 33,673 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||
| Shareholders' equity 18 |
||
| Restricted shareholders' equity | ||
| Share capital | 119 | 119 |
| Statutory reserve | 2,525 | 2,525 |
| Non-restricted shareholders' equity | ||
| Share premium reserve | 3,435 | 3,435 |
| Retained earnings | 3,259 | 1,836 |
| Net profit for the year | 222 | 2,085 |
| Total shareholders' equity | 9,560 | 10,000 |
| Long-term liabilities | ||
| Interest-bearing long-term loans 10 |
15,851 | 15,929 |
| Total long-term liabilities | 15,851 | 15,929 |
| Current liabilities | ||
| Interest-bearing current loans 11 |
5,646 | 5,147 |
| Accounts payable | 35 | 30 |
| Liabilities to Group companies | 1,351 | 2,396 |
| Current tax liabilities | 8 | – |
| Other liabilities | 2 | 3 |
| Accrued expenses and deferred income 13 |
200 | 168 |
| Total current liabilities | 7,242 | 7,744 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 32,653 | 33,673 |
For information about pledged assets and contingent liabilities, refer to Note 14.
| Restricted shareholders' equity |
||||||
|---|---|---|---|---|---|---|
| SEK M | Share capital | Statutory reserve |
Share premium reserve |
Retained earnings and net profit for the year |
Total shareholders' equity |
|
| Opening balance at January 1, 2015 | 119 | 2,525 | 3,435 | 2,503 | 8,582 | |
| Total comprehensive income for the period | – | – | – | 2,085 | 2,085 | |
| Dividend | – | – | – | –667 | –667 | |
| Closing balance at December 31, 2015 | 119 | 2,525 | 3,435 | 3,921 | 10,000 | |
| Opening balance at January 1, 2016 | 119 | 2,525 | 3,435 | 3,921 | 10,000 | |
| Total comprehensive income for the period | – | – | – | 219 | 219 | |
| Share-based remuneration | – | – | – | 8 | 8 | |
| Dividend | – | – | – | –667 | –667 | |
| Closing balance at December 31, 2016 | 119 | 2,525 | 3,435 | 3,481 | 9,560 |
Each share's quotient value is SEK 0.50. The share capital consists of 15,940,050 Class A shares carrying ten voting rights per share and 222,383,327 Class B shares carrying one voting right per share, totaling 238,323,377 shares.
| SEK M | Note | 2016 | 2015 |
|---|---|---|---|
| Operating activities | |||
| Operating result | –164 | –261 | |
| Adjustments for items not included in cash flow | 23 | 19 | |
| Interest received and similar items | 164 | 248 | |
| Dividend received | 168 | 1,890 | |
| Interest paid and similar items | –2,383 | –1,293 | |
| Taxes paid | –61 | –94 | |
| Cash flow before changes to working capital | –2,253 | 509 | |
| Changes in working capital | |||
| Current receivables | 1,976 | –4,672 | |
| Current liabilities | 1,330 | –54 | |
| Cash flow from operating activities | 1,053 | –4,217 | |
| Investing activities | |||
| Investments in intangible assets | 3 | –25 | –78 |
| Investments in tangible assets | 4 | –1 | – |
| Investments in subsidiaries | –21 | –243 | |
| Cash flow from investing activities | –47 | –321 | |
| Financing activities | |||
| Change in interest-bearing loans | –1,908 | 779 | |
| Dividend paid | –667 | –667 | |
| Group contributions received | 1,569 | 3,625 | |
| Cash flow from financing activities | –1,006 | 3,737 | |
| Cash flow for the year | 0 | –801 | |
| Cash and cash equivalents at the beginning of the year | 0 | 801 | |
| Cash flow for the year | 0 | –801 | |
| Cash and cash equivalents at year-end | 0 | 0 |
The financial statements of the Parent Company were prepared in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2, Reporting of Legal Entities. In accordance with the regulations stipulated in RFR 2, in the annual financial statements for a legal entity, the Parent Company is to apply all of the IFRS/IAS regulations and statements that have been endorsed by the EU where possible within the framework of the Swedish Annual Accounts Act and with consideration of the link between accounting and taxation. The recommendation specifies which exceptions are to be made from IFRS/IAS. Provisions conforming to IFRS/IAS are stated in Note 1 Accounting policies, for the consolidated financial statements. The Parent Company applies the accounting policies detailed for the Group with the exception of the following:
Remunerations to employees. The Parent Company complies with the Swedish Pension Obligations Vesting Act and directives from the Swedish Financial Supervisory Authority when calculating defined benefit pension plans.
Financial derivatives. The Parent Company applies hedge accounting for currency and interest rate swaps in accordance with IAS 39. For other derivatives, the exemption in RFR 2 pertaining to IAS 39 is applied, meaning that measurement and recognition of financial instruments is based on cost pursuant to the Swedish Annual Accounts Act.
Shares and participations. Subsidiaries are recognized in accordance with the acquisition method, implying that holdings are recognized at cost in the balance sheet less any impairment. Dividends from subsidiaries are recognized as dividend income.
| SEK M | 2016 | 2015 |
|---|---|---|
| Equipment, tools, fixtures and fittings | –1 | 0 |
| Intangible assets | –22 | –19 |
| Total | –23 | –19 |
| Depreciation/amortization is recognized as administrative expenses |
–23 | –19 |
| Intangible assets, SEK M | 2016 | 2015 |
|---|---|---|
| Opening cost | 227 | 149 |
| Investments | 25 | 78 |
| Closing accumulated cost | 252 | 227 |
| Opening amortization | –126 | –107 |
| Amortization for the year | –22 | –19 |
| Closing accumulated amortization | –148 | –126 |
| Closing carrying amount | 104 | 101 |
| Equipment, tools, fixtures and fittings, SEK M | 2016 | 2015 |
|---|---|---|
| Opening cost | 7 | 7 |
| Investments | 1 | – |
| Closing accumulated cost | 8 | 7 |
| Opening depreciation | –4 | –4 |
| Depreciation for the year | –1 | 0 |
| Closing accumulated depreciation | –5 | –4 |
| Closing carrying amount | 3 | 3 |
| SEK M | 2016 | 2015 |
|---|---|---|
| Dividends from Group companies | 168 | 1,890 |
| Divestment of subsidiaries | 12 | – |
| Impairment of shares in Group companies | –93 | – |
| Group contributions | 2,427 | 1,569 |
| Total | 2,514 | 3,459 |
| SEK M | 2016 | 2015 |
|---|---|---|
| Interest income from Group companies | 163 | 242 |
| Interest income | 1 | 6 |
| Total | 164 | 248 |
| SEK M | 2016 | 2015 |
|---|---|---|
| Interest expenses to Group companies | –3 | –7 |
| Interest expenses | –538 | –627 |
| Currency losses | –1,803 | –631 |
| Other | –26 | –22 |
| Total | –2,370 | –1,287 |
| Tax, SEK M | 2016 | 2015 |
|---|---|---|
| Current tax | –90 | –85 |
| Deferred tax | 168 | 11 |
| Total | 78 | –74 |
| Relationship between the year's tax expenses and the recognized profit before tax, SEK M: |
||
| Recognized profit before tax | 144 | 2,159 |
| Tax according to current tax rate in Sweden (22%) |
–32 | –475 |
| Effects of non-deductible costs | –30 | –16 |
| Effects of non-taxable income | 49 | 417 |
| Foreign tax | –8 | – |
| Adjustment of tax from earlier years | 99 | – |
| Recognized tax expense | 78 | –74 |
| Parent Company's holdings | Reg. office | Swedish Corp. Reg. No. |
No. of shares |
Percentage holding |
Carrying amount, SEK M 2016 |
Carrying amount, SEK M 2015 |
|---|---|---|---|---|---|---|
| Arjo Finance Holding AB | Gothenburg | 556473–1700 | 23,062,334 | 100 | 5,716 | 5,716 |
| Getinge Sterilization AB | Halmstad | 556031–2687 | 50,000 | 100 | 452 | 452 |
| Maquet Holding AB | Halmstad | 556535–6317 | 1,000 | 100 | 1,481 | 1,481 |
| Getinge Disinfection AB | Halmstad | 556042–3393 | 25,000 | 100 | 118 | 118 |
| Getinge Letting AB | Halmstad | 556495–6976 | 1,000 | 100 | 0 | 0 |
| Getinge Skärhamn AB | Tjörn | 556412–3569 | 1,000 | 100 | 6 | 6 |
| Arjo AB | Gothenburg | 559092–8064 | 500,000 | 100 | 0 | – |
| Getinge Australia Pty Ltd | Australia | 39,500 | 100 | 9 | 9 | |
| Getinge NV | Belgium | 600 | 100 | 2 | 2 | |
| Getinge Danmark A/S | Denmark | 525 | 100 | 3 | 3 | |
| Getinge IT Solutions Aps | Denmark | 533,000 | 100 | 27 | 27 | |
| Getinge Finland Oy | Finland | 15 | 100 | 0 | 0 | |
| Getinge Infection Control SAS | France | 289,932 | 85 | 236 | 236 | |
| Getinge/Castle International Ltd | Greece | 100 | 100 | 2 | 2 | |
| Getinge Treasury Ireland DAC | Ireland | 1 | 100 | 891 | 984 | |
| Getinge Japan KK | Japan | 10,000 | 100 | – | 16 | |
| Getinge (Suzhou) Co. Ltd. | China | 1 | 100 | 111 | 111 | |
| Getinge Holding Luxembourg Sarl | Luxembourg | 163,972 | 100 | 10,887 | 10,887 | |
| Getinge Norge AS | Norway | 4,500 | 100 | 4 | 4 | |
| Getinge Poland Sp.z.o.o | Poland | 50,500 | 100 | 13 | 13 | |
| NeuroMédica SA | Spain | 40,000 | 100 | 16 | 16 | |
| ArjoHuntleigh GmbH | Austria | 1 | 3 | 7 | 7 | |
| Getinge Shared Services Sp.z.o.o | Poland | 60,600 | 100 | 33 | 33 | |
| Getinge Holding USA Inc | USA | 10,000 | 100 | 4,977 | 4,977 | |
| Getinge Shared Services CR Sociedad | Costa Rica | 10 | 100 | 26 | 5 | |
| Maquet Medizintechnik vertrieb und Service GmbH | Austria | 1 | 100 | 7 | 7 | |
| Total carrying amount | 25,024 | 25,112 |
The Parent Company's holding of shares in the subsidiaries constitutes the entire capital of the respective company, which also corresponds to 100% of the voting rights, unless otherwise stated.
Getinge Group, with operations in many countries, is organized into sub-groups in several categories, and accordingly, the legal structure cannot be reflected in a simpler manner in a tabular presentation. The following is a list of the companies that is not owned directly by Getinge AB. Except for the following, the ownership interest is 100%.
Arjo Ltd Med. AB, 556473-1718, Gothenburg
Arjo Scandinavia AB, 556528-
• Maquet Colombia S.A.S
• Getinge Group Shared Services CR Sociedad
• Getinge Dominican Republic SA
Note 9, continued from preceding page
• Getinge/Castle International Ltd
• Getinge Holding Luxembourg S.a.r.l.
All loans fall due for payment within five years.
• Getinge Group South East Europe
84 GETINGE ANNUAL REPORT 2016
NOTE 10 Interest-bearing long-term loans NOTE 11 Interest-bearing current loans
* The Parent Company has issued a guarantee under section 479(C) of the UK Companies Act 2006 for the year ended 31 December 2016 in respect of the subsidiaries registered in the United Kingdom, marked above. The Parent Company guarantees all outstanding liabilities to which the subsidiary companies are subject to at 31 December 2016, until they are satisfied in full and the guarantee is enforceable against the company by any person to whom the subsidiary companies are liable in respect of those liabilities. The subsidiaries
have taken advantage of the exemption from audit by virtue of Section 479(A) of the Companies Act 2006.
SEK M 2016 2015 Liabilities to credit institutions 15,851 15,929 Total 15,851 15,929
• Maquet Slovakia s.r.o.
• Maquet Cardiopulmonary Ltd Sti • Maquet Tibbi Sistemler San Ve
Tk AS Germany
ing GmbH
GmbH
GmbH • Maquet GmbH
GmbH
Ukraine
USA
• ArjoHuntleigh GmbH • Getinge Holding GmbH • Getinge-Maquet Germany Hold-
• Getinge Vertrieb und Service
• HCS Homecare Service GmbH • HNE Huntleigh Nesbit Evans Healthcare GmbH
• Maquet Cardiopulmonary GmbH • Maquet Financial Services
• Maquet Holding BV&Co KG • Maquet Hospital Solutions
• Maquet Vertrieb und Service Deutschland GmbH • MediKomp GmbH
• Maquet Medical Systems AG
• Maquet Cardiovascular LLC • Maquet Cardiovascular US Sales
• Maquet Datascope Inc • SteriTec Products Mfg Inc
• ArjoHuntleigh GmbH
und Service GmbH
• Maquet Medizintechnik Vertrieb
LLC
Austria
SEK M 2016 2015 Liabilities to credit institutions 5,646 5,147 Total 5,646 5,147
• Maquet Ukraine LLC
• ArjoHuntleigh Inc • Atrium Medical Corp • Datascope Trademark Corp
• Genisphere Inc • Getinge USA Inc • Getinge Group Logistics Americas, LLC • Getinge Holding USA, Inc • Getinge Holding USA II, Inc • Getinge Sourcing LLC • InterVascular Inc • InterVascular C Inc • InterVascular V Inc • La Calhéne Inc. • Lancer Inc • Laax Inc
• Huntleigh Luton Ltd* • Huntleigh Properties Ltd* • Huntleigh (SST) Ltd • Huntleigh Technology Ltd*
• Jostra Ltd
• Maquet Ltd • Pegasus Ltd • Pulsion Medical UK Ltd • Scantrack Healthcare Ltd
South Africa
(Pty) Ltd
South Korea
Taiwan
Thailand
Turkey
Czech Republic • ArjoHuntleigh sro
ited Sirketi
Tic A.S
Ltd
• ArjoHuntleigh South Africa (Pty)
• Huntleigh Africa Provincial Sales
• Huntleigh Africa (Pty) Ltd • Maquet South Africa
• ArjoHuntleigh Korea Co. Ltd • Getinge Korea Co Ltd • Maquet Medical Korea Co. Ltd
• Getinge Group Taiwan Co., Ltd
• Getinge Czech Republic, s.r.o. • Maquet Czeck Republic s.r.o.
• Getinge Saglik Urunleri Ithalat Ihracat Ticaret Ve Sanayi Lim-
• Getinge Stericool Medikal Aletler Sanayi ve • Trans Medikal Aletler San.ve
• Maquet Thailand Co. Ltd • ArjoHuntleigh (Thailand) Co. Ltd
| SEK M | 2016 | 2015 |
|---|---|---|
| Prepaid financial expenses | 31 | 9 |
| Other | 33 | 39 |
| Total | 64 | 48 |
| SEK M | 2016 | 2015 |
|---|---|---|
| Salaries | 46 | 27 |
| Social security expenses | 84 | 66 |
| Interest expenses | 40 | 53 |
| Other | 30 | 22 |
| Total | 200 | 168 |
The Parent Company has no pledged assets in 2016 or 2015.
| Contingent liabilities, SEK M | 2016 | 2015 |
|---|---|---|
| Pension guarantees FPG/PRI | 251 | 243 |
| Other | 346 | 37 |
| Total | 597 | 280 |
| Sweden | 2016 | 2015 |
|---|---|---|
| Men | 37 | 36 |
| Women | 27 | 19 |
| Total | 64 | 55 |
| Distribution of senior executives and Board members at year-end |
||
| Women | ||
| Board members | 3 | 3 |
| Other members of senior management, including the CEO |
2 | – |
| Men | ||
| Board members | 7 | 7 |
| Other members of senior management, including the CEO |
2 | 3 |
| 2016, SEK M | Board and CEO |
Other | Total |
|---|---|---|---|
| Salaries and remuneration | –58 | –79 | –137 |
| Social security expenses | –24 | –28 | –52 |
| Pension expenses | –14 | –28 | –42 |
| Total | –96 | –135 | –231 |
| 2015, SEK M | Board and CEO |
Other | Total |
|---|---|---|---|
| Salaries and remuneration | –43 | –50 | –93 |
| Social security expenses | –12 | –9 | –21 |
| Pension expenses | –36 | –5 | –41 |
| Total | –91 | –64 | –155 |
| Fee to PwC, SEK M | 2016 | 2015 |
|---|---|---|
| Fee and expense reimbursement: | ||
| Auditing assignment | –6 | –5 |
| Auditing activities other than auditing assign ments |
–1 | –1 |
| Tax consultancy services | – | – |
| Other services | –1 | –4 |
| Total | –8 | –10 |
Öhrlings PricewaterhouseCoopers AB (PwC) has the auditing assigment for the Parent Company. Auditing assignment refer to statutory auditing, meaning assignments required to issue the auditor's report. Auditing activities other than auditing assignments include the review of interim reports and services in conjunction with the issuance of certificates and audit certificates. Tax consultancy services primarily pertain to general tax matters concerning corporate tax. Other services pertain to consultancy regarding financial accounting and services in conjunction with acquisitions.
| Share premium reserve | 3,435 |
|---|---|
| Retained earnings | 3,259 |
| Net profit for the year | 222 |
| Total | 6,916 |
| The Board and Chief Executive Officer propose that a dividend of SEK 2.00 per share shall be distributed to |
|
| shareholders | 477 |
| to be carried forward | 6,439 |
| Total | 6,916 |
We have audited the annual accounts and consolidated accounts of Getinge AB for 2016 with the exception of the Corporate Governance Report on pages 45–49. The annual accounts and consolidated accounts of the Company are included on pages 42–85 in this document.
In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of parent company as of 31 December 2016 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2016 and their financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. Our opinion does not include the Corporate Governance Report found on pages 45–49. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.
We therefore, recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the group.
We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.
The focus and scope of the audit
We designed our audit by determining materiality and assessing the risks of material misstatement in the consolidated financial statements. In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the group operates.
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Key audit matters of the audit are those matters that, in our professional judgment, were most significant in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters.
Key audit matters How our audit addressed the Key audit matter
Impairment testing of intangible assets
As at 31 December 2016, goodwill and other intangible assets with an indefinite useful life amounted to MSEK 23,037 (21,838). According to IFRS, an annual impairment test is to be performed.
The Company's management bases its impairment assessment on a calculation of the discounted cash flow for the cash generating units in which goodwill is reported.
This impairment test is based on judgments and assumptions regarding future cash flows and on circumstances which are complex and involve a high level of judgment by company management. Information is provided in Notes 1 and 12 as to how the Company's management has undertaken its assessments, and also provides information on important assumptions and sensitivity analyses. It is also seen that no impairment requirement has been identified based on the assumptions undertaken.
In our audit, we have evaluated the calculation model applied by management and we have reconciled important assumptions against the Company's budget and strategic plan.
We have also taken a positon regarding the management's assumptions and judgments. This has taken place through an analysis of the degree to which previous years' assumptions have been achieved and of any possible adjustments of the assumptions from previous years, arising as a result of the development of the operations, or external factors.
We have challenged management's assumptions, primarily linked to the variables having the largest impact on the impairment assessment, such as growth, profit margins and the discount factor (cost of capital). This has taken place through our own sensitivity analyses in order to test the margin of safety for the respective segments.
We have tested the impact of changes in significant assumptions which such factors as operating income and the discount factor have on the margin of safety and, based on these tests, we have evaluated the risk of the existence of an impairment requirement.
We have also assessed the correctness of the disclosures included in the financial statements.
Valuation of accounts receivables
Accounts receivables comprise a significant area in the Group's financial reports as they are equivalent to approximately 15% of total assets. Based on the Group's business operations, a significant portion of net sales is generated during the fourth quarter, which usually implies a significant increase in accounts receivables in conjunction with the year-end closing. The Group undertakes business operations with both private and public players in a number of different countries where, for certain regions, the payment of client invoices takes a long time after delivery to the clients. In the Group's operation, this refers primarily to the United States of America, United Arab Emirates, Italy and Spain. As at 31 December 2016, accounts receivables matured more than 90 days amounted to MSEK 1,460 which is equivalent to approximately 18% of total accounts receivables as per the balance sheet date. The valuation of these, and other matured, or yet to mature, accounts receivables, is based on the management's assessment of the clients' future payment capacity.
In our audit we have evaluated the correctness of the valuation of the accounts receivables by assessing the appropriateness of the impairment testing executed by management, which was based on individual assessments taking into consideration the unique risk profiles of the local markets.
Our audit includes an assessment of the control environment for the sales process and also includes an examination of the reported revenue transactions against underlying documentation, such as customer agreements, sales orders, suppliers' documentation, client invoices, reconciliation against price lists, payment verification and obtaining client invoice confirmations from clients. We have examined management's assessment of the valuation of client receivables compared with the historical outcome for bad debts. The appropriate audit procedures for the respective significant units in the Group have been determined based on the nature of the operations and the complexity of the sales transactions. We have also assessed the correctness of the information regarding accounts receivables provided in the financial statements.
As at balance sheet date, 31 December 2016, total provisions, including restructuring reserves, amounted to MSEK 1,856 and these were reported on in Note 20, 21 and 22 in the annual report. Sub items reported in these areas refer primarily to assumptions regarding pensions, restructuring programs, severance pay to previous group management and action plans as regards FDA. Common to these areas is that they are primarily based on significant assessments undertaken by management regarding future events. The assessment of these areas is associated with a large degree of uncertainty and subjectivity. In our audit, all of these areas have been subject to examination but we have particularly focused our audit activities on the assessment of the provisions for the action plans regarding FDA, which amount to MSEK 371.
This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1–41. The Board of Directors and the Managing Director are responsible for this other information.
Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information.
In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated.
If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.
We have examined the external documentation from FDA and also Getinge's internal documentation regarding the assessment of future costs for the action plan to fulfill FDA's quality requirements. We have assessed the reasonableness of the reported provision based on the information presented to us and based on the historical outcome of the previous action plans. We have assessed the completeness and correctness of the information included in the annual report regarding the action plans associated with FDA involving the management's judgments concerning these risks.
As regards other provisions, we have assessed the reasonableness of the management's assumptions and cost calculations. This assessment has taken place based on available information and historical outcome.
In preparing the annual accounts and consolidated accounts, The Board of Directors and the Managing Director are responsible for the assessment of the Company's and the group's ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intends to liquidate the company, to cease operations, or has no realistic alternative but to do so.
The Audit Committee of the Board of Directors shall, without prejudice to the Board of Director's responsibilities and tasks in general, among other things oversee the company's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts.
A further description of our responsibility for the audit of the annual accounts is found on Revisorsnämnden's (The Supervisory Board of Public Accountant's) web site: www.revisorsinspektion.se/rn/showdocument/ documents/re_dok/revisors_ansvar.pdf. This description is a part of the Auditor's Report.
In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Getinge AB for the year 2016 and the proposed appropriations of the company's profit or loss.
We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.
We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.
The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company's and the group's type of operations, size and risks place on the size of the parent company's and the group's equity, consolidation requirements, liquidity and position in general.
The Board of Directors is responsible for the company's organization and the administration of the company's affairs. This includes among other things continuous assessment of the company's and the group's financial situation and ensuring that the company's organization is designed so that the accounting, management of assets and the company's financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the ongoing administration according to the Board of Directors' guidelines and instructions and among other matters take measures that are necessary to fulfil the company's accounting in accordance with law and handle the management of assets in a reassuring manner.
Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect:
Our objective concerning the audit of the proposed appropriations of the company's profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company's profit or loss are not in accordance with the Companies Act.
A further description of our responsibility for the audit of the annual accounts is found on Revisorsnämnden's (The Supervisory Board of Public Accountant's) web site: www.revisorsinspektion.se/rn/showdocument/ documents/re_dok/revisors_ansvar.pdf. This description is a part of the Auditor's Report.
The Board of Directors is responsible for that the corporate governance statement on pages 45–49 has been prepared in accordance with the Annual Accounts Act.
Our examination of the corporate governance statement is conducted in accordance with FAR´s auditing standard RevU 16 The auditor´s examination of the corporate governance statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions.
A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2–6 of the Annual Accounts Act and Chapter 7 section 31 the second paragraph the same law are consistent with the other parts of the annual accounts and consolidated accounts and are in accordance with the Annual Accounts Act.
Gothenburg, 1 March 2017 Öhrlings PricewaterhouseCoopers AB
Johan Rippe Eric Salander Authorised Public Accountant Authorised Public Accountant Auditor-in-Charge
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |
|---|---|---|---|---|---|---|---|---|---|---|
| ORDER SITUATION. SEK M | ||||||||||
| Order intake | 16,497 | 19,447 | 23,036 | 22,406 | 22,012 | 24,416 | 25,395 | 26,817 | 30,431 | 30,142 |
| INCOME STATEMENT. AMOUNTS IN SEK M UNLESS OTHERWISE STATED. | ||||||||||
| Net sales | 16,445 | 19,272 | 22,816 | 22,172 | 21,854 | 24,248 | 25,287 | 26,669 | 30,235 | 29,756 |
| of which, overseas sales, % | 97.8 | 98.0 | 98.2 | 98.4 | 98.0 | 98.2 | 98.2 | 98.1 | 98.0 | 98.2 |
| EBITDA | 2,938 | 3,846 | 4,446 | 5,111 | 5,376 | 5,748 | 5,614 | 4,765 | 5,187 | 4,990 |
| EBITA – before restructuring, integration and acquisition expenses | 2,651 | 3,428 | 3,933 | 4,371 | 4,571 | 4,849 | 4,766 | 4,501 | 4,179 | 4,341 |
| Operating profit | 2,255 | 2,877 | 3,070 | 3,689 | 3,924 | 4,006 | 3,748 | 2,646 | 2,729 | 2,287 |
| Net financial items | –507 | –751 | –436 | –573 | –480 | –570 | –595 | –659 | –732 | –637 |
| Profit before tax | 1,748 | 2,126 | 2,634 | 3,116 | 3,444 | 3,436 | 3,153 | 1,987 | 1,997 | 1,650 |
| Taxes | –515 | –603 | –720 | –836 | –907 | –905 | –858 | –539 | –540 | –437 |
| Net profit for the year | 1,233 | 1,523 | 1,914 | 2,280 | 2,537 | 2,531 | 2,295 | 1,448 | 1,457 | 1,213 |
| BALANCE SHEET. SEK M | ||||||||||
| Intangible assets | 10,524 | 15,879 | 20,353 | 19,224 | 24,498 | 24,895 | 25,126 | 30,064 | 30,543 | 32,004 |
| Tangible assets | 2,327 | 3,257 | 3,674 | 3,192 | 3,452 | 4,066 | 4,341 | 4,971 | 4,699 | 4,313 |
| Financial assets | 755 | 1,250 | 1,135 | 761 | 750 | 887 | 667 | 1,410 | 1,374 | 1,329 |
| Inventory | 2,913 | 4,015 | 4,156 | 3,619 | 3,837 | 4,060 | 4,254 | 5,245 | 5,409 | 5,431 |
| Other receivables | 5,557 | 7,125 | 6,791 | 6,696 | 7,725 | 7,759 | 8,767 | 9,646 | 9,742 | 10,454 |
| Cash and cash equivalents | 894 | 1,506 | 1,389 | 1,093 | 1,207 | 1,254 | 1,148 | 1,482 | 1,468 | 1,680 |
| Total assets | 22,970 | 33,032 | 37,498 | 34,585 | 41,469 | 42,921 | 44,303 | 52,818 | 53,235 | 55,211 |
| Shareholders' equity | 6,805 | 10,890 | 12,726 | 13,248 | 14,636 | 15,200 | 16,560 | 18,694 | 19,593 | 20,916 |
| Provisions for pensions, interest-bearing | 1,510 | 1,435 | 1,409 | 1,813 | 1,627 | 2,111 | 2,298 | 3,271 | 3,052 | 3,368 |
| Restructuring reserve | 71 | 68 | 202 | 219 | 172 | 201 | 238 | 649 | 389 | 531 |
| Provisions | 980 | 1,285 | 2,116 | 1,499 | 2,087 | 1,823 | 1,916 | 1,929 | 1,854 | 1,325 |
| Loans, interest-bearing | 9,455 | 13,244 | 16,052 | 12,656 | 16,689 | 17,525 | 17,169 | 20,752 | 21,283 | 21,701 |
| Other liabilities, non-interest bearing | 4,149 | 6,110 | 4,993 | 5,150 | 6,258 | 6,061 | 6,122 | 7,523 | 7,064 | 7,370 |
| Total shareholders' equity and liabilities | 22,970 | 33,032 | 37,498 | 34,585 | 41,469 | 42,921 | 44,303 | 52,818 | 53,235 | 55,211 |
| Net debt, including pension liabilities | 10,071 | 13,173 | 16,072 | 13,376 | 17,109 | 18,382 | 18,318 | 22,541 | 22,867 | 23,389 |
| Net debt, excluding pension liabilities | 8,561 | 11,738 | 14,663 | 11,563 | 15,482 | 16,271 | 16,020 | 19,270 | 19,815 | 20,021 |
| CASH FLOW. AMOUNTS IN SEK M UNLESS OTHERWISE STATED. | ||||||||||
| Cash flow from operating activities | 1,496 | 1,774 | 4,000 | 4,124 | 3,496 | 3,687 | 3,544 | 3,473 | 3,458 | 3,671 |
| – per average number of shares | 7.4 | 8.4 | 16.8 | 17.3 | 14.7 | 15.5 | 14.9 | 14.6 | 14.5 | 15.4 |
| Acquired operations | 6,106 | 5,008 | 5,072 | 10 | 4,649 | 2,226 | 248 | 1,236 | 41 | 212 |
| Net investments in non-current assets* | 468 | 642 | 907 | 588 | 688 | 959 | 1,004 | 945 | 1,046 | 831 |
| Cash conversion, % | 51 | 46 | 90 | 81 | 65 | 64 | 63 | 73 | 67 | 74 |
| RETURN INDICATORS | ||||||||||
| Return on working capital, % | 19.4 | 14.0 | 13.3 | 14.2 | 15.3 | 13.1 | 12.8 | 8.2 | 8.6 | 8.3 |
| Return on shareholders' equity, % | 20.0 | 17.2 | 16.2 | 17.6 | 18.2 | 17.0 | 14.4 | 10.4 | 8.5 | 6.0 |
| EBITA margin before restructuring, acquisition expenses and integr. cost, % | 16.1 | 17.8 | 17.2 | 19.7 | 20.9 | 20.0 | 18.8 | 16.9 | 13.8 | 14.6 |
| Operating margin, % | 13.7 | 14.9 | 13.5 | 16.6 | 18.0 | 16.5 | 14.8 | 9.9 | 9.0 | 7.7 |
| EBITDA margin, % | 17.9 | 20.0 | 19.5 | 23.1 | 24.6 | 23.7 | 22.2 | 17.9 | 17.1 | 16.8 |
| FINANCIAL INDICATORS | ||||||||||
| Interest-coverage ratio, multiple Equity/assets ratio, % |
4.0 29.6 |
4.0 33.0 |
5.5 33.9 |
6.7 38.3 |
8.4 35.3 |
7.3 35.4 |
6.9 37.4 |
5.7 35.4 |
4.6 36.8 |
5.6 37.9 |
| Net debt/equity ratio, multiple | 1.48 | 1.21 | 1.26 | 1.01 | 1.17 | 1.21 | 1.10 | 1.21 | 1.17 | 1.12 |
| Working capital, SEK M | 10,555 | 22,051 | 23,771 | 27,247 | 26,453 | 31,920 | 32,526 | 36,529 | 40,771 | 43,383 |
| Shareholders' equity, December 31, SEK M | 6,805 | 10,890 | 12,726 | 13,248 | 14,636 | 15,200 | 16,560 | 18,694 | 19,593 | 20,916 |
| PERSONNEL | ||||||||||
| No. of employees, December 31 | 10,358 | 11,604 | 12,135 | 12,208 | 13,111 | 14,919 | 15,183 | 15,747 | 15,424 | 15,582 |
| Salaries and other remuneration, SEK M | 5,190 | 5,838 | 7,113 | 6,938 | 7,155 | 7,479 | 7,888 | 8,394 | 10,001 | 10,099 |
| SHARE DATA. AMOUNTS IN SEK PER SHARE UNLESS OTHERWISE STATED. | ||||||||||
| Earnings per share after tax | 6.10 | 7.23 | 8.02 | 9.55 | 10.61 | 10.58 | 9.59 | 6.01 | 5.83 | 4.98 |
| Market price, December 31 | 173.50 | 93.50 | 136.30 | 140.90 | 174.40 | 220.00 | 220.00 | 177.80 | 222.50 | 146.1 |
| Cash flow | 5.09 | 5.37 | 12.98 | 14.84 | 11.78 | 11.45 | 10.66 | 10.61 | 10.12 | 11.92 |
| Dividend | 2.40 | 2.40 | 2.75 | 3.25 | 3.75 | 4.15 | 4.15 | 2.80 | 2.80 | 2.00 |
| Dividend growth, % | 9.09 | 0.00 | 14.58 | 18.18 | 15.40 | 10.67 | 0.00 | –32.53 | 0.00 | –28.6 |
| Dividend yield, % | 1.38 | 2.57 | 2.02 | 2.31 | 2.15 | 1.89 | 1.89 | 1.57 | 1.26 | 1.37 |
| Price/earnings ratio | 28.44 | 12.93 | 17.00 | 14.75 | 16.44 | 20.79 | 22.94 | 29.58 | 38.16 | 29.34 |
| Dividend as profit percentage, % | 39.34 | 33.20 | 34.29 | 34.03 | 35.34 | 39.22 | 43.27 | 46.59 | 48.03 | 40.15 |
| Shareholders' equity Average number of shares (million) |
32.54 201.9 |
50.66 210.8 |
53.30 238.3 |
55.49 238.3 |
61.30 238.3 |
63.66 238.3 |
69.58 238.3 |
78.45 238.3 |
82.21 238.3 |
87.76 238.3 |
| Number of shares, December 31 (million) | 201.9 | 214.5 | 238.3 | 238.3 | 238.3 | 238.3 | 238.3 | 238.3 | 238.3 | 238.3 |
*Excluding capital development costs and rental equipment
| SURGICAL WORKFLOWS | 2015 | 2016 |
|---|---|---|
| Order intake, SEK M | 11,013 | 10,643 |
| Net sales, SEK M | 10,891 | 10,496 |
| Share of Group's net sales, % | 36.0 | 35.3 |
| Gross profit, SEK M | 4,228 | 3,961 |
| Gross margin, % | 38.8 | 37.7 |
| Operating expenses, SEK M | –3,023 | –2,705 |
| EBITA – before restructuring, acquisition and integration costs, SEK M | 1,233 | 1,283 |
| Share of Group's EBITA, % | 29.5 | 29.6 |
| EBITA margin, % | 11.3 | 12.2 |
| Operating profit, SEK M | 1,054 | 1,001 |
| Share of Group's operating profit, % | 38.6 | 43.8 |
| Operating margin, % | 9.7 | 9.5 |
| ACUTE CARE THERAPIES | 2015 | 2016 |
| Order intake, SEK M | 11,637 | 12,059 |
| Net sales, SEK M | 11,577 | 11,804 |
| Share of Group's net sales, % | 38.3 | 39.7 |
| Gross profit, SEK M | 6,428 | 6,552 |
| Gross margin, % | 55.5 | 55.5 |
| Operating expenses, SEK M | –4,751 | –4,793 |
| EBITA – before restructuring, acquisition and integration costs, SEK M | 2,276 | 2,326 |
| Share of Group's EBITA, % | 54.5 | 53.6 |
| EBITA margin, % | 19.7 | 19.7 |
| Operating profit, SEK M | 1,346 | 1,000 |
| Share of Group's operating profit, % | 49.3 | 43.7 |
| Operating margin, % | 11.6 | 8.5 |
| PATIENT & POST-ACUTE CARE | 2015 | 2016 |
| Order intake, SEK M | 7,781 | 7,440 |
| Net sales, SEK M | 7,767 | 7,456 |
| Share of Group's net sales, % | 25.7 | 25.1 |
| Gross profit, SEK M | 3,507 | 3,327 |
| Gross margin, % | 45.2 | 44.6 |
| Operating expenses, SEK M | –2,750 | –2,497 |
| EBITA – before restructuring, acquisition and integration costs, SEK M | 889 | 956 |
| Share of Group's EBITA, % | 21.3 | 22.0 |
| EBITA margin, % | 11.4 | 12.8 |
| Operating profit, SEK M | 573 | 665 |
| Share of Group's operating profit, % | 21.0 | 29.1 |
| Operating margin, % | 7.4 | 8.9 |
Getinge Group has performed extremely well over the past ten years. Sales grew from SEK 16 billion to SEK 30 billion during the period. The strong growth was achieved through a combination of acquisitions of leading businesses and organic growth. Major acquisitions include Huntleigh (wound care, healthcare beds, etc.) two divisions of Boston Scientific (cardiac and vascular surgery), Datascope (heart-support products), Atrium Medical (products for the cardiovascular market) and the TSS division of the US company KCI. Organic growth primarily derives from the development and launch of new products and geographic expansion.
| MEDICAL SYSTEMS | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|---|---|---|---|---|---|---|---|---|
| Order intake, SEK M | 5,879 | 8,560 | 11,488 | 11,179 | 11,214 | 13,242 | 13,340 | 14,061 | 16,035 |
| Net sales, SEK M | 6,079 | 8,416 | 11,255 | 11,195 | 11,031 | 13,089 | 13,322 | 14,105 | 16 078 |
| Share of Group's net sales, % | 37.0 | 43.7 | 49.3 | 50.5 | 50.5 | 54.0 | 52.7 | 52.9 | 53.0 |
| Gross profit, SEK M | 3,112 | 4,723 | 6,343 | 6,492 | 6,365 | 7,668 | 7,789 | 7,756 | 8,348 |
| Gross margin, % | 51.2 | 56.1 | 56.4 | 58.0 | 57.7 | 58.6 | 58.5 | 55.0 | 51.9 |
| Operating expenses, SEK M | –2,079 | –3,140 | –4,510 | –4,372 | –4,234 | –5,236 | –5,356 | –5,390 | –6,326 |
| EBITA – before restructuring, acquisition and integration costs, SEK M | 1,040 | 1,784 | 2,231 | 2,502 | 2,495 | 2,945 | 2,894 | 2,868 | 2,628 |
| Share of Group's EBITA, % | 39.2 | 52.0 | 56.7 | 57.2 | 54.6 | 60.7 | 60.7 | 63.7 | 62.9 |
| EBITA margin, % | 17.1 | 21.2 | 19.8 | 22.3 | 22.6 | 22.5 | 21.7 | 20.3 | 16.3 |
| Operating profit, SEK M | 1,033 | 1,511 | 1,636 | 1,990 | 2,016 | 2,384 | 2,334 | 1,292 | 1,628 |
| Share of Group's operating profit, % | 45.8 | 52.5 | 53.3 | 53.9 | 51.4 | 59.5 | 62.3 | 48.8 | 59.6 |
| Operating margin, % | 17.0 | 18.0 | 14.5 | 17.8 | 18.3 | 18.2 | 17.5 | 9.2 | 10.1 |
| No. of employees at December 31 | 3,264 | 4,295 | 5,028 | 5,202 | 6,011 | 6,344 | 6,572 | 7,045 | 6,761 |
| EXTENDED CARE | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| Order intake, SEK M | 6,124 | 6,223 | 6,406 | 6,033 | 5,711 | 5,965 | 6,910 | 7,217 | 7,781 |
| Net sales, SEK M | 6,009 | 6,174 | 6,467 | 6,033 | 5,751 | 5,990 | 6,870 | 7,164 | 7,767 |
| Share of Group's net sales, % | 36.5 | 27.9 | 28.4 | 27.2 | 26.3 | 24.7 | 27.2 | 26.9 | 25.7 |
| Gross profit, SEK M | 2,750 | 2,847 | 2,964 | 2,977 | 2,981 | 3,052 | 3,369 | 3,398 | 3,505 |
| Gross margin, % | 45.8 | 46.1 | 45.8 | 49.3 | 51.8 | 51.0 | 49.0 | 47.4 | 45.1 |
| Operating expenses, SEK M | –1,895 | –1,969 | –2,074 | –1,904 | –1,800 | –1,871 | –2,202 | –2,494 | –2,806 |
| EBITA – before restructuring, acquisition and integration costs, SEK M | 971 | 992 | 1,002 | 1,178 | 1,278 | 1,274 | 1,296 | 1,041 | 831 |
| Share of Group's EBITA, % | 28.6 | 25.6 | 23.8 | 27.0 | 28.0 | 26.3 | 27.2 | 23.1 | 19.9 |
| EBITA margin, % | 16.2 | 16.1 | 15.5 | 19.5 | 22.2 | 21.3 | 18.9 | 14.5 | 10.7 |
| Operating profit, SEK M | 597 | 732 | 835 | 1,048 | 1,121 | 1,005 | 983 | 817 | 509 |
| Share of Group's operating profit, % | 21.8 | 24.4 | 24.4 | 28.4 | 28.6 | 25.1 | 26.2 | 30.9 | 18.7 |
| Operating margin, % | 9.9 | 11.9 | 12.9 | 17.4 | 19.5 | 16.8 | 14.3 | 11.4 | 6.5 |
| No. of employees at December 31 | 4,228 | 4,314 | 4,111 | 3,958 | 5,092 | 5,457 | 5,479 | 5,499 | 4,460 |
| INFECTION CONTROL | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| Order intake, SEK M | 4,494 | 4,665 | 5,142 | 5,192 | 5,086 | 5,209 | 5,144 | 5,539 | 6,615 |
| Net sales, SEK M | 4,357 | 4,682 | 5,094 | 4,944 | 5,072 | 5,170 | 5,095 | 5,400 | 6,390 |
| Share of Group's net sales, % | 26.5 | 24.3 | 22.3 | 22.3 | 23.2 | 21.3 | 20.1 | 20.2 | 21.1 |
| Gross profit, SEK M | 1,659 | 1,763 | 1,945 | 1,902 | 2,056 | 1,984 | 1,966 | 1,956 | 2,309 |
| Gross margin, % | 38.1 | 37.7 | 38.2 | 38.5 | 40.5 | 38.4 | 38.6 | 36.2 | 36.1 |
| Operating expenses, SEK M | –1,034 | –1,126 | –1,261 | –1,225 | –1,268 | –1,363 | –1,405 | –1,380 | –1,611 |
| EBITA – before restructuring, acquisition and integration costs, SEK M | 640 | 652 | 700 | 691 | 798 | 631 | 575 | 592 | 720 |
| Share of Group's EBITA, % | 24.1 | 19.0 | 17.8 | 15.8 | 17.5 | 13.0 | 12.1 | 13.2 | 17.2 |
| EBITA margin, % | 14.7 | 13.9 | 13.7 | 14.0 | 15.7 | 12.2 | 11.3 | 11.0 | 11.3 |
| Operating profit, SEK M | 625 | 634 | 599 | 652 | 788 | 618 | 431 | 536 | 592 |
| Share of Group's operating profit, % | 27.7 | 22.0 | 19.5 | 17.7 | 20.1 | 15.4 | 11.5 | 20.3 | 21.7 |
| Operating margin, % | 14.3 | 13.5 | 11.8 | 13.2 | 15.5 | 12.0 | 8.5 | 9.9 | 9.3 |
| No. of employees at December 31 | 2,866 | 2,995 | 2,996 | 3,048 | 2,008 | 3,118 | 3,132 | 3,203 | 4,203 |
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK M | % | # | SEK M | % | # | SEK M | % | # | SEK M | % | # | SEK M | % | # | |
| USA | 10,058 | 33.8% | 1 | 10,098 | 33.4% | 1 | 8,045 | 30.2% | 1 | 7,567 | 29.9% | 1 | 6,778 | 28.0% | 1 |
| Germany | 2,091 | 7.0% | 2 | 2,081 | 6.9% | 3 | 1,963 | 7.4% | 3 | 1,899 | 7.5% | 2 | 1,758 | 7.2% | 2 |
| UK | 2,052 | 6.9% | 3 | 2,256 | 7.5% | 2 | 1,998 | 7.5% | 2 | 1,755 | 6.9% | 3 | 1,746 | 7.2% | 3 |
| France | 1,684 | 5.7% | 4 | 1,685 | 5.6% | 4 | 1,716 | 6.4% | 4 | 1,578 | 6.2% | 4 | 1,607 | 6.6% | 4 |
| Japan | 1,399 | 4.7% | 5 | 1,250 | 4.1% | 5 | 1,166 | 4.4% | 5 | 1,158 | 4.6% | 5 | 1,344 | 5.5% | 5 |
| China | 1,208 | 4.1% | 6 | 1,243 | 4.1% | 6 | 982 | 3.7% | 7 | 964 | 3.8% | 7 | 970 | 4.0% | 6 |
| Canada | 1,002 | 3.4% | 7 | 1,035 | 3.4% | 8 | 985 | 3.7% | 6 | 1,008 | 4.0% | 6 | 946 | 3.9% | 7 |
| Australia | 965 | 3.2% | 8 | 1,117 | 3.7% | 7 | 897 | 3.4% | 8 | 786 | 3.1% | 8 | 867 | 3.6% | 8 |
| Italy | 813 | 2.7% | 9 | 852 | 2.8% | 9 | 777 | 2.9% | 9 | 743 | 2.9% | 9 | 753 | 3.1% | 9 |
| Netherlands | 605 | 2.0% | 10 | 605 | 2.0% | 10 | 586 | 2.2% | 10 | 562 | 2.2% | 11 | 614 | 2.5% | 11 |
| Sweden | 549 | 1.8% | 11 | 595 | 2.0% | 11 | 494 | 1.9% | 12 | 464 | 1.8% | 13 | 429 | 1.8% | 13 |
| India | 504 | 1.7% | 12 | 526 | 1.7% | 12 | 407 | 1.5% | 15 | 384 | 1.5% | 15 | 335 | 1.4% | 16 |
| Belgium | 428 | 1.4% | 13 | 482 | 1.6% | 13 | 465 | 1.7% | 13 | 459 | 1.8% | 14 | 422 | 1.7% | 14 |
| Switzerland | 394 | 1.3% | 14 | 418 | 1.4% | 14 | 321 | 1.2% | 19 | 339 | 1.3% | 16 | 308 | 1.3% | 17 |
| Spain | 359 | 1.2% | 15 | 341 | 1.1% | 18 | 337 | 1.3% | 18 | 252 | 1.0% | 20 | 259 | 1.1% | 18 |
| Austria | 353 | 1.2% | 16 | 386 | 1.3% | 15 | 345 | 1.3% | 16 | 306 | 1.2% | 18 | 227 | 0.9% | 20 |
| Brazil | 339 | 1.1% | 17 | 355 | 1.2% | 17 | 569 | 2.1% | 11 | 641 | 2.5% | 10 | 509 | 2.1% | 12 |
| Turkey | 308 | 1.0% | 18 | 282 | 0.9% | 19 | 245 | 0.9% | 20 | 174 | 0.7% | 22 | 147 | 0.6% | 26 |
| Denmark | 303 | 1.0% | 19 | 263 | 0.9% | 20 | 237 | 0.9% | 21 | 260 | 1.0% | 19 | 236 | 1.0% | 19 |
| Hong Kong | 263 | 0.9% | 20 | 235 | 0.7% | 21 | 166 | 0.6% | 24 | 134 | 0.5% | 29 | 125 | 0.5% | 27 |
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK M | % | # | SEK M | % | # | SEK M | % | # | SEK M | % | # | SEK M | % | # | |
| SURGICAL WORKFLOWS BUSINESS AREA | |||||||||||||||
| USA | 2,283 | 21.8% | 1 | 2,453 | 22.5% | 1 | 1,859 | 19.3% | 1 | 1,822 | 19.5% | 1 | 1,672 | 18.2% | 1 |
| Germany | 904 | 8.6% | 2 | 895 | 8.2% | 2 | 840 | 8.7% | 2 | 848 | 9.1% | 2 | 858 | 9.3% | 2 |
| Japan | 716 | 6.8% | 3 | 636 | 5.8% | 5 | 610 | 6.3% | 4 | 582 | 6.2% | 4 | 679 | 7.4% | 4 |
| France | 709 | 6.8% | 4 | 751 | 6.9% | 3 | 754 | 7.8% | 3 | 721 | 7.7% | 3 | 743 | 8.1% | 3 |
| UK | 681 | 6.5% | 5 | 690 | 6.3% | 4 | 601 | 6.2% | 5 | 465 | 5.0% | 5 | 453 | 4.9% | 5 |
| China | 584 | 5.6% | 6 | 558 | 5.1% | 6 | 437 | 4.5% | 6 | 418 | 4.5% | 6 | 439 | 4.8% | 6 |
| Sweden | 344 | 3.3% | 7 | 440 | 4.0% | 8 | 342 | 3.6% | 7 | 332 | 3.5% | 7 | 312 | 3.4% | 9 |
| Australia | 313 | 3.0% | 8 | 454 | 4.2% | 7 | 285 | 3.0% | 9 | 226 | 2.4% | 11 | 245 | 2.7% | 10 |
| Italy | 284 | 2.7% | 9 | 339 | 3.1% | 9 | 296 | 3.1% | 8 | 294 | 3.1% | 8 | 330 | 3.6% | 8 |
| Switzerland | 203 | 1.9% | 10 | 218 | 2.0% | 10 | 154 | 1.6% | 16 | 180 | 1.9% | 14 | 160 | 1.7% | 16 |
| ACUTE CARE THERAPIES BUSINESS AREA | |||||||||||||||
| USA | 5,444 | 46.1% | 1 | 5,269 | 45.5% | 1 | 4,071 | 41.3% | 1 | 3,714 | 41.0% | 1 | 3,621 | 40.0% | 1 |
| Germany | 697 | 5.9% | 2 | 689 | 5.9% | 2 | 645 | 6.5% | 2 | 565 | 6.2% | 2 | 570 | 6.3% | 3 |
| Japan | 654 | 5.5% | 3 | 582 | 5.0% | 3 | 538 | 5.5% | 3 | 550 | 6.1% | 3 | 634 | 7.0% | 2 |
| China | 524 | 4.4% | 4 | 552 | 4.8% | 4 | 449 | 4.6% | 4 | 437 | 4.8% | 4 | 406 | 4.5% | 4 |
| France | 391 | 3.3% | 5 | 383 | 3.3% | 5 | 413 | 4.2% | 5 | 333 | 3.7% | 6 | 342 | 3.8% | 5 |
| Italy | 317 | 2.7% | 6 | 304 | 2.6% | 7 | 294 | 3.0% | 6 | 266 | 2.9% | 7 | 277 | 3.1% | 8 |
| India | 291 | 2.5% | 7 | 287 | 2.5% | 8 | 241 | 2.4% | 9 | 223 | 2.5% | 9 | 194 | 2.1% | 11 |
| UK | 262 | 2.2% | 8 | 313 | 2.7% | 6 | 261 | 2.6% | 8 | 199 | 2.2% | 12 | 188 | 2.1% | 12 |
| Canada | 238 | 2.0% | 9 | 253 | 2.2% | 9 | 226 | 2.3% | 11 | 260 | 2.9% | 8 | 225 | 2.5% | 9 |
| Australia | 226 | 1.9% | 10 | 227 | 2.0% | 10 | 235 | 2.4% | 10 | 205 | 2.3% | 10 | 216 | 2.4% | 10 |
| PATIENT & POST-ACUTE CARE BUSINESS AREA | |||||||||||||||
| USA | 2,331 | 31.3% | 1 | 2,376 | 29.6% | 1 | 2,115 | 28.4% | 1 | 2,031 | 28.6% | 1 | 1,485 | 23.9% | 1 |
| UK | 1,109 | 14.9% | 2 | 1,253 | 15.6% | 2 | 1,137 | 15.3% | 2 | 1,091 | 15.4% | 2 | 1,105 | 17.8% | 2 |
| France | 583 | 7.8% | 3 | 550 | 6.8% | 4 | 550 | 7.4% | 3 | 525 | 7.4% | 4 | 521 | 8.4% | 3 |
| Canada | 562 | 7.5% | 4 | 564 | 7.0% | 3 | 549 | 7.4% | 4 | 568 | 8.0% | 3 | 490 | 7.9% | 4 |
| Germany | 490 | 6.6% | 5 | 497 | 6.2% | 5 | 478 | 6.4% | 5 | 486 | 6.8% | 5 | 329 | 5.3% | 6 |
| Australia | 426 | 5.7% | 6 | 436 | 5.4% | 6 | 378 | 5.1% | 6 | 355 | 5.0% | 6 | 407 | 6.5% | 5 |
| Netherlands | 244 | 3.3% | 7 | 249 | 3.1% | 7 | 255 | 3.4% | 7 | 251 | 3.5% | 7 | 269 | 4.3% | 7 |
| Italy | 212 | 2.8% | 8 | 208 | 2.6% | 8 | 187 | 2.5% | 8 | 182 | 2.6% | 8 | 146 | 2.3% | 9 |
| Austria | 176 | 2.4% | 9 | 168 | 2.1% | 10 | 165 | 2.2% | 9 | 161 | 2.3% | 9 | 58 | 0.9% | 15 |
| Belgium | 165 | 2.2% | 10 | 173 | 2.2% | 9 | 154 | 2.1% | 11 | 147 | 2.1% | 10 | 148 | 2.4% | 8 |
| Year | Company | Business | Country | Sales | |
|---|---|---|---|---|---|
| 2016 | AccuMed | Production facility for medical textiles | DR | SEK | 100 M |
| 2016 | 1st Call Mobility Ltd | Medical-device solutions for bariatric patients | GB | SEK | 100 M |
| 2015 | GOA Teknoloji Danismanlik Elektronik | Low temperature sterilization technology | TR | SEK | 20 M |
| 2014 | Pulsion AG | Systems for hemodynamic monitoring | DE | SEK | 300 M |
| 2014 | Altrax Group Ltd | Systems for traceability and quality assurance for sterilization | GB | SEK 35 M | |
| 2014 | Cetrea A/S | Systems for resource planning | DK | SEK | 30 M |
| 2014 | Austmel Pty Ltd | Sterilization and thermal processes | AU | SEK | 80 M |
| 2013 | LAAx Inc. | Cardiac and vascular surgery | US | SEK | 8 M |
| 2013 | Trans Medikal Devices Inc. | Manufacture of sterilizers and distribution of disinfectors | TR | SEK | 55 M |
| 2013 | STS East LLC | Service | US | SEK | 25 M |
| 2012 | Product rights from Avalon Laboratories | Cardiopulmonary | US | – | – |
| 2012 | Eirus Medical | Critical Care | SE | – | – |
| 2012 | Acare Medical Science Ltd | Healthcare beds | CH | SEK | 135 M |
| 2012 | USCI | Distributor | JP | SEK | 150 M |
| 2012 | Tecno Hospitalia | Distributor | CO | SEK | 4 M |
| 2012 | Therapeutic Support Systems (TSS) | Wound care | US | SEK | 1,600 M |
| 2012 | Steritec Products Mfg Inc. | Consumables | US | SEK 70 M | |
| 2011 | Blanchet Medical Service | Service | FR | SEK | 3 M |
| 2011 2011 |
Atrium Medical Inc Combimobil AB |
Products for the cardiovascular market Rehabilitation aids |
US SE |
SEK 2 M | USD 200 M |
| 2011 | Fumedica | Distributor | CH | SEK | 70 M |
| 2011 | IDS Medical Equipment | Distributor | SG | SEK | 25 M |
| 2011 | Mak Saglik | Distributor | TR | SEK | 20 M |
| 2011 | STS Holding West | Service | US | SEK | 20 M |
| 2010 | Odelga | Service | AT | SEK 25 M | |
| 2008 | Datascope | Cardiac assist and vascular surgery | US | USD 231 M | |
| 2008 | Cardio Research Pty Ltd. | Distributor | AU | AUD 5.1 M | |
| 2008 | Subtil Crepieux | Service | FR | EUR 8 M | |
| 2008 | Getus Services Ltd | Service | NZ | NZD 1.1 M | |
| 2008 | Olmed AB | Distributor | SE | SEK | 70 M |
| 2008 | Boston Scientific's Cardiac and | Endoscopic vessel harvesting (EVH), anastomosis, stabilizers and instruments | US | SEK | 1,733 M |
| Vascular surgery divisions | for surgery on beating hearts and vascular implants | ||||
| 2007 | NS Nielsen Equipment A/S | Distributor | DK | – | – |
| 2006 | Huntleigh Technology | Special mattresses for pressure-ulcer treatment, beds for intensive, specialist | UK | SEK | 2,675 M |
| and elderly care vein thrombosis prophylaxis and equipment for fetal and vascular | |||||
| diagnostics. | |||||
| 2006 | Comercio E Industria Medicia | Consumables for open-heart surgery | BR | SEK | 25 M |
| 2006 | OTY GmbH | Telemedicine specializing in products and solutions for hospitals' IT infrastructure focused on the operating room. |
DE | SEK | 20 M |
| 2006 | Getinge Czech Republic | Distributor | CZ | SEK | 10 M |
| 2005 | Lancer UK | Distributor | UK | SEK | 104 M |
| 2005 | La Cahlené | Isolator technology and electron sterilization technology | FR | EUR 40 M | |
| 2004 | Dynamed | Distributor | CA | SEK | 85 M |
| 2004 | BHM Medical Inc. | Patient management products for the care and elderly care segments | CA | SEK | 206 M |
| 2003 | MAQUET AG, Swiss dealer | Distributor | CH | CHF 4.9 M | |
| 2003 | Siemens LSS | Ventilators and anesthesia equipment for the hospital market | SE | EUR 230 M | |
| 2003 | Jostra GmbH | Equipment and consumables for cardiac surgery | DE | EUR 90 M | |
| 2003 | Copharm B.V. | Distributor | NL | EUR 10 M | |
| 2002 | Heraeus Medical | Surgical lamps, ceiling service units and therapy accessories and gas | DE | EUR 52 M | |
| distribution for operating rooms | |||||
| 2001 | ALM | Surgical lamps | FR | FRF 490 M | |
| 2000 | Maquet | Surgical tables | DE | EUR 155 M | |
| 2000 | Parker Bath | Bathing systems for the semi-institutional care market | UK | SEK | 150 M |
| 2000 | Lenken Healthcare | Distributor | IE | SEK | 65 M |
| 2000 | Gestion Techno-Medic | Patient lifting systems | CA | SEK | 22 M |
| 1999 | Lunatronic Aps | Comprehensive IT solutions for the maintenance of sterilization departments | DK | DKK 15 M | |
| 1999 | MPT Corp. | Washer disinfectors for the Life Science market | US | SEK | 35 M |
| 1998 | Egerton Hospital Equipment | Specialist beds and anti-decubitus mattresses for hospitals and care facilities | UK | SEK | 45 M |
| 1998 | Royal Linden B.V. | Infection control | NL | SEK | 60 M |
| 1998 1998 |
Medibo OMASA |
Patient lifting and pressure-ulcer treatments Infection control |
BE IT |
SEK SEK |
28 M 100 M |
| 1998 | SMI/BBC | Infection control | FR | SEK | 75 M |
| 1998 | Kemiterm | Water distillers pure-steam generators for pharmaceutical industry | DK | DKK 25 M | |
| 1998 | Pegasus | Anti-decubitus products for hospitals and elderly care | UK | SEK | 350 M |
| 1996 | MDT/Castle | Infection control | US | – | – |
| 1996 | Van Dijk Medizintechnik GmbH | Infection control | DE | SEK | 30 M |
| 1995 | Arjo | Products for aging care related to hygiene and patient management | SE | SEK | 1,538 M |
| 1994 | Lancer | Disinfection products | FR | FRF | 70 M |
| 1993 | British Sterilizer | Sterilizers | UK | SEK | 15 M |
| 1993 | Stirn | Disinfection | FR | – | – |
| Percentage distribution of sales for the year | Percentage distribution of operating profit | |||||||
|---|---|---|---|---|---|---|---|---|
| Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | |
| 2012 total | 21.6 | 23.1 | 23.0 | 32.2 | 17.6 | 21.6 | 21.1 | 39.7 |
| Medical Systems | 20.5 | 22.8 | 23.9 | 32.8 | 12.5 | 19.6 | 21.0 | 46.9 |
| Extended Care | 24.4 | 23.5 | 22.4 | 29.7 | 31.7 | 27.2 | 24.0 | 17.1 |
| Infection Control | 21.2 | 23.7 | 21.4 | 33.8 | 14.4 | 20.0 | 17.1 | 48.5 |
| 2013 total | 22.4 | 23.8 | 23.1 | 30.7 | 10.7 | 20.7 | 19.1 | 49.6 |
| Medical Systems | 21.0 | 23.7 | 22.9 | 32.4 | 12.1 | 20.5 | 16.7 | 50.7 |
| Extended Care | 25.0 | 24.2 | 24.0 | 26.8 | 9.9 | 22.4 | 23.6 | 44.2 |
| Infection Control | 22.4 | 23.6 | 22.5 | 31.5 | 4.6 | 17.6 | 21.6 | 56.1 |
| 2014 total | 21.2 | 23.7 | 23.3 | 31.7 | –11.0 | 27.3 | 25.6 | 58.2 |
| Medical Systems | 20.2 | 23.4 | 23.1 | 33.3 | –43.3 | 35.9 | 33.1 | 74.3 |
| Extended Care | 23.7 | 23.8 | 24.5 | 27.9 | 25.7 | 16.4 | 19.7 | 38.2 |
| Infection Control | 20.7 | 24.4 | 22.4 | 32.5 | 10.6 | 22.9 | 16.6 | 49.8 |
| 2015 total | 22.2 | 23.8 | 22.9 | 31.1 | 12.3 | 15.7 | 15.4 | 56.6 |
| Surgical Workflows | 19.5 | 22.0 | 21.9 | 36.6 | 2.7 | 7.1 | 19.2 | 71.1 |
| Acute Care Therapies | 22.6 | 24.7 | 23.3 | 29.4 | 17.5 | 24.6 | 13.7 | 44.2 |
| Patient & Post-Acute Care | 25.4 | 24.7 | 23.7 | 26.2 | 20.1 | 14.3 | 16.4 | 49.2 |
| Group functions | – | – | – | – | –17.6 | –24.6 | –24.6 | –33.2 |
| 2016 total | 21.4 | 23.3 | 23.3 | 32.0 | 13.8 | 20.7 | 2.1 | 63.4 |
| Surgical Workflows | 18.5 | 22.7 | 22.6 | 36.1 | –0.3 | 14.8 | 23.7 | 61.8 |
| Acute Care Therapies | 22.1 | 23.7 | 23.3 | 30.9 | 17.4 | 31.4 | –19.2 | 70.4 |
| Patient & Post-Acute Care | 24.5 | 23.4 | 24.2 | 27.9 | 31.7 | 13.5 | 22.9 | 31.9 |
| Group functions | – | – | – | – | –17.4 | –20.8 | –39.1 | –22.7 |
Historically, most of Getinge's sales are conducted in the fourth quarter of the year. A significant reason behind this pattern is that portions of customers' investment budgets are released late in the year. The high capacity utilization in the fourth quarter also results in a considerable portion of the net profit for the year being generated during the final quarter.
Quarter 4
Source: Interim Reports
Alternative performance measures refer to financial measures used by the company's management and investors to evaluate the Group's earnings and financial position and that cannot be directly read or derived from the financial statements. These financial measures are intended to facilitate analysis of the Group's performance. The alternative performance measures are not to be considered a substitute for, but rather a supplement to, the financial statements prepared in accordance with IFRS. The financial measures recognized in this report may differ from similar measures used by other companies.
| EBITA | 2016 | 2015 |
|---|---|---|
| Operating profit, SEK M | 2,287 | 2,729 |
| Add-back of amortizations and write-downs of business acquired intangible assets, SEK M | 720 | 761 |
| EBITA, SEK M | 3,007 | 3,490 |
| EBITA BEFORE RESTRUCTURING, ACQUISITION AND INTEGRATION COSTS | 2016 | 2015 |
| Operating profit, SEK M | 2,287 | 2,729 |
| Add-back of amortizations and write-downs of business acquired intangible assets, SEK M | 720 | 761 |
| Add-back of restructuring, acquisition and integration costs, SEK M | 1,334 | 689 |
| EBITA before restructuring, acquisition and integration costs, SEK M | 4,341 | 4,179 |
| CASH CONVERSION | 2016 | 2015 |
| Cash flow from operating activities, SEK M | 3,671 | 3,458 |
| EBITDA, SEK M | 4,990 | 5,187 |
| Cash conversion*, % | 73.6% | 66.7% |
*Cash flow from operating activities in relation to EBITDA
* Net interest-bearing debt in relation to equity
| Medical Systems | Production | ISO 9001 | ISO 13485 | ISO 14001 | |
|---|---|---|---|---|---|
| Antalya | Turkey | Consumables for perfusion products | N/A | ■ | ■ |
| Ardon | France | Surgical lamps | ■ | ■ | ■ |
| Fairfield/Mahwah | USA | Cardiac assist | N/A | ■ | i |
| Hechingen | Germany | Consumables for perfusion products | ■ | ■ | – |
| Hudson | USA | Products for the cardiovascular market | N/A | ■ | – |
| La Ciotat | France | Vascular implants | N/A | ■ | ■ |
| Rastatt | Germany | Surgical tables, other surgical equipment and cardiopulmonary machines | ■ | ■ | ■ |
| Solna | Sweden | Ventilators and anesthesia machines | N/A | ■ | ■ |
| Suzhou | China | Ceiling service units, surgical tables and cardiovascular products | ■ | ■ | ■ |
| Pump consoles for DVT products and therapeutic surfaces | |||||
| Disinfection and sterilization equipment | |||||
| Wayne | USA | Instruments for vascular surgery and vascular implants | N/A | ■ | – |
| Cardiff | UK | Diagnostics | ■ | ■ | ■ |
| Magog | Canada | Passive patient lifts | ■ | ■ | ■ |
| Poznan | Poland | Therapeutic Surfaces, Medical Beds, DVT cuffs, table-top autoclaves | ■ | ■ | ■ |
| Zhuhai | China | Medical Beds | ■ | ■ | ■ |
| Ankara | Turkey | Sterilization equipment | ■ | ■ | ■ |
| Denver | USA | Chemical indicators | ■ | ■ | ■ |
| Getinge | Sweden | Sterilization equipment | ■ | ■ | ■ |
| Toulouse (Tournefeuille) | France | Disinfection equipment | ■ | ■ | ■ |
| Vendôme | France | Isolators | ■ | N/A | ■ |
| Växjö | Sweden | Disinfection equipment | ■ | ■ | ■ |
| San Cristobal | Dominican Republic | Slings for patient lifting systems and mattress covers | ■ | ■ | i |
| Feldkirchen | Germany | Advanced monitoring | N/A | ■ | i |
■ Certified plant i Certification planned in 2017
| Hazardous waste, | |||
|---|---|---|---|
| CO2 /Internal sales * |
Recycled waste, % | tons | |
| Getinge Group | 1.9 (2.2) | 81.4 (82.0) | 148 (289) |
* Direct and indirect carbon emissions deriving from production. Tons/SEK 1,000 M of internal sales.
| 2016 | 2015 | 2014 | 2013 | 2012 | ||
|---|---|---|---|---|---|---|
| Number of employees, December 31 | Total | 15,582 | 15,424 | 15,747 | 15,183 | 14,919 |
| Of whom are women, % | 36 | 33 | 32 | 32 | 31 | |
| Age distribution, % | 20–30, % | 17 | 16 | 16 | 16 | 17 |
| 31–40, % | 30 | 29 | 30 | 30 | 29 | |
| 41–50, % | 28 | 29 | 29 | 30 | 30 | |
| 51–60, % | 21 | 21 | 21 | 20 | 20 | |
| 61–70, % | 4 | 5 | 4 | 4 | 4 | |
| Health and safety | Number of accidents per 100 employees | 2.9 | 2.5 | 2.9 | 2.7 | 2.5 |
| Sickness absence (entire Group) | ||||||
| Total sickness absence in regular working hours, % | 3.4 | 2.9 | 2.7 | 2.7 | 2.8 | |
| Men, % | 2.9 | 2.4 | 2.3 | 2.4 | 2.5 | |
| Women, % | 4.3 | 3.9 | 3.5 | 3.3 | 3.6 |
HEAD OFFICE Getinge AB Box 8861, SE-402 72, Gothenburg Tel: +46 10 335 0000
AUSTRALIA ArjoHuntleigh Healthcare Pty Ltd Box 330, Hamilton Hill, Perth AU-6163 Tel: +61 89 337 4111
Getinge Australia Pty Ltd Level 1/205. Queensport Road North Murarrie, Queensland, AU 4172 Tel: +61 1800 438 4643
Maquet Australia Pty Ltd Level 2, 4 Talavera Road, AU-2113 Macquarie Park Tel: +61 1800 605 824
AUSTRIA ArjoHuntleigh GmbH Lemböckgasse 49, Stg. A/ 4.OG AT-1230 Vienna Tel: +43-1-866 56 4436
Maquet Medizintechnik Vertrieb und Service GmbH Kärntner Ring 12, AT-1010 Vienna Tel: +43 1 8651 4870
BELGIUM ArjoHuntleigh NV/SA Evenbroekveld 16, Erpe-Mere, BE-9420 Tel: +32 53 60 73 80
Getinge NV Evenbroekveld 16, Erpe-Mere, BE-9420 Tel: +32 33 28 10 12
Maquet Belgium NV Evenbroekveld 16, Erpe-Mere, BE-9420 Tel: +32 53 60 7380
BRAZIL Maquet do Brasil Equipamentos Medicos Ltda. Rua Tenente Alberto Spicciati, 200 Barra Funda, São Paulo, BR-01140-130 Tel: +55 11 2608 7400
Maquet Cardiopulmonary do Brasil Industria e Comercio Ltda. Jordanesia - Cajamar / SP São Paulo, BR- 07755-240 Tel: +55 11 4898 7768
CANADA ArjoHuntleigh Canada Inc. 90-300 Matheson Boulevard West MISSISSAUGA, ON, L5R 3R3 Tel: +1 905 238 7880
ArjoHuntleigh Magog Inc. 2001, Tanguay, Magog, Quebec J1X 5Y5 Tel: +1-819 868 0441
90-300 Matheson Boulevard West MISSISSAUGA, ON, L5R 3R3 Tel: +1 905 629 8777
Maquet-Dynamed Inc 235 Shields Court, Markham, Ontario, L3R 8V2 Tel: +1 905 752 3300
CHINA ArjoHuntleigh (Shanghai)
Medical Equipment Co. Ltd. 4F, No.3, Lane 128, Lin Hong Road CN-200 335 Shanghai Tel: +86 21 61973999
Acare Medical Science Co. Ltd. No. 6, Hongxingyi Road, Hongwan Industrial Park, Nanping, Xiangzhou District, CN-519000 Zhuhai, China Tel: +86 756 6326 108
Getinge (Shanghai) Trading Co. Ltd. No. 3, Lane 128, Lin Hong Road, CN-200 335 Shanghai Tel: +86 21 61973999
Getinge (Suzhou) Co. Ltd. No. 158, Fang Zhou Road, SIP, CN-215024 Suzhou, Jiangsu Tel: +86 512 6283 8966
Maquet (Shanghai) Medical Equipment Co. Ltd. No. 158, Fang Zhou Road, SIP, CN-215024 Suzhou, Jiangsu Tel: +86 512 6283 8966
Maquet (Shanghai) Medical Equipment Co. Ltd. No. 3, Lane 128, Lin Hong Road, CN-200 335 Shanghai Tel: +86 21 619 739 99
Maquet (Suzhou) Co. Ltd. No. 158, Fang Zhou Road, SIP, CN-215024 Suzhou, Jiangsu Tel: +86 512 6936 9206
COLOMBIA Maquet Colombia S.A.S. Edificio Astoria Carrera 16 Nº 95 – 70 Oficina 701 Bogota, D.C. Tel: +57 1 7438124
COSTA RICA Getinge Shared Services Costa Rica SA Avenida Escazú Edificio 101B Piso #5 Escazú, San José 10203 Tel: +506 4100 5523
CZECH REPUBLIC ArjoHuntleigh s.r.o. Hlinky 118, Brno, CZ-603 00 Tel: +420 225 092 307
Getinge Czech Republic, s.r.o Na Strzi 65/1702, CZ-140 00 Prague 4 Tel: +42 02 51 56 42 86
Maquet Czech Republic s.r.o. Na Strzi 65/1702, CZ-140 00 Prague 4 Tel: +420 731 991 522
DENMARK ArjoHuntleigh A/S Vassingerödvej 52, Lynge, DK-3540 Tel: +45 4 913 8486
Cetrea A/S Brendstrupgaardsvej 21F Aarhus, DK-8200 Tel: +45 38 400 570
Getinge Danmark A/S Industriparken 44B, Ballerup, DK-2750 Tel: +45-459 32 727
Getinge IT Solutions ApS Amaliegade 4 DK-1256 Copenhagen K Tel: +45 33 33 88 55
Maquet Danmark A/S Industriparken 44 B, DK-2750 Ballerup Tel: +45 4694 4216
DOMINICAN REPUBLIC Getinge Dominican Republic, SA Carretera sanchez, KM 18 1/2 ; Cameron Clark street, building 9 91000 Haina, San Cristobal Tel: 809-908-0055
FINLAND Getinge Finland Oy Ängsgatan 8, FI-02200 Espoo Tel: +358-96 82 41 20
Maquet Finland OY Niittykatu 8, FI-02200 Espoo Tel: +358-96 82 41 250
FRANCE ArjoHuntleigh SAS 2 Avenue Alcide de Gasperi 59436 RONCQ CEDEX Tel: +33-320 281 313
Getinge France SAS 7 avenue du Canada CS20049 91942 Courtaboeuf Les Ulis Tel: +33-164 868 900
Getinge Infection Control SAS 30, Boulevard de l Índustrie, FR-31170 Tournefeuille Tel: +33-561 155 111
Getinge La Calhène 1, Rue du Comté de Donegal, FR-41100 Vendome, Tel: +33-254 734 747
Getinge Lancer SAS 30, Boulevard de l Índustrie, FR-31170 Tournefeuille Tel: +33-561 155 111
Intervascular SAS ZI Athelia I La Ciotat, FR-13600 Tel: + 33-442 084 646
Parc de Limère Avenue de la Pomme de Pin CS 10008, FR-45074 Orleans, Ardon Tel: +33 238 258 888
ArjoHuntleigh GmbH Peter-Sander-Strasse 10, DE-55252 Mainz-Kastel, Tel: +49-613 418 60
Tel: + 49-722 293 26 45
DE- 55252, Mainz-Kastel Tel: +49-613 418 60
Healthcare GmbH Industriering Ost 66, DE-47906, Kempen Tel: +49-215 255 11 11
Maquet Medical Systems AG Kehler Strasse 31 DE-76437 Rastatt Tel: +49-722 293 20
Maquet GmbH Kehler Strasse 31 DE-76437 Rastatt Tel: +49-722 293 20
Maquet Vertrieb und Service Deutschland GmbH Kehler Strasse 31 DE-76437 Rastatt Tel: +49-722 293 20
MAQUET Hospital Solutions GmbH Kehler Strasse 31 DE-76437 Rastatt Tel: +49-722 293 20
MediKomp GmbH Kehler Strasse 31 DE-76437 Rastatt Tel: +49-722 293 20
Pulsion Medical Systems SE Hans-Riedl-Strasse 21 DE-85622 , Feldkirchen, Tel: +49-894 599 140
ArjoHuntleigh (Hong Kong) Ltd. Unit 1510-1517 Kowloon Commerce Center, Tower 2, 51 Kwai Cheong Road, Kwai Chung, New Territories, Hong Kong Tel: +852-2207 6363
Kowloon Commerce Center, Tower 2, 51 Kwai Cheong Road, Kwai Chung, New Territories, Hong Kong Tel: +852 2207 6328
Kowloon Commerce Center, Tower 2, 51 Kwai Cheong Road, Kwai Chung, New Territories, Hong Kong Tel: +852-2207 6111
ArjoHuntleigh Healthcare India Pvt. Ltd. Plot No. 8, Shah Industrial Estate, Off Veera Desai Road, Andheri (West) Mumbai, India 400053 Tel: + 91 22 6694 6697
Plot No. 8, Shah Industrial Estate, Off Veera Desai Road, Andheri (West) Mumbai, India 400053 Tel: + 91 22 4260 8000
Mehta Trade Centre, Sir Mathuradass Vissanji Road, Shivaji Colony, Andheri (East) Mumbai, IN – 400 099 Tel: +91 22 406 921 00
ArjoHuntleigh Ireland Ltd EA House Damastown Industrial Park Dublin 15 Tel: +353 01 809 8960
Maquet Ireland B6 Calmount Park, Ballymount, Dublin 12 Tel: +353 1 426 0032
ITALY ArjoHuntleigh S.p.A. Via Giacomo Peroni 400-402, Rome, IT-00131 Tel: +39-068 742 62 11
Getinge S.p.A. Via Giacomo Peroni 400/402, Rome, IT-00131 Tel: +39-066 56 631
Maquet Italia S.p.A. Via Gozzano 14, Cinisello Balsamo Milan, IT-20092 Tel: +39 026 111 35200
ArjoHuntleigh Korea Co. Ltd. 13F GeumKang Building, 681 Yeoksam-dong, Gangnam-gu, 06143, Seoul, Tel: +82 2567 6501
13F, KeumKang Building, 304, Bongeunsa-ro Gangnam-gu, 06143, Seoul, Tel: +82 2567 1240
13F, KeumKang Building, 304, Bongeunsa-ro Gangnam-gu, 06143, Seoul, Tel: +82 255 822 71
Maquet Mexicana, S. de R.L. de C.V. World Trade Center Calle de Montecito no 38, piso 10 oficina 17, Colonia Nápoles 03810, México, D.F. Tel: +52 55 9000 8970
Hamburgo No. 206 Int. 404, Col. Juarez 06600 Mexico; D.F. Tel: +52 55 5207 6115
ArjoHuntleigh Netherlands BV Biezenwei 21, Tiel, NL-4004MB Tel: +31 344 640 800
Biezenwei 21, Tiel, NL-4004MB Tel: +31 (0) 344-809 900
Maquet Verwaltungs BV Biezenwei 21, Tiel, NL-4004MB Tel: +31 344 640 800
ArjoHuntleigh Limited 34, Vestey Drive Mt. Wellington, Auckland 1060 PO Box 132-262, Sylvia Park, Auckland 1644 Tel: +64 9 573 5344
ArjoHuntleigh UK (Belfast Office) 19 Heron Road Sydenham Business Park BT3 9LE, Belfast Tel: +44 (0)28 9050 2000
NORWAY ArjoHuntleigh Norway AS Olaf Helsets vei 5 Oslo, NO-0694 Tel: +47 2208 0050
Getinge Norge AS Strandveien 13 Lysaker, NO-1366 Tel: +47 2303 5200
POLAND ArjoHuntleigh Polska Sp.z.o.o. ul. Ks. Wawrzyniaka 2, Komorniki, PL-62-052 Tel: +48 61 662 1550
Getinge IC Production Poland Sp.z.o.o. Szkolna 30, Plewiska, PL-62064 Tel: +48 61 630 9900
Getinge Poland Sp.z.o.o. ul. Osmańska 14, 02-823 Warsaw Tel: +48-22 882 06 26
Maquet Polska Sp.z.o.o. ul. Osmańska 14, 02-823 Warsaw Tel: +48 22 882 06 44
Getinge Shared Services Sp.z.o.o. Klimeckiego 1 30-705 Krakow Tel: +48 12 385 42 22
PORTUGAL Getinge Group Portugal Unipessoal Lda Rua Poeta Bocage, 2 -2G, PT-1600-233, Lisbon Tel: +351 214 189 815
RUSSIA Maquet LLC Stanislavskogo street 21, Building 3 Moscow, RU-109004 Tel: +7 495 514 0055
SERBIA Getinge Group South East Europe Ltd. Spaniskih Boraca 3, 11070, Belgrade, Tel: +381 11 7856370
SINGAPORE ArjoHuntleigh Singapore Pte Ltd 6 Temasek Blvd #29-00 Suntec City Tower 4 Singapore, SG- 38986 Tel: +65 6293 3387
Getinge Singapore Pte. Ltd. 20, Bendemeer Road #06-04 Cyberhub Building Singapore 339914 Tel: +65-6 396 7298
Maquet South East Asia Pte. Ltd. 20, Bendemeer Road #06-04 Cyberhub Building Singapore 339914 Tel: +65 6 296 1992
SLOVAKIA Maquet Slovakia s.r.o. Pribinova 25, Bratislava, SK-81109 Tel: +42 1 2335 59150
SOUTH AFRICA ArjoHuntleigh South Africa Pty Ltd Box 16216, Pretoria North, 0116 Tel: +27 12 527 2000
Huntleigh Africa Pty Ltd Box 16216, Pretoria North, 0116 Tel: +27 12 527 2000
Maquet Southern Africa (PTY) Ltd. Box 16216, Pretoria North, 0116 Tel: +27 12 527 2000
SPAIN Getinge Group Spain S.L. C/Marie Curie 5,Edificio Alfa Planta 6 ES-28521 Rivas Vacia Madrid Tel: +34 91 678 1652
SWEDEN ArjoHuntleigh AB Hans Michelsensgatan 10 SE-211 20, Malmö Tel: +46 10 335 4500
Arjo Hospital Equipment AB Hans Michelsensgatan 10 SE-211 20, Malmö Tel: +46 10 335 4500
ArjoHuntleigh International AB Hans Michelsensgatan 10 SE-24138, Malmö Tel: +46 10 335 45 00
Arjo Scandinavia AB Hans Michelsensgatan 10 SE-21120, Malmö Tel: +46 10 335 45 00
CombiMobil AB Hans Michelsensgatan 10 SE-24121, Malmö Tel: +46 10 335 45 00
Getinge AB P.O. Box 8861 SE-402 72, Gothenburg Tel: +46 10 335 0000
Getinge Disinfection AB Box 1505 SE-35115, Växjö Tel: +46-10 335 9800
Getinge Infection Control AB Box 69 SE-305 05, Getinge Tel: +46 10 335 0000
Getinge International AB Box 69 SE-305 05, Getinge Tel: +46 10 335 0000
Getinge Sterilization AB Box 69 SE-305 05, Getinge Tel: +46 10 335 0000
Maquet Critical Care AB Box 6108 SE-171 06, Solna, Tel: +46 (0)10 335 7300
Maquet Nordic AB Röntgenvägen 2, SE-171 54, Solna, Tel: +46 (0)10-335 7736
SWITZERLAND ArjoHuntleigh AG Fabriksstrasse 8, CH-4614 Haegendorf, Solothurn Tel: +41-61 3379 777
Getinge Schweiz AG Quellenstrasse 41b CH-4310 Rheinfelden Tel: +41 61 836 47 70
Maquet AG Wilerstrasse 75, CH-9200 Gossau/SG Tel: +41 71 3350 303
TAIWAN Getinge Group taiwan Co. Ltd. Rm. A1, 6F., No.16, Sec. 4, Nanjing E. Rd., Songshan Dist., Taipei city 105 Tel: + 886-2-81616588
THAILAND Maquet Thailand 5 soi 4 Krungthep Kreetha Road Huamark Bangkapi TH-10240, Bangkok, Tel: +66 2 704 4388
TURKEY Getinge Saglik Urunleri Ith.Ihr.Tic.San. Ve Ltd. Buyukhanlı Plaza Kucukbakkalkoy Mahallesi Defne Sokak No:3 Kat.8 34750 Istanbul Tel: +90 216 360 62 74
Maquet Cardiopulmonary Medikal Serbest Bolge R Ada,108/1,109/1,110/1,111/1 Parseller 1 Cadde Dış Kapı No:8 Adres No: 2419050956 Yeni Liman TR-07070 Antalya
Maquet Tibbi Sistemler San. Ve Tic.Ltd. A.S. Buyukhanlı Plaza Kucukbakkalkoy Mahallesi Defne Sokak No:3 Kat.8 34750 Istanbul Tel: +90 216 444 66 78
Trans Medikal Aletler Sanayi ve Tic A.Ş Ahievran 1. OSB Kırımhanlığı Cad.
No:6 Sincan TR-06930, Ankara, Tel: +90 312 385 77 20
Getinge Stericool Medikal
Aletler Sanayi ve Ticaret Anonim Şirketi Ahievran 1. OSB Kırımhanlığı Cad. No:6 Sincan TR-06930, Ankara, Tel: +90 312 387 39 40
Maquet LLC Glybochitskaya 17 d, Building 1 04050 Kiev Telefon: +38(044) 207-43-43
ArjoHuntleigh Middle East FZ LLC G005 Nucleotide Complex Dubai Science Park Box 214742 Dubai, Tel: +971 4 447 0942
G005 Nucleotide Complex Dubai Science Park Box 214742 Dubai, Tel: +971 4 447 0963
Altrax Group, Ltd Unit 5 Bowling Hill Business Park, Chipping Sodbury BS37 6JL, Bristol Tel: +44 145 431 8373
ArjoHuntleigh House Houghton Hall Business Park Houghton Regis Bedfordshire, LU5 5XF Tel: +44 (0) 1582 745 767
17 Maisies Way DE55 2DS South Normanton, Derbyshire Tel: +44 (0) 1773 814730
14-15 Burford Way, Boldon Business Park Sunderland, Tyne & Wear, NE35 9PZ Tel: +44 191 519 6200
ArjoHuntleigh Inc. 2349 West Lake Street, Suite 250, Addison, IL 60101 Tel: +1 303 660 4201
5 Wentworth Drive Hudson, New Hampshire 03051-4929, Tel: +1 603 880 1433
1777 East Henrietta Road, Rochester NY 14623-3133 Tel: +1 585 475 1400
1325 S. Frandsen Avenue Rush City, MN55069 Tel: +1 320 358 4713
FL-32746 LAKE MARY FL Tel: +1-4073278488
45 Barbour Pond Drive Wayne, New Jersey 07470 Tel: +1 303 660 4201
15 Law Drive 07004, Fairfield, NJ Tel: +1-800-777-4222
74 Inverness Dr. E Englewood, CO 80112 Tel: +1 303 660 4201
Working capital. Average total assets with a reversal of cash and cash equivalents, other provisions, accounts payable and other non-interest-bearing liabilities.
Return on working capital. Rolling 12 months' operating profit with add-back of restructuring, integration and acquisition expenses in relation to working capital.
Return on shareholders' equity. Rolling 12 months' profit after tax in relation to average shareholders' equity.
Cash conversion. Cash flow from operating activities in relation to EBITDA.
Dividend yield. Dividend in relation to the market share price on December 31.
EBIT. Operating profit.
EBITA. Operating profit before amortization and write-down of intangible assets identified in conjunction with corporate acquisitions.
EBITA margin. EBITA in relation to net sales.
EBITDA. Operating profit before depreciation/ amortization and write-down.
EBITDA margin. EBITDA in relation to net sales.
Cash flow per share. Cash flow after investments in tangible assets divided by the number of shares.
Net debt/equity ratio. Net interest-bearing debt in relation to equity.
P/E ratio. Share price (final price) divided by earnings per share.
Interest-coverage ratio. Profit after net financial items plus interest expenses and add-back of restructuring costs, as a percentage of interest expenses.
Operating margin. Operating profit in relation to net sales.
Equity/assets ratio. Shareholders' equity in relation to total assets.
Earnings per share. Net profit attributable to Parent Company shareholders in relation to average number of shares.
Recurring revenue. Revenues from consumables, service, spare parts and similar items.
Anesthesia. Narcosis. ARDS (Acute respiratory distress syndrome). Life-threatening lung damage.
Sterilizer. A type of pressure-cooker for sterilization.
Cardiac Assist. Technology that improves blood circulation in a patients' coronary artery in the heart by forcing blood into the coronary artery with the help of a balloon pump placed in the aorta. The pump works in synchronization with the heart rhythm and the increased blood circulation supplies oxygen to the heart muscle, which thus improves its ability to pump.
Cardiac Surgery. Heart surgery.
Cardiopulmonary. Pertaining or belonging to both heart and lung.
Cardiovascular. Pertaining or belonging to both heart and blood vessels.
Deep vein thrombosis (DVT). Formation of a blood clot in a deep leg vein.
Endoscope. Equipment for visual examination of the body's cavities, such as the stomach.
EVH (Endoscopic Vessel Harvesting). Minimally invasive surgical interventions, to explant a
healthy blood vessel through endoscopic means. Extracorporal life support. Extracorporal support, for instance external oxygenation of blood through medical technology.
Hemodynamics. Change in pressure and flow of blood in the cardiovascular system.
Cardiovascular diseases. Heart and blood vessel diseases.
Kinetic Therapy. A function in Getinge's hightech RotoProne™ hospital bed. This function offers continuous rotation of immobile patients from side to side down to 40° and up to 62° to treat and prevent complications in the lungs.
Surgery perfusion. A heart-lung machine conducts the work of the heart and lungs during an operation.
Artificial grafts. Artificial vascular implants.
Low temperature sterilization. Low temperature sterilization of instruments is used in minimally invasive surgery, a type of instrument that is extremely sensitive to the high temperatures and pressure of a steam sterilization process.
Counterpulsation. Therapy for treatment of resistant angina.
Minimally invasive instruments. Various types of instruments that make it possible to conduct treatment and other measures through very small operations without the need for major surgery. The benefits of minimally invasive operations include less pain for the patient, shorter rehabilitation periods and lower costs.
Neonatal. Newborn infant during the first month. Perfusion. Artificial circulation of body fluids, such as blood.
Perfusion products. Products that handle blood circulation and oxygenation during cardio surgery, often referred to as heart-lung machines.
Prevention/prophylaxis. Preventive activity/ treatment.
Pressure ulcers. Ulcers that arise as a result of blood flow to the skin being limited by external pressure. Most often affects patients with limited mobility.
Vascular intervention. A medical procedure conducted through vascular puncturing instead of using an open surgery method.
Vein. Blood vessel that carries blood to the heart.
Ventilator. Maintaining a patient's ability to breathe through a ventilator (respirator).
Americas. North, South and Central America. APAC. Asia and Pacific.
EMEA. Europe, Middle East and Africa.
The printed version of Getinge AB's Annual Report is only distributed to shareholders who expressly request a copy. The Annual Report is also available in its entirety at the Group's website: www.getinge.com
The Annual General Meeting will be held on March 29, 2017, at 2:00 p.m. in Kongresshallen at Hotel Tylösand, Halmstad, Sweden.
Shareholders wishing to participate at the Annual General Meeting should:
Shareholders whose shares are registered in the name of a nominee must have temporarily registered their shares in their own name, well in advance of March 23, 2017, to be able to participate at the Annual General Meeting. Shareholders represented by proxy must submit a power of attorney to the company prior to the meeting. Anyone representing a legal entity must have a copy of the registration certificate or a corresponding authorization document that indicates the proper authorized signatory.
Getinge AB's interim report for the third quarter of 2016 contained instructions for shareholders on how to proceed to submit proposals to Getinge's Nomination Committee and how to propose motions to be addressed at the Annual General Meeting.
The Board of Directors and the CEO propose that a dividend for 2016 of SEK 2.00 (2.80) per share be paid, totaling SEK 477 M (667). The Board's proposed record date is March 31, 2017. Euroclear anticipates being able to forward the dividend to shareholders on April 5, 2017.
Updated information on, for example, the Getinge share and corporate governance is available on Getinge's website www.getinge.com.
The Annual Report, year-end report and interim reports are published in Swedish and English and are available for download at www.getinge.com.
The Annual Report can also be ordered from: Getinge AB Att: Group Communications P.O. Box 8861 SE-402 72, Gothenburg, Sweden Tel: +46 (0) 10 335 00 00
The following information will be published for the 2017 financial year:
Production: Solberg Print: Elanders
GETINGE ANNUAL REPORT 2016 III
CONSOLIDATED FINANCIAL STATEMENTS
Getinge AB Lindholmspiren 7a Box 8861 402 72 Göteborg Sweden
Phone: +46 (0)10-335 00 00 E-mail: [email protected] www.getinge.com
Getinge is a global provider of innovative solutions for operating rooms, intensive-care units, sterilization departments and for life science companies and institutions. Based on our first-hand experience and close partnerships with clinical experts, healthcare professionals and medtech specialists, we are improving the every-day life for people, today and tomorrow.
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