Getinge — Interim / Quarterly Report 2018

Oct 18, 2018

Interim report

January – September 2018

Comments from Mattias Perjos, President & CEO Continued strong sales but mix effects negatively impact gross margin

"Our growth is continuing at a high pace – net sales for the quarter increased by close to 15%, almost half of which was organic growth. The order intake increased by slightly more than 8%, of which just under 1% was organic. This was in line with expectations due to a strong third quarter in 2017. Market and product mix effects in the form of robust growth in capital goods and in emerging markets are continuing to have an adverse effect on the gross margin. As we have stated earlier, these effects were foreseen and are natural in a phase of growth, and they are expected to support future sales of consumables linked to the use of our capital goods. In addition, the gross margin was negatively impacted by Getinge actively securing a number of large business opportunities in emerging markets at lower margins. I am not satisfied that despite higher volumes we have only limited productivity effects in our plants. We are now working on this in all business areas, in the same way as we have addressed operating expenses, which have now declined from quarter to quarter. Cash flow also improved significantly, as a result of more efficient management of our working capital. The operating profit for the quarter was strongly negatively affected by a provision of SEK 1.8 billion, intended to cover future costs associated with claims related to hernia mesh products in North America. Today, as a result of a strategic review, we have signed an agreement to divest the surgical mesh business, with closing in the fourth quarter."

July – September 2018 in brief

• Order intake rose organically by 0.9% and net sales increased organically by 7.2% primarily due to the continued favorable trend in capital goods and in emerging markets.
• Adjusted EBITA amounted to SEK 438 M (544), negatively affected by a lower gross margin due to the product and market mix.
• Currency effects had an impact of SEK +383 M on net sales, SEK +129 M on gross profit and SEK -24 M on EBITA.
• Adjusted earnings per share amounted to SEK 0.78 (1.20).
• A provision of SEK 1.8 B was made to cover costs related to lawsuits in North America related to surgical mesh implants. The provision is recognized as items affecting comparability in operating profit.
• The TSO3 distribution agreement for low temperature sterilization ended, resulting in an item affecting comparability of SEK -126 M in operating profit.
• Cash flow after net investments amounted to SEK 801 M (182).

January – September 2018 in brief

• Order intake increased organically by 4.7%.
• Net sales increased organically by 6.2%.
• Adjusted EBITA amounted to SEK 1,277 M (1,731).
• Adjusted earnings per share amounted to SEK 2.45 (3.84).
• Agreement signed with the Brazilian authorities entailing a company fine of SEK 276 M, which is covered by previously announced provisions. An additional tax provision of SEK 64 M has been made for self correction of tax return.
• Paul Marcun was appointed President Surgical Workflows Business Area and took office at the end of June.
• Life Science is reported as a new business area from January 1, 2018.

Outlook 2018 (preceding outlook in parentheses)

• Organic sales growth is expected to be well within 2-4% for the full-year 2018.
• Currency transaction effects are expected to have a negative impact of about SEK -200 M (-175) on the Group's 2018 EBIT.

Summary of financial performance1)

SEK M	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Order intake	6,173	5,702	17,618	16,604	23,228
Organic change, %	0.9	7.7	4.7	0.9	2.5
Net sales	5,683	4,944	16,282	15,124	22,495
Organic change, %	7.2	0.0	6.2	0.6	1.3
Adjusted gross profit	2,721	2,623	8,153	8,061	11,652
Margin, %	47.9	53.1	50.1	53.3	51.8
Adjusted EBITDA	757	823	2,181	2,595	4,285
Margin, %	13.3	16.6	13.4	17.2	19.0
Adjusted EBITA	438	544	1,277	1,731	3,108
Margin, %	7.7	11.0	7.8	11.4	13.8
Adjusted EBIT	323	403	931	1,286	2,522
Margin, %	5.7	8.2	5.7	8.5	11.2
Operating profit/loss (EBIT)	-1,736	304	-1,492	648	1,493
Margin, %	-30.5	6.1	-9.2	4.3	6.6
Profit/loss before tax	-1,777	172	-1,728	215	933
Net profit/loss for the period	-1,444	125	-1,654	157	1,117
Adjusted net profit for the period	221	301	692	948	1,994
Margin, %	3.9	6.1	4.3	6.3	8.9
Adjusted earnings per share, SEK	0.78	1.20	2.45	3.84	7.87
Earnings per share, SEK	-5.34	0.49	-6.17	0.59	4.37
Cash flow from operating activities2)	1,120	592	1,819	1,683	2,763

1) See page 3 for underlying calculations of adjusted performance measures. 2) Cash flow for 2017 also includes Arjo, which was distributed to shareholders in December 2017.

Every care has been taken in the translation of this Financial Report. In the event of discrepancies, the Swedish original will supersede the English translation. Unless otherwise stated, all results in this report pertain to the continuing operations, excluding Arjo, which was distributed to shareholders in December 2017.

Group performance

Order intake

Jul – Sep 2018

Order intake business areas, SEK M Jul-Sep 2018 Jul-Sep 2017 Org Δ, % Jan-Sep 2018 Jan-Sep 2017 Org Δ, % Jan-Dec 2017 Acute Care Therapies 3,293 2,845 7.8 9,419 8,929 4.7 12,383 Life Science 548 427 17.1 1,679 1,443 12.5 2,011 Surgical Workflows 2,332 2,430 -10.0 6,520 6,232 3.0 8,834 Total 6,173 5,702 0.9 17,618 16,604 4.7 23,228 Order intake regions, SEK M Jul-Sep 2018 Jul-Sep 2017 Org Δ, % Jan-Sep 2018 Jan-Sep 2017 Org Δ, % Jan-Dec 2017 Americas 2,506 2,266 1.9 6,997 6,783 3.9 9,149 APAC 1,434 1,124 20.2 3,783 3,242 15.2 4,744 EMEA 2,233 2,312 -9.4 6,838 6,579 0.4 9,335 Total 6,173 5,702 0.9 17,618 16,604 4.7 23,228

Net sales

Jul – Sep 2018

Net sales	Jul-Sep	Jul-Sep		Jan-Sep	Jan-Sep		Jan-Dec
business areas, SEK M	2018	2017	Org Δ, %	2018	2017	Org Δ, %	2017
Acute Care Therapies	3,159	2,621	12.2	9,158	8,540	6.3	12,201
Life Science	480	487	-9.8	1,472	1,354	5.5	1,947
Surgical Workflows	2,044	1,836	4.6	5,652	5,230	6.1	8,347
Total	5,683	4,944	7.2	16,282	15,124	6.2	22,495
							Jan
Net sales	Jul-Sep	Jul-Sep		Jan-Sep	Jan-Sep		Dec
regions, SEK M	2018	2017	Org Δ, %	2018	2017	Org Δ, %	2017
Americas	2,306	2,052	2.9	6,719	6,499	4.0	9,039
APAC	1,231	965	19.7	3,291	2,823	15.1	4,684
EMEA	2,146	1,927	5.6	6,272	5,802	4.3	8,772
Total	5,683	4,944	7.2	16,282	15,124	6.2	22,495
Net sales specified by
capital goods and	Jul-Sep	Jul-Sep		Jan-Sep	Jan-Sep		Jan-Dec
consumables, SEK M	2018	2017	Org Δ, %	2018	2017	Org Δ, %	2017
Capital goods	2,317	1,956	12.0	6,377	5,652	11.3	9,589
Consumables	3,366	2,988	4.2	9,905	9,472	3.2	12,906
Total	5,683	4,944	7.2	16,282	15,124	6.2	22,495

Net sales – bridge between Jul-Sep 2017 and Jul-Sep 2018

• Very high order intake in Acute Care Therapies in APAC, with India performing particularly well.
• Particularly high growth in Life Science in disinfection and sterilizers in APAC and EMEA.
• Surgical Workflows is growing in Americas, while the order intake in EMEA and APAC is declining.
• Sharp organic growth in order intake in APAC, particularly in India, Japan and China.

• Very high organic growth in net sales in Acute Care Therapies; the standout was sales of ventilators in Critical Care.

• Surgical Workflows is growing in both Infection Control and Surgical Workplaces.
• Net sales for Life Science declined organically, mainly related to a weak trend in sterilizers in APAC and EMEA.
• Sales of capital goods continued to grow at a faster rate than consumables, and sales in emerging markets are growing faster than in mature markets, contributing to a negative mix effect on the gross margin.

• Net sales increased by SEK 739 M for the quarter, corresponding

• SEK 383 M, accounting for slightly more than half of growth, derived from positive currency effects. • Volume, price and product and market mix effects accounted for the remaining SEK 356 M of growth, corresponding to organic growth of 7.2% compared with the

to growth of 14.9%.

third quarter of 2017.

Underlying earnings trend

	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
SEK M	2018	2017	2018	2017	2017
Net sales	5,683	4,944	16,282	15,124	22,495
Adjusted gross profit	2,721	2,623	8,153	8,061	11,652
Margin, %	47.9	53.1	50.1	53.3	51.8
Adjusted operating expenses	-1,964	-1,800	-5,972	-5,466	-7,367
Adjusted EBITDA	757	823	2,181	2,595	4,285
Margin, % Depreciation, amortization and write-downs of tangible and	13.3	16.6	13.4	17.2	19.0
intangible assets 1)	-319	-279	-904	-864	-1,177
Adjusted EBITA	438	544	1,277	1,731	3,108
Margin, %	7.7	11.0	7.8	11.4	13.8
A Amortization and write-down of acquired intangible assets 1)	-115	-141	-346	-445	-586
Adjusted EBIT	323	403	931	1,286	2,522
Margin, %	5.7	8.2	5.7	8.5	11.2
B Acquisition and restructuring costs	-32	-99	-46	-638	-763
C Other items affecting comparability2)	-2,027	-	-2,377	-	-266
Operating profit/loss (EBIT)	-1,736	304	-1,492	648	1,493
Net financial items	-41	-132	-236	-433	-560
Profit/loss before tax	-1,777	172	-1,728	215	933
Adjusted profit before tax (adjusted for A, B and C)	397	412	1,041	1,298	2,548
Margin, %	7.0	8.3	6.4	8.6	11.3
Taxes	333	-47	74	-58	184
D Adjustment of tax 2)	-509	-64	-423	-292	-738
Adjusted net profit for the period (adjusted for A, B, C and D)	221	301	692	948	1,994
Margin, %	3.9	6.1	4.3	6.3	8.9
Of which, attributable to Parent Company shareholders	211	296	666	934	1,973
Average number of shares, thousands	272,370	246,952	272,370	243,504	250,720
Adjusted earnings per share, SEK (adjusted for A, B, C and D)	0.78	1.20	2.45	3.84	7.87

1) Excluding items affecting comparability (see Note 3 for depreciation, amortization and write-downs). 2) See Note 5.

Adjusted EBITA per business area1)

	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
SEK M	2018	2017	2018	2017	2017
Acute Care Therapies	438	458	1,504	1,653	2,500
Margin, %	13.9	17.5	16.4	19.4	20.5
Life Science	38	99	147	267	369
Margin, %	7.9	20.3	10.0	19.7	19.0
Surgical Workflows	15	49	-189	-29	445
Margin, %	0.7	2.7	-3.3	-0.6	5.3
Group functions and
other (incl. eliminations)	-53	-62	-185	-160	-206
Total	438	544	1,277	1,731	3,108
Margin, %	7.7	11.0	7.8	11.4	13.8

1) See Note 3 for depreciation, amortization and write-downs and Note 5 for other items affecting comparability

Adjusted EBITA – bridge between Jul-Sep 2017 and Jul-Sep 2018

• Currency effects impacted net sales by SEK +383 M, gross profit by SEK +129 M and EBITA by SEK -24 M.
• Weaker gross margin year-onyear and also compared with the second quarter of this year, primarily attributable to a lower margin in Acute Care Therapies.
• The lower gross margin was mainly due to the product and market mix – with particularly high growth in capital goods and in emerging markets during the quarter. A number of large business transactions at lower margins were delivered. Intensive remediation efforts also had a negative impact on the gross margin, for example, as a result of planned production stops.
• Operating expenses declined between the second and the third quarter of 2018 and adjusted for currency effects operating expenses are now marginally higher than in the year-earlier period, despite investments in sales, R&D and quality.
• Tax expense for the period was negatively impacted by SEK 68 M related to non-deductible costs associated with historical acquisitions the US.
• Adjusted EBITA in Acute Care Therapies fell by SEK 20 M, mainly due to a lower gross margin.
• In Life Science, adjusted EBITA declined by SEK -61 M, as a result of lower net sales and gross margin. Higher operating expenses, as a result of establishing the business area and continuing costs after the distribution of Arjo, also had a negative impact.
• Adjusted EBITA in Surgical Workflows fell by SEK -34 M, mainly related to a lower gross margin.

Adjusted operating expenses

(excluding depreciation, amortization and write-downs and other items affecting comparability)1)

	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
SEK M	2018	2017	2018	2017	2017
Selling expenses	-1,101	-1,052	-3,361	-3,216	-4,319
Administrative expenses	-707	-581	-2,053	-1,814	-2,427
Research and development costs	-147	-142	-494	-414	-568
Other operating income and expenses	-9	-25	-64	-22	-53
Total	-1,964	-1,800	-5,972	-5,466	-7,367

1) See Note 3 for depreciation and write-downs and Note 5 for other items affecting comparability.

Adjusted operating expenses Q1-Q3 2018

Adjusted EBITA – bridge between Jul-Sep 2017 and Jul-Sep 2018

Currency impact

SEK M	Jul-Sep 2018	Jan-Sep 2018
Net sales	383	223
Gross profit/loss	129	-81
EBITDA	-6	-192
EBITA	-24	-218
Operating loss (EBIT)	-35	-218

Cash flow and financial position1)

SEK M	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Cash flow before changes in working capital	748	597	1,460	2,316	3,653
Changes in working capital	372	-5	359	-633	-890
Net investments in non-current assets	-319	-410	-972	-1,166	-1,633
Cash flow after net investments	801	182	847	517	1,130
Net interest-bearing debt at end of the period			12,936	17,608	12,792
In relation to adjusted EBITDA2) R12M, multiple			3.3	N/A	3.0

1) Cash flows for 2017 also include Arjo, which was distributed to shareholders in December 2017. 2) See Note 5 and Note 7 (Alternative performance measures).

• Excluding currency effects, adjusted operating expenses are in line with the year-earlier period, despite investments in sales, quality and R&D as well as continuing costs after the spin-off of Arjo.

• Adjusted operating expenses declined by -2.3% or SEK 47 M compared with the second quarter of 2018.

• Net sales for the quarter were positively impacted by SEK 383 M in translation effects. Support mainly derived from the EUR and USD.

• EBITA for the quarter was impacted by translation effects of SEK +27 M and transaction effects of SEK -51 M.
• Cash flow was positively impacted by SEK 71 M due to sell-back of inventory to TSO3.
• Working capital declined in general during the quarter, leading to increased non-restricted cash flow.
• Payment of a company fine of SEK 276 M related to ongoing investigations in Brazil is planned for the fourth quarter of 2018.

Research and development

	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
SEK M	2018	2017	2018	2017	2017
R&D costs, gross	-289	-257	-955	-829	-1,123
In relation to net sales, %	5.1	5.2	5.9	5.5	5.0
Capitalized development costs	134	108	439	395	529
In relation to net sales, %	2.4	2.2	2.7	2.6	2.4
Research and development costs, net	-155	-149	-516	-434	-594
Amortization and write-downs of capitalized
R&D	-136	-163	-379	-401	-675
Of which write-downs	-4	-48	-4	-48	-193

• Gross expenses for R&D increased by 12.5%.

• Capitalized development costs rose by 24.1%

• Research and development costs increased by 4.0%, net.

• Improvements continue to take place in Hechingen in accordance

with the revised plan from 2017. • The unutilized provision totaled SEK 438 M at the end of the quarter, compared with SEK 498 M at the start of the quarter.

Update regarding Consent Decree with the FDA

	Sep 30	Sep 30	Dec 31
SEK M	2018	2017	2017
Provision at beginning of period	556	371	371
Used amount	-148	-212	-296
Provisions	-	488	488
Translation differences	30	-32	-7
Provision at close of period	438	615	556

• The Consent Decree with the FDA was signed in February 2015 and originally encompassed a total of four production units in the US and Germany.
• Improvement plans for the necessary corrections have been prepared for each unit. Necessary corrections according to the established plan at the two production units in the US are expected to be completed by the end of 2018. This work is expected to take longer at Hechingen.
• Getinge committed SEK 995 M in 2014 related to the remediation program for strengthening the former Medical Systems' quality management system, and in 2016 and 2017 SEK 400 M and SEK 488 M, respectively, were committed for the same purpose. The total cost of the remediation program thus amounted to SEK 1,983 M at the end the third quarter of 2018.

Other key events during the quarter

Provision of SEK 1.8 billion related to Atrium Medical Corporation's surgical mesh claims

Getinge has made a provision of SEK 1.8 billion for expected costs associated with Atrium Medical Corporation's surgical mesh product liability claims filed in the US and Canada. The suits consist of individual lawsuits, consolidated state cases and consolidated multi-district federal litigation. The first trials are expected to take place in late 2019 and early 2020. The provision will impact the operating result in the third quarter 2018 and will be reported as items affecting comparability. The provision is based on the information available today and is intended to cover every sort of cost related to the claims, including defense and handling of claims.

The surgical mesh implants are manufactured by Getinge's subsidiary Atrium Medical, which was acquired by Getinge in 2011. Polypropylene mesh is the established standard for hernia repair.

Patients are claiming damages for complications and injuries allegedly sustained after receiving surgical mesh implants. A material uptick in the number of claims filed began in late 2017, following the consolidation of the mass tort litigation. The claims are being vigorously defended and there have been no adverse verdicts against Atrium Medical. The first trials are expected to take place in late 2019 and early 2020.

Getinge predicts that future cashflows will be sufficient to cover the expenses related to the claims. Due to the uncertainty relating to loss reserve estimates, additional provisions may be required and actual costs may be materially higher or lower than the related provisions made. The company is simultaneously making a write-down mainly of its intangible assets, which brings a negative Group impact of SEK 90 M on the result of the third quarter 2018.

The Group holds related product liability insurance and is in continuing discussions with its insurance carriers regarding the scope of its insurance coverage. If those discussions are not productive, the Group may commence litigation against its carriers.

Getinge and TSO3 end exclusive distribution agreement on low temperature sterilization

Getinge and TSO3 have mutually decided not to renew the exclusive distribution agreement between the two companies, which was initiated in 2015. The agreement ends on August 1, 2018. The impact on the income statement is expected to be SEK -126 M mainly related to write-offs. The effect is reported in this report and recognized as an item affecting comparability in Surgical Workflows. Cash flow will be positively impacted by SEK 71 M due to sell-back of inventory to TSO3.

Getinge and TSO3 entered into an agreement in 2015, whereby Getinge acquired exclusive global distribution rights to the STERIZONE VP4 Sterilizer. Due to an overall slower market development than expected, both companies have jointly decided it would be equally beneficial not to continue with the current distribution set-up.

Getinge continues to believe in the future of low temperature sterilization technology and will primarily focus on the development of the company's own product, Stericool, offering a wide portfolio of sterilizers and a complete range of consumables for markets outside North America.

The Stericool sterilizers are Getinge's most technologically advanced and affordable solution for low temperature sterilization. Stericool sterilizers employ patented technologies to deliver rapid and safe sterilization for delicate, heat-sensitive and moisture-sensitive instruments.

Getinge and TSO3 will maintain a collaborative working relationship in North America, which will enable Getinge to offer the Sterizone VP4 when low temperature sterilization is requested by a customer as part of total infection control solution.

Key events after the quarter

Atrium Medical Corporation divests its biosurgery business (surgical mesh)

October 18, Atrium Medical Corporation, a subsidiary of Getinge, signed an agreement to divest its biosurgery business to HJ Capital 1, the parent company of SeCQure Surgical Corporation, a global medical device company. The deal is expected to close in the fourth quarter of this year subject to receipt of customary regulatory approvals and satisfaction of other customary closing conditions. Sales in 2017 relating to the biosurgery business amounted to approximately SEK 128 M. The divestment will have no material financial impact on results or financial position.

The biosurgery business was added to Getinge's therapeutic portfolio via the acquisition of Atrium Medical in 2011. The business is dedicated to the development of biological, mechanical and therapeutic solutions for soft tissue reinforcement following trauma, surgery and other interventional procedures. The biosurgery business has been a relatively small segment within Getinge's overall portfolio and the only therapeutic asset in the general surgery field. The divestment is a strategic decision in order to focus on core therapeutic solutions.

The divestment of the biosurgery business is a carve-out of assets from the Atrium Medical business. The divestment includes all assets and liabilities relating to the biosurgery business, but excludes the mesh product liability claims raised against Atrium Medical in relation to products sold prior to closing and also the associated insurance claims of Atrium Medical.

SeCQure Surgical is a company that provides versatile system configurations in general surgical for both minimally invasive and traditional open procedures including energy systems (ultrasonic and RF), surgical staplers and surgical mesh.

Acute Care Therapies

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. The addressable market amounted to SEK 85 billion with expected organic growth of 2-4% per year to 2020.

Order intake and net sales

• Very high organic order intake in ventilators, heart-lung machines and vascular implants.

• Particularly robust growth in APAC, with India, Japan and China performing strongly.

• Healthy organic sales growth in ventilators, heart-lung machines and vascular implants.
• High growth in India, Japan and China in APAC and in Russia, Turkey and the Middle East in EMEA.
• Growth in Americas was mainly attributable to ventilators and heart-lung machines in North America. Sales of vascular stents in the US are continuing to decline.
• Sales of capital goods increased significantly faster than consumables and service, creating future growth opportunities.
• Lower gross margin due to mix effects, primarily in the form of higher sales in emerging markets and faster growth in capital goods. Large business transactions were also secured at lower margins. The gross margin was also negatively impacted by ongoing remediation measures and lower sales in vascular stents in the US.
• The lower operating profit was mainly attributable to a lower gross margin. Operating expenses increased in administration, driven by quality costs, and R&D.
• Currency effects impacted sales by SEK +220 M, gross profit by SEK +106 M and EBITA by SEK +18 M.

Order intake regions, SEK M	Jul-Sep 2018	Jul-Sep 2017	Org Δ, %	Jan-Sep 2018	Jan-Sep 2017	Org Δ, %	Jan-Dec 2017
Americas	1,650	1,463	3.6	4,638	4,602	1.5	6,234
APAC	716	501	35.4	1,870	1,525	21.9	2,191
EMEA	927	881	-0.9	2,911	2,802	0.5	3,958
Total	3,293	2,845	7.8	9,419	8,929	4.7	12,383
Net sales regions, SEK M	Jul-Sep 2018	Jul-Sep 2017	Org Δ, %	Jan-Sep 2018	Jan-Sep 2017	Org Δ, %	Jan-Dec 2017
Americas	1,551	1,386	2.1	4,575	4,558	1.1	6,263
APAC	663	465	34.3	1,802	1,464	22.0	2,227
EMEA	945	770	16.9	2,781	2,518	6.7	3,711
Total	3,159	2,621	12.2	9,158	8,540	6.3	12,201
Net sales specified by capital goods and consumables, SEK M	Jul-Sep 2018	Jul-Sep 2017	Org Δ, %	Jan-Sep 2018	Jan-Sep 2017	Org Δ, %	Jan-Dec 2017
Capital goods	811	597	30.1	2,211	1,982	11.4	3,289

Underlying earnings trend1)

SEK M	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Net sales	3,159	2,621	9,158	8,540	12,201
Adjusted gross profit	1,710	1,610	5,319	5,249	7,403
Margin, %	54.1	61.4	58.1	61.5	60.7
Adjusted EBITDA	637	620	2,048	2,153	3,174
Margin, %	20.2	23.7	22.4	25.2	26.0
Depreciation, amortization and write
downs of tangible and intangible assets	-199	-162	-544	-500	-674
Adjusted EBITA	438	458	1,504	1,653	2,500
Margin, %	13.9	17.5	16.4	19.4	20.5

Consumables 2,348 2,024 6.9 6,947 6,558 4.8 8,912 Total 3,159 2,621 12.2 9,158 8,540 6.3 12,201

1) See Note 3 for depreciation, amortization and write-downs, Note 5 for other items affecting comparability and Note 7 (Alternative performance measures).

Key events in the business area

• Positive clinical results from the SEMPER FI pilot study related to intra-aortic balloon pumps for the treatment of patients with an acute heart attack following the internal repair of an artery wall or "percutaneous coronary intervention" (PCI). The pilot study showed positive clinical results related to reduced mortality and need for mechanical assistance due to reduced blood circulation.
• In Cardiac Assist, Getinge launched a new VuMedi training initiative to improve and expand existing clinical training in use of intra-aortic balloon pumps. VuMedi is a knowledge platform that is available in 250,000 clinics around the world.

Life Science

Life Science offers a comprehensive range of equipment, technical expertise and consultation to prevent contamination in biopharmaceutical production, biomedical research, medical device manufacturing and laboratory applications. The addressable market amounted to SEK 23 billion with expected organic growth of 3-5% per year to 2020.

Order intake and net sales

Order intake regions, SEK M	Jul-Sep 2018	Jul-Sep 2017	Org Δ, %	Jan-Sep 2018	Jan-Sep 2017	Org Δ, %	Jan-Dec 2017
Americas	167	177	-16.4	574	518	10.2	673
APAC	118	42	164.7	324	234	34.8	335
EMEA	263	208	16.2	781	691	6.7	1,003
Total	548	427	17.1	1,679	1,443	12.5	2,011
Net sales regions, SEK M	Jul-Sep 2018	Jul-Sep 2017	Org Δ, %	Jan-Sep 2018	Jan-Sep 2017	Org Δ, %	Jan-Dec 2017
Americas	194	174	1.6	569	522	8.4	718
APAC	89	108	-23.4	201	213	-8.2	328
EMEA	197	205	-12.1	702	619	7.7	901
Total	480	487	-9.8	1,472	1,354	5.5	1,947
Net sales specified by capital goods

Net sales specified by capital goods	Jul-Sep	Jul-Sep		Jan-Sep	Jan-Sep		Jan-Dec
and consumables, SEK M	2018	2017	Org Δ, %	2018	2017	Org Δ, %	2017
Capital goods	280	288	-11.3	887	788	8.9	1,183
Consumables	200	199	-7.6	585	566	0.7	764
Total	480	487	-9.8	1,472	1,354	5.5	1,947

Underlying earnings trend1)

SEK M Net sales Adjusted gross profit Margin, % Adjusted EBITDA Margin, %	Jul-Sep 2018 480 174 36.3 57 11.9	Jul-Sep 2017 487 196 40.2 117 24.0	Jan-Sep 2018 1,472 556 37.8 202 13.7	Jan-Sep 2017 1,354 555 41.0 316 23.3	Jan-Dec 2017 1,947 790 40.6 435 22.3
Depreciation, amortization and write downs of tangible and intangible assets Adjusted EBITA Margin, %	-19 38 7.9	-18 99 20.3	-55 147 10.0	-49 267 19.7	-66 369 19.0

1) See Note 3 for depreciation, amortization and write-downs, Note 5 for other items affecting comparability and Note 7 (Alternative performance measures).

Key events in the business area

• The quarter saw high demand for the new series of Getinge Steam Sterilizers (GSS), developed to meet the strict requirements of the growing field of biopharmaceutical production and biomedical research.

Information on characteristics of the operations

A high share of the sales in Life Science comprise large and customized projects, meaning that the order intake and sales can be markedly affected by individual agreements and vary significantly between quarters.

• The gross margin was adversely affected by lower volumes and an

• Lower sales in sterilizers in APAC and EMEA resulted in an organic decrease in net sales. • Strong sales in isolators, with growth exceeding 20%.

• Particularly high organic order intake in disinfection and

• Sharp growth in APAC, mainly related to strong trend in India, China and South Korea.

sterilizers.

• unfavorable product mix. • Operating profit was negatively affected by the lower gross margin and higher operating expenses in sales and administration connected with the establishment of the business area. The business area was also adversely impacted by continuing costs after the distribution of Arjo.
• Currency effects impacted sales by SEK +40 M, gross profit by SEK +8 M and EBITA by SEK -2 M.

Surgical Workflows

Surgical Workflows offers products and services for efficient disinfection and sterilization of instruments used in operations, operating tables and other high-quality hardware for operating rooms and advanced IT systems for efficient and secure hospital workflows. The addressable market amounted to SEK 62 billion with expected organic growth of 2-4% per year to 2020.

Order intake and net sales

• Lower organic order intake in all product segments.

• The trend is mainly the result of a lower order intake in EMEA and APAC in Surgical Workplaces.

• Healthy growth in all product categories.
• Strong performance in Surgical Workplaces in Americas and disinfection and sterilizers in APAC and EMEA.
• Particularly high growth in India, China and Thailand.
• Net sales are continuing to grow faster in capital goods than in consumables and service.
• The gross margin was negatively impacted by the product and market mix, with higher sales in emerging markets and in capital goods. Large strategic business transactions were also secured at lower margins.
• Operating profit was negatively affected by the lower gross margin.
• Operating expenses were unchanged, excluding currency effects, year-on-year.
• Currency effects impacted sales by SEK +123 M, gross profit by SEK +15 M and EBITA by SEK -39 M.

Order intake regions, SEK M	Jul-Sep 2018	Jul-Sep 2017	Org Δ, %	Jan-Sep 2018	Jan-Sep 2017	Org Δ, %	Jan-Dec 2017
Americas	689	626	3.1	1,785	1,663	8.3	2,242
APAC	600	581	-3.3	1,589	1,483	5.3	2,218
EMEA	1,043	1,223	-19.9	3,146	3,086	-1.0	4,374
Total	2,332	2,430	-10.0	6,520	6,232	3.0	8,834
Net sales	Jul-Sep	Jul-Sep	Org Δ,	Jan-Sep	Jan-Sep		Jan-Dec
regions, SEK M	2018	2017	%	2018	2017	Org Δ, %	2017
Americas	561	492	5.5	1,575	1,419	11.7	2,058
APAC	479	392	14.3	1,288	1,146	10.6	2,129
EMEA	1,004	952	0.2	2,789	2,665	1.3	4,160
Total	2,044	1,836	4.6	5,652	5,230	6.1	8,347
Net sales specified by capital goods and consumables, SEK M	Jul-Sep 2018	Jul-Sep 2017	Org Δ, %	Jan-Sep 2018	Jan-Sep 2017	Org Δ, %	Jan-Dec 2017
Capital goods	1,226	1,071	8.2	3,279	2,882	11.9	5,117
Consumables	818	765	0.0	2,373	2,348	-0.8	3,230

Underlying earnings trend1)

SEK M Net sales Adjusted gross profit Margin, % Adjusted EBITDA Margin, %	Jul-Sep 2018 2,044 837 40.9 116 5.7	Jul-Sep 2017 1,836 817 44.5 147 8.0	Jan-Sep 2018 5,652 2,278 40.3 113 2.0	Jan-Sep 2017 5,230 2,257 43.2 283 5.4	Jan-Dec 2017 8,347 3,459 41.4 878 10.5
Depreciation, amortization and write downs of tangible and intangible assets Adjusted EBITA Margin, %	-101 15 0.7	-98 49 2.7	-302 -189 -3.3	-312 -29 -0.6	-433 445 5.3

Total 2,044 1,836 4.6 5,652 5,230 6.1 8,347

1) See Note 3 for depreciation, amortization and write-downs, Note 5 for other items affecting comparability and Note 7 (Alternative performance measures).

Key events in the business area

• Launch of a new model in the Getinge 86 washer-disinfector series the compact and robust S-8668T. The new model provides increased process volumes, lower water and energy consumption, and a safe and ergonomic work environment.
• Launch of the Maquet Variop HPL modular room system, which offers wall modules in high pressure laminate and thus meets the healthcare sector's specific strength and hygiene requirements.

Other information

Risk management

Healthcare reimbursement system

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

Customers

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

Authorities and control bodies

Parts of Getinge's operations and 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 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 and every business area assumes overall responsibility for quality and regulatory issues. 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. Getinge is also, and may become in the future, involved in government investigations, disputes and similar proceedings within the framework of its other business operations concerning such issues as the environment, tax and competition. Since Getinge operates in a global environment, the company is also exposed to local business risks, such as corruption and restrictions on trade. To minimize the risk of being subject to such investigations, disputes and proceedings, Getinge works actively on developing, implementing and maintaining policies and systems for ensuring compliance with applicable rules and regulations.

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 Group prioritizes correctly when choosing which potential projects to pursue. This process includes careful analyses of the market, technological progress, choice of production method and selection of subcontractors. The development work is conducted in a structured manner and each project undergoes a number of fixed control points.

Product liability and damage claims

Healthcare suppliers run a risk, like other players in the healthcare industry, of being subject to 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. Getinge carries the customary indemnity and product liability insurance, but there is a risk that Getinge's insurance coverage may not fully cover product liability and other claims.

Protection of intellectual property

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

Financial risk management

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

Seasonal variations

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

Transactions with related parties

During the period, Board members and Group Management in Getinge AB acquired synthetic options in Getinge, issued by the company's principal owner Carl Bennet AB. Getinge is not a party to the transactions and the offer has been submitted by Carl Bennet AB on its own initiative, without Getinge's participation. The options have been acquired at a price corresponding to estimated market value. Following the distribution of Arjo in December 2017, Getinge carried out normal commercial transactions with Arjo for the sale and purchase of goods and services. In addition, no other significant transactions with related parties occurred during the period other than transactions with subsidiaries.

Forward-looking information

This report contains forward-looking information based on the current expectations of company management. Although management deems that the expectations presented by such forwardlooking information are reasonable, no guarantee can be given that these expectations will prove correct. Accordingly, the actual future outcome could vary considerably compared with what is stated in the forward-looking information, due to such factors as changed conditions regarding finances, market and competition, changes in legal and regulatory requirements and other political measures, and fluctuations in exchange rates.

Getinge's financial targets

• Average annual organic growth in net sales: 2-4%
• Average earnings per share growth: >10%
• Getinge's dividend policy is to pay dividends of 30-50% of net profit to shareholders.

Nomination Committee ahead of 2019 Annual General Meeting

Pursuant to a resolution by Getinge AB's 2005 General Meeting, the Nomination Committee comprises Getinge's Chairman and representatives for the five largest shareholders at August 31, 2018, as well as a representative for minority shareholders. Ahead of the 2019 Annual General Meeting, this means that Getinge's Nomination Committee comprises: a representative from Carl Bennet AB, the Fourth Swedish National Pension Fund, Incentive, Swedbank Robur Fonder and a representative for minority shareholders. Shareholders who would like to submit proposals to Getinge's 2019 Nomination Committee can contact the Nomination Committee by e-mail at valberedningen@getinge.com or by mail: Getinge AB, Att: Nomination Committee, Box 8861, SE-402 72 Gothenburg, Sweden.

2019 Annual General Meeting

Getinge AB's Annual General Meeting will be held on April 23, 2019 at 2:00 p.m. in Kongresshallen at Hotel Tylösand in Halmstad, Sweden. Shareholders wishing to have a matter addressed at the Annual General Meeting can submit their proposal to Getinge's Board Chairman by e-mail: arenden.bolagsstamma@getinge.com, or by mail: Getinge AB, Att: Bolagsstämmoärenden, Box 8861, SE-402 72 Gothenburg, Sweden. To ensure inclusion in the notice and thus in the Annual General Meeting's agenda, proposals must be received by the company not later than March 5, 2019.

Assurance

The Board of Directors and CEO assure that the interim report provides a true and fair review of the Parent Company and the Group's operations, position and earnings and describes the material risks and uncertainties faced by the Parent Company and the Group.

	Gothenburg, October 18, 2018
Carl Bennet Chairman	Johan Bygge	Cecilia Daun Wennborg
Barbro Fridén	Dan Frohm	Sofia Hasselberg
Peter Jörmalm	Rickard Karlsson	Johan Malmquist
Mattias Perjos President & CEO	Malin Persson	Johan Stern Vice Chairman

AUDITOR'S REPORT

INTERIM REPORT PREPARED IN ACCORDANCE WITH IAS 34 AND CHAPTER 9 OF THE SWEDISH ANNUAL ACCOUNTS ACT

Introduction

We have reviewed the condensed interim financial information (interim report) of Getinge AB (publ) as of 30 September 2018 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Gothenburg, October 18, 2018 Öhrlings PricewaterhouseCoopers AB

Johan Rippe Eric Salander Authorized Public Accountant Authorized Public Accountant Auditor in Charge

Consolidated financial statements

Consolidated income statement

SEK M	Note	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Net sales	2	5,683	4,944	16,282	15,124	22,495
Cost of goods sold	3	-3,263	-2,496	-8,804	-7,604	-11,783
Gross profit	2	2,420	2,448	7,478	7,520	10,712
Selling expenses	3	-1,368	-1,209	-3,895	-3,715	-4,980
Administrative expenses	3	-792	-661	-2,299	-2,062	-2,760
Research and development costs		-155	-149	-516	-434	-594
Acquisition expenses		-2	0	-4	-3	-4
Restructuring costs		-30	-99	-42	-635	-759
Other operating income and expenses1)		-1,809	-26	-2,214	-23	-122
Operating profit/loss (EBIT)	2.3	-1,736	304	-1,492	648	1,493
Net financial items	2	-41	-132	-236	-433	-560
Profit/loss after financial items	2	-1,777	172	- 1,728	215	933
Taxes		333	-47	74	-58	184
Net profit/loss for the period from continuing operations		-1,444	125	-1,654	157	1,117
Net profit/loss for the period from discontinued operations2)	9	-	-70	-	186	280
Net profit/loss for the period from continuing and discontinued operations		-1,444	55	-1,654	343	1,397
Attributable to:
Parent Company shareholders
Profit/loss from continuing operations		-1,454	120	-1,680	143	1,096
Profit/loss from discontinued operations		-	-70	-	186	280
Profit/loss from continuing and discontinued operations		-1,454	50	-1,680	329	1,376
Non-controlling interests
Profit/loss from continuing operations		10	5	26	14	21
Profit/loss from discontinued operations		-	-	-	-	-
Profit from continuing and discontinued operations		10	5	26	14	21
Earnings per share, SEK3		-5.34	0.20	-6.17	1.35	5.49
Of which, continuing operations, SEK		-5.34	0.49	-6.17	0.59	4.37
Of which, discontinued operations, SEK		-	-0.29	-	0.76	1.12
Weighted average number of shares for calculation of earnings per share (000s)4)		272,370	246,952	272,370	243,504	250,720

1) Of which SEK -350 M is related to ongoing investigations in Brazil (provision made in the first quarter 2018) and SEK -1,800 M pertains to surgical mesh-related claims (provision made

in the third quarter 2018). 2) The shares in Arjo were distributed to Getinge's shareholders in December 2017 and in this report Arjo is recognized separately as a discontinued operation in accordance with IFRS 5 3) Before and after dilution

4) Adjusted for bonus issue effect of the rights issue

Consolidated statement of comprehensive income

	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
SEK M	2018	2017	2018	2017	2017
Net profit/loss for the period from continuing and discontinued operations	-1,444	55	-1,654	343	1,397
Other comprehensive income
Items that cannot be restated in profit for the period
Actuarial gains/losses pertaining to defined-benefit pension plans	36	76	36	198	179
Tax attributable to items that cannot be restated in profit	-8	-34	-8	-81	-159
Items that can later be restated in profit for the period
Translation differences and hedging of net investments	-436	-632	995	-1409	-762
Cash flow hedges	75	137	-81	472	561
Reversal of translation differences and hedges, discontinued operations	-	-	-	-	-127
Tax attributable to items that can be restated in profit	32	-174	239	-474	-448
Other comprehensive income for the period, net after tax	-301	-627	1,181	-1294	-756
Total comprehensive income for the period	-1,745	-572	-473	-951	641
Comprehensive income attributable to:
Parent Company shareholders	-1,751	-572	-520	-963	609
Non-controlling interests	6	0	47	12	32

Consolidated balance sheet

SEK M	Note	Sep 30 2018	Sep 30 20171)	Dec 31 2017
Assets
Intangible assets		24,034	29,392	23,045
Tangible assets		3,081	4,105	2,911
Financial assets		2,344	1,365	1,586
Inventories		5,392	6,173	4,879
Accounts receivable		4,749	6,006	6,067
Other current receivables		2,083	3,094	2,088
Cash and cash equivalents	6	940	1,521	1,526
Total assets		42,623	51,656	42,102
Equity and liabilities
Equity		18,905	23,755	19,806
Provisions for pensions, interest-bearing	6	3,144	2,981	3,081
Other interest-bearing liabilities	6	10,732	16,148	11,237
Other provisions		3,984	2,150	2,202
Accounts payable		1,606	1,792	2,025
Other non-interest-bearing liabilities		4,252	4,830	3,751
Total equity and liabilities		42,623	51,656	42,102

1) The consolidated balance sheet includes Arjo, which was distributed to the shareholders in December 2017

Changes in equity for the Group

		Other capital		Retained		Non controlling	Total
SEK M	Share capital	provided	Reserves1)	earnings	Total	interests	equity
Opening balance at January 1, 2017 Total comprehensive income for the period	119 -	5,960 -	955 -787	13,474 1,396	20,508 609	408 32	20,916 641
Share-based remuneration	-	-	-	-4	-4	-	-4
Dividend	-	-	-	-477	-477	- 18	-495
Rights issue2)	17	4,264	-	-	4,281	-	4,281
Distribution of Arjo3)	-	-3,435	-	-2,098	-5,533	-	-5,533
Closing balance at December 31, 2017	136	6,789	168	12,291	19,384	422	19,806
Opening balance at January 1, 2018	136	6,789	168	12,291	19,384	422	19,806
Total comprehensive income for the period	-	-	1,132	-1,652	-520	47	-473
Share-based remuneration	-	-	-	-4	-4	-	-4
Dividend	-	-	-	-409	-409	-15	-424
Closing balance at September 30, 2018	136	6,789	1,300	10,226	18,451	454	18,905

1) Reserves pertain to cash flow hedges, hedges of net investments and translation differences.

2) After deductions for transaction costs and taking tax effects into consideration.

3) Including transaction costs and taxes.

Consolidated cash flow statement

	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
SEK M	2018	2017	2018	2017	2017
Operating activities
Operating profit (EBIT) for continuing operations	-1,736	304	-1,492	648	1,493
Operating profit (EBIT) for discontinued operations	-	-43	-	315	294
Add-back of depreciation, amortization and write-downs	535	631	1,351	1,902	2,609
Other non-cash items1)	1,915	16	2,277	31	51
Add-back of restructuring costs2)	30	182	42	733	887
Paid restructuring costs	-82	-126	-191	-383	-539
Financial items	-58	-184	-226	-494	-663
Taxes paid	144	-183	-301	-436	-479
Cash flow before changes in working capital	748	597	1,460	2,316	3,653
Changes in working capital
Inventories	53	-262	-551	-1,312	-910
Current receivables	136	170	1,429	991	-653
Current liabilities	183	87	-519	-312	673
Cash flow from operating activities	1,120	592	1,819	1,683	2,763
Investing activities
Acquisition of operations	-	-	-4	-81	-81
Investments in intangible assets and tangible assets	-325	-410	-1,002	-1,191	-1,663
Divestment of non-current assets	6	-	30	25	30
Cash flow from investing activities	-319	-410	-976	-1,247	-1,714
Financing activities
Change in interest-bearing liabilities	-754	-4,248	-1,029	-4,294	-4,276
Change in interest-bearing receivables	-3	-37	6	-22	-56
Distribution of Arjo	-	-	-	-	-623
Dividend paid	-15	-15	-424	-492	-495
Rights issue	-	4,281	-	4,281	4,281
Cash flow from financing activities	-772	-19	-1,447	-527	-1,169
Cash flow for the period	29	163	-604	-91	- 120
Cash and cash equivalents at the beginning of the period	939	1,400	1,526	1,680	1,680
Translation differences	-28	-42	18	-68	-34
Cash and cash equivalents at the end of the period	940	1,521	940	1,521	1,526

1) Of which SEK -350 M is related to ongoing investigations in Brazil and SEK -1,800 M pertains to provision for surgical mesh-related claims.

2) Excluding write-downs on non-current assets

Note 1 Accounting policies

The Group's interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. For the Parent Company, the report has been prepared in accordance with the Swedish Annual Accounts Act and RFR 2. The accounting policies adopted are consistent with those applied for the 2017 Annual Report and should be read in conjunction with that Annual Report. The interim report provides alternative performance measures for monitoring the Group's operations. Percentual changes and key figures in the report have been calculated based on the rounded amounts as presented in the report. Unless otherwise specified, all figures pertain to SEK M and figures in parentheses pertain to the year-earlier period.

New accounting policies

The Group has assessed the effects of the implementation of IFRS 9 Financial instruments and IFRS 15 Revenue from Contracts with Customers and has concluded that there are no material differences between these new standards and the accounting policies previously applied by the Group as regards the recognition and measurement of financial instruments, impairment of doubtful receivables and revenue recognition. Accordingly, the introduction of IFRS 9 and IFRS 15, which apply from January 1, 2018, did not impact the Group's equity. IFRS 16 Leases comes into effect on January 1, 2019 and will be applied from this date. The implementation of the new standard and the analysis of its effects on the consolidated financial statements is continuing. Since IFRS 16 entails that a lessee is to recognize all material leases in the balance sheet, the Group's total assets will increase. At the same time, operating profit will increase compared with the current amount because some of the leasing payments will be recognized as interest expenses in net financial items. In total, this means that several of the Group's key figures will be impacted by the new standard. For more information about the new standards, refer to page 75 in the 2017 Annual Report.

Restated segment information

Getinge reports Life Science as a new business area from January 1, 2018, and segment information for 2017 was thus restated. Life Science was previously part of the Surgical Workflows business area.

Reclassification of costs

Costs the 2017 comparative year were reclassified between cost of goods sold and administrative expenses to reflect organizational changes in functions including Quality and IT. These reclassifications entail that cost of goods sold declined by SEK 50 M in the first quarter of 2017 and SEK 60 M in the second quarter of the same year. The decline in the cost of goods sold for the full-year 2017 thus amounted to SEK 110 M. Administrative expenses increased at a corresponding amount. The reclassifications affect only the Surgical Workflows business area.

Change in accounting policy for the Parent Company

The Parent Company changed its accounting policy for Group contributions in 2018. Group contributions paid and received are now recognized as appropriations according to the alternative rule in RFR 2 and for this reason Group contributions were reclassified from Result from participations in Group companies to Appropriations.

Distribution of Arjo

The distribution of Arjo in December 2017 is recognized in this report in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Net profit for the period for the discontinued operations is recognized separately in the consolidated income statement under the item "Net profit for the period from discontinued operations." This means that income and expenses for Arjo are excluded from other income-statement items for all reported periods. The discontinued operations were not separated in the consolidated cash flow statement. Cash flow disclosures for these operations are instead recognized in Note 9. Only assets and liabilities remaining in the Group after the distribution of Arjo are recognized in the balance sheet, meaning that Arjo is included in the balance sheet as per September 30, 2017.

Note 2 Segment overview

	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Net sales, SEK M	2018	2017	2018	2017	2017
Acute Care Therapies	3,159	2,621	9,158	8,540	12,201
Life Science	480	487	1,472	1,354	1,947
Surgical Workflows	2,044	1,836	5,652	5,230	8,347
Total	5,683	4,944	16,282	15,124	22,495
	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Gross profit, SEK M	2018	2017	2018	2017	2017
Acute Care Therapies	1,573	1,492	4,938	4,893	6,787
Life Science	164	184	526	524	749
Surgical Workflows	683	772	2,014	2,103	3,176
Total	2,420	2,448	7,478	7,520	10,712
	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Operating profit (EBIT), SEK M	2018	2017	2018	2017	2017
Acute Care Therapies	-1,590	271	-958	688	1,131
Life Science	37	96	144	262	364
Surgical Workflows	-130	2	-493	-138	211
Group functions and other (incl.
eliminations)1)	-53	-65	-185	-164	-213
Operating profit/loss (EBIT)	-1,736	304	-1,492	648	1,493
Net financial items	-41	-132	-236	-433	-560
Profit/loss after financial items	-1,777	172	-1,728	215	933

1) Group functions and other refer mainly to central functions such as finance, communication, HR and other items, such as eliminations.

Note 3 Depreciation, amortization and write-downs

	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
SEK M	2018	2017	2018	2017	2017
Acquired intangible assets	-212	-141	-443	-445	-586
Intangible assets	-207	-230	-568	-600	-943
Tangible assets	-116	-101	-340	-318	-437
Total	-535	-472	-1,351	-1,363	-1,966
of which write-downs	-101	-52	-101	-54	-203
	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
SEK M	2018	2017	2018	2017	2017
Cost of goods sold	-203	-175	-577	-541	-891
Selling expenses	-239	-158	-506	-500	-661
Administrative expenses	-85	-81	-246	-249	-333
Research and development costs	-8	-6	-22	-19	-26
Restructuring costs	-	-52	-	-54	-55
Total	-535	-472	-1,351	-1,363	-1,966
of which write-downs	-101	-52	-101	-54	-203

Note 4 Quarterly results

	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec
SEK M	2018	2018	2018	2017	2017	2017	2017	2016
Net sales	5,683	5,731	4,868	7,371	4,944	5,369	4,811	7,434
Cost of goods sold	-3,263	-3,077	-2,464	-4,179	-2,496	-2,725	-2,383	-4,036
Gross profit	2,420	2,654	2,404	3,192	2,448	2,644	2,428	3,398
Operating expenses	-4,156	-2,249	-2,565	-2,347	-2,144	-2,602	-2,126	-2,090
Operating profit/loss (EBIT)	-1,736	405	-161	845	304	42	302	1,308
Net financial items	-41	-74	-121	-127	-132	-158	-143	-127
Profit/loss after financial items	-1,777	331	-282	718	172	-116	159	1,181
Taxes	333	-240	-19	242	-47	31	-42	-309
Net profit/loss for the period from
continuing operations	-1,444	91	-301	960	125	-85	117	872

Note 5 Adjustment items

Adjusted EBITA, SEK M	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Acute Care Therapies	438	458	1,504	1,653	2,500
Life Science	38	99	147	267	369
Surgical Workflows	15	49	-189	-29	445
Group functions and other (incl. eliminations)	-53	-62	-185	-160	-206
Total, Group	438	544	1,277	1,731	3,108
Adjustments of EBITA, SEK M	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Specification of items affecting comparability
Acquisition and restructuring costs, Acute Care Therapies	-30	-44	-39	-546	-607
Acquisition and restructuring costs, Life Science	-	-	-	-2	-2
Acquisition and restructuring costs, Surgical Workflows	-2	-52	-7	-86	-147
Write-down of inventories, Acute Care Therapies1)	-	-	-	-	-17
Write-down of R&D, Acute Care Therapies1)	-	-	-	-	-122
Write-down of acquired intangible assets, Acute Care Therapies2)	-66	-	-66	-	-
Write-down of inventories, Surgical Workflows1)	-91	-	-91	-	-32
Write-down of R&D, Surgical Workflows1)	-4	-	-4	-	-26
Write-down of acquired intangible assets, Surgical Workflows2)	-31	-	-31	-	-
Provision related to mesh, Acute Care Therapies3)	-1,800	-	-1,800	-	-
Provision for ongoing investigation in Brazil, Acute Care Therapies3)	-	-	-210	-	-69
Provision for ongoing investigation in Brazil, Surgical Workflows3)	-	-	-140	-	-
Other, Acute Care Therapies2)	-24	-	-24	-	-
Other, Surgical Workflows1)	-7	-	-7	-	-
Other, Surgical Workflows2)	-4	-	-4	-	-
Group functions and other (incl. eliminations)	-	-3	-	-4	-7
Total, Group	-2,059	-99	-2,423	-638	-1,029
Items affecting comparability per segment
Acute Care Therapies	-1,920	-44	-2,139	-546	-815
Life Science	-	-	-	-2	-2
Surgical Workflows	-139	-52	-284	-86	-205
Group functions and other (incl. eliminations)	-	-3	-	-4	-7
Total, Group	-2,059	-99	-2,423	-638	-1,029

1) Reported in Cost of goods sold

2) Reported in Operating expenses 3) Reported in Other operating income and operating expenses

EBITA, SEK M	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Acute Care Therapies	-1,482	414	-635	1,107	1,685
Life Science	38	99	147	265	367
Surgical Workflows	-124	-3	-473	-115	240
Group functions and other (incl. eliminations)	-53	-65	-185	-164	-213
Total, Group	-1,621	445	-1,146	1,093	2,079

Adjustment of tax, SEK M	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Amortization and write-down of acquired intangible assets	115	141	346	445	586
Items affecting comparability	2,059	99	2,423	638	1,029
Adjustment items, total	2,174	240	2,769	1,083	1,615
Tax effect on adjustment items1)	-534	-64	-600	-292	-436
Tax items affecting comparability2)	25	-	177	-	-302
Total, Group	-509	-64	-423	-292	-738

1) Excluding write-downs, classified as items affecting comparability.

2) Tax effect on tax deductible adjustment items

3) January – September 2018: Tax item affecting comparability primarily refers to the provision of SEK 64 M for self correction of tax related to ongoing investigations into competition-law breaches in Brazil and SEK 88 in tax effect due to the tax rate change in Sweden. For the full-year 2017, the tax items affecting comparability refer to the US Tax Reform.

Note 6 Consolidated net interest-bearing debt

SEK M	Sep 30 2018	Sep 30 2017	Dec 31 2017
Other interest-bearing liabilities	10,732	16,148	11,237
Provisions for pensions, interest-bearing	3,144	2,981	3,081
Interest-bearing liabilities	13,876	19,129	14,318
Less cash and cash equivalents	-940	-1,521	-1,526
Net interest-bearing debt	12,936	17,608	12,792

Note 7 Key figures for the Group

Financial and operative key figures	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Key figures based on Getinge's financial targets
Organic growth in net sales, %	7.2	0.0	6.2	0.6	1.3
Earnings per share1), SEK	-5.34	0.49	-6.17	0.59	4.37
Other operative and financial key figures
Organic growth in order intake, %	0.9	7.7	4.7	0.9	2.5
Gross margin, %	42.6	49.5	45.9	49.7	47.6
Selling expenses, % of net sales	24.1	24.5	23.9	24.6	22.1
Administrative expenses, % of net sales	13.9	13.4	14.1	13.6	12.3
Research and development costs, % of net sales	5.1	5.2	5.9	5.5	5.0
Operating margin, %	-30.5	6.1	-9.2	4.3	6.6
EBITDA, SEK M	-1,201	776	-141	2,011	3,459
Number of shares2), thousands	272,370	246,952	272,370	243,504	250,720
Number of shares at the end of the period2), thousands	272,370	272,370	272,370	272,370	272,370
Interest-coverage ratio, multiple			9.7	8.6	8.6
Net debt/equity ratio3), multiple			0.68	N/A	0.65
Net debt/Rolling 12m adjusted EBITDA3), multiple			3.3	N/A	3.0
Return on equity3)4), %			-2.9	N/A	6.6
Equity/assets ratio, %			44.4	46.0	47.0
Equity per share3), SEK			69.41	N/A	72.72
Number of employees			10,690	10,644	10,684

1) Before and after dilution (no dilutive effect during the periods stated)

2) Adjusted for bonus issue effect of the rights issue

3) Not applicable due to the distribution of Arjo in December 2017 4) Refers to remaining and discontinuing operations

Alternative performance measures

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.

Adjusted gross profit, SEK M	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Gross profit Add-back of:	2,420	2,448	7,478	7,520	10,712
Depreciation, amortization and write-downs of
intangible and tangible assets	203	175	577	541	891
Other items affecting comparability	102	-	102	-	197
Adjustment for write-downs included in other
items affecting comparability	-4	-	-4	-	-148
Adjusted gross profit	2,721	2,623	8,153	8,061	11,652
	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Adjusted EBITDA, SEK M	2018	2017	2018	2017	2017
Operating profit/loss (EBIT)	-1,736	304	-1,492	648	1,493
Add-back of:
Depreciation, amortization and write-downs of
intangible and tangible assets	323	331	908	918	1,380
Amortization and write-down of acquired
intangible assets	212	141	443	445	586
Other items affecting comparability	2,027	-	2,377	-	266
Acquisition and restructuring costs	32	99	46	638	763
Adjustment for write-downs included in other
items affecting comparability and restructuring
costs	-101	-52	-101	-54	-203
Adjusted EBITDA	757	823	2,181	2,595	4,285
	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Adjusted EBITA, SEK M	2018	2017	2018	2017	2017
Operating profit/loss (EBIT)	-1,736	304	-1,492	648	1,493
Add-back of:
Amortization and write-down of acquired
intangible assets	212	141	443	445	586
Other items affecting comparability	2,027	-	2,377	-	266
Acquisition and restructuring costs	32	99	46	638	763
Adjustment for write-downs of acquired
intangible assets included in other items
affecting comparability and restructuring costs	-97	-	-97	-	-
Adjusted EBITA	438	544	1,277	1,731	3,108
	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Adjusted EBIT, SEK M	2018	2017	2018	2017	2017
Operating profit/loss (EBIT)	-1,736	304	-1,492	648	1,493
Add-back of:
Other items affecting comparability	2,027	-	2,377	-	266
Acquisition and restructuring costs	32	99	46	638	763
Adjusted EBIT	323	403	931	1,286	2,522
Adjusted net profit/loss for the period from	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
continuing operations, SEK M	2018	2017	2018	2017	2017
Net profit/loss for the period from
continuing operations	-1,444	125	-1,654	157	1,117
Add-back of:
Amortization and write-down of acquired
intangible assets	212	141	443	445	586
Other items affecting comparability	2,027	-	2,377	-	266
Acquisition and restructuring costs	32	99	46	638	763
Adjustment for write-downs of acquired
intangible assets included in other items
affecting comparability and restructuring costs	-97	-	-97	-	-
Tax items affecting comparability	25	-	177	-	-302
Tax on add-back items	-534	-64	-600	-292	-436
Adjusted net profit for the period from	221	301	692	948	1,994
continuing operations

Note 8 Acquisitions

No acquisitions took place in January – September 2018.

Note 9 Discontinued operations

Distribution and listing of Arjo

Arjo was distributed to the shareholders of Getinge AB and listed on Nasdaq Stockholm on December 12, 2017. In this report, Arjo is recognized as a discontinued operation in the consolidated income statement with retrospective effect for prior periods and in accordance with IFRS 5.

Income statement for discontinued operations, SEK M	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Net sales	-	1,795	-	5,620	6,929
Cost of goods sold	-	-1,050	-	-3,093	-3,863
Gross profit	-	745	-	2,527	3,066
Selling expenses	-	-344	-	-1,122	-1,425
Administrative expenses	-	-285	-	-775	-992
Research and development costs	-	-27	-	-91	-118
Restructuring costs	-	-135	-	-219	-250
Other operating income and expenses	-	3	-	-5	13
Operating profit/loss (EBIT)	-	-43	-	315	294
Net financial items	-	-52	-	-61	-84
Profit/loss after financial items	-	-95	-	254	210
Taxes	-	25	-	-68	-57
Net profit/loss for the period from the operations	-	-70	-	186	153
Profit from translation differences and hedges	-	-	-	-	127
Net profit/loss for the period	-	-70	-	186	280

Cash flow from discontinued operations, SEK M	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Cash flow from operating activities	-	122	-	397	269
Cash flow from investing activities	-	-101	-	-293	-320
Cash flow from financing activities	-	16	-	7	4
Cash flow for the period	-	37	-	111	-47

Parent Company financial statements

Parent Company's income statement

SEK M	Jul-Sep 2018	Jul-Sep 2017	Jan-Sep 2018	Jan-Sep 2017	Jan-Dec 2017
Administrative expenses	-107	-37	-343	-232	-251
Other operating expenses	-	-	-301	-	-
Operating result	-107	-37	-644	-232	-251
Result from participations in Group companies1)	126	856	8,343	2,815	2,859
Interest income and other similar income	0	754	205	1,912	1,614
Interest expenses and other similar expenses	-110	-159	-1,471	-441	-574
Profit/loss after financial items2)	-91	1,414	6,433	4,054	3,648
Appropriations	-	-	-	-	-420
Taxes	45	-246	321	-293	-99
Net profit/loss for the period3)	-46	1,168	6,754	3,761	3,129

1) Internal restructuring took place in June which resulted in a liquidation gain of SEK 8,329 M in the Parent Company.

2) Interest income and other similar income and interest expenses and other similar expenses include exchange-rate gains and losses attributable to the translation of receivables and liabilities in foreign currencies measured

3) Comprehensive income for the period corresponds to net profit for the period

Parent Company's balance sheet

SEK M	Sep 30 2018	Sep 30 2017	Dec 31 2017
Assets
Intangible assets	86	95	86
Tangible assets	10	5	6
Participations in Group companies	28,062	28,020	25,455
Deferred tax assets	507	158	189
Long-term receivables	54	-	53
Receivables from Group companies	14	5,782	953
Current receivables	247	135	191
	28,980	34,195
Total assets			26,933
Equity and liabilities	18,926	17,127
Equity	5,527	4,164	12,584
Long-term liabilities	709	-	4,257
Long-term liabilities to Group companies Current liabilities to Group companies	158	1,329	659 2,990
Current liabilities	3,660	11,575	6,443

Definitions

Financial terms

Return on equity. Rolling 12 months' profit after tax in relation to average equity.

Gross margin. Gross profit in relation to net sales.

Adjusted gross profit. Gross profit with add-back of depreciation, amortization and write-downs and other items affecting comparability.

EBIT. Operating profit.

Adjusted EBIT. Operating profit with addback of acquisition and restructuring costs and other items affecting comparability.

EBITA. Operating profit before depreciation and write-down of acquired intangible assets.

Adjusted EBITA. EBITA with add-back of acquisition and restructuring costs and other items affecting comparability.

EBITA margin. EBITA in relation to net sales.

EBITDA. Operating profit before depreciation, amortization and write-down.

Adjusted EBITDA. EBITDA with add-back of acquisition and restructuring costs and other items affecting comparability.

EBITDA margin. EBITDA in relation to net sales.

Equity per share, SEK. Equity in relation to the number of shares at the end of the period.

Cash flow after net investments. Cash flow from operating activities and investing activities, excluding acquisitions and divestment of operations.

Net debt/equity ratio. Net interest-bearing debt in relation to equity.

Organic change. A change in percentage adjusted for currency, acquisitions and divestments in the past period compared with the year-earlier period.

Adjusted net profit for the period. Net profit for the period with add-back of amortization and write-down of acquired intangible assets, acquisition and restructuring costs, other items affecting comparability and tax effect of add-back of income-statement items.

Adjusted profit before tax Profit before tax for the period with add-back of amortization and write-down of acquired intangible assets, acquisition and restructuring costs and other items affecting comparability.

Earnings per share. Net profit for the period attributable to Parent Company shareholders in relation to average number of shares.

Adjusted earnings per share. Adjusted net profit for the period attributable to Parent Company shareholders in relation to average number of shares.

Interest-coverage ratio. Rolling 12 months' adjusted EBITDA in relation to rolling 12 months' net interest.

Operating margin. Operating profit (EBIT) in relation to net sales.

Equity/assets ratio. Equity in relation to total assets.

Currency transaction effect. Exchange of current year's volumes of foreign currency

at this year's exchange rates, compared with the exchange rates in the preceding year.

Medical terms

Sterilizer. A device to destroy microorganisms on surgical instruments, usually by bringing to a high temperature with steam.

Cardiopulmonary. Pertaining or belonging to both heart and lung.

Cardiovascular. Pertaining or belonging to both heart and blood vessels.

Endoscope. Equipment for visual examination of the body's cavities, such as the stomach.

Endovascular. Vascular treatment using catheter technologies.

Artificial grafts. Artificial vascular implants.

Low temperature sterilization. A device used to sterilize surgical instruments which cannot be sterilized with high temperature steam. It is mainly used for instruments used in the minimal invasive and robotic surgery.

Stent. A tube for endovascular widening of blood vessels.

Vascular intervention. A medical procedure conducted through vascular puncturing instead of using an open surgery method.

Geographical areas Americas. North, South and Central America.

APAC. Asia and Pacific.

EMEA. Europe, Middle East and Africa.

Teleconference

Teleconference with President & CEO Mattias Perjos and CFO Lars Sandström on October 18, 2018 at 3:00-4:00 p.m. CEST. Please see dial in details below to join the conference:

SE: +46 8 56642697 UK: +44 2030089807 US: +1 8558315947 Hong Kong: +852 3068 9834

PIN: 60457638

A presentation will be held during the telephone conference. To access the presentation, please use this link: https://tv.streamfabriken.com/getinge-q3-2018

Alternatively, use the following link to download the presentation: https://www.getinge.com/int/about-us/investors/reportspresentations/2018/

A recording of the teleconference will be available for three days via the following link:https://tv.streamfabriken.com/getinge-q3-2018

Financial information

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 following dates have been set for the publication of financial communication for the remainder of 2018 and 2019:

November 21, 2018	Capital Markets Day
January 30, 2019	Year-End Report 2018
March 2019	2018 Annual Report
April 23, 2019	Interim report January-March 2019
April 23, 2019:	Annual General Meeting

Contact

Jeanette Hedén Carlsson, Executive Vice President, Communications & Brand Management +46 (0) 10 335 1003 Jeanette.hedencarlsson@getinge.com

Lars Mattsson, Head of Investor Relations +46 (0)10 335 0043 lars.mattsson@getinge.com

This information is such that Getinge AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the contact person set out above, on October 18, 2018 at 1:00 p.m. CEST.

Getinge AB (publ) Lindholmspiren 7 SE-417 56 Gothenburg Sweden

Tel: +46 (0)10 335 0000 E-mail: info@getinge.com Corporate registration number: 556408-5032 www.getinge.com