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Getinge

Quarterly Report Oct 18, 2007

2917_10-q_2007-10-18_15c9fc1a-ca03-4fd9-94c4-3a0bbd92b14f.pdf

Quarterly Report

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Reporting period January – September

  • Orders received increased by 24% to SEK 11,933 million (9,657)
  • Net sales increased by 25% to SEK 11,288 million (9,006)
  • Profit before tax amounted to SEK 873 million (940)
  • Net profit totalled SEK 620 million (686)
  • Earnings per share amounted to SEK 3.07 (3.38)

Third quarter

  • Orders received increased organically by a good 11%
  • Net sales increased by 33% to SEK 3 844 million (2 883)
  • Operating profit (EBITA) before restructuring increased by 33% to SEK 500 million (377)
  • Huntleigh integration proceeding according to plan
  • Earnings outlook for the year remains favourable

Third quarter 2007

Favourable demand in conjunction with a strong market organisation and a solid product portfolio resulted in a continued healthy volume trend. Excluding integration costs for Huntleigh, earnings growth in the operation continued to develop very favourably. The integration of Huntleigh is proceeding as planned.

Orders received Demand in several geographical markets remained strong and orders
received for the Group rose organically by 11.2% during the period.
For Medical Systems, orders received increased organically by 10.0%
during the quarter and were particularly strong for the Critical Care and
Cardiopulmonary divisions.
The trend in orders received for Infection Control also remained
favourable and the business areas reported an organic increase of 12.4%
for the quarter. Orders received were primarily very strong in emerging
markets.
Extended Care reported a continued favourable trend in orders received.
During the quarter, organic growth amounted to 11.8% and similar to the
year's earlier quarters, it was particularly strong in North America and
Europe. Orders received by Huntleigh operations increased according to
plan, despite extensive restructuring of the production and market
organisation.
Results Consolidated profit before tax for the period decreased to SEK 221
million (314). Restructuring costs of SEK 110 million relating to the
Huntleigh integration were charged against profit before tax for the
period. Excluding restructuring costs, the Group's EBITA amounted to
SEK 500 million (377), an increase of 33% compared with the preceding
year. Earnings for the third quarter of the preceding year included a
capital gain totalling SEK 34 million from the sale of a property. Excluding
restructuring costs for the seasonally weak third quarter, the EBITA
margin amounted to 13.0%, which is comparable to the margin in 2006.
Medical Systems' EBITA for the period amounted to SEK 206 million
(208), which was in line with results in the corresponding period in the
preceding year. The poorer EBITA margin is principally attributable to
invoicing during the period of a large export project with a planned lower
operating margin.
Infection Control's operating profit improved sharply during the period.
EBITA amounted to SEK 113 million (67), an increase of 69%. The
business area's EBITA margin improved by 4.2 percentage points to
11.7% in the period. The earnings improvement was an effect of
increased invoicing and favourable utilisation of plant capacity.
Excluding restructuring costs totalling SEK 109 million, Extended Care's
EBITA amounted to SEK 181 million (101), an increase of 79%. The
EBITA margin totalled 12.6%, which is somewhat below the level of the
preceding year. Excluding Huntleigh, the EBITA margin continued to rise
and was better than the corresponding period in the preceding year.
Consolidated operating cash flow before restructuring continued to
develop favourably and amounted to SEK 697 million (395), an increase
of 76%. For the nine-month period, the operating cash flow amounted to
SEK 2,010 million (1,699).
Outlook The demand situation for the Group's products is still considered to be
good in most geographic regions. In Europe, the stable demand
continues, while growth in the increasingly important emerging markets is
strong. In the North American markets, demand remains healthy, which is
expected to be better reflected in orders received in future quarters.
Medical Systems anticipates a continued favourable volume trend as a
result of investments made within the product development area and the
expanded market organisation in the US and in emerging markets. The
gross and operating margins are rising as a result of ongoing efficiency
enhancements within Cardiopulmonary's production and the newly
launched products. The business area anticipates that it will achieve its
EBITA margin target of 17% already during the current year.
The Infection Control business area also anticipates growing invoicing
volumes in the next few quarters. As with Medical Systems, the market
organisation has been systematically built up and expanded outside
Europe, and several new products are being launched and support
volume growth. The integration of La Cahlène, now complete, will lead to

a reduction in nonrecurring costs while synergies in the wake of the acquisition will simultaneously become visible in earnings. The business area's EBITA margin is expected to rise during the current year.

In Extended Care, the underlying volume growth is expected to gradually improve during the year. Due to the effects of major deliveries of patienthandling equipment during the preceding year to Canada, and to the US, in the wake of the earlier FDA embargo, there has only been modest visible growth in invoicing during the year. The efficiency enhancements implemented by patient-handling production will lead to rising operating margins. The Huntleigh acquisition, consolidated as of February this year, is expected to contribute to consolidated pre-tax profits, excluding restructuring costs, which are expected to be charged against the full year in the amount of SEK 250-260 million.

On the whole, the Group's assessment of its earnings outlook has not changed since the most recent report and the outlook for 2007 is deemed favourable. The Group continues to invest in expanding its market organisation and in developing new products, albeit at a somewhat lower pace than in 2006. The EBITA margin will improve for the Group as a whole also including Huntleigh, but excluding restructuring costs related to the Huntleigh integration.

Business area Medical Systems

Market development

2007 2006 Change adjusted fo r 2007 2006 Change adjusted fo r
Orders received per market Q 3 Q 3 curr.flucs.&co rp.acqs. 9 Mon 9 Mon curr.flucs.&co rp.acqs.
Europe 814 708 14,9% 2 466 2 419 2,6%
USA and Canada 246 293 -11,1% 757 912 -10,2%
As ia and Aus tralia 261 211 26,9% 741 631 23,0%
Rest of the world 119 115 2,8% 294 288 2,5%
Bus ines s area total 1 440 1 327 10,0% 4 258 4 250 2,9%

Volume growth was generally healthy during the period and orders received increased organically by 10.0% compared with a strong quarter in the preceding year. In Europe, growth was particularly good in markets in Eastern Europe, Russia, the Benelux countries and southern Europe. In Scandinavia, the order level was on a par with the preceding year, while the combined growth in other regions was somewhat poorer.

In North America, volumes declined during the period, which was partially attributable to the strong third quarter in the preceding year and that the date for the conclusion of orders within Surgical Workplaces was deferred slightly. The business area anticipates a strengthening of orders received during the remainder of the year.

In general, the situation regarding orders received in other geographical regions was highly favourable, and the trend in markets in Southeast Asia was particularly strong.

Results

2007 2006 Change 2007 2006 Change 2006
Q 3 Q 3 9 Mon 9 Mon FY
Net sales, SEK m illion 1 445 1 284 12,5% 4 130 3 862 6,9% 5 542
adjusted for currency flucs.& corp.acqs 13,9% 9,6%
Gross profit 726 632 14,9% 2 154 1 914 12,5% 2 784
Gross margin % 50,2% 49,2% 1,0% 52,2% 49,6% 2,6% 50,2%
Operating cost, SEK m illion -522 -425 22,8% -1 532 -1 350 13,5% -1 895
EBITA before restructuring and
integration costs
206 208 -1,0% 628 568 10,6% 896
EBITA margin % 14,3% 16,2% -1,9% 15,2% 14,7% 0,5% 16,2%
Restructuring and integration
costs
0,0% 0,0%
EBIT 204 207 -1,4% 622 564 10,3% 889
EBIT margin % 14,1% 16,1% -2,0% 15,1% 14,6% 0,5% 16,0%
The business area's EBITA for the quarter was on a par with the third
quarter of 2006. Invoicing growth was favourable for the period as a
result of project deliveries, particularly to Russia. As planned, these major
deliveries were conducted at operating margins that are below average

for the business area, which accounts for the decrease in the EBITA margin for the period. The higher operating costs are partially an effect of planned investments, but are also due to sales overheads paid to third parties in connection with delivery of the projects detailed above, which were classified as sales costs. The business area expects to achieve the EBITA margin target of 17% already during the current year.

EBITA and EBITA margin for Cardiopulmonary, which has continually been below the average for the business area, continued to improve sharply.

Activities Product development and product launches

As part of an effort to strengthen the business area's competitiveness and increase its organic growth, significant ongoing investments were made in product development, particularly within the Critical Care and Cardiopulmonary divisions.

The launch of Critical Care's NAVA (Neurally Adjusted Ventilatory Assist) technology is proceeding according to plan. NAVA is considered to have good potential to shorten the duration of medical treatment and enhance the quality of care within intensive care, which is of considerable value for health care market. Indications from users are promising and a number of clinical studies relating to NAVA are currently being performed in Europa.

Efforts to develop a new generation of anaesthesia machines are also proceeding according to plan. The business area will start to exhibit the product at the Medica trade fair in November. It is estimated that deliveries on a commercial scale will commence during the second half of 2008. Medical Systems expects the new product family to be highly competitive and offer distinct clinical benefits. The long-term ambition is

to capture a significant share of the global anaesthesia market, which is valued at approximately SEK 5,500 million.

The launch and introduction of a new generation of oxygenators within the Cardiopulmonary division is currently under way, and until the end of 2008, these will replace existing oxygenators for all patent categories. The new oxygenator family will improve both costs and performance.

A development program is also being performed within the Cardiopulmonary division aimed at producing a new and improved modular heart-lung machine with applications in heart surgery and the cardiology area.

Production in China

The expansion of the business area's local production in China is proceeding according to plan. The new production unit that is to be built in China for Medical Systems will be deployed at the beginning of next year and will facilitate an expansion of local production. At present, local Chinese manufacturing is focusing on ceiling service units. Production of surgical lights is expected to commence before the end of the current year. In 2008, the locally produced range will also include basic surgical tables.

Acquisition of Medical Systems' Danish distributor

During the third quarter, the business area signed an agreement concerning the acquisition of 100% of the shares in the Danish company N.C. Nielsen Trade Aps. The company, which has its offices in Bröndby, has been the business area's distributor of Surgical Workplaces' products since 2003. Sales total approximately DKK 27 million and the company has ten employees. Its assets have been estimated at DKK 1 million and liabilities at DKK 0.8 million.

Business area Infection Control

Market development

2007 2006 Change adjusted fo r 2007 2006 Change adjusted fo r
Orders received per market Q 3 Q 3 curr.flucs.&co rp.acqs. 9 Mon 9 Mon curr.flucs.&co rp.acqs.
Europe 552 530 3,8% 1 824 1 647 11,2%
USA and Canada 329 302 16,3% 974 1 057 -0,1%
As ia and Aus tralia 149 102 49,7% 389 341 16,9%
Rest of the world 16 23 -7,1% 75 54 55,2%
Bus ines s area total 1 046 957 12,4% 3 262 3 099 8,7%

For the business area, the trend of orders received was strong and organic growth of 12.4% was reported during the quarter. Orders received increased in the European markets, with favourable growth in Scandinavia and southern and eastern Europe. In the UK, the Benelux countries and German-speaking markets, volumes were somewhat lower than the corresponding period in the preceding year.

In North America, orders received improved sharply compared with the weak trend during the first six months of the year, both in the US and Canada.

Volume growth in Southeast Asia was highly favourable, as it was in Japan and Australia.

Results

2007 2006 Change 2007 2006 Change 2006
Q 3 Q 3 9 Mon 9 Mon FY
Net sales, SEK m illion 967 890 8,7% 2 884 2 839 1,6% 4 262
adjusted for currency flucs.& corp.acqs 12,4% 5,3%
Gross profit 347 301 15,3% 1 080 1 049 3,0% 1 605
Gross margin % 35,9% 33,8% 2,1% 37,4% 36,9% 0,5% 37,7%
Operating cost, SEK m illion -237 -238 -0,4% -748 -784 -4,6% -1 043
EBITA before restructuring and
integration costs
113 67 68,7% 343 276 24,3% 577
EBITA margin % 11,7% 7,5% 4,2% 11,9% 9,7% 2,2% 13,5%
Restructuring and integration
costs
0 0,0% -7 -100,0% -10
EBIT 110 63 74,6% 332 258 28,7% 552
EBIT margin % 11,4% 7,1% 4,3% 11,5% 9,1% 2,4% 13,0%

Infection Control's EBITA was strengthened considerably and amounted to SEK 113 million (67), an increase of 69%. The profit growth was an effect of rising volumes, strong cost control, and primarily, excellent capacity utilization of plants during the quarter. The EBITA margin improved according to plan and amounted to 11.7% in the seasonally weak third quarter.

Activities Logistics project

Infection Control's logistics project, which is aimed at enhancing the efficiency of order and delivery procedures, is proceeding as planned. When fully implemented, the project will result in annual savings of about SEK 50 million.

Expansion of local production in China

It is expected to be possible for plans for the production of pressure vessels for sterilizer manufacturing for the Chinese market to be launched at the end of the fourth quarter of the current year. The location of pressure-vessel production in China is a key step toward further reducing manufacturing costs for sterilizers.

Business area Extended Care

Market development

2007 2006 Change adjusted fo r 2007 2006 Change adjusted fo r
Orders received per market Q 3 Q 3 curr.flucs.&co rp.acqs. 9 Mon 9 Mon curr.flucs.&co rp.acqs.
Europe 910 421 8,1% 2 732 1 372 7,2%
USA and Canada 430 261 18,7% 1 228 845 2,5%
As ia and Aus tralia 139 22 5,9% 358 74 0,7%
Rest of the world 28 0 193,4% 95 2 4,5%
Bus ines s area total 1 507 704 11,8% 4 413 2 293 5,3%

During the third quarter, the positive order trend for Extended Care continued with an organic increase in orders received of 11.8%. All geographic regions reported healthy volume growth.

With the exception of Scandinavia, where volumes were on a par with the preceding year, all regions in Europe had a positive trend during the quarter. Growth was particularly favourable in German-speaking markets and in southern Europe.

The trend in orders received remained highly favourable in North America. Growth was particularly strong in Canada, despite the major deliveries to the state of Ontario in recent years.

For Huntleigh, whose orders received are not included in calculations for the organic development, volumes are growing and in line with expectations.

Results

2007 2006 Change 2007 2006 Change 2006
Q 3 Q 3 9 Mon 9 Mon FY
Net s ales, SEK m illion 1 431 709 101,8% 4 274 2 290 86,6% 3 183
adjusted for currency flucs.& corp.acqs 3,0% 0,6%
Gross profit 631 331 90,6% 1 957 1 050 86,4% 1 500
Gross margin % 44,1% 46,7% -2,6% 45,8% 45,9% -0,1% 47,1%
Operating cost, SEK m illion -482 -234 106,0% -1 433 -742 93,1% -977
EBITA before restructuring and
integration costs
181 101 79,2% 610 319 91,2% 539
EBITA margin % 12,6% 14,2% -1,6% 14,3% 13,9% 0,4% 16,9%
Res tructuring and integration
cos ts
-109 100,0% -229 -41 458,5% -35
EBIT 40 97 -58,8% 295 267 10,5% 488
EBIT margin % 2,8% 13,7% -10,9% 6,9% 11,7% -4,8% 15,3%

Excluding restructuring costs of SEK 109 million, Extended Care's EBITA amounted to SEK 181 million (101), an increase of 79%. The EBITA margin for the third quarter was slightly below the level of the preceding year, which is attributable to Huntleigh's lower operating margin. For the

"old" Extended Care, the operating margin rose when compared with the third quarter of 2006. Extended Care's operating profit for the third quarter of 2006 includes a capital gain of SEK 34 million from a property sale.

Activities Product development and product launches

The development and introduction of a new modular family of passive patient lifts is proceeding according to plan. The new product family is based on three product platforms and replaces seven existing platforms. The new product platform is expected to offer improved product functionality and lower production costs. The launch of the new product family will be completed during 2008.

During the quarter, Extended Care launched a new Negative Pressure Wound Therapy (NPWT) product at a wound-care conference in the UK. NPWT is the wound-care market's most rapidly growing product area with growth of 13% in 2006. The total market for NPWT amounts to SEK 7,500 million, 80% of which is represented by North America. Through its well-developed distribution network, mainly in Western Europe, Extended Care intends to establish a significant market position in Europe in the next few years. The product, which goes by the name of Wound Assist, has undergone clinical trials and will be initially marketed in the UK and Germany.

Huntleigh integration

The integration of Huntleigh, which commenced during the early part of this year, has made considerable progress. The majority of the initiatives, which are aimed at ensuring that cost and sales synergies will be realised during the next few years, have been initiated, and in some instances, concluded. In addition to the measures detailed in the most recent interim report, the following has occurred during the third quarter:

  • Negotiations relating to the closure of the Wednesbury hospital bed plant in the UK have been concluded after the of the reporting period. Production will be relocated to Poznan, in Poland, and will result in the discontinuation of about 340 workplaces in Wednesbury. The relocation will be largely completed by year-end 2007.
  • A decision has been made to close the production unit for so-called DVT products in Eatontown, New Jersey, in the US. The production of DVT product will also be relocated to Poznan, in Poland, and is expected to be completed by about year-end 2007. A total of 125 people in Eatontown will be affected by the closure.
  • The sales companies in France, Belgium and the Netherlands will be grouped together under a joint management in each market.
  • Sales to emerging markets that are conducted through proprietary sales companies and via distributors will be combined under a joint international division.
  • The work to develop a joint brand for the new Extended Care is in its final stages.

As was announced earlier, in the short term, the bulk of activities focus primarily on creating a cost-effective structure. In the medium term, the emphasis will gradually shift to developing sales synergies, which are expected to become apparent not earlier than mid-2008.

Cost synergies are expected to exceed SEK 300 million annually when fully developed in 2009/2010. For the current year, cost synergies are expected to contribute between SEK 50 million and SEK 60 million. The cost to fully implement the integration program is estimated to total approximately SEK 400 million, of which SEK 250–260 million will be charged against earnings for the current year. The remainder of the restructuring costs, totalling about SEK 150 million, will be mainly charged against earnings for 2008.

Other information

New Vice President HR

Magnus Lundbäck has been appointed as the new Vice President HR of the Getinge Group.

Magnus, who is 38 years old, has a solid education within the field of personnel administration and will be responsible for the Getinge Group's strategic HR work with a strong focus on ensuring the supply of managers in an expansive and international Group.

Most recently, Magnus worked at Volvo Cars, where he was employed as Vice President HR for the research and development operation – an organisation with 4,000 qualified employees.

Nomination Committee for AGM 2008

In accordance with a resolution by Getinge AB's 2005 Annual General Meeting, the Nomination Committee comprises Getinge's Chairman, representatives of the five largest shareholders at 31 August, and a representative of the smaller shareholders. Accordingly, Getinge's Nomination Committee for the Annual General Meeting in 2008 comprises: Carl Bennet, Carl Bennet AB; Marianne Nilsson, Swedbank Robur AB; Joachim Spetz, Handelsbanken; Torgny Wännström, AFA Försäkring; Anders Oscarsson, SEB Wealth Management and Olle Törnblom, representative of the smaller shareholders.

Shareholders wishing to submit proposals to Getinge's 2008 Nomination Committee can contact the Nomination Committee by e-mail at [email protected] or by letter to: Getinge AB, Attention: Valberedningen, PO Box 69, SE-310 44 GETINGE, Sweden.

Annual General Meeting

Getinge AB's Annual General Meeting will be held on 17 April 2008, at 4:00 p.m., in the Kongresshallen, Hotell Tylösand, Halmstad, Sweden. Shareholders who wish to have a matter addressed at the Meeting on 17 April 2008, can submit proposals to Getinge's Chairman by e-mail to [email protected] or by letter to: Getinge AB Attn. Bolagsstämmoärende, PO Box 69, SE-310 44 GETINGE, Sweden. To be certain of inclusion in the notification of the Meeting and, accordingly, in the Meeting agenda, the proposals must reach the company not later than Thursday, 28 February 2008.

Risk management

Political decisions altering the healthcare reimbursement system represent the single greatest risk to the Getinge Group. The risk to the Group as a whole is limited by the fact that Getinge is active in a large number of countries. The Group's operational risks are limited, since as a rule its customers' operations are funded directly or indirectly from public funds. The Group's Risk Management team works continuously to minimise the risk of production disruptions. Financial risk management

Getinge is exposed to a number of financial risks in its operations. "Financial risks" refer primarily to risks related to currency and interest rates as well as credit risks. Risk management is regulated by a financial policy established by the Board of Directors. The ultimate responsibility for managing the Group's financial risks and developing methods and

principles of financial risk management lies with Group management and
the treasury function. The main financial risks to which the Group is
exposed are currency risks, interest-rate risks, and credit and
counterparty risks.
Accounting This interim report was prepared in accordance with IAS 34 Interim
Financial Reporting. The accounting and calculation principles used in
the interim report are identical to those used in the most recent annual
report.
Forward-looking information This report contains forward-looking information based on the current
expectations of the Getinge's Group management, Although
management deems that the expectations presented by such forward
looking information are reasonable, no guarantee can be given that these
expectations will prove correct. Accordingly, the actual future outcome
could vary considerably compared with what is stated in the forward
looking information, due to such factors as changed conditions regarding
business cycles, market and competition, changes in legal requirements
and other political measures, and fluctuations in exchange rates.
Next report The next report from the Getinge Group (2007 Year-end report) will be
published on 28 January 2008.
Teleconference A teleconference will be held today at 3:00 p.m. Swedish time. To
participate, please call:
from Sweden: 08-50 520 114, password: Getinge
outside Sweden: +44 (0)20 7162 0125, password: Getinge
A recorded version of the conference will be available for five working
days on the following numbers:
Sweden: 08-505 203 33, access code: 768697
UK: +44 (0)20 7031 4064, access code: 768697

Getinge, 18 October 2007

Johan Malmquist CEO

Getinge AB Box 69, 310 44 Getinge Telefon 035-15 55 00. Telefax 035-549 52 e-post [email protected] Organisationsnummer 556408-5032 www.getingegroup.com

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

Consolidated Income statement

2007 2006 Change 2007 2006 Change 2006
SEK million Q 3 Q 3 9 Mon 9 Mon FY
Net sales 3844 2883 33,3% 11 288 9 0 0 6 25,3% 13 001
Cost of goods sold 4 $-2140$ $-1618$ 32,3% $-6097$ $-4988$ 22,2% $-7107$
Gross profit 1704 1 2 6 5 34,7% 5 1 9 1 4 0 1 8 29,2% 5893
Gross margin 44.3% 43.9% 0.4% 46.0% 44.6% 1.4% 45,0%
Selling expenses 4 $-775$ $-602$ 28,7% $-2283$ $-1822$ 25,3% $-2467$
Administrative expenses 4 $-389$ $-282$ 37,9% $-1174$ $-880$ 33,4% $-1191$
Research & development costs
1) $-85$ $-59$ 44.1% $-265$ $-212$ 25.0% $-282$
Restructuring and integration
costs $-110$ 0 $-230$ $-47$ $-45$
Other operating income and
expenses 8 45 $-82.2%$ 10 39 $-74.4%$ 28
Operating profit 2) 353 367 $-3,8%$ 1 2 4 9 1 0 9 6 14,0% 1936
Operating margin 9,2% 12,7% $-3,5%$ 11,1% 12.2% $-1.1%$ 14.9%
Financial net $-132$ $-53$ $-376$ $-156$ $-208$
Profit before tax 221 314 $-29.6%$ 873 940 $-7.1%$ 1728
Taxes $-64$ $-85$ $-253$ $-254$ $-469$
Net profit 157 229 $-31.4%$ 620 686 $-9.6%$ 1 2 5 9
Attributable to:
Parent company's shareholders 157 230 620 682 1 2 5 4
Minority interest 0 $-1$ 0 4 5
Net profit 157 229 620 686 1 2 5 9
Earnings per share, SEK 3) 0,78 1,14 $-31.6%$ 3,07 3,38 $-9.2%$ 6,21

1) Developm ent costs totalling SEK 210 (128) m illion have b een capitalised during the year, of which 68 (46) m illion were capitalised during the quarter.

2) Operating profit is charged with

— amort. Intangibles on
acquired companies -37 -9 $-102$ -27 $-37$
— amort. intangibles -21 -10 -55 -30 $-47$
— depr. on other fixed assets $-119$ -61 -337 $-195$ -250
-177 -80 -494 -252 $-334$

3) There are no dilutions

4) Due to reclassification of certain costs, som e transfer have b een m ade in the com parision from cost of goods sold to selling- and adm inistration expenses.

Quarterly results

2005 2005 2006 2006 2006 2006 2007 2007 2007
SEK millio n Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3
Net sales 2 728 3 888 2 975 3 148 2 883 3 995 3 415 4 029 3 844
Cost of goods sold -1 525 -2 163 -1 644 -1 726 -1 618 -2 120 -1 751 -2 206 -2 140
Gross profit 1 203 1 725 1 331 1 422 1 265 1 875 1 664 1 823 1 704
Operating cos t -856 -986 -1 020 -1 004 -898 -1 035 -1 264 -1 327 -1 351
Operating profit 347 739 311 418 367 840 400 496 353
Financial net -55 -47 -49 -54 -53 -52 -114 -130 -132
Profit before tax 292 692 262 364 314 788 286 366 221
Taxes -82 -197 -71 -98 -85 -215 -83 -106 -64
Profit after tax 210 495 191 266 229 573 203 260 157

Consolidated Balance sheet

2007 2006 2006
Assets
SEK millio n
30 Sept 30 Sept 31 Dec
Intangible fixed assets 10 333 5 609 5 516
Tangible fixed assets 2 291 1 367 1 397
Financial assets 1 006 798 1 876
Stock-in-trade 3 089 2 354 2 083
Current receivables 4 462 3 628 4 332
Cash and cash equivalents 951 683 673
Total assets 22 132 14 439 15 877
Shareholders' equity & Liabilities
Shareholders' equity 6 060 5 540 6 005
Long-term liabilities 11 882 5 617 6 568
Current liabilities 4 190 3 282 3 304
Total Equity & Liabilities 22 132 14 439 15 877

Consolidated Cash flow statement

2007 2006 2007 2006 2006
SEK millio n Q 3 Q 3 9 Mon 9 Mon FY
Current activities
Operating profit 353 367 1 249 1 096 1 936
Adjustm ent for item s not included in cash flow 245 29 622 212 277
Financial item s -132 -52 -376 -155 -203
Taxes paid -101 -66 -397 -308 -387
Cash flow before changes in working capital 365 278 1 098 845 1 623
Changes in working capital
Stock-in-trade -81 -47 -588 -292 -75
Rental equipm ent -40 -3 -125 -2 -11
Current receivables 71 -139 648 310 -484
Current operating liabilities 111 175 116 340 451
Cash flow from operations 426 264 1 149 1 201 1 504
Investm ents
Acquisition of subsidiaries 0 -243 -5 578 -239 -272
Investm ents in intangible fixed assets -77 -49 -232 -133 -206
Investm ents in tangible fixed assets -117 -87 -337 -205 -315
Disposal of tangible fixed assets 10 58 17 152 157
Cash flow from investments -184 -321 -6 130 -425 -636
Financial activities
Change in interest-bearing debt -240 -232 4 427 -379 568
Change in long-term receivables 1 29 1 231 -91 -1 277
Minority redem ption 54 54 51
Dividend paid 0 -1 -444 -405 -405
Cash flow from financial activities -239 -150 5 214 -821 -1 063
Cash flow for the period 3 -207 233 -45 -195
Cash and cash equivalents at begin of the year 843 942 673 684 684
Translation differences 105 -52 45 44 184
Cash and cash equivalents at end of the period 951 683 951 683 673

Operating cash flow statement

2007 2006 2007 2006 2006
SEK millio n Q 3 Q 3 9 Mon 9 Mon FY
Business activities
Operating profit 353 367 1 249 1 096 1 936
Restructuring costs 109 230 47 45
Adjustm ent for item s not included in cash flow 173 43 480 200 277
635 410 1 959 1 343 2 258
Changes in operating capital
Stock-in-trade -81 -47 -588 -292 -75
Rental equipm ent -40 -3 -125 -2 -11
Current receivables 71 -139 648 310 -484
Current liabilities 112 174 116 340 451
Operating cash flow 697 395 2 010 1 699 2 139
Restructuring cost cash generated -37 -13 -87 -35 -45
Operating cash flow after restructuring
cost 660 382 1 923 1 664 2 094

Consolidated Net interest-bearing debt

Net interest-bearing debt 10 285 4 692 5 575
Less liquid funds -951 -683 -673
Provis ions for pens ions, interest-bearing 1 923 1 672 1 639
Debt to credit ins titutions 9 313 3 703 4 609
SEK millio n 30 Sept 30 Sept 31 Dec
2007 2006 2006

Changes to shareholders' equity

2007 2006 2006
SEK millio n 30 Sept 30 Sept 31 Dec
Shareholders' equity – opening balance 6 005 5 381 5 381
Dividend distributed -444 -403 -404
Dividend to m inority -2 -1
Change of reserve hedge accounting -7 99 160
Change of m inority -55 -51
Translation differences -114 -166 -339
Net profit 620 686 1 259
Shareholders' equity – closing balance 6 060 5 540 6 005
Attributable to:
Parent com pany's shareholders 6 036 5 520 5 983
Minority interest 24 20 22
Total shareholders' equity 6 060 5 540 6 005

Key figures

2007 2006 Change 2005 2007 2006 Change 2005 2006
Q 3 Q 3 Q 3 9 Mon 9 Mon 9 mån FY
Orders received, SEK m illion 3 993 2 988 33,6% 2 901 11 933 9 657 23,6% 8 668 13 316
adjusted for currency flucs.& corp.acqs 11,2% 5,3%
Net sales, SEK m illion 3 844 2 883 33,3% 2 727 11 288 9 006 25,3% 7 992 13 001
adjusted for currency flucs.& corp.acqs 10,8% 6,0%
EBITA before restructuring- and
integration costs 500 376 33,0% 355 1 581 1 170 35,1% 1 081 2 018
EBITA m argin before restructuring
and integration costs
13,0% 13,0% 0,0% 13,0% 14,0% 13,0% 1,0% 14,0% 16,0%
Restructuring and integration costs 110 0 0,0% 230 47 389,4% 45
EBITA 390 376 3,7% 355 1 351 1 123 20,3% 1 081 1 973
EBITA m argin 10,1% 13,0% -2,9% 13,0% 12,0% 12,5% -0,5% 13,5% 15,2%
Earnings per share after full tax, SEK 0,78 1,14 -31,6% 1,03 3,07 3,38 -9,2% 3,19 6,21
Nm b of shares, thousands 201 874 201 874 201 874 201 874 201 874 201 874 201 874
Operating capital, SEK m illion 10 555 10 133 4,2% 8 958 10 217
Return on operating capital, per cent 19,4% 18,0% 1,4% 18,6% 19,2%
Return on equity, per cent 19,9% 22,2% -2,3% 25,2% 22,6%
Net debt/equity ratio, m ultiple 1,70 0,85 0,85 1,06 0,93
Interest cover, m ultiple 4,7 8,7 -4,0 8,0 9,0
Equity/ass ets ratio, per cent 27,4% 38,4% -11,0% 34,1% 37,8%
Equity per share, SEK 29,90 27,34 9,4% 23,51 29,64
Num ber of em ployees at the period's e 10 608 7 428 42,8% 7 252 7 531

Income statement for the parent company

2007 2006 2007 2006 2006
M kr Q 3 Q 3 9 Mon 9 Mon Helår
Adm inistrative expenses -24 -25 -75 -72 -87
Operating profit -24 -25 -75 -72 -87
Financial net 23 -37 59 121 580
Profit after financial items -1 -62 -16 49 493
Appropriations 12
Profit vefore tax -1 -62 -16 49 505
Taxes -8 17 -7 -15 -52
Net profit -9 -45 -23 34 453

Balance sheet for the parent company

2007 2006 2006
Assets
SEK millio n
30 Sept 30 Sept 31 Dec
Tangible fixed as sets 13 16 15
Financial ass ets 3 536 3 493 3 508
Current receivables 7 949 3 503 8 526
Total assets 11 498 7 012 12 049
Shareholders' equity & Liabilities
Shareholders' equity 3 173 3 338 3 648
Untaxed reserves 0 12 0
Long-term liabilities 7 069 3 137 3 818
Current liabilities 1 256 525 4 583
Total Equity & Liabilities 11 498 7 012 12 049

Companies acquired in 2007

Huntleigh Technology PLC.

During the first quarter of 2007, the Getinge Group acquired all of the shares in Huntleigh Technology PLC. Huntleigh operates in the areas of special wound-care mattresses, beds for intensive, specialist and geriatric care, compression products that prevent the occurrence of deep vein thromboses and facilitate the treatment of lymphodema and pressure sores, as well as equipment for embryonic and cardiocirculatory diagnostics. At the time of the acquisition, the company's assets amounted to approximately SEK 2,400 million and its liabilities to SEK 1,000 million. The contractual purchase consideration for 100% of the shares amounted to approximately SEK 5,600 million. In the purchase price allocation, the surplus value of intangible and tangible assets was estimated at SEK 1,400 million. Net sales in 2006 totalled approximately SEK 3,000 million, EBIT approximately SEK 390 million and the number of employees was approximately 2,700. Huntleigh is consolidated as of February 2007, The final acquisition analysis will be completed during the fourth quarter.

Acquisition of Medical Systems' Danish distributor

During the third quarter, the business area signed an agreement concerning the acquisition of 100% of the shares in the Danish company N.C. Nielsen Trade Aps.

The company, which has its offices in Bröndby, has been the business area's distributor of Surgical Workplaces' products since 2003. Sales total approximately DKK 27 million and the company has ten employees. Its assets have been estimated at DKK 1 million and liabilities at DKK 0.8 million.

Definitions

EBIT Operating profit EBITA Operating profit before amortisation of intangible assets identified in conjunction with corporate acquisitions.

Review report

Introduction

We have conducted a review of the condensed financial interim information for Getinge AB at September 30, 2007 and of the nine-month-period ending on that date. The Board of Directors and the President are responsible for preparing this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express an opinion on this interim report based on our review.

Focus and scope of the review

We have conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Financial Information 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 has a different direction and is substantially more limited in scope than an audit conducted in accordance with Standards on auditing in Sweden RS and other generally accepted auditing practices in Sweden. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed on the basis of a review does not give the same level of assurance as a conclusion expressed based on an audit.

Conclusion

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

Getinge, 18 October 2007 DELOITTE AB

Jan Nilsson Authorised Public Accountant

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