Getinge

Quarterly Report • Jul 17, 2017

Interim Report

January – June 2017

April – June 2017 in brief

• Order intake increased by 1.1% to SEK 7,539 M (7,460). The order intake declined organically by 3.8%.
• Net sales rose by 4.5% to SEK 7,241 M (6,927). Net sales decreased organically by 0.5%.
• Cash flow from operations declined 51.8% to SEK 223 M (463). The cash conversion amounted to 29.1% (44.7).
• EBITA 1* increased 9.6% to SEK 864 M (788).
• Restructuring and integration costs amounted to SEK 524 M (133), of which SEK 488 M comprised a provision for improvements in Hechingen in accordance with the Consent Decree with the FDA.
• Profit after financial items fell to SEK 9 M (311).
• Earnings per share declined to SEK 0.01 (0.93).
• Savings of slightly more than SEK 100 M were achieved via the Big 5 efficiency-enhancement program.
• Plan for guaranteed rights issue of approximately SEK 4 billion.
• A minor acquisition within Surgical Workflows
• After the quarter: Lars Sandström was appointed CFO and the notice of the EGM for the proposed Rights Issue was published.

January – June 2017 in brief

• Order intake increased by 2.8% to SEK 14,788 M (14,384). The order intake declined organically by 1.6%.
• Net sales increased by 4.5% to SEK 13,905 M (13,304), corresponding to an organic change of 0.0%.
• Cash flow from operations fell by 6.2% to SEK 1,091 M (1,163). The cash conversion amounted to 55.3% (59.2).
• EBITA 1* improved by 19.5% to SEK 1,682 M (1,408).
• Restructuring and integration costs amounted to SEK 620 M (260).
• Profit after financial items decreased to SEK 392 M (468).
• Earnings per share declined to SEK 1.17 (1.39).
• Savings of slightly more than SEK 200 M were achieved via the Big 5 efficiency-enhancement program.

Financial summary

	Quarter 2 2017	Quarter 2 2016	Jan-Jun 2017	Jan-Jun 2016	Rolling 12M	Full year 2016
Order intake, SEK M	7,539	7,460	14,788	14,384	30,546	30,142
Net sales, SEK M	7,241	6,927	13,905	13,304	30,357	29,756
Gross profit, SEK M	3,449	3,167	6,744	6,178	14,406	13,840
Gross margin, %	47.6	45.7	48.5	46.4	47.5	46.5
EBITA 1*, SEK M	864	788	1,682	1,408	4,615	4,341
EBITA 1* margin, %	11.9	11.4	12.1	10.6	15.2	14.6
Operating profit (EBIT), SEK M	162	473	702	789	2,200	2,287
Profit after financial items, SEK M	9	311	392	468	1,574	1,650
Net profit, SEK M	7	227	288	342	1,159	1,213
Earnings per share, SEK	0.01	0.93	1.17	1.39	4.77	4.98
Cash flow from operating activities, SEK M	223	463	1,091	1,163	3,599	3,671

* EBITA 1: EBITA before acquisition, restructuring and integration costs. See definition on page 23.

Getinge is a global provider of innovative solutions for operating rooms, intensive-care units, sterilization departments and for life science companies and institutions. Based on our first-hand experience and close partnerships with clinical experts, healthcare professionals and medtech specialists, we are improving everyday life for people, today and tomorrow.

Comments by the CEO Increased EBITA and continued actions related to our challenges

Our business performance for the second quarter was not satisfactory. Our net sales and order intake declined organically compared with the year-earlier quarter. At EBITA level, this trend was partly offset by currency effects and internal efficiency improvements.

One of the reasons for the weak performance is found in the Surgical Workflows business area. After having delivered a relatively strong first quarter of 2017, order intake in the second quarter declined organically by 8.4% year-on-year. The largest downturn was noted in the Americas sales region, in the Life Science, Surgical Workplaces and Infection Control product segments, and in Infection Control in the EMEA sales region. Net sales in Surgical Workflows fell organically by 6.5% compared with the second quarter of 2016.

We saw a more positive performance in the Acute Care Therapies business area during the quarter, reporting a +4.8% (+0.8) organic increase in net sales. Cardiopulmonary represented the largest increase, followed by Critical Care. All regions reported growth.

Patient & Post-Acute Care noted a weak quarter for order intake which declined organically by 2.2%, mainly attributable to Americas. Net sales declined organically by 0.8% compared with the year-earlier period.

On a positive note, the gross margin strengthened to 47.6% compared with 45.7% in 2016, due to continued efficiency enhancements, a favorable product mix and positive currency effects. EBITA before acquisition, restructuring and integration costs increased 9.6% from SEK 788 M to SEK 864 M, corresponding to a margin of 11.9%.

Improvements at the production units under the Consent Decree with the FDA continued during the quarter. The US sites are progressing with their remediation programs according to plan and the scheduled relocation of production from Hudson to Merrimack was completed during the second quarter. As I stated in the first quarter, the situation in Hechingen is more complex and the remediation program was re-planned during the quarter. As a result, we are making a provision of an additional SEK 488 M for employee costs and process validation.

Progress was made on the preparations for the proposed distribution and listing of Patient & Post-Acute Care. If the Board of Directors decides to propose this, and if it is approved by the EGM, the plan is to distribute and list the company in the first quarter 2018, at the latest. During the quarter, we also announced our plans for a rights issue of approximately SEK 4 billion to strengthen our balance sheet. The rights issue has been guaranteed in its entirety by our principal owner Carl Bennet AB and an Extraordinary General Meeting will be held on August 15.

I have devoted most of my time in my first few months to meeting customers and employees. I can conclude that we have a solid platform to work from but challenges will remain in 2017. Alongside managing these challenges, we are working on our long-term plan for Getinge in order to bring us back to profitable growth, which I am confident we will succeed with. I look forward to presenting more information about this later in the year.

Mattias Perjos, President & CEO

Group performance

Getinge's order intake for the second quarter amounted to SEK 7,539 M (7,460). The organic order intake declined by -3.8% (+3.0). The order intake for capital goods declined by -7.5% (+1.6) during the quarter, while the order intake for disposables was +0.1% (+4.4) compared with the year-earlier period.

The order intake for Acute Care Therapies fell organically by -0.4% (+8.7) year-on-year, primarily due to a lower order intake in Cardiac Systems and Vascular Systems. However, Cardiopulmonary reported a strong order intake for the quarter.

The order intake for Surgical Workflows declined organically by -8.4% (+3.3) during the quarter. Integrated Workflow Solutions reported growth in all regions, while the other product segments noted declines in their organic order intakes year-on-year.

The organic order intake for Patient & Post-Acute Care fell by -2.2% (-5.6) due to the weak performance of DVT and Wound Care in both leasing and capital goods.

APAC reported a slightly increased organic order intake for the quarter due to robust growth in Acute Care Therapies, while EMEA noted a downturn in order intake, mainly in Surgical Workflows. Americas reported negative growth in all business areas.

January-June 2017

The weak second-quarter order intake led to the organic order intake for the first half of the year declining by -1.6% (+0.5) compared with the year-earlier period.

Order intake regions, SEK M	Quarter 2 2017	Quarter 2 2016	Organic change	Jan-Jun 2017	Jan-Jun 2016	Organic change	Rolling 12M	Full year 2016
Americas	2,902	2,895	-6.2%	5,877	5,804	-4.9%	12,011	11,938
APAC	1,419	1,343	0.1%	2,540	2,411	-0.7%	5,590	5,461
EMEA	3,218	3,222	-3.2%	6,371	6,169	1.1%	12,945	12,743
Total	7,539	7,460	-3.8%	14,788	14,384	-1.6%	30,546	30,142

Organic order intake

Net sales per business area

Net sales and results

April–June 2017

Getinge's net sales for the second quarter amounted to SEK 7,241 M (6,927). Net sales declined organically by -0.5% (-0.3). Sales of capital goods fell by -2.3% (-3.6), while net sales in disposables increased by +1.0% (+2.7) year-on-year.

Organic net sales increased by +4.8% (+0.8) in Acute Care Therapies, primarily the result of the favorable performance in Cardiopulmonary. Surgical Workflows' net sales declined organically by -6.5% (+2.4), mainly due to the weak trend in Life Science and Surgical Workplaces. Net sales for Patient & Post-Acute Care fell organically by -0.8% (-5.3), as a result of lower sales of capital goods and leasing in Hygiene and Wound Care. However, this was partly offset by higher net sales in Medical Beds and Bariatric.

The robust trend in Acute Care Therapies contributed to an increase in organic net sales in Americas of +2.4% (-1.1). Net sales in EMEA declined organically by -2.0% (-0.3) as the result of low sales in Surgical Workflows. APAC reported net sales that declined organically by -3.8% (+1.6), as a result of weaker sales, mainly in Surgical Workflows.

Gross profit amounted to SEK 3,449 M (3,167) with currency effects of approximately SEK 235 M positively impacting profit. The gross margin strengthened to 47.6% (45.7), which was the result of higher net sales, a favorable product mix and enhanced efficiency in sourcing and production.

Operating expenses increased by 8.2% year-on-year, mainly due to currency effects, improvements in the quality organization and the sales organization.

EBITA 1 amounted to SEK 864 M (788) with currency effects of approximately SEK 127 M positively impacting profit.

The quarter was charged with restructuring and integration costs totaling SEK 524 M (133). These costs mainly refer to the provision of SEK 488 M for continued corrections at the production unit in Hechingen related to the Consent Decree with the FDA. Net financial items amounted to SEK -153 M (-162). Profit after financial items fell to SEK 9 M (311). Net profit for the period amounted to SEK 7 M (227).

January-June 2017

Lower organic net sales in the second quarter contributed to slightly negative growth for the first half of the year compared with the year-earlier period. Gross profit and EBITA 1 were positively impacted by completed efficiency enhancements and currency effects. However, the provision of SEK 488 M for remediation activities in Hechingen meant that operating profit declined compared with the first half of 2016.

Net sales regions, SEK M	Quarter 2 2017	Quarter 2 2016	Organic change	Jan-Jun 2017	Jan-Jun 2016	Organic change	Rolling 12M	Full year 2016
Americas	3,027	2,765	2.4%	5,893	5,520	0.3%	12,192	11,819
APAC	1,206	1,184	-3.8%	2,220	2,151	-2.7%	5,452	5,383
EMEA	3,008	2,978	-2.0%	5,792	5,633	0.7%	12,713	12,554
Total	7,241	6,927	-0.5%	13,905	13,304	0.0%	30,357	29,756

3 100 3 200 3 300 3 400 3 500 3 600 3 700 3 800 3 900 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 60% 62% 64% 66% 68% 70% 72% 74% 76% Cash flow, R12M Kassaflöde från den löpande verksamheten

Cash flow and financial position

Cash flow from operations amounted to SEK 223 M (463) for the quarter, corresponding to a cash conversion of a 29.1% (44.7). Net investments amounted to SEK 390 M (401). The Group's cash and cash equivalents at the end of the period amounted to SEK 1,400 M (1,845) and interest-bearing net debt was SEK 22,666 M (23,341). The equity/assets ratio amounted to 38.0% (35.4) and net debt/equity ratio to 1.13 (1.23).

Research and development

Getinge's research and development costs for the quarter amounted to SEK 346 M (325), corresponding to 4.8% (4.7) of the Group's net sales.

Big 5 efficiency-enhancement program progressing according to plan

The Big 5 efficiency-enhancement program is progressing according to plan. The savings for the quarter amounted to slightly more than SEK 100 M, mainly as the result of improved efficiency in direct and indirect sourcing. Total savings in 2016 and the first half of 2017 amounted to approximately SEK 600 M. The savings are mainly allocated to fund product development and to strengthen the quality organization.

Update regarding Consent Decree with the FDA

Background

As previously announced, a US federal judge approved the terms of a Consent Decree between Getinge's former Medical Systems business area (corresponding to Acute Care Therapies today) and the FDA on February 3, 2015. The Consent Decree establishes a framework that provides assurances to the FDA that Getinge will complete the improvements to strengthen the quality management system. The Consent Decree originally encompasses four legal entities: Atrium Medical Corporation in Hudson (New Hampshire, USA), Wayne (New Jersey, USA), Rastatt (Germany) and Hechingen (Germany).

Under the terms of the Consent Decree, ongoing third-party inspections are carried out at the production units encompassed by the Decree. Improvement plans have been prepared based on the deviations identified. The plans are continuously updated to ensure that the right priorities are made and that shortcomings are correctly addressed.

Progress during the second quarter of 2017

During the second quarter, the remediation program continued at all production units under the Consent Decree. However, the production units remain in different phases of the remediation program.

The US sites are progressing with their remediation programs according to plan and the scheduled relocation of production from Hudson to Merrimack, New Hampshire, was completed during the quarter.

The situation is more complex in Hechingen, which has led to comprehensive re-planning of the ongoing remediation program during the quarter. A provision of an additional SEK 488 M was made in order to make the necessary changes in Hechingen. The costs are primarily attributable to increased staffing and process validation.

During the first half of 2017, SEK 141 M of the provision had been utilized for remediation measures, of which SEK 76 M in the second quarter. The provision, including the additional SEK 488 M, totaled SEK 710 M at the end of the quarter.

Other key events during the quarter

A guaranteed rights issue of approximately SEK 4 billion is being planned.

Getinge announced during the quarter that it is planning a new share issue of approximately SEK 4 billion to strengthen the Group's balance sheet by reducing debt and thereby creating greater scope for action. An Extraordinary General Meeting will be held on 15 August at which the Board of Directors proposes that the Meeting authorize the Board to resolve on a new share issue with preferential rights for Getinge's shareholders.

Provided that the Extraordinary General Meeting grants authorization to the Board, the intention is utilize such authorization relatively promptly and set out the terms and conditions of the rights issue. A prospectus for the rights issue will be published at the end of August and the issue is expected to be completed by the end of September.

Getinge's principal owner, Carl Bennet AB, representing 18.1% of the share capital and 48.9% of the number of votes in Getinge, has undertaken to vote in favor of and subscribe for its portion of the new share issue. Furthermore, in an agreement with Getinge, Carl Bennet AB has undertaken to subscribe for any shares that are not subscribed and paid for by the remaining shareholders. The Fourth Swedish National Pension Fund has expressed support for the rights issue and has the intention to subscribe for its portion.

Preparation for potential distribution and listing of Patient & Post-Acute Care

As previously announced, the Getinge Board is preparing a proposal on a structural change under which the Group will be divided into two businesses, Getinge and Arjo (Patient & Post-Acute Care) to give each the best possible conditions for developing and realizing their potential. The preparations for the intended distribution and listing of Patient & Post-Acute Care have continued according to plan during the second quarter. Provided that the Board so decides, a proposal will be presented at an extraordinary general meeting. Should the meeting approve the potential proposal, the intention is to complete the distribution and listing no later than in the first quarter of 2018.

Investigation by Brazilian competition authority encompasses two Getinge subsidiaries

Two of Getinge's subsidiaries in Brazil and the employees of these companies are being investigated by the Brazilian competition authority for allegedly forming cartels. According to a press release from the authority, a total of 46 companies, 80 individuals and one industrial organization are being investigated. The potential consequences of the ongoing investigations for Getinge are not yet known and it is too early make any statement. Brazil accounted for 1.1% of the Group's net sales in 2016.

Changes to Getinge Executive Team

Jeanette Hedén Carlsson took office as Executive Vice President, Communications & Brand Management at Getinge on June 12. She joins the Group from Volvo trucks where she was Senior Vice President, Brand & Communications and also a member of Group Management. She has previously held senior positions at Volvo Buses and Volvo Car Group. Jeanette Hedén Carlsson succeeds Kornelia Rasmussen, who has taken office as Communications Director for Patient & Post-Acute Care, which is prepared for a potential proposal to be distributed to the shareholders and listed.

Product launches, updates and other initiatives to strengthen the offering

Acute Care Therapies

Getinge launched two updates of its FLOW-i anesthesia device in the first half of 2017. In February, an automatic and stepwise lung recruitment function that helps the doctor by easily and safely opening collapsed alveoli in the lung was released. It is important to reduce the risk of atelectasis that can lead to pneumonia and other complications. The update in the second quarter (SW 4.4) allows the clinician to further reduce the fresh gas flow, which gives even lower consumption of expensive and environmentally hazardous anesthetics. To prevent the risk of hypoxia during low fresh gas flows, Flow-i has a unique function, the O2Guard, that automatically adjusts to the new "low Flow".

Compatibility between systems that communicate and exchange data is becoming increasingly important to healthcare providers. For this reason, Getinge now offers MSync, which transfers clinical data in the international standard format of Health Level Seven (HL7). MSync is already offered as an accessory to SERVO ventilators and FLOW-i anesthesia systems. MSync was updated in the second quarter to now also support CARDIOHELP and HCU 40. CARDIOHELP is the world's smallest heart-lung support system for treating patients in critical conditions. The device is portable meaning that a patient can start to be treated even in an ambulance or helicopter while being transported to hospital. The Heater-Cooler Unit (HCU 40) is used to cool or heat a patient undergoing cardiac bypass surgery and offers precise temperature control for use during the surgical procedure.

In the US, the relocation of the production of covered stents and thoracic drainage products from Hudson to Merrimack was completed during the quarter. A new size of V12 stents was also launched in Europe and the first patients received implants in June.

Surgical Workflows

During the quarter, Getinge acquired German IT company Carus to strengthen its offering in Integrated Workflow Solutions, comprising leading software systems for higher quality, safety and efficiency in managing sterile supplies, patient flows and work flows in operating rooms. Carus was founded in 1994 and has its head office in Hamburg, Germany. The company has about 30 employees and forecasts sales of SEK 20 M for 2017. The company holds a strong position in software for surgery scheduling. Sales are currently generated in German-speaking regions of Europe.

A new modern hybrid operating room was opened at the end of June at the Getinge Experience Center in Rastatt, Germany – an international knowledge center featuring a wide range of leading medical devices and attracting more than 24,000 visitors from the international healthcare industry every year. Getinge's new Hybrid OR is the result of a successful collaboration with Siemens Healthineers and displays advanced medical imaging devices that enable intraoperative 2D and 3D imaging during minimally-invasive surgery.

Patient & Post-Acute Care

Investments were made to rapidly expand current product portfolios in new and existing markets. For example, the AtmosAir™ 9000A, a powered hybrid mattress, was launched during the quarter in the UK and Ireland, and will be expanded further into Singapore, Hong Kong and European markets in the coming months. The product is already offered in the US as part of the product range for preventing pressure ulcers. The product can be used in acute care and long-term care settings.

Continued Supply Chain improvements

Efficiency enhancements continued to be made in the Group's Supply Chain function during the quarter. Activities include the priority areas such as efficient supplier management, process harmonization and production optimization based on the Lean Production principles.

The measures taken during the quarter resulted in direct spend reductions according to plan. Productivity was particularly high in manufacturing for Acute Care Therapies, which had a positive effect on the Group's profit.

Outlook 2017 (The preceding quarter's outlook is provided in parentheses if changed)

Organic sales growth is deemed to be slightly positive in 2017.

Currency transaction effects are expected to have a positive impact of approximately SEK 250 M (200) on the Group's 2017 earnings.

Estimated costs related to the potential distribution and listing of Patient & Post-Acute Care amount to SEK 400-500 M for 2017, of which about half are non-recurring.

Acute Care Therapies

Net sales per product segment

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.

Order intake

The order intake declined organically by -0.4% (+8.7) compared with the second quarter of 2016. Cardiopulmonary, comprising cardiopulmonary machines and associated disposables, reported growth. Critical Care, which includes ventilators and anesthesia devices, also increased its order intake. However, Vascular Systems and Cardiac Systems reported a weaker performance year-onyear. The order intake increased significantly in APAC, with China standing out and noting a strong order intake in the Cardiopulmonary product segment. Americas and EMEA reported a lower order intake year-on-year.

Order intake regions, SEK M	Quarter 2 2017	Quarter 2 2016	Organic change	Jan-Jun 2017	Jan-Jun 2016	Organic change	Rolling 12M	Full year 2016
Americas	1,564	1,487	-1.9%	3,138	3,033	-3.0%	6,305	6,200
APAC	567	501	7.4%	1,024	983	-1.6%	2,246	2,205
EMEA	978	970	-2.3%	1,922	1,823	2.6%	3,753	3,654
Total	3,109	2,958	-0.4%	6,084	5,839	-1.0%	12,304	12,059

Net sales and results

Net sales increased organically by +4.8% (+0.8) in the second quarter, with Cardiopulmonary representing the largest increase, followed by Critical Care. All regions reported growth. Growth in Americas was mainly attributable to the solid performance in the US, Canada and Latin America. East Asia, Australia and New Zealand reported a particularly favorable performance in APAC, while the trend in EMEA was primarily the result of increased sales in Cardiopulmonary and Critical Care in Central and Western Europe.

Net sales, regions, SEK M	Quarter 2 2017	Quarter 2 2016	Organic change	Jan-Jun 2017	Jan Jun 2016	Organic change	Rolling 12M	Full year 2016
Americas	1,634	1,441	5.8%	3,173	2,885	3.2%	6,375	6,087
APAC	541	479	7.1%	998	882	6.9%	2,221	2,105
EMEA	919	876	1.8%	1,748	1,640	4.3%	3,720	3,612
Total	3,094	2,796	4.8%	5,919	5,407	4.1%	12,316	11,804

The gross margin increased to 57.1% (56.0) in the quarter, due to higher net sales, a favorable product mix and continued efficiency enhancements in the Supply Chain function. Operating expenses increased by 4.1%, and EBITA 1 increased by 29.9% to SEK 638 M (491). Exchange-rate fluctuations had a positive effect of approximately SEK 123 M on gross profit and about SEK 66 M on EBITA 1. The quarter was charged with SEK 491 M (38) in restructuring and integration costs, of which SEK 488 M comprised a provision for improvements at the production unit in Hechingen in accordance with the Consent Decree with the FDA.

Income statement in brief	Quarter 2 2017	Quarter 2 2016	Jan-Jun 2017	Jan-Jun 2016	Rolling 12M	Full year 2016
Net sales, SEK M	3,094	2,796	5,919	5,407	12,316	11,804
Gross profit, SEK M	1,766	1,566	3,401	3,002	6,951	6,552
Gross margin %	57.1%	56.0%	57.5%	55.5%	56.4%	55.5%
Operating expenses, SEK M	-1,262	-1,212	-2,482	-2,414	-4,861	- 4,793
EBITA 1, SEK M	638	491	1,195	862	2,659	2,326
EBITA 1 margin, %	20.6%	17.6%	20.2%	15.9%	21.6%	19.7%
Acquisition expenses, SEK M	-1	-2	-2	-4	-6	- 8
Restructuring and integration costs, SEK M	-491	-38	-500	-96	-1,155	- 751
Operating profit (EBIT), SEK M	12	314	417	488	929	1,000
EBIT margin, %	0.4%	11.2%	7.0%	9.0%	7.5%	8.5%

Surgical Workflows

Net sales per product segment

Surgical Workplaces Infection Control Life Science Integrated Workflow solutions

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

Order intake

The organic order intake declined by -8.4% (+3.3) during the quarter. The Integrated Workflow Solutions product segment reported growth in all regions, while the other product segments noted declines in their organic order intakes year-on-year. All regions reported lower order intakes for the period. The most substantial decline was in Americas, attributable to Life Science and Surgical Workplaces as well as Infection Control. The lower order intake mainly in Infection Control led to the decline in EMEA, while APAC reported a lower order intake in Surgical Workplaces and Infection Control.

Order intake region, SEK M	Quarter 2 2017	Quarter 2 2016	Organic change	Jan-Jun 2017	Jan Jun 2016	Organic change	Rolling 12M	Full year 2016
Americas	686	740	-13.0%	1,372	1,375	-6.2%	2,793	2,796
APAC	610	611	-5.2%	1,058	1,021	-1.9%	2,449	2,412
EMEA	1,293	1,359	-7.4%	2,576	2,550	-0.4%	5,461	5,435
Total	2,589	2,710	-8.4%	5,006	4,946	-2.3%	10,703	10,643

Net sales and results

Net sales declined organically by -6.5% (+2.4) compared with the second quarter of 2016. The downturn was primarily due to lower sales in Life Science and Surgical Workplaces. This trend was only partly offset by higher sales in Integrated Workflow Solutions.

All regions reported lower organic sales growth for the quarter. The decline in APAC was mainly attributable to Surgical Workplaces and Life Science. It should be noted in this context that APAC reported growth of 9.8% in the year-earlier period. Lower sales in Surgical Workplaces also contributed to the decline in EMEA, while the slightly negative trend in Americas was mainly related to declining sales in Life Science.

Net sales regions, SEK M	Quarter 2 2017	Quarter 2 2016	Organic change	Jan-Jun 2017	Jan Jun 2016	Organic change	Rolling 12M	Full year 2016
Americas	690	653	-0.9%	1,282	1,224	-1.5%	2,844	2,786
APAC	448	495	-14.3%	818	872	-11.4%	2,350	2,404
EMEA	1,185	1,236	-6.4%	2,231	2,231	-1.3%	5,306	5,306
Total	2,323	2,384	-6.5%	4,331	4,327	-3.4%	10,500	10,496

The gross margin for Surgical Workflows increased to 36.1% (35.9) in the quarter. Operating expenses increased by 14.8%, primarily due to currency effects and higher expenses for sales and R&D. EBITA 1 fell to SEK 78 M (193). Exchange-rate fluctuations had a positive effect of approximately SEK 61 M on gross profit and about SEK 31 M on EBITA 1 compared with the preceding year. Restructuring and integration costs amounted to SEK 7 M (37).

Income statement in brief	Quarter 2 2017	Quarter 2 2016	Jan-Jun 2017	Jan-Jun 2016	Rolling 12M	Full year 2016
Net sales, SEK M	2,323	2,384	4,331	4,327	10,500	10,496
Gross profit, SEK M	839	856	1,616	1,568	4,009	3,961
Gross margin %	36.1%	35.9%	37.3%	36.2%	38.2%	37.7%
Operating expenses, SEK M	-769	-670	-1,482	-1,343	-2,844	- 2,705
EBITA 1, SEK M	78	193	150	238	1,195	1,283
EBITA 1 margin, %	3.4%	8.1%	3.5%	5.5%	11.4%	12.2%
Acquisition expenses, SEK M	0	-1	0	-1	-1	- 2
Restructuring and integration costs, SEK M	-7	-37	-24	-79	-198	- 253
Operating profit (EBIT), SEK M	63	148	110	145	966	1,001
EBIT margin, %	2.7%	6.2%	2.5%	3.4%	9.2%	9.5%

Patient & Post-Acute Care

Net sales per product segment

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

Order intake

The order intake fell organically by -2.2% (-5.6) year-on-year, primarily as the result of the negative performance in the DVT product segment (products for prevention of deep vein thrombosis) and in Wound Care regarding both rental and capital goods.

EMEA reported a higher organic order intake, mainly due to the favorable trend in Medical Beds. The lower order intake in the US within DVT and Patient Handling contributed to the negative performance in Americas.

Order intake regions, SEK M	Quarter 2 2017	Quarter 2 2016	Organic change	Jan-Jun 2017	Jan-Jun 2016	Organic change	Rolling 12M	Full year 2016
Americas	652	668	-8.4%	1,367	1,396	-7.9%	2,913	2,942
APAC	242	231	-1.7%	458	407	4.7%	895	844
EMEA	947	893	2.2%	1,873	1,796	1.6%	3,731	3,654
Total	1,841	1,792	-2.2%	3,698	3,599	-1.7%	7,539	7,440

Net sales and results

Net sales declined organically by -0.8% (-5.3) in the quarter, primarily as a result of reduced rental and lower sales of capital goods in Hygiene and Wound Care. However, this was offset by higher sales in Medical Beds and Bariatric. Patient Handling made a positive contribution to the quarter and was the main reason for growth in EMEA. The decline in Americas was primarily due to lower sales in DVT and Wound Care, while weak sales in Hygiene were the main reason for the downturn in APAC.

Net sales regions, SEK M	Quarter 2 2017	Quarter 2 2016	Organic change	Jan-Jun 2017	Jan-Jun 2016	Organic change	Rolling 12M	Full year 2016
Americas	703	671	-1.5%	1,438	1,411	-4.0%	2,973	2,946
APAC	217	210	-3.8%	404	397	-5.3%	881	874
EMEA	904	866	0.5%	1,813	1,762	0.1%	3,687	3,636
Total	1,824	1,747	-0.8%	3,655	3,570	-2.1%	7,541	7,456

The gross margin increased to 46.3% (42.6) in the quarter, primarily due to higher sales, efficiency enhancements in the Supply Chain function. Operating expenses increased by 9.5 %, mainly as the result of costs related to the planned distribution and listing of the business area. EBITA 1 increased 27.9% to SEK 197 M (154). Exchange-rate fluctuations had a positive effect of approximately SEK 51 M on gross profit and about SEK 30 M on EBITA 1. The quarter was charged with restructuring and integration costs totaling SEK 27 M (29). These costs were mainly related to the ongoing preparations for the proposed distribution and listing of the business area.

Income statement in brief	Quarter 2 2017	Quarter 2 2016	Jan-Jun 2017	Jan-Jun 2016	Rolling 12M	Full year 2016
Net sales, SEK M	1,824	1,747	3,655	3,570	7,541	7,456
Gross profit, SEK M	844	745	1,727	1,608	3,446	3,327
Gross margin %	46.3%	42.6%	47.3%	45.0%	45.7%	44.6%
Operating expenses, SEK M	-680	-621	-1,357	-1,259	-2,595	- 2,497
EBITA 1, SEK M	197	154	435	409	982	956
EBITA 1 margin, %	10.8%	8.8%	11.9%	11.5%	13.0%	12.8%
Acquisition expenses, SEK M	0	-5	0	-5	-4	- 9
Restructuring and integration costs, SEK M	-27	-29	-96	-43	-209	- 156
Operating profit (EBIT), SEK M	137	90	274	301	638	665
EBIT margin, %	7.5%	5.2%	7.5%	8.4%	8.5%	8.9%

Other information

Key events after the end of the quarter

Notice of Extraordinary General Meeting regarding the planned rights issue

The notice of the Extraordinary General Meeting was published on July 17, 2017. The Meeting will be held on Tuesday, August 15, 2017, at 11:00 a.m. at Clarion Hotel Post, Drottningtorget 10 in Gothenburg, Sweden.

Getinge appoints Lars Sandström as CFO and member of Getinge Executive Team

Lars Sandström has been appointed CFO and member of Getinge Executive Team. He has held a large number of senior positions within the Finance organization in Scania and most recently served as Senior Vice President, Group reporting, Tax & Control in the Volvo Group.

Lars Sandström will be a member of the Getinge Executive Team and report to Mattias Perjos, President and CEO Getinge. He succeeds Reinhard Mayer, who will leave Getinge for personal reasons, and takes up the position latest January 2018.

Risk management

Healthcare reimbursement system

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

Customers

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

Authorities and control bodies

Parts of Getinge's product range are covered by legislation stipulating rigorous assessments, quality control and documentation. It cannot be ruled out that Getinge's operations, financial position and earnings may be negatively impacted in the future by difficulties in complying with current regulations and requirements of authorities and control bodies or changes to such regulations and requirements. To limit these risks to the greatest possible extent, Getinge conducts extensive work focused on quality and regulatory issues 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.

Research and development

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

Product liability and damage claims

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

Protection of intellectual property

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

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

Forward-looking information

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

Assurance

The Board of Directors and CEO assure that the interim report provides a true and fair view 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, July 16, 2017

Carl Bennet Chairman	Johan Bygge	Cecilia Daun Wennborg
Barbro Fridén	Dan Frohm	Sofia Hasselberg
Rickard Karlsson	Åke Larsson	Johan Malmquist
Mattias Perjos President & CEO	Malin Persson	Johan Stern Vice Chairman

This interim report is unaudited.

Consolidated financial statements

Consolidated income statement

		Quarter 2	Quarter 2	Jan-Jun	Jan-Jun	Full year
SEK M	Note	2017	2016	2017	2016	2016
Net sales	2	7,241	6,927	13,905	13,304	29,756
Cost of goods sold	3	-3,792	-3,760	-7,161	-7,126	- 15,916
Gross profit		3,449	3,167	6,744	6,178	13,840
Selling expenses	3	-1,649	-1,514	-3,284	-3,092	- 6,250
Administrative expenses	3	-908	-828	-1,781	-1,656	- 3,359
Research and development costs	4	-185	-160	-349	-327	- 671
Acquisition expenses		-2	-8	-3	-12	- 21
Restructuring and integration costs		-524	-133	-620	-260	- 1,313
Other operating income and expenses		-19	-51	-5	-42	61
Operating profit (EBIT)	2, 3	162	473	702	789	2,287
Net financial items	2	-153	-162	-310	-321	- 637
Profit after financial items	2	9	311	392	468	1,650
Taxes		-2	-84	-104	-126	- 437
Net profit for the period		7	227	288	342	1,213
Attributable to:
Parent Company's shareholders		2	221	279	331	1,188
Non-controlling interests		5	6	9	11	25
Earnings per share, SEK*		0.01	0.93	1.17	1.39	4.98

* Before and after dilution

Consolidated statement of comprehensive income

SEK M	Quarter 2 2017	Quarter 2 2016	Jan-Jun 2017	Jan-Jun 2016	Full year 2016
Net profit for the period	7	227	288	342	1,213
Other comprehensive income
Items that cannot be restated in profit for the period
Actuarial gains/losses pertaining to defined-benefit pension plans	122	-167	122	-141	- 280
Tax attributable to items that cannot be restated in profit	-47	31	-47	26	104
Items that can later be restated in profit for the period
Translation differences and hedging of net investments	-676	651	-777	75	551
Cash-flow hedges	201	-252	335	-304	86
Tax attributable to items that cannot be restated in profit	-193	56	-300	67	326
Other comprehensive income for the period, net after tax	-593	319	-667	-277	787
Total comprehensive income for the period	-586	546	-379	65	2,000
Comprehensive income attributable to
Parent Company's shareholders	-594	527	-391	45	1,964
Non-controlling interests	8	19	12	20	36

Consolidated balance sheet

		June 30	June 30	December 31
SEK M	Note	2017	2016	2016
Assets
Intangible assets		30,463	30,686	32,004
Tangible assets		4,155	4,652	4,313
Financial assets		1,391	1,773	1,329
Inventories		6,188	5,896	5,431
Accounts receivable		6,694	6,284	8,159
Other current receivables		2,546	2,420	2,295
Cash and cash equivalents	6	1,400	1,845	1,680
Total assets		52,837	53,556	55,211
Shareholders' equity and liabilities
Shareholders' equity		20,060	18,977	20,916
Provisions for pensions, interest-bearing	6	3,169	3,115	3,368
Other interest-bearing liabilities	6	20,897	22,071	21,701
Other provisions	8	2,157	2,024	1,856
Accounts payable		1,839	1,765	2,201
Other non-interest-bearing liabilities		4,715	5,604	5,169
Total shareholders' equity and liabilities		52,837	53,556	55,211

Changes in shareholders' equity for the Group

SEK M	Share capital	Other capital provided	Reserves	Retained earnings	Total	Non controlling interests	Total equity
Opening balance at January 1, 2016	119	5,960	3	13,121	19,203	390	19,593
Total comprehensive income for the period	-	-	952	1,012	1,964	36	2,000
Share-based remuneration	-	-	-	8	8	-	8
Dividend	-	-	-	- 667	- 667	- 18	- 685
Closing balance at December 31, 2016	119	5,960	955	13,474	20,508	408	20,916
Opening balance at January 1, 2017	119	5,960	955	13,474	20,508	408	20,916
Total comprehensive income for the period	-	-	- 745	354	-391	12	-379
Share-based remuneration	-	-	-	-	-	-	-
Dividend	-	-	-	- 477	- 477	-	- 477
Closing balance at June 30, 2017	119	5,960	210	13,351	19,640	420	20,060

Consolidated cash-flow statement

SEK M	Quarter 2 2017	Quarter 2 2016	Jan-Jun 2017	Jan-Jun 2016	Full year 2016
Operating activities
Operating profit (EBIT)	162	473	702	789	2,287
Add-back of amortization, depreciation and write-downs	605	562	1,271	1,174	2,703
Other non-cash items	11	28	15	32	85
Expensed restructuring and integration costs*	523	133	551	260	1,015
Paid restructuring and integration costs	-142	-202	-257	-401	- 872
Financial items	-153	-162	-310	-321	- 637
Taxes paid	-81	-101	-253	-262	- 332
Cash flow before changes in working capital	925	731	1,719	1,271	4,249
Changes in working capital
Inventories	-492	-211	-1,050	-565	- 234
Current receivables	-152	193	821	1,115	- 252
Current liabilities	-58	-250	-399	-658	- 92
Cash flow from operating activities	223	463	1,091	1,163	3,671
Investing activities
Acquired operations	-41	-214	-81	-214	- 212
Divested operations	-	-	-	-	-
Net investments	-390	-401	-756	-761	- 1,585
Cash flow from investing activities	-431	-615	-837	-975	- 1,797
Financing activities
Change in interest-bearing liabilities	-224	511	-46	850	- 1,106
Change in interest-bearing receivables	39	48	15	28	42
Dividend paid	-477	-681	-477	-681	- 685
Cash flow from financing activities	-662	-122	-508	197	- 1,749
Cash flow for the period	-870	-274	-254	385	125
Cash and cash equivalents at the beginning of the period	2,334	2,056	1,680	1,468	1,468
Translation differences	-64	63	-26	-8	87
Cash and cash equivalents at the end of the period	1,400	1,845	1,400	1,845	1,680

* 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 and RFR 2. The accounting policies adopted are consistent with those applied for the 2016 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.

The Group is yet to assess the full impact of implementing the standards IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases. For more information about these new standards, which have not yet come into force, refer to page 62 in the 2016 Annual Report.

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 operations in 2016.

Note 2 Segment overview

Net sales, SEK M	Quarter 2 2017	Quarter 2 2016	Jan-Jun 2017	Jan-Jun 2016	Full year 2016
Acute Care Therapies	3,094	2,796	5,919	5,407	11,804
Surgical Workflows	2,323	2,384	4,331	4,327	10,496
Patient & Post-Acute Care	1,824	1,747	3,655	3,570	7,456
Total	7,241	6,927	13,905	13,304	29,756
	Quarter 2	Quarter 2	Jan-Jun	Jan-Jun	Full year
Operating profit (EBIT), SEK M	2017	2016	2017	2016	2016
Acute Care Therapies	12	314	417	488	1,000
Surgical Workflows	63	148	110	145	1,001
Patient & Post-Acute Care	137	90	274	301	665
Group functions*	-50	-79	-99	-145	- 379
Operating profit (EBIT)	162	473	702	789	2,287
Net financial items	-153	-162	-310	-321	- 637
Profit after financial items	9	311	392	468	1,650

* Group functions refer mainly to central functions such as finance, communication and HR.

Note 3 Depreciation and write-downs

SEK M	Quarter 2 2017	Quarter 2 2016	Jan-Jun 2017	Jan-Jun 2016	Full year 2016
Intangible assets in acquired companies	-176	-174	-357	-347	- 720
Intangible assets	-221	-200	-504	-427	- 1,169
Tangible assets	-208	-188	-410	-400	- 814
Total	-605	-562	-1,271	-1,174	- 2,703
of which write-downs	-1	-	-69	-	- 298

Some IT-related tangible assets were reclassified to intangible assets in the fourth quarter of 2016 and depreciation for comparative periods were adjusted accordingly.

Note 4 Capitalized development costs

SEK M	Quarter 2 2017	Quarter 2 2016	Jan-Jun 2017	Jan-Jun 2016	Full year 2016
Research and development costs, gross	-346	-325	-673	-613	- 1,265
Capitalized development costs	161	165	324	286	594
Research and development costs, net	-185	-160	-349	-327	- 671

Note 5 Quarterly results

	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2
SEK M	2015	2015	2016	2016	2016	2016	2017	2017
Net sales	6,925	9,417	6,377	6,927	6,929	9,523	6,664	7,241
Cost of goods sold	- 3,685	- 4,968	- 3,366	- 3,760	- 3,654	-5,136	- 3,369	-3,792
Gross profit	3,240	4,449	3,011	3,167	3,275	4,387	3,295	3,449
Operating expenses	- 2,819	- 2,904	- 2,695	- 2,694	- 3,226	- 2,938	- 2,755	-3,287
Operating profit (EBIT)	421	1,545	316	473	49	1,449	540	162
Net financial items	- 183	- 174	- 159	- 162	- 159	- 157	- 157	-153
Profit after financial items	238	1,371	157	311	- 110	1,292	383	9
Taxes	- 64	- 372	- 42	- 84	29	- 340	- 102	-2
Net profit for the period	174	999	115	227	- 81	952	281	7

Note 6 Consolidated interest-bearing net debt

SEK M	June 30 2017	June 30 2016	December 31 2016
Other interest-bearing liabilities	20,897	22,071	21,701
Provisions for pensions, interest-bearing	3,169	3,115	3,368
Interest-bearing liabilities	24,066	25,186	25,069
Cash and cash equivalents	-1,400	- 1,845	- 1,680
Interest-bearing net debt	22,666	23,341	23,389

Note 7 Key figures for the Group

Financial and operative key figures

	Quarter 2	Quarter 2	Jan-Jun	Jan-Jun	Full year
	2017	2016	2017	2016	2016
Key figures based on Getinge's financial targets
Organic growth in net sales, %	-0.5	-0.3	0.0	-1.7	-1.5
EBITA 1 growth, %	9.6	10.2	19.5	-1.7	3.9
Cash conversion, %	29.1	44.7	55.3	59.2	73.6
Return on equity, %			5.9	8.0	6.0
Other operative and financial key figures
Organic growth in order intake, %	-3.8	3.0	-1.6	0.5	-0.8
Gross margin, %	47.6	45.7	48.5	46.4	46.5
Selling expenses, % of net sales	22.8	21.9	23.6	23.2	21.0
Administrative expenses, % of net sales	12.5	12.0	12.8	12.4	11.3
Research and development costs, % of net sales	4.8	4.7	4.8	4.6	4.3
Operating margin, %	2.2	6.8	5.0	5.9	7.7
Earnings per share, SEK*	0.01	0.93	1.17	1.39	4.98
Number of shares, thousands	238,323	238,323	238,323	238,323	238,323
Interest-coverage ratio, multiple			6.3	5.0	5.6
Operating capital, SEK M			42,523	42,245	43,383
Return on operating capital, %			9.1	8.1	8.3
Net debt/equity ratio, multiple			1.13	1.23	1.12
Net debt/EBITDA**, multiple			3.58	3.99	3.88
Equity/assets ratio, %			38.0	35.4	37.9
Equity per share, SEK			84.17	79.63	87.76
Number of employees			16,333	15,591	15,582

* Before and after dilution

**EBITDA before acquisition, restructuring and integration costs

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.

	Quarter 2	Quarter 2	Jan-Jun	Jan-Jun	Full year
EBITA 1, SEK M	2017	2016	2017	2016	2016
Operating profit (EBIT)	162	473	702	789	2,287
Add-back of depreciation and write-down in acquired companies	176	174	357	347	720
Add-back of acquisition,
restructuring and integration costs	526	141	623	272	1,334
EBITA 1	864	788	1,682	1,408	4,341
	Quarter 2	Quarter 2	Jan-Jun	Jan-Jun	Full year
EBITA 2, SEK M	2017	2016	2017	2016	2016
Operating profit (EBIT)	162	473	702	789	2,287
Add-back of depreciation and write-down in
acquired companies	176	174	357	347	720
EBITA 2	338	647	1,059	1,136	3,007
Cash conversion	Quarter 2 2017	Quarter 2 2016	Jan-Jun 2017	Jan-Jun 2016	Full year 2016
Cash flow from operating
activities, SEK M	223	463	1,091	1,163	3,671
Operating profit (EBIT)	162	473	702	789	2,287
Add-back of depreciation and write-downs in
intangible and tangible assets	605	562	1,271	1,174	2,703
EBITDA, SEK M	767	1,035	1,973	1,963	4,990
Cash conversion, %	29.1	44.7	55.3	59.2	73.6
			June 30	June 30	December 31
Net debt/equity ratio			2017	2016	2016
Interest-bearing net debt, SEK M			22,666	23,341	23,389
Equity, SEK M			20,060	18,977	20,916
Net debt/equity ratio, multiple			1.13	1.23	1.12

Note 8 Provision FDA

SEK M	June 30 2017	June 30 2016	December 31 2016
Provision at beginning of period	371	193	193
Used amount	-141	- 106	- 235
Provisions	488	-	400
Translation differences	-8	-	13
Provision at close of period	710	87	371

Getinge committed SEK 995 M in 2014 related to the remediation program for strengthening the former Medical Systems' quality management system, and in 2016, an additional SEK 400 M was committed for this purpose. During the period, SEK 141 M was utilized for corrections under the remediation program. An additional provision of SEK 488 M was made during the period. The total cost of the remediation program thus amounted to SEK 1,983 M, of which SEK 1,883 comprised costs for the remediation program and SEK 100 M fines.

Note 9 Acquisitions

Carus HMS GmbH

During the quarter, Getinge acquired the German IT company Carus to strengthen its offering in Integrated Workflow Solutions. The company has about 30 employees and forecasts sales of SEK 20 M for 2017. The total purchase consideration amounted to SEK 19 M.

Simm Company and Surgeon Aid

During the quarter, Getinge completed the acquisition from Thai Simm Company and Surgeon Aids. The operation has about 60 employees and generates sales of about SEK 75 M. The total purchase consideration is expected to amount to SEK 40 M.

Parent Company financial statements

Parent Company's income statement

	Quarter 2	Quarter 2	Jan-Jun	Jan-Jun	Full year
SEK M	2017	2016	2017	2016	2016
Administrative expenses	-71	-149	-195	-276	- 164
Operating result	-71	-149	-195	-276	- 164
Result from participations in Group companies	1,959	-4	1,959	-4	2,514
Interest income and other similar income	799	-105	1,158	126	164
Interest expenses and other similar expenses	-140	-605	-282	-745	- 2,370
Profit/loss after financial items*	2,547	-863	2,640	-899	144
Taxes	-25	-5	-47	-6	78
Net profit for the period	2,522	-868	2,593	-905	222

* Interest income and similar profit items and interest expenses and similar loss items includes exchange-rate gains and losses attributable to the translation of receivables and liabilities in foreign currencies measured at the closing day rate.

Parent Company's balance sheet

	June 30	June 30	December 31
SEK M	2017	2016	2016
Assets
Intangible assets	98	107	104
Tangible assets	5	3	3
Participations in Group companies	27,364	25,133	25,024
Deferred tax assets	183	54	222
Receivables from Group companies	5,255	7,258	7,160
Current receivables	196	117	140
Total assets	33,101	32,672	32,653
Shareholders' equity and liabilities
Shareholders' equity	11,676	8,431	9,560
Long-term liabilities	11,098	17,296	15,851
Liabilities to Group companies	527	2,190	1,351
Current liabilities	9,800	4,755	5,891
Total shareholders' equity and liabilities	33,101	32,672	32,653

Definitions

Financial terms

Cash conversion. Cash flow from operating activities in relation to EBITDA.

EBITA 1. Operating profit before amortization and write-down of intangible assets identified in conjunction with corporate acquisitions with add-back of restructuring, integration and acquisition costs.

EBITA 2. Operating profit before amortization and write-down of intangible assets identified in conjunction with corporate acquisitions.

EBITA 1 margin. EBITA in relation to net sales.

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

EBITDA margin. EBITDA in relation to net sales.

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

Equity/assets ratio. Shareholders' equity in relation to total assets.

Interest-coverage ratio. Profit after net financial items plus interest expenses and add-back of restructuring costs, as a percentage of interest expenses.

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

Operating capital. Average total assets with a reversal of cash and cash equivalents, other provisions, accounts payable and other non-interest-bearing liabilities.

Operating margin. Operating profit in relation to net sales.

Organic change. A financial change adjusted for currency, acquisitions and divestments.

Return on operating capital. Rolling 12 months' operating profit with add-back of restructuring, integration and acquisition costs in relation to operating capital.

Recurring revenue. Revenues from consumables, service, spare parts and similar items.

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

Medical terms

Artificial grafts. Artificial vascular implants.

Cardiac Assist. Technology that improves blood circulation in a patients' coronary artery in the heart by forcing blood into the coronary artery with the help of a balloon pump placed in the aorta. The pump works in synchronization with the heart rhythm and the increased blood circulation supplies oxygen to the heart muscle, which thus improves its ability to pump.

Cardiopulmonary. Pertaining or belonging to both heart and lung.

Cardiac Surgery. Heart surgery.

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

Cardiovascular diseases. Heart and blood vessel diseases.

Counterpulsation. Therapy for treatment of resistant angina.

Deep vein thrombosis (DVT). Formation of a blood clot in a deep leg vein.

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

Extracorporal life support. For instance external oxygenation of blood using medical technology.

EVH (Endoscopic Vessel Harvesting).

Minimally invasive surgical interventions, to explant a healthy blood vessel through endoscopic means.

Hemodynamics. Change in pressure and flow of blood in the cardiovascular system.

Kinetic Therapy. A function in Getinge's hightech RotoProne™ hospital bed. This function offers continuous rotation of immobile patients from side to side down to 40° and up to 62° to treat and prevent complications in the lungs.

Low temperature sterilization. Low temperature sterilization of instruments is used in minimally invasive surgery, a type of instrument that is extremely sensitive to the high temperatures and pressure of a steam sterilization process.

Perfusion products. Products that handle blood circulation and oxygenation during cardio surgery, often referred to as heartlung machines.

Surgery perfusion. A heart-lung machine conducts the work of the heart and lungs during an operation.

Sterilizer. A type of pressure-cooker for sterilization.

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.

DACH. Germany, Austria and Switzerland

EMEA. Europe, Middle East and Africa.

Teleconference

Teleconference with President & CEO Mattias Perjos and CFO Reinhard Mayer on July 17, 2017 at 10:00-11:00 a.m. CET. Please see dial in details below to join the conference:

Sweden: +46 (0)8 5033 6574 UK: +44 (0)330 336 9105 USA: +1 719-457-2086 Code: 6534318

A presentation will be held during the telephone conference. To access the presentation, please use this link: https://slideassist.webcasts.com/starthere.jsp?ei=1153628

Alternatively, use the following link to download the presentation: https://www.getinge.com/sv/om-oss/investerare/rapporter-presentationer/2017/

A recording of the teleconference will be available for 90 days via the following link: https://slideassist.webcasts.com/starthere.jsp?ei=1153628

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 information will be published for the 2017 fiscal year:

October 18, 2017:	Interim report January – September
January 29, 2018:	Year-End Report 2017
March 2018:	2017 Annual Report

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, at 8:00 a.m. CET on July 17, 2017.

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