Nine month report January-September 2002

Nine month report January - September 2002: · Group revenues increased 9% currency adjusted, good organic growth in all business areas · Operating earnings, EBITDA, up 8% currency adjusted · Operating cash flow strong at MSEK 932 (-681) · Earnings per share increased to SEK 0.66 (0.45) MSEK Q3 Curre Jan-Sept Currenc ncy y (excl 2002 2001 Nomi adjus 2002 2001 Nomi adjuste nonrecurring nal ted nal d items) Revenues 6,739 6,745 0% +11% 20,701 19,544 +6% +9% EBITDA1) 1,144 1,070 +7% +17% 3,376 3,191 +6% +8% EBITDA margin 17.0% 15.9% 16.3% 16.3% EBITDA margin 17.0% 15.9% 16.3% 11.6% (incl nonrecurring) Operating cash 452 49 932 -681 flow Earnings per 0.27 0.00 0.66 0.45 share, SEK Cash earnings2) 2.42 2.09 6.98 6.35 per share, SEK 1) Earnings before depreciation and amortization 2) Net income plus depreciation and amortization Third quarter highlights: ·Strong revenue growth, +11% currency adjusted, with outstanding organic growth for Gambro Healthcare. U.S. revenue per treatment improved by USD 3 to USD 255. ·EBITDA margin for the group at 17.0%, improved from the second quarter as well as from the third quarter last year. -Continued margin improvement in Gambro Healthcare U.S. The combined margin for Gambro Renal Products and Gambro BCT improved from the second quarter as well as from third quarter last year. ·Operating cash flow improved through strong underlying performance and very well managed accounts receivable in Gambro Healthcare. ·Net debt reduced by MSEK 217 from second quarter. "We are experiencing strong organic revenue growth which has improved market positions in some key areas. In a period of heavy investments in new capacity, I'm pleased to announce that we have reduced our net debt and improved the operating cash flow" said Sören Mellstig, Gambro President and CEO. Key data (excluding nonrecurring items) Q3 Jan-Sept Oct 2001- Jan- Dec MSEK 2002 2001 2002 2001 Sept 2002 2001 Revenues 6,739 6,745 20,701 19,54 27,877 26,720 4 Operating earnings 1,144 1,070 3,376 3,191 4,453 4,268 before depr. (EBITDA) EBITDA margin 17.0% 15.9% 16.3% 16.3% 16.0% 16.0% EBITDA margin, incl. 17.0% 15.9% 16.3% 11.6% 15.8% 12.4% nonrecurring 2) Operating earnings 400 350 1,196 1,159 1,507 1,470 (EBIT) EBIT margin 5.9% 5.2% 5.8% 5.9% 5,4% 5.5% Earnings before tax 287 139 773 610 867 704 (EBT) Earnings per share 0.27 0.00 0.66 0.45 0.60 0.39 (EPS) SEK 1) Earnings per share (EPS) SEK 1) 0.27 0.00 0.66 -1.19 0.62 -1.22 including nonrecurring 2) Cash earnings per 2.42 2.09 6.98 6.35 9.13 8.50 share (CEPS) SEK 3) Goodwill amortization -0.74 -0.84 -2.33 -2.38 -3.25 -3.30 per share Operating cash flow 4) 452 49 932 -681 1,602 -11 Operating cash flow 1.31 0.14 2.70 -1.98 4.65 -0.03 per share 4) Net debt 9,391 9,918 9,391 9,918 9,391 9,434 1)After full tax 2)The majority of the nonrecurring items in the 2001 figures refer to the provision of MSEK 927 for unbilled receivables for laboratory services in the U.S. recorded in second quarter last year. For more information see the Income Statement on page 12. 3)Net income plus depreciation and amortization divided by number of shares 4)Cash flow before acquisitions/divestitures and taxes THIRD QUARTER 2002 (* =currency adjusted) Gambro's third quarter 2002 revenues increased by 11% currency adjusted; in nominal values the development was flat. Revenues for the quarter reached MSEK 6,739 (6,745) with no major acquisitions. Revenue development in major markets was in line with or above market growth, Europe +3% (+5%*), U.S. +2% (+15%*) and Asia and the rest of the world - 18% (+1%*). Growth was balanced between the company's three business areas. For Gambro Healthcare, revenues grew by 1% (16%*), including a continued improvement in revenue per treatment in the U.S. For Gambro Renal Products, revenues increased by 2% (7%*). Internal sales grew by 43%*, 13%* on a comparable basis, excluding effects of a change in reporting from last year. Gambro BCT revenues decreased by 3%, but increased by 7% currency adjusted. Operating margin, EBITDA, for the Group reached 17.0% (15.9%). Gambro Healthcare improved its margin to 15.6% (14.3%), with increased margin in the U.S. and a slightly reduced margin in the non-U.S. business. The combined EBITDA margin for Gambro Renal Products and Gambro BCT improved to 19.3% (19.1%), an increase from second quarter this year as well as from third quarter last year. A minor capital gain from the divestiture of Scandinavian Heart Center is included in the EBITDA margin (reported in "Others"). Operating earnings (EBIT) for the group increased by 14% (22%*) to MSEK 400 (350), with minor changes in amortization and depreciation mainly related to currency effects. The EBIT margin reached 5.9% (5.2%) including a MSEK 50 write down of Gambro BCT's technology investments. The financial net was improved from third quarter last year due to lower U.S. interest rates and the capital gain of MSEK 45 from the divestiture of Thoratec shares. The financial net was effected negatively by the result of treasury operations. This is because by current Swedish Accounting Standards gains are not recognizable unless realized. These unrecognized gains mainly refer to transactions made to keep interest duration in line with Gambro's financial policy. Earnings before tax (EBT) increased by 106% from last year. The crude tax rate was higher than for the third quarter 2001 mainly due to the geographical change of earnings; more of the Gambro group earnings are currently created in the U.S., with higher tax rate than most European countries. Net income for the quarter increased from MSEK 1 last year to MSEK 91 this year. The group experienced a positive development in operating cash flow, mainly due to a strong cash flow from Gambro Healthcare as a result of improved underlying performance and very good management of accounts receivable. Net debt on September 30 amounted to MSEK 9,391, a reduction by MSEK 217 from the second quarter. The average net debt was some MSEK 900 lower than for the second quarter but on the same level as the third quarter 2001. Financial net was reduced to MSEK -113 (-211), mainly as a result of lower U.S. dollar interest rates and the capital gain of MSEK 45 from the divestiture of Thoratec shares. OUTLOOK The company reconfirms its overall objectives for the year 2002 - to leverage the improved platform for growth and profitability. Focus will also be on defining the business model as an integrated service provider and exploring new growth opportunities. The financial objectives for the group in 2002 are to deliver a revenue growth of 8-10%, improve the operating margin trend and further improve operating cash flow. The financial results on a group level will be affected by costs related to the subpoena in Gambro Healthcare U.S. *) Currency adjusted ------------------------------------------------------------ This information was brought to you by Waymaker The following files are available for download: The full report The full report