Interim report june 2001

INTERIM REPORT JUNE 2001 · Orders received increased by 63% to SEK 4,099.5 million (2,518.7) · Net sales increased by 59% to SEK 3,845.1 million (2,419.5) · Operating profit increased by 44% to SEK 434.0 million (301.3) · Profit before tax increased by 20% and amounted to SEK 313.5 million (260.7) · Good earnings trend for the Extended Care business area · Continued good development shown by the Surgical Systems business area The quarter Developments during the second quarter of the year have been comprehensively good. Organic growth was strengthened in comparison with Q1and totalled 11% in the period. Operating profit increased by 44%. The Surgical Systems business area again had a strong quarter as regards orders received. Satisfactory invoicing and an improved cost structure resulted in a good operating profit for the period. Developments in Extended Care continue to be extremely good, with improvements in volume and earnings in most markets. The demand situation for Infection Control improved during the quarter. Weakness in orders received during the beginning of the year has, however, resulted in a fall-off in invoiced sales with a weakened operating profit during the period as a result. Outlook The Surgical Systems business area continued to develop according to plan. Good volume growth and an improved cost structure mean that prospects for the year as a whole continue to be very good. A stable and satisfactory demand situation in the majority of Extended Care's markets have contributed to continued satisfactory development of the earnings trend for the business area. Deteriorated earnings for Infection Control are the direct result of reduced volumes. The business area expects a gradual improvement in demand during the remainder of the year. The weak start does mean however, that operating profit for the year as a whole is expected to be somewhat less favourable than in the previous year. The earnings trend within the Infection Control business area is well compensated by strong demand in Surgical Systems and Extended Care. The total assessment is that the group's outlook regarding earnings continues to be positive. Surgical Systems business area 2001 2000 2001 2000 Market developments Orders received per market Q 2 Q 2 H1 H1 USA and Canada 106.9 12.8 206.4 53.2 Great Britain 19.1 65.3 Germany 166.5 315.5 Other Western Europe 213.5 339.9 Rest of the world 134.0 17.5 254.2 22.2 Business area total 640.0 30.3 1,181.3 75.4 Order intake for the business area continues to be very good. Demand was good in most of the business area's markets in Europe and the Far East. Demand in North America improved during the quarter. The combined sales organisation for the Surgical Systems and Infection Control business areas in the USA is now in place and order intake is estimated to get still stronger during the second half of the year. 2001 2000 2001 2000 2000 Results Q 2 Q 2 H1 H1 FY Net sales, SEK Million 533.9 35.6 1,090.0 70.1 146.6 Gross profit 269.7 8.9 535.7 20.9 44.3 Gross margin % 50.5% 25.0% 49.1% 29.8% 30.2% Operating cost, SEK Million -207.2 -10.5 -412.4 -23.0 -45.3 Operating profit 62.5 -1.6 123.3 -2.1 -1.0 Operating margin % 11.7% -4.5% 11.3% -3.0% -0.7% Earnings for the period resulted from a good volume trend and an improved cost structure achieved by the actions taken. Operating tables and lighting systems both showed improved earnings during the period. Restructuring programme The restructuring and action programme announced earlier, is continuing to fulfilment as planned. For the present year, synergy improvements are estimated at SEK 80 - 100 million. Synergy benefits for the coming financial year are estimated to be SEK 140 - 150 million. The closure of Orto Maquet was completed during the quarter. Parts of the operation, together with certain key personnel, have been sold. During the first half of the year, restructuring costs totalled SEK 346.9 million, of which 230.6 relates to OrtoMaquet. Disposal of ALM's table business Because of the very high market share of the business area in respect of operating tables in the French market (about 90%) an agreement has been reached with the French competition authorities involving parts of ALM's table business being sold within the next 12-month period. The business involved has an annual turnover of FFR 55 million. Other activities Surgical Systems continues to capture important reference orders for its unique table system for image guided surgery, AWIGS (Advanced Workstation for Image Guided Surgery) and VIWAS (Vascular Interventional Workplace for Advanced Surgery). The products will be launched on a further number of selected markets during the second half of the year. The two new mobile operating tables C-MAX and Alpha MAX which were developed specifically for the American market and were launched during the spring, continue to be very well received. Certain delivery interruptions have, however, meant that the effect of earnings from this will first become apparent during the second half of the .year. Infection Control business area Market developments 2001 2000 Change 2001 2000 Change Orders received per market Q 2 Q 2 H1 H1 Western Europe 374.3 328.9 13.8% 718.6 652.5 10.1% USA and Canada 344.3 307.7 11.9% 642.8 558.4 15.1% Asia/Australia 85.5 59.7 43.2% 148.7 120.5 23.4% Rest of the world 40.7 33.5 21.5% 65.6 89.2 -26.5% Business area total 844.8 729.8 15.8% 1,575.7 1,420.6 10.9% Adjusted for currency 3.6% -2.4% flucs.& corp.acqs During the quarter, demand improved, but continues to be difficult to assess for Europe. Markets which themselves proved to be very positive during the quarter were France, Great Britain and Scandinavia. Demand from hospital customers in the USA was better during the quarter, but important orders to the pharmaceutical industry in the USA were postponed. Developing markets which improved as regards orders received during the quarter are expected to show still improved orders received during the remainder of the year. 2001 2000 Change 2001 2000 Chang 2000 Results e Q 2 Q 2 H1 H1 FY Net sales, SEK 748.5 721.8 3.7% 1,430.8 1,339.8 6.8% 2,934.6 Million Adjusted for currency -9.4% -6.0% flucs.& corp.acqs Gross profit 273.6 262.5 4.2% 517.0 501.8 3.0% 1,090.7 Gross margin % 36.6% 36.4% 0.2% 36.1% 37.5% -1.4% 37.2% Operating cost, SEK -209.7 -172.5 21.6% -401.9 -342.5 17.3% -722.2 Million Operating profit 63.9 90.0 -29.0% 115.1 159.3 - 368.5 27.7% Operating margin % 8.5% 12.5% -4.0% 8.0% 11.9% -3.9% 12.6% The deteriorated operating profit for the period is totally due to lower net turnover adjusted for currency fluctuations and corporate acquisitions. This lower net turnover is a result of a lower level of orders received during the last 9-month period. The deterioration regarding autoclaves to hospital customers was especially noticeable. As regards the Disinfection product line, developments were satisfactory. SEK 4.3 million has been charged against the quarter for the World Sterilizer Project, and for the year so far the total is SEK 7.0 million. Activities The World Sterilizer Project, WSP, which is one of the new generation of standard autoclaves primarily intended for hospital customers, continues as planned although somewhat delayed. The WSP will be fully implemented during the first half of 2002 and as from 2003 will improve the result of the business area by between SEK 60 - 70 million per year. New organisation The executive management of the business area has been strengthened with two important appointments during the quarter. Christophe Hammer, formally head of the Disinfection business unit has been appointed head of Sales and Markets. Mats Ottosson has been engaged as head of the Sterilization business unit as well as a member of the group executive board. Extended Care business area 2001 2000 Change 2001 2000 Change Market developments Orders received per market Q 2 Q 2 H1 H1 USA and Canada 237.0 187.4 26.5% 477.0 368.7 29.4% Great Britain 137.7 104.8 31.4% 344.3 260.5 32.2% Germany 67.5 58.2 16.0% 136.3 118.0 15.5% Other Western Europe 151.0 107.7 40.2% 311.5 212.0 46.9% Rest of the world 21.8 20.9 4.3% 42.2 33.8 24.9% Business area total 615.0 479.0 28.4% 1,311.3 993.0 32.1% adjusted for currency flucs.& 15.3% 17.6% corp.acqs Demand for the business area's products continued to be very good in most markets. Markets which performed especially well during the quarter were Spain, France, Benelux and Great Britain. The North American market continues to develop in a positive direction, both as regards Canada and the USA. Results 2001 2000 Chang 2001 2000 Change 2000 e Q 2 Q 2 H1 H1 FY Net sales, SEK 629.2 480.5 30.9% 1,292.5 978.7 32.1% 2,110.9 Million adjusted for 18.1% 17.7% currency flucs.& corp.acqs Gross profit 305.9 230.5 32.7% 630.4 487.0 29.4% 1,042.3 Gross margin % 48.6% 48.0% 0.6% 48.8% 49.8% -1.0% 49.4% Operating cost, SEK -227.2 -170.8 33.0% -437.0 - 26.2% -719.4 Million 346.3 Operating profit 78.7 59.7 31.8% 193.4 140.7 37.5% 322.9 Operating margin % 12.5% 12.4% 0.1% 15.0% 14.4% 0.6% 15.3% The improvement in earnings during the quarter was due to a positive volume trend. The Patient Handling business unit showed an especially good earnings trend, the Wound Care business unit showed a somewhat weaker trend. Medical The independent Medical business unit, together with companies LIC Audio and NeuroMédica reported net sales of SEK 31.7 million (30.9). Operating profits totalled SEK 2.2 million (3.3). Next report The next report from the Getinge group (Q3 2001) will be issued on 18 October 2001. Getinge 16 July 2001 Johan Malmquist President The tele-conference will be held today at 11 a.m. Swedish time. To take part please phone +44 (0) 20 82 40 8240, codeword: Getinge. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.bit.se/bitonline/2001/07/16/20010716BIT00020/bit0001.doc The full report http://www.bit.se/bitonline/2001/07/16/20010716BIT00020/bit0001.pdf The full report