Integration and restructuring of Siemens' LSS
Getinge today announces the
essential parts of the planned restructuring that will secure
stable, long-term profitability for Siemens’ LSS, which was
acquired in autumn 2003. The structural initiative that further
underpins LSS’ profitability falls into three categories: a
new, more effective sales organization, phasing out the
anesthesia product range and coordinating production and product
development in the Medical Systems business area between the
units at Solna and Lund in Sweden.
New sales organization
As previously announced, the Medical Systems (formerly
Surgical Systems) business area will coordinate the sales
organizations for the existing product range with the
acquisitions of Jostra and LSS. Because of this, countries where
Medical Systems is represented will have a joint sales company
consisting of three divisions: Surgical Workplaces (surgical
tables, surgical lights and ceiling service units), Cardio-Pulmonary
(formerly Jostra, heart/lung apparatus) and Critical Care (formerly
LSS, ventilators and anesthesia systems). The companies will have
joint management, administration and service organization.
The new sales organization will
result in higher cost-efficiency and strong customer relations.
The acquisitions of Jostra and LSS also mean that the business
area has dramatically increased its market penetration in those
countries where the business area is represented via wholly-owned
companies. New companies are set up in Switzerland, Austria,
Spain, Scandinavia, Portugal, China, Singapore, Brazil, India,
Russia and Hong Kong. Other countries are addressed through
agents and distributors. The stronger market presence will
strengthen every division’s long-term business development.
Phasing out the anesthesia
product range
Negotiations will begin today to phase out LSS’
anesthesia activities. The anesthesia product range (KION and
SYMEON), despite comprehensive investment, has produced losses
for some time and the forecast is that its market share is too
small to create profitable business in the long-term. The
anesthesia product range has annual sales of EUR 30 million.
Coordinating production in
the Medical Systems business area
Medical Systems currently runs similar production and
product development of medical technology equipment at the
business areas’ Centres of Excellence for Cardio-Pulmonary
machines in Lund and for Critical Care’s (formerly LSS)
products at the unit in Solna. To get the best out of the
business area’s resources for product development and
production, negotiations begin today to move the Cardio-Pulmonary
activities from Lund to Solna, thus phasing out activities in
Lund.
Profit prospects –
Critical Care (formerly LSS)
As previously announced, the Getinge Group expects the
LSS acquisition to provide a profit contribution before tax of
around EUR 10-12 million this year, and a contribution before tax
of around EUR 17-20 million for 2005 (profit after depreciation
of goodwill and acquisition financing).
However, volume growth in 2004 is
expected to be somewhat lower than previously expected, because
of lower sales activities at LSS in 2003 when Siemens LSS was in
the process of being sold. Nevertheless, measures being taken and
the greater focus on the LSS business following the takeover,
will lead to planned volumes being reached from 2005.
Due to the deteriorating short-term
volume prospects that have appeared when analysing LSS, the
acquisition price for activities has been renegotiated with the
seller and led to the acquisition price being cut by around EUR
20 million.
Getinge, 12th January 2004
Johan Malmquist, President and CEO
GETINGE is a
leading provider of equipment and systems to customers within
health care, extended care and pharmaceutical industries/laboratories.
Equipment, services and technologies for infection control,
operating theatres, patient hygiene, patient handling and wound
care are supplied to customers throughout the world. In 2002 the
Getinge Group had net sales of approx. SEK 8.6 billion with 5.600
employees.
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