Interim report January - September 2000
- Orders received totalled SEK
3,782.6 million (3,663.9 m)
- Net sales totalled SEK
3,620.2 million (3,455.8 m)
- The operating profit was SEK
419.3 million (451.6 m)
- The profit before tax was SEK
352.2 million (408.5 m)
- A strong Q3 for the
Geriatrics business area
- The acquisition of Parker
Bath underpins Getinge’s world leading position
Comments on the quarter and
outlook
The level of demand from the European market for the Infection
Control business area continues to be difficult to judge in the
short-term. The upturn in orders that was expected in Q3 failed
to materialize and projects continued to be put on hold. The
American market registered increased demand and there were
grounds for believing that both the hospital and life science
markets can continue to perform well. The underlying volume trend
in the developing markets is good and a number of major projects
are underway. The US with somewhat lower operating margins was
responsible for a large part of the volume growth.
The Geriatrics business area
continues to progress well in the US. The American geriatric care
chains have gradually adapted themselves to the new Medicare
regulations. In the UK the market improved significantly during
Q3 for the Hygiene system and Patient handling product lines. The
pressure sore business also improved compared to the first six
months, but certain industry-specific problems remain. Western
Europe has also seen considerable progress, even if Germany has
been negatively affected by exchange rates. The business
area’s current problems are totally related to the pressure
sore business in the UK, which is expected to see a gradual
improvement starting next year.
We estimate that the Infection
Control business area’s results will be at a similar level
to last year’s as a consequence of the US being responsible
for a growing part of the volumes. The assessment for the
Geriatrics business area is that its full-year results will be
closer to last year’s levels given the prevailing market
outlook.
Net financial items for Q4 are
expected to be at Q3’s level.
Infection Control business area
| Market
developments |
2000 |
1999 |
Change |
2000 |
1999 |
Change |
| Orders
received per market |
Q3 |
Q3 |
|
9 Mon. |
9 Mon. |
|
| Western
Europe |
266.7 |
302.8 |
-11.9% |
919.4 |
980.4 |
-6.2% |
| USA and
Canada |
332.6 |
256.0 |
29.9% |
945.1 |
814.6 |
16.0% |
| Asia/Australia |
83.1 |
143.0 |
-41.9% |
205.5 |
242.6 |
-15.3% |
| Rest of the
world |
49.5 |
48.5 |
2.1% |
158.0 |
91.5 |
72.7% |
| Business
area total |
731.9 |
750.2 |
-2.5% |
2,228.0 |
2,129.1 |
4.6% |
| adjusted
for currency flucs.& corp.acqs |
|
-5.0% |
|
|
2.4% |
The North American market
continued its dynamic progress during Q3. The number of inquiries
increased in the medical care segment and the market in the US is
judged to be developing positively. Research in the
bio-technology sector means that the life science market is
progressing well and is expected to continue to do so over the
next two years. The pharmaceutical industry is characterized by
restraint, which is particularly noticeable in North America and
Western Europe.
Orders received in Western Europe
have been weaker than expected during Q3. As previously, project
delays are one of the main reasons. The activity level is still
high however and the business area’s positive opinion about
the inflow of orders in the longer term remains in place.
The underlying market conditions
for the developing markets continue to be good. When making a
comparison with Q3 last year, there was a major one-off order
from Thailand worth around SEK 70 million. Sales to the
developing markets are often in project form, and the business
area is currently working on a number of large deals. For this
quarter an order from Iraq for 200 hospital sterilizers should be
mentioned, worth a combined total of USD 12 million. A condition
for the order is approval from the UN. While waiting for
approval, the order has not been included in orders received.
| Results |
2000 |
1999 |
Change |
2000 |
1999 |
Change |
1999 |
| |
Q3 |
Q3 |
|
9 Mon. |
9 Mon. |
|
FY |
| Net sales,
SEK Million |
687.5 |
620.6 |
10.8% |
2,097.4 |
1,916.4 |
9.4% |
2,811.1 |
| adjusted
for currency flucs.& corp.acqs |
|
7.8% |
|
|
7.2% |
|
| Gross profit |
233.0 |
228.2 |
2.1% |
755.7 |
732.5 |
3.2% |
1,084.6 |
| Gross
margin % |
33.9% |
36.8% |
-2.9% |
36.0% |
38.2% |
-2.2% |
38.6% |
| Operating
cost, SEK Million |
-183.7 |
-166.8 |
10.1% |
-549.1 |
-517.0 |
6.2% |
-719.3 |
| Operating
profit |
49.3 |
61.4 |
-19.7% |
206.6 |
215.5 |
-4.1% |
365.4 |
| Operating
margin % |
7.2% |
9.9% |
-2.7% |
9.9% |
11.2% |
-1.3% |
13.0% |
The decline in the quarter’s
results is an effect of the changing market mix. The US, where
operating margins are lower as a consequence of higher marketing
costs and lower gross margins, was responsible for a greater
amount of sales.
Important activities
The Group is continually involved with projects and programs
aimed at improving competitive strength and gross margins.
Projects that can be mentioned include cost optimization of the
new equipment for automated goods handling in the life science
sector. Future deliveries will be made at better margins. This
will not be seen in the results before next year because of the
long lead times.
Another project, the next
generation of sterilizers known as "world sterilizers",
will be introduced at the trade fair Medica in Germany in
November. The project concerns reducing production costs for
standard sterilizers and it is estimated that annual savings of
SEK 50–60 million will be achieved from 2002.
Getinge’s new systems for the
automatic handling of large amounts of instruments (AGS) have now
been installed on all the important markets and sales have been
greater than expected. The system means making work in sterile
centers more effective and also contributes to the working
environment. Customer interest has led to further development and
implementation of the system for sterilizers.
Interest in the Group’s
newly-developed operating lamps continues to be high. Delivery of
the product will start at the beginning of next year.
Outlook
The North American business will continue to progress well for
the rest of the year, while lower net sales in Western Europe
will mean a decline in results there. Taken together it is judged
that the results for the business area will be at last
year’s level.
Geriatrics business area
| Market
developments |
2000 |
1999 |
Change |
2000 |
1999 |
Change |
| Orders
received per market |
Q3 |
Q3 |
|
9 Mon. |
9 Mon. |
|
| USA and
Canada |
187.6 |
169.8 |
10.5% |
556.3 |
576.7 |
-3.5% |
| Great
Britain |
137.2 |
109.3 |
25.5% |
397.7 |
379.2 |
4.9% |
| Germany |
58.7 |
58.8 |
-0.2% |
176.8 |
177.4 |
-0.3% |
| Other
Western Europe |
106.6 |
99.0 |
7.7% |
318.5 |
299.1 |
6.5% |
| Rest of the
world |
26.9 |
15.5 |
73.5% |
60.6 |
56.4 |
7.4% |
| Business
area total |
517.0 |
452.4 |
14.3% |
1,509.9 |
1,488.8 |
1.4% |
| adjusted
for currency flucs.& corp.acqs |
|
8.1% |
|
|
-2.0% |
The turbulence that has
characterized the geriatric care market in the US ever since the
introduction of the new benefits system in 1998 (PPS) has started
to settle and a certain optimism can be seen among the geriatric
care chains. In the UK the market for geriatric care equipment
improved in Q3 as new contributions were provided from the
authorities. This was seen clearly in the Patient Handling and
Hygiene Systems product lines. The negative effects of changes in
customers’ purchasing patterns in the pressure sore business
remain, even if they are reduced. Other markets in Western Europe
are showing a stable, positive trend.
| Results |
2000 |
1999 |
Change |
2000 |
1999 |
Change |
1999 |
| |
Q3 |
Q3 |
|
9 Mon. |
9 Mon. |
|
FY |
| Net sales,
SEK Million |
498.6 |
440.9 |
13.1% |
1,477.4 |
1,492.9 |
-1.1% |
2,007.7 |
| adjusted
for currency flucs.& corp.acqs |
|
5.6% |
|
|
-4.9% |
|
| Gross profit |
241.7 |
220.2 |
9.8% |
728.7 |
780.9 |
-6.7% |
1,051.6 |
| Gross
margin % |
48.5% |
49.9% |
-1.4% |
49.3% |
52.3% |
-3.0% |
52.4% |
| Operating
cost, SEK Million |
-174.4 |
-172.6 |
1.0% |
-520.7 |
-549.1 |
-5.2% |
-731.2 |
| Operating
profit |
67.3 |
47.6 |
41.4% |
208.0 |
231.8 |
-10.3% |
320.4 |
| Operating
margin % |
13.5% |
10.8% |
2.7% |
14.1% |
15.5% |
-1.4% |
16.0% |
Q3’s major profit improvement
is mainly related to a strong volume rise in the Patient Handling
and Hygiene Systems product lines. The deteriorated gross margin
is attributable to the pressure sore business.
Important activities
During Q3 the business area carried out a further corporate
acquisition – Parker Bath Ltd. of England. The acquisition
represents an important part of the Group’s strategy to
complement its own product development by acquiring companies
with a strong product range. The company develops and
manufactures bathing systems, mainly for the semi-institutional
market where growth potential is considered to be very good.
Parker Bath has annual sales of SEK 150 million and 140 employees
mainly in the UK, France and the US. The acquisition is expected
to have a positive impact on profits from 2001.
Techno-Médic of Canada, acquired
in June, is currently trying to get its unique ceiling-mounted
hoist approved for distribution in the US and Europe. It is
calculated that the product will be ready for delivery in the US
during Q1 2001 and during Q4 2001 in Europe.
The Encore patient hoist that was
launched in late autumn 1999, has continued to progress very
well. Sunbeam, which will replace the Maxi – a patient lift
that has been a big seller in the product range for 10 years
– will be launched and available for delivery in Q1 2001.
Outlook
Following Q3 it is assessed that the business area has a more
positive outlook. Results for the full year are expected to be
close to last year’s level.
Medical
The independent Medical product line that includes the companies
LIC Audio and NeuroMédica reported invoiced sales of SEK 45.5
million (46.4 m). The operating profit was SEK 4.7 million (4.4
m).
Next report
The next report from the Getinge Group (full year) will be
published on 25 January 2001.
Getinge 19 October 2000
Johan Malmquist
President and CEO Tel.no. +46 (0)
3515 55 00
| The
Group: Income Statements |
2000 |
1999 |
Change |
2000 |
1999 |
Change |
1999 |
| SEK
Million |
Q3 |
Q3 |
|
9 Mon. |
9 Mon. |
|
FY |
| Net sales
1) |
1,200.7 |
1,074.8 |
11.7% |
3,620.2 |
3,455.8 |
4.8% |
4,884.7 |
| Cost of
goods sold 2) |
-721.2 |
-622.2 |
15.9% |
-2,121.4 |
-1,927.4 |
10.1% |
-2,727.0 |
| Gross
profit |
479.5 |
452.6 |
5.9% |
1,498.8 |
1,528.4 |
-1.9% |
2,157.7 |
| Gross
margin |
39.9% |
42.1% |
-2.2% |
41.4% |
44.2% |
-2.8% |
44.2% |
| Operating
cost 2) |
-361.5 |
-342.7 |
5.5% |
-1,079.5 |
-1,076.8 |
0.3% |
-1,465.5 |
| Operating
profit 3) |
118.0 |
109.9 |
7.4% |
419.3 |
451.6 |
-7.2% |
692.2 |
| Operating
margin |
9.8% |
10.2% |
-0.4% |
11.6% |
13.1% |
-1.5% |
14.2% |
| Interest
income |
4.5 |
4.5 |
|
12.9 |
21.6 |
|
25.9 |
| Interest
expense |
-28.9 |
-19.8 |
|
-76.4 |
-59.7 |
|
-77.6 |
| Other
financial items |
-2.1 |
-2.5 |
|
-3.6 |
-4.1 |
|
-3.3 |
| Ass.companies'
profit/loss |
0.0 |
-0.3 |
|
0.0 |
-0.9 |
|
-1.0 |
| Profit
before tax |
91.5 |
91.8 |
-0.3% |
352.2 |
408.5 |
-13.8% |
636.2 |
| Tax 4) |
-22.8 |
-23.0 |
|
-88.0 |
-102.2 |
|
-158.5 |
| Net
profit |
68.7 |
68.8 |
-0.1% |
264.2 |
306.3 |
-13.7% |
477.7 |
| |
|
|
|
|
|
|
|
| 1)
Adjusted for currency fluctuations and company
acquisitions |
|
|
|
|
| the net
sales' change is |
|
|
6.9% |
|
|
1.8% |
|
| 2)
Due to the reclassification of certain costs, some minor
transfers |
|
|
|
|
|
| have
been made in the comparison from operating cost to cost
of goods sold. |
|
|
|
|
| 3)
Operating profit is charged with |
|
|
|
|
|
|
|
| —
amortisation on goodwill |
-16.7 |
-15.2 |
|
-47.8 |
-45.7 |
|
-60.7 |
| —
depr. on other fixed assets |
-33.6 |
-29.2 |
|
-95.6 |
-95.6 |
|
-127.5 |
| |
-50.3 |
-44.4 |
|
-143.4 |
-141.3 |
|
-188.2 |
| 4)
For fiscal 2000, tax is estimated at 25% of the profit
before tax. For 1999 the Group's full tax cost was 24.9%
of the profit before tax. |
| |
|
|
|
|
|
|
|
| Quarterly
results |
1998 |
1998 |
1999 |
1999 |
1999 |
1999 |
2000 |
2000 |
2000 |
| SEK
Million |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
| Net sales |
978.3 |
1,427.6 |
1,183.1 |
1,197.9 |
1,074.8 |
1,428.9 |
1,167.9 |
1,251.6 |
1,200.7 |
| Cost of
goods sold |
-542.2 |
-807.2 |
-644.5 |
-660.7 |
-622.2 |
-799.4 |
-654.5 |
-745.7 |
-721.2 |
| Gross profit |
436.1 |
620.4 |
538.6 |
537.2 |
452.6 |
629.5 |
513.4 |
505.9 |
479.5 |
| Operating
cost |
-314.5 |
-401.5 |
-361.2 |
-372.9 |
-342.7 |
-388.9 |
-361.4 |
-356.6 |
-361.5 |
| Operating
profit |
121.6 |
218.9 |
177.4 |
164.3 |
109.9 |
240.6 |
152.0 |
149.3 |
118.0 |
| Financial
net |
-17.4 |
-18.5 |
-16.0 |
-8.4 |
-17.8 |
-12.8 |
-16.4 |
-24.2 |
-26.5 |
| Ass.comp.s'
profit/loss |
-0.1 |
-0.5 |
-0.3 |
-0.3 |
-0.3 |
-0.1 |
0.0 |
0.0 |
0.0 |
| Profit
before tax |
104.1 |
199.9 |
161.1 |
155.6 |
91.8 |
227.7 |
135.6 |
125.1 |
91.5 |
| Tax |
-22.6 |
-40.7 |
-40.2 |
-39.0 |
-23.0 |
-56.3 |
-33.9 |
-31.3 |
-22.8 |
| Net profit |
81.5 |
159.2 |
120.9 |
116.6 |
68.8 |
171.4 |
101.7 |
93.8 |
68.7 |
| |
|
|
|
|
|
|
|
|
|
| The
Group: Balance Sheets |
|
|
|
|
| Assets
SEKMillion |
|
30 Sept 2000 |
30 Sept 1999 |
31 Dec 1999 |
| Goodwill |
|
1,102.5 |
999.3 |
1,012.7 |
| Fixed assets |
|
1,036.0 |
718.7 |
815.6 |
| Stock-in-trade |
|
907.4 |
824.5 |
765.3 |
| Receivables |
|
1,695.4 |
1,516.2 |
1,625.1 |
| Liquid
assets |
|
268.4 |
203.8 |
158.8 |
| |
|
|
|
|
| Total
assets |
|
5,009.6 |
4,262.5 |
4,377.5 |
| |
|
|
|
|
| Shareholders'
equity & Liabilities |
|
|
|
|
| Shareholders'
equity |
|
1,713.8 |
1,372.4 |
1,560.8 |
| Interest
bearing liabilities |
|
2,218.0 |
1,807.4 |
1,673.7 |
| Non-interest
bearing liabilities |
|
1,077.8 |
1,082.7 |
1,143.0 |
| |
|
|
|
|
| Total
Equity & Liabilities |
|
5,009.6 |
4,262.5 |
4,377.5 |
| The
Group: Cash flow |
|
2000 |
1999 |
2000 |
1999 |
1999 |
| SEK
Million |
|
Q3 |
Q3 |
9 Mon. |
9 Mon. |
FY |
| Operations |
|
|
|
|
|
|
| Operating
profit |
|
118.0 |
109.9 |
419.3 |
451.6 |
692.2 |
| Depreciation |
|
50.2 |
44.4 |
143.3 |
141.3 |
188.2 |
| Financial
items |
|
-26.5 |
-17.8 |
-67.1 |
-42.2 |
-55.0 |
| Share in
ass. companies' profit/loss |
|
0.0 |
-0.3 |
0.0 |
-0.9 |
-1.0 |
| Taxes paid |
|
-26.2 |
-27.5 |
-83.9 |
-78.7 |
-100.3 |
| Cash flow
before changes in |
|
|
|
|
|
|
| working
capital |
|
115.5 |
108.7 |
411.6 |
471.1 |
724.1 |
| Changes
in working capital |
|
|
|
|
|
|
| Stock-in-trade |
|
-7.6 |
3.1 |
-133.7 |
-52.7 |
7.8 |
| Rental
equipment |
|
-12.8 |
-4.5 |
-20.7 |
-13.5 |
-15.7 |
| Current
receivables |
|
-54.6 |
63.6 |
-54.4 |
190.9 |
40.7 |
| Current
operating liabilities |
|
39.1 |
-45.7 |
-68.8 |
-121.4 |
-33.6 |
| Restructuring
reserves, utilised |
|
-5.9 |
-34.6 |
-38.4 |
-74.5 |
-118.8 |
| Cash flow
before investments |
|
73.7 |
90.6 |
95.6 |
399.9 |
604.5 |
| Direct net
investments in machinery, |
|
|
|
|
|
|
| equipment
and buildings |
|
-19.2 |
-33.0 |
-80.1 |
-114.6 |
-167.4 |
| Operating
cash flow |
|
54.5 |
57.6 |
15.5 |
285.3 |
437.1 |
| Net impact
of company acquisitions and |
|
|
|
|
|
|
| disposal of
operations |
|
-102.2 |
-2.6 |
-117.8 |
-20.9 |
-35.4 |
| Change in
long-term receivables |
|
-96.8 |
1.1 |
-154.2 |
2.2 |
15.8 |
| Change in
deferred tax |
|
-5.0 |
5.5 |
-12.3 |
-2.0 |
-43.2 |
| Dividend
paid |
|
|
|
-159.0 |
-147.6 |
-147.6 |
| Translation
differences |
|
-8.7 |
8.4 |
-6.9 |
1.8 |
-19.2 |
| Decrease
+/Increase - in net debt |
|
-158.2 |
70.0 |
-434.7 |
118.8 |
207.5 |
| Orders
received |
2000 |
1999 |
Change |
Adj
f acq's |
2000 |
1999 |
Change |
Adj
f acq's |
1999 |
| per
product line |
Q3 |
Q3 |
|
&
curr.fluct's |
9
Mon. |
9
Mon. |
|
&
curr.fluct's |
FY |
| Sterilization |
499.4 |
522.1 |
-4.3% |
-7.8% |
1,538.6 |
1,459.7 |
5.4% |
2.1% |
1,942.6 |
| Disinfection |
232.6 |
228.2 |
1.9% |
1.3% |
689.4 |
669.4 |
3.0% |
3.0% |
941.9 |
| Infection
Control total |
731.9 |
750.2 |
-2.5% |
-5.0% |
2,228.0 |
2,129.1 |
4.6% |
2.4% |
2,884.5 |
| Hygiene
Systems |
207.2 |
180.6 |
14.7% |
11.1% |
623.9 |
574.3 |
8.6% |
7.0% |
790.3 |
| Patient
Handling |
205.9 |
160.2 |
28.6% |
17.6% |
571.8 |
561.2 |
1.9% |
-2.6% |
745.1 |
| Antidecubitus |
103.9 |
111.7 |
-7.0% |
-11.2% |
314.2 |
353.3 |
-11.1% |
-16.1% |
446.2 |
| Geriatrics
total |
517.0 |
452.4 |
14.3% |
8.1% |
1,509.9 |
1,488.8 |
1.4% |
-2.0% |
1,981.6 |
| Medical |
15.0 |
13.8 |
8.7% |
10.1% |
44.7 |
46.0 |
-2.8% |
-1.1% |
66.1 |
| |
1,263.9 |
1,216.4 |
3.9% |
0.0% |
3,782.6 |
3,663.9 |
3.2% |
0.6% |
4,932.2 |
| |
|
|
|
|
|
|
|
|
|
| Net
sales |
2000 |
1999 |
Change |
Adj
f acq's |
2000 |
1999 |
Change |
Adj
f acq's |
1999 |
| per
product line |
Q3 |
Q3 |
|
&
curr.fluct's |
9
Mon. |
9
Mon. |
|
&
curr.fluct's |
FY |
| Sterilization |
485.1 |
418.5 |
15.9% |
11.7% |
1,445.9 |
1,300.1 |
11.2% |
8.0% |
1,902.7 |
| Disinfection |
202.4 |
202.1 |
0.1% |
-0.3% |
651.5 |
616.3 |
5.7% |
5.5% |
908.4 |
| Infection
Control total |
687.5 |
620.6 |
10.8% |
7.8% |
2,097.4 |
1,916.4 |
9.4% |
7.2% |
2,811.1 |
| Hygiene
Systems |
203.0 |
184.6 |
10.0% |
6.2% |
603.9 |
589.2 |
2.5% |
0.6% |
814.4 |
| Patient
Handling |
191.4 |
156.2 |
22.5% |
13.5% |
554.8 |
568.2 |
-2.4% |
-6.2% |
749.1 |
| Antidecubitus |
104.2 |
100.1 |
4.1% |
-7.9% |
318.7 |
335.5 |
-5.0% |
-12.5% |
444.2 |
| Geriatrics
total |
498.6 |
440.9 |
13.1% |
5.6% |
1,477.4 |
1,492.9 |
-1.1% |
-4.9% |
2,007.7 |
| Medical |
14.6 |
13.3 |
9.9% |
10.5% |
45.5 |
46.4 |
-2.1% |
-0.5% |
65.9 |
| |
1,200.7 |
1,074.8 |
11.7% |
6.9% |
3,620.2 |
3,455.8 |
4.8% |
1.8% |
4,884.7 |
| Key
figures |
9 Mon. |
9 Mon. |
Change |
1999 |
| Orders
received, SEK Million |
3,782.6 |
3,663.9 |
3.2% |
4,932.2 |
| adjusted
for currency flucs.& corp.acqs |
|
|
0.6% |
|
| Net sales,
SEK Million |
3,620.2 |
3,455.8 |
4.8% |
4,884.7 |
| adjusted
for currency flucs.& corp.acqs |
|
|
1.8% |
|
| Financial
net |
-67.1 |
-42.2 |
59.0% |
-55.0 |
| Profit
before tax, SEK Million |
352.2 |
408.5 |
-13.8% |
636.2 |
| Net profit,
SEK Million |
264.2 |
306.3 |
-13.6% |
477.7 |
| Earnings per
share after full tax, SEK |
5.82 |
6.74 |
-13.6% |
10.52 |
| Capital
employed, SEK Million |
3,250.9 |
2,895.0 |
12.4% |
2,988.2 |
| Return on
capital employed, per cent |
20.9% |
23.2% |
-2.3% |
23.2% |
| Net
debt/equity ratio, multiple |
1.14 |
1.17 |
-0.03 |
0.97 |
| Equity/assets
ratio, per cent |
34.2% |
32.2% |
2.0% |
35.7% |
| Equity per
share, SEK |
37.73 |
30.22 |
24.9% |
34.36 |
| Cash flow
before investments, SEK Million |
95.6 |
399.9 |
|
604.5 |
| Net
investments in fixed assets, SEK Million |
80.1 |
114.6 |
|
167.4 |
| Number of
employees at the period's end |
3,866 |
3,781 |
|
3,812 |
This report has not been
subject to an official audit.
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