STOCKHOLM, Sweden, July 15, 2002 (PRIMEZONE) -- Getinge:
-- Heraeus acquisition concluded during Q2 - significant synergy effects -- The Q2 profit before tax rose by 22% -- The profit before tax was SEK 324.6 million (313.5) -- Good profit improvement in Extended Care and Surgical Systems -- Orders received in Q2 climbed organically by 5.3% -- Orders received stood at SEK 4,355.9 million (4,099.5) -- Strong inflow of orders for Infection Control and Extended Care -- Net sales amounted to SEK 3,987.4 million (3,845.1)
The quarter
Orders received in Q2 climbed organically by 5.3%. Demand continued to be particularly good for Infection Control. The Extended Care business area noticeably improved its orders received. Orders received for Surgical Systems fell back in comparison to a very strong Q2 last year.
The profit before tax rose by 22% compared to the same period last year. The improvement is due to increased invoicing and lower net financial items in Q2. The Surgical Systems and Extended Care business areas have seen a very good profit trend in Q2, while Infection Control's profit trend has been weaker.
Outlook
Good demand for the Group's products and services is expected to continue in all business areas and on all the most important markets.
Improving and strengthening Infection Control's competitiveness is continuing according to plan and is laying a solid platform for sound and long-lasting profitability. Extended Care is well-positioned and has a strong product portfolio, which will take advantage of the sector's growth opportunities. Surgical Systems, which is today an important and integrated part of the Group, concluded the acquisition of the German company Heraeus Med Tec during Q2 and this will improve the business area's already strong position. The acquisition will significantly contribute to the earnings trend from 2003 for business area Surgical Systems.
To sum up, the profit outlook for the current year remains good, and the measures and activities now being carried out are also laying a stable foundation for continued, good profit growth next year.
Surgical Systems business area
Market development
2002 2001 Change 2002 2001 Change
Orders received per Q 2 Q 2 H1 H1
market
USA and Canada 115.1 106.9 7.7% 226.8 206.4 9.9%
Great Britain 24.9 19.1 30.4% 79.5 65.3 21.7%
Germany 109.5 166.5 -34.2% 246.7 315.5 -21.8%
Other Western 172.1 213.5 -19.4% 340.6 339.9 0.2%
Europe
Rest of the world 118.7 134.0 -11.4% 305.9 254.2 20.3%
Business area total 540.3 640.0 -15.6% 1,199.5 1,181.3 1.5%
adjusted for -15.3% -0.1%
currency flucs.&
corp.acqs
Orders received during Q2 have slipped back when compared with the same period last year. The reduction in the inflow of orders is particularly noticeable on the German market and can be explained by the fact that volumes last year rose spectacularly in both Q1 and Q2. Surgical table sales in Germany are at a similar level to last year and the reduction can be attributed to fewer orders for the module-built operating room (Variop).
The Other Western Europe region also reported sluggish orders received in Q2, but for the six-month period the level was the same as last year. In France, which is responsible for a significant amount of the region's sales, public funds have been made available for investments later than usual. Orders received are expected to improve in the coming quarters.
For the Rest of the world, orders received were weak in Q2, but for Q1 and Q2 combined the figure is at a very good level. Volumes in North America have progressed well, but are not at a satisfactory level yet. Coupled with Japan, the US has the most significant expansion potential for the business area.
Results
2002 2001 Change 2002 2001 Change 2001
Q 2 Q 2 H1 H1 FY
Net sales, SEK 565.7 533.9 6.0% 1,083.5 1,090.0 -0.6% 2,223.4
Million
adjusted for
currency 6.5% -1.7%
flucs.& corp.
acqs
Gross profit 286.2 269.7 6.1% 524.1 535.7 -2.2% 1,108.9
Gross margin % 50.6% 50.5% 0.1% 48.4% 49.1% -0.7% 49.9%
Operating cost,
SEK -207.5 -207.2 0.1% -412.8 -412.4 0.1% -880.5
Million
Operating profit 78.7 62.5 25.9% 111.3 123.3 -9.7% 228.4
Operating margin % 13.9% 11.7% 2.2% 10.3% 11.3% -1.0% 10.3%
The earnings trend has been very good in Q2. Greater volumes haveimproved the factory utilisation level and enhanced the gross margincompared with Q1. Costs are at last year's level and mean that thebusiness area can show a good operating margin of 14% for the period.
Sale of ALM's surgical tables business As announced in an earlier press release, France's national competition authority has instructed Getinge to sell ALM's surgical tables business. Negotiations with potential buyers continue and it is thought the sale will be completed during the second half of 2002.
Acquisition of Heraeus Medical Technology
The acquisition of the German company Heraeus Medical Technology was concluded during Q2. Heraeus Med Tec has annual sales of around SEK 500 million and means a considerable strengthening of the business area's market position for surgical lights and ceiling service units.
The drawn out administrative process of the German national competition authorities, means that Heraeus Med Tec will be consolidated in the Group's activities from 1 July 2002. As a consequence of the postponed integration, the planned synergy gains will be insignificant in the current year. It has been assessed that next year Heraeus will contribute an operating profit after goodwill amortisation of at least SEK 50 million.
Other activities
The business area's recently developed surgical tables for image-guided surgery, AWIGS and VIWAS, continue to progress well and important reference orders have been secured in Japan during Q2.
Product development resources for the surgical table sector are aimed at strengthening the mobile table range, which is important for successful expansion in North America and Japan. The AXCEL project, which is a new family of surgical lights for simpler surgical requirements and for developing markets, will be launched during the latter half of the year. Modulis, which is the business area's new generation of Ceiling Service Units, has been very well received by the markets and is a significant improvement on the previous product range.
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