Revised Strategy, New Financial Targets and Restated Financial Information for Getinge (Excluding Arjo)

GOTHENBURG, Sweden, Nov. 10, 2017 /PRNewswire/ -- Following the strategic review and the proposed distribution and listing of the business area Patient & Post-Acute Care (now called Arjo), the Board of Directors of Getinge has decided on a revised strategy, new financial targets and present restated historical financial information for Getinge excluding Arjo.

New financial targets

As a result of the proposed distribution and listing of Patient & Post-Acute Care and the related area disinfection flushers, now called Arjo, the Board of Directors of Getinge has decided on new financial targets based on the revised strategy for Getinge excluding Arjo. Focus is on organic growth and Getinge foresees an organic market growth of 2-4% on average during 2017-2020 in the addressable market. Getinge's organic growth in net sales is expected to increase gradually during 2018 and move closer to expected market growth on a run-rate basis by the end of 2018.

    --  Average growth in organic net sales: 2-4%
    --  Average earnings per share growth: >10%
    --  Dividend policy: 30-50% of net income

The new financial targets are valid from January 1, 2018.

Revised strategy

The priorities for Getinge going forward are to strengthen the product and service offering in prioritized segments for the customers within the business areas Acute Care Therapies and Surgical Workflows and continue to use the global salesforce to penetrate geographically with existing products. Furthermore, the company will put additional focus and continue to develop an attractive offering towards selected parts of the growing value segment. Getinge has also the intention to introduce Life Science as a separate Business Area as from January 1, 2018.

"I am confident that our revised strategy and financial targets will create a more focused business and organization that is better positioned to develop market leading offerings for our customers," says Mattias Perjos, President and CEO of Getinge. "The Life Science business has many similarities with our Infection Control business when it comes to technology, but given the customized solutions offering within this segment we believe this setup will better realize further growth opportunities", he continues.

Getinge excluding Arjo

    --  A global medtech leader within therapies and workflows, focusing on a
        well-defined space in hospitals: the operating room, Intensive Care
        Unit, Central Sterile Supply Department, Cathlab and Endo Suite.
    --  Customer offering that enables rapid recovery, shorter average length of
        stay, higher efficiency and reduced risk of infection in hospital
        settings.
    --  Net sales of SEK 22.6 billion (rolling 12 months, September 2017).
    --  Over 90% of sales go to hospitals, and the remainder to customers within
        Life Science, such as pharma companies.
    --  Close to 60% recurring revenues.
    --  Sales in over 150 countries worldwide.
    --  More than 10,000 employees.

Getinge restated financial information

Getinge provides historical financial information excluding the discontinued operations within Arjo in two appendicies to this press release.

    --  Appendix 1: Pro forma restatement of income statement, balance sheet,
        cash flow statement and key figures. These tables are not financial
        reports according to IFRS 5.
    --  Appendix 2: Restated segment information according to IFRS 5. As a
        consequence of the planned distribution and listing of Arjo, the
        historical financial information for Surgical Workflows has been
        recalculated.

If the Extraordinary General Meeting on December 4, 2017, resolves on the distribution and listing of Arjo, Getinge will publish the results of the operations in Arjo separately, as discontinued operations in accordance with IFRS 5, in its year-end report, January 29, 2018.

Costs for creating an independent Arjo and transaction costs

Getinge has previously communicated that costs related to the planned distribution and listing and costs to create an independent Arjo are estimated to charge the group's result with SEK 400-500 M for 2017. For the period January to September in the current year, Getinge's result has been charged with SEK 360 M in respect of such costs. Of these, non-recurring restructuring costs in Arjo have accounted for SEK 144 M and increased operating costs in Arjo have accounted for the remaining SEK 216 M. In addition to the above costs, Getinge's equity will be charged with transaction costs that are estimated to amount to approximately SEK 147 M excluding tax expenses.

Telephone conference

A telephone conference with Getinge's President & CEO, Mattias Perjos, and Arjo's President & CEO, Joacim Lindoff, will be held at 09:00-10:00 CET, November 10, 2017. Please see dial in details below to join the conference:

Sweden: +46 (0)8 5065 3942

UK: +44 (0)330 336 9435

USA: +1 323 794 2551

Code: 3769823

A presentation will be held during the telephone conference. To access the presentation, please use this link: https://slideassist.webcasts.com/starthere.jsp?ei=1170039

Please join the event conference 5-10 minutes prior to the start time. You will be asked to provide the confirmation code.

A recording of the telephone conference will be available for 90 days via the following link: https://slideassist.webcasts.com/starthere.jsp?ei=1170039

This information is information that Getinge AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07:30 CET on November 10, 2017.

About Getinge

Getinge is a global provider of innovative solutions for operating rooms, intensive-care units, sterilization departments and for life science companies and institutions. Based on our first-hand experience and close partnerships with clinical experts, healthcare professionals and medtech specialists, we are improving the every-day life for people, today and tomorrow.

Appendix 1: Restated financial information - Getinge excluding Arjo
(pro forma, not according to IFRS 5)

The following tables show selected financial information for Getinge excluding Arjo (which represents the remaining business after the dividend), rolling 12 months, by the end of September 2017. Getinge excluding Arjo consists of the difference between Getinge's and Arjo's financial information adjusted for internal transactions. The information presented in the tables are not financial reports in accordance with IFRS and is thus not necessarily comparable to similar calculations in other companies and has some limitations as analytical tools.




    Consolidated   income statement (SEK M)



    September
     30, 2017
     (R12)                                Getinge         Arjo
                                                                      Getinge excl Arjo



    Net sales
     1)                                            30,124       7,794                     22,558



    Cost of
     goods sold                                   -15,800      -4,278                    -11,750



    Gross
     profit                                        14,324       3,516                     10,808



    Gross
     Profit
     Margin                                         47.6%      45.1%

                                                                                         47.9%



    Selling
     expenses                                      -6,458      -1,444

                                                                                        -5,014



     Administrative
       expenses                                    -3,595      -1,191

                                                                                        -2,404



    Research
     and
     development
     costs                                           -728        -136

                                                                                          -592



    Acquisition
     expenses                                          -6          -2

                                                                                            -4



     Restructuring
     and
     integration
     costs                                         -1,175        -326

                                                                                          -849



    Other
     operating
     income
     and
     expenses                                          50          39

                                                                                            11



    Operating
     profit
     (EBIT)                                         2,412         456

                                                                                         1,956



    EBIT
     Margin                                          8.0%       5.9%

                                                                                          8.7%



    Net
     financial
     items                                           -651         -91

                                                                                          -560



    Profit/
     loss
     after
     financial
     items                                          1,761         365

                                                                                         1,396



    Taxes                                            -466         -99

                                                                                          -367



    Net
     profit/
     loss for
     the period                                     1,295         266

                                                                                         1,029

1) In Getinge excluding Arjo, sales to Arjo amounting to SEK 63 M is included, and in Arjo sales to Getinge excluding Arjo of SEK 165 M is included. In Getinge, all such internal sales are eliminated.




    Balance   sheet in summary after reallocation of net debt (SEK M)



    September   30,
     2017                               Getinge                       Arjo1)         Getinge excl Arjo



    Assets



    Intangible assets                                     29,392               6,518                    22,874



    Tangible assets                                        4,105               1,079                     3,026



    Financial assets                                       1,365                 469                       896



    Inventories                                            6,173               1,130                     5,043



    Accounts
     receivable                                            6,006             1,7532)                   3,9964)



    Other current
     receivables                                           3,094                 545                     2,549



                                                           1,521                 400                     1,121

    Cash and cash
     equivalents
    -------------



                                                          51,656              11,894                    39,505

    Total   assets




    Equity   and
     liabilities



    Equity                                                23,755               5,209                    18,546



    Provisions for
     pensions,
     interest-
     bearing                                               2,981                  27                     2,954



    Other interest-
     bearing
     liabilities                                          16,148               4,841                    11,307



    Other provisions                                       2,150                 197                     1,953



    Accounts payable                                       1,792               5423)                     9935)



                                                           4,830               1,078                     3,752

    Other   non-
     interest-
     bearing
     liabilities
    ------------



                                                          51,656              11,894                    39,505

    Total   equity
     and liabilities

1) Arjo's balance sheet has been adjusted for the following changes after September 30, 2017:

- One intra-Group transfer to Getinge excluding Arjo, which reduced Arjo's net debt.

- Getinge made a shareholder contribution of SEK 1,203 M to Arjo.

- Net recording of intra-group financial transactions, which will be replaced by external financing at the time of listing.

2) Including SEK 123 M Group-internal receivables eliminated in Getinge.

3) Including SEK 134 M Group-internal debt eliminated in Getinge.

4) Including SEK 134 M Group-internal receivables eliminated in Getinge.

5) Including SEK 123 M Group-internal debt eliminated in Getinge.




    Cash-flow   from operating
     activities (SEK M)



    September   30, 2017 (R12)      Getinge       Arjo




                                                             Getinge
                                                             excl Arjo



    Operating   activities



    Operating profit   (EBIT)               2,412        456

                                                                       1,956



    Add-back of   amortization,
     depreciation and write-downs           2,670        799

                                                                       1,871



    Other non-cash items                       55         30

                                                                          25



    Add-back of   restructuring and
     integration costs 1)                     914        171

                                                                         743



    Paid restructuring and
     integration costs                       -632        -61

                                                                        -571



    Financial items                          -651        -91

                                                                        -560



                                             -367       -144

    Taxes paid                                                          -223
    ----------                                                          ----



                                            4,401      1,160

    Cash   flow before changes in
     working capital                                                   3,241




    Changes   in working capital



    Inventories                              -813       -195

                                                                        -618



    Current receivables                      -867       -129

                                                                        -738



                                              745       -243

    Current liabilities                                                  988
    -------------------                                                  ---



                                            3,466        593

    Cash   flow from operating
     activities                                                        2,873

1) Excluding write-downs of fixed assets.






    Key   figures



    September   30,
     2017 (R12)     Getinge         Arjo




                                                 Getinge excl Arjo



    EBITA 1 1),
     SEK M                    4,311          891

                                                                    3,420



    EBITA 1 Margin,
     %                        14.3         11.4

                                                                     15.2



    Net debt/
     equity ratio,
      multiple                 0.74         0.84

                                                                     0.71



    Equity/assets
     ratio, %                46.0         43.8

                                                                     46.9



    Net debt, SEK M          17,608        4,400

                                                                   13,208



    Net debt/
     EBITDA 2),
     multiple                  2.93         3.08

                                                                     2.89



    EBITDA, SEK M             5,082        1,255

                                                                    3,827



    Cash
     conversion, %           68.2         47.3

                                                                     75.1



    Earnings per
     share 3),
     SEK                       5.23         1.09

                                                                     4.14



    Average number
     of   shares,
     thousands              243,073      243,073

                                                                  243,073



    Number of
     employees               16,631        5,987

                                                                   10,644

1) EBITA 1: EBITA before acquisition, restructuring and integration costs.

2) EBITDA: EBITDA before acquisition, restructuring and integration costs.

3) The calculation of earnings per share is based on the average number of shares in Getinge. As the average number of shares for Arjo and Getinge is not the same, Arjo reports other figures on earnings per share for the corresponding period.

Appendix 2: Restated segment information - Getinge excluding Arjo
(according to IFRS 5)

As a consequence of the planned distribution and listing of Arjo, the historical financial information for Surgical Workflows has been recalculated. The adjustments mainly concern the disinfection flushers business in Arjo, previously reported in Surgical Workflows. In addition, Surgical Workflows has been adjusted for sales between Surgical Workflows and Arjo (eliminated in Getinge). Getinge will also continue to distribute Arjo products in some minor markets and these sales will be reported in Surgical Workflows.




                Q4       Q1       Q2       Q3      Jan-Sep 2017
                    2016     2017     2017     2017
    Order
     intake
     SEK M


                                                                      Full Year
                                                                                  2016



                   3,492    2,975    3,109    2,845              8,929

    Acute
     Care
     Therapies                                                                  12,059
    ----------                                                                  ------



                   3,020    2,404    2,414    2,857              7,675

    Surgical
     Workflows                                                                  10,544
    ----------                                                                  ------



                   6,512    5,379    5,523    5,702             16,604

    Remaining
     operations                                                                 22,603
    -----------                                                                 ------




                Q4       Q1       Q2       Q3      Jan-Sep 2017
                    2016     2017     2017     2017
    Net
     salesSEK
     M


                                                                      Full Year
                                                                                  2016



                   3,649    2,825    3,094    2,621              8,540

    Acute
     Care
     Therapies                                                                  11,804
    ----------                                                                  ------



                   3,785    1,986    2,275    2,323              6,584

    Surgical
     Workflows                                                                  10,366
    ----------                                                                  ------



                   7,434    4,811    5,369    4,944             15,124

    Remaining
     operations                                                                 22,170
    -----------                                                                 ------




                Q4       Q1       Q2       Q3      Jan-Sep 2017
                    2016     2017     2017     2017
    Gross
     profitSEK
     M


                                                                     Full Year
                                                                                 2016



                   1,990    1,635    1,766    1,492             4,893

    Acute Care
     Therapies                                                                  6,552
    ----------                                                                  -----



                   1,408      743      818      956             2,517

    Surgical
     Workflows                                                                  3,846
    ----------                                                                  -----



                   3,398    2,378    2,584    2,448             7,410

    Remaining
     operations                                                                10,398
    -----------                                                                ------




                   Q4       Q1      Q2      Q3     Jan-Sep 2017
                       2016    2017    2017    2017
    EBITA 1* SEK M


                                                                     Full Year
                                                                                2016



                        923     557     638     458             1,653

    Acute Care
     Therapies                                                                 2,326
    ----------                                                                 -----



                        831     -23     113     148               238

    Surgical
     Workflows                                                                 1,173
    ----------                                                                 -----



                        -65     -49     -49     -62              -160

    Group
     Functions                                                                  -224
    ----------                                                                  ----



                      1,689     485     702     544             1,731

    Remaining
     operations                                                                3,275
    -----------                                                                -----

*EBITA 1: EBITA before acquisition-, restructuring and integration costs




                    Q4       Q1      Q2      Q3     Jan-Sep 2017
                        2016    2017    2017    2017
    EBITSEK M


                                                                     Full Year
                                                                                2016



                         704     405      12     271              688

    Acute Care
     Therapies                                                                 1,000
    ----------                                                                 -----



                         690     -54      80      98              124

    Surgical
     Workflows                                                                   885
    ----------                                                                   ---



                         -86     -49     -50     -65             -164

    Group Functions                                                             -379
    ---------------                                                             ----



                       1,308     302      42     304              648

    Remaining
     operations                                                                1,506
    -----------                                                                -----

Contacts

Jeanette Hedén Carlsson,
Executive Vice President Communications & Brand Management
Telephone: +46 (0)10-335-10-03
Email: jeanette.hedencarlsson@getinge.com

Lars Mattsson,
Head of Investor Relations
Telephone: +46 (0)10-335-00-43
E-mail: lars.mattsson@getinge.com

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http://news.cision.com/getinge/r/revised-strategy--new-financial-targets-and-restated-financial-information-for-getinge--excluding-ar,c2387293

The following files are available for download:


    http://mb.cision.com/Main/942/2387293/749323.pdf                   PDF

    http://news.cision.com/getinge/i/joacim-lindoff,c2271239           Joacim Lindoff

    http://news.cision.com/getinge/i/getinge---mattias-perjos,c2271240  Getinge -Mattias
                                                                        Perjos

    http://news.cision.com/getinge/i/joacim-lindoff,c2271241           Joacim Lindoff

    http://news.cision.com/getinge/i/mattias-perjos-,c2271242          Mattias Perjos

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SOURCE Getinge