Getinge (GETI) Q1 2007 earnings summary

Executive summary

• Q1 orders received rose 12.8% to SEK 3,736.8m and net sales increased 14.8% to SEK 3,414.8m; profit before tax rose 9.3% to SEK 285.9m.

• EBITA increased 33.5% to SEK 427.3m and the EBITA margin expanded 1.7 percentage points to 12.5%; all business areas improved EBITA margins.

• Huntleigh integration was proceeding according to plan; the 2007 earnings outlook remained favourable.

Financial highlights

• Gross profit was SEK 1,664.3m and gross margin 48.7%, up 4.0 percentage points YoY; operating profit was SEK 399.7m, up 28.6%.

• Net profit rose 6.3% to SEK 203.1m; EPS increased 7.5% to SEK 1.00.

• Operating cash flow increased 44% to SEK 870.8m; cash and cash equivalents were SEK 931.4m at quarter-end.

• Restructuring and integration costs charged to earnings were SEK 50.5m, compared with SEK 46.1m in Q1 2006.

Outlook and guidance

• 2007 earnings outlook remained favourable; the order book was at a particularly favourable level versus 2006 and Group EBITA margin was expected to improve, including Huntleigh but excluding Huntleigh integration restructuring costs.

• Huntleigh was expected to contribute positively to profit before tax in 2007, excluding SEK 250m of integration restructuring costs.

• Extended Care expected Huntleigh sales synergies to support ~7% growth from 2008; cost synergies of SEK 50m–60m were expected in 2007 and more than SEK 300m when fully implemented in 2009/2010.

• Extended Care’s structural program costs were expected to total ~SEK 400m; existing profitability and growth targets were expected to be achievable by 2009.