Getinge (GETI) Q2 2007 earnings summary

Executive summary

• Q2 orders received rose 25.3% to SEK 4,203m and net sales increased 28.0% to SEK 4,029m; organic growth was 5.1% for orders and 6.6% for sales.

• Q2 EBITA before restructuring and integration costs increased 40.9% to SEK 603m; excluding these costs, the EBITA margin rose 1.4 percentage points to 15.0%.

• Huntleigh integration was proceeding as planned; the 2007 earnings outlook remained favourable, with adjusted EBITA margin expected to improve including Huntleigh.

Financial highlights

• Q2 gross profit was SEK 1,823m, up 28.2%; gross margin was 45.2%, unchanged YoY.

• Q2 operating profit was SEK 496m, up 18.7%; profit before tax was SEK 366m, up 0.5%, and net profit was SEK 260m, down 2.3%.

• H1 net sales rose 21.6% to SEK 7,444m; profit before tax increased 4.2% to SEK 652m and net profit rose 1.3% to SEK 463m.

• H1 earnings per share increased 2.2% to SEK 2.29; Q2 EPS was SEK 1.29, down 1.5% YoY.

Outlook and guidance

• 2007 earnings outlook remained favourable; demand was considered excellent across most regions and product areas, with the order backlog at a historically excellent level.

• EBITA margin was expected to improve for the overall business including Huntleigh, excluding Huntleigh restructuring and integration costs.

• Huntleigh was expected to contribute to 2007 pre-tax profit; SEK 250–260m of its integration and restructuring costs were expected to be charged in 2007.

• Extended Care targeted 2009 EBITA margin of at least 19% and organic growth of 7%; Huntleigh cost synergies were expected to exceed SEK 300m annually by 2009/2010.