Getinge (GETI) Q3 2007 earnings summary

Executive summary

• Q3 orders grew organically 11.2%; sales rose 33.3% to SEK 3,844m and adjusted EBITA increased 33.0% to SEK 500m, with a 13.0% margin.

• Huntleigh integration progressed to plan; Q3 included SEK 110m in restructuring and integration costs, while the 2007 earnings outlook remained favourable.

Financial highlights

• For 9M, orders rose 23.6% to SEK 11,933m and sales increased 25.3% to SEK 11,288m; adjusted EBITA grew 35.1% to SEK 1,581m.

• 9M profit before tax fell 7.1% to SEK 873m, net profit declined 9.6% to SEK 620m, and EPS was SEK 3.07 versus SEK 3.38.

• Q3 operating profit was SEK 353m, down 3.8%; net profit was SEK 157m versus SEK 229m, and EPS was SEK 0.78 versus SEK 1.14.

• Q3 gross margin was 44.3%, up 0.4 percentage points YoY; reported operating margin was 9.2% versus 12.7%, affected by SEK 110m of integration costs.

Outlook and guidance

• Demand was expected to remain good across most regions; the 2007 earnings outlook was favourable and unchanged, with Group EBITA margin expected to improve excluding Huntleigh integration costs.

• Medical Systems expected to reach its 17% EBITA margin target during 2007; Infection Control expected rising invoicing and an improving margin.

• Huntleigh was expected to contribute to pre-tax profit excluding restructuring costs; full-year integration charges were estimated at SEK 250–260m.

• Infection Control's logistics project was expected to generate annual savings of SEK 50m when fully implemented.