Getinge (GETI) Q4 2007 earnings summary

Executive summary

• FY 2007 net sales rose 26.5% to SEK 16,445m; profit before tax was SEK 1,775m, net profit SEK 1,261m and EPS SEK 6.24.

• Q4 orders grew organically 5.5%; net sales rose 29.1% to SEK 5,157m and EBITA before restructuring increased 29.2% to SEK 1,096m.

• The Boston Scientific cardio and vascular surgery divisions were acquired after year-end; revised consolidated EBITA margin target is 18–19%.

Financial highlights

• FY orders received increased 24.1% to SEK 16,519m; net sales increased 26.5% to SEK 16,445m.

• FY gross profit was SEK 7,546m, gross margin 45.9%, operating profit SEK 2,282m and operating margin 13.9%.

• FY profit before tax rose 2.7% to SEK 1,775m; net profit was SEK 1,261m, up 0.2%, and EPS was SEK 6.24, up 0.5%.

• Q4 profit before tax increased 14.5% to SEK 902m; net profit was SEK 641m, up 11.9%, and EPS was SEK 3.17, up 12.0%.

• FY EBITA before restructuring and integration costs increased 32.7% to SEK 2,678m; margin was 16.3%, versus 15.5% in 2006.

Outlook and guidance

• Expected organic invoicing growth is in line with 2007; EBITA margin is expected to strengthen, excluding the Boston Scientific divisions, while FX changes are expected to weigh on earnings.

• Revised EBITA margin targets are 18–19% consolidated and 19–20% for Medical Systems; the consolidated target is expected to be reached in FY 2009.

• Current-year tax rate is expected to improve by 1 percentage point to 28%.

• Medical Systems expects to outgrow its market; Infection Control anticipates continued strong invoicing growth; Extended Care expects improved volume growth versus 2007.

• Boston Scientific divisions are expected, excluding integration costs, to contribute to profit before tax and continued EBITA margin expansion.