Getinge (GETI) Q4 2008 earnings summary

Executive summary

• FY08 orders received rose 17.9% to SEK 19,447m, with 7.1% organic growth; net sales increased 17.2% to SEK 19,272m.

• FY08 profit before tax increased 21.4% to SEK 2,155m; net profit rose 23.1% to SEK 1,552m and EPS increased 23.5% to SEK 7.37.

• Q4 orders rose 23.6% to SEK 5,638m, with 5.1% organic growth; earnings remained strong and met expectations, with varied segment trends.

Financial highlights

• Q4 net sales increased 24.6% to SEK 6,423m; gross profit rose 30.5% to SEK 3,074m and gross margin improved 2.2 percentage points to 47.9%.

• Q4 operating profit increased 22.9% to SEK 1,270m; profit before tax rose 18.2% to SEK 1,066m and net profit increased 19.8% to SEK 767m.

• FY08 gross margin was 48.6%, up 2.7 percentage points; operating profit rose 27.3% to SEK 2,906m, with a 15.1% operating margin.

• EBITA excluding restructuring increased 31% to SEK 1,436m in Q4, with a 22.4% margin; FY08 adjusted EBITA rose 29.1% to SEK 3,456m, with a 17.9% margin.

• Q4 included SEK 73m of restructuring expenses; operating cash flow rose 37.1% to SEK 747m.

Outlook and guidance

• FY09 organic invoicing growth is expected to be somewhat lower than FY08, while demand and proprietary growth initiatives are expected to support continued good volume growth.

• Continued strong earnings growth is anticipated from acquisition synergies, lower restructuring expenses, and strengthened products and production structure.

• FY09 EBITA margin target is 18–19%, excluding restructuring; Extended Care expects a full-year margin of ~19%.

• Datascope, including restructuring and financing expenses, is expected to have limited impact on FY09 profit before tax; earnings contribution is expected from 2010.