First quarter report for January - March 1999

FIRST QUARTER REPORT FOR JANUARY - MARCH 1999 21 APRIL 1999 * ORDERS RECEIVED TOTALLED SEK 1,250.3 MILLION (SEK 1,002.7 M) - AN INCREASE OF 24.7 % * INVOICED SALES TOTALLED SEK 1,183.1 MILLION (SEK 937.2 M) - AN IMPROVEMENT OF 26.2 % * THE OPERATING PROFIT BEFORE ITEMS AFFECTING COMPARABILITY ROSE 17.2% TO SEK 177.4 MILLION (SEK151.4 M) * THE PROFIT BEFORE TAX ROSE 6.9 % TO SEK 161.1 MILLION (SEK150.7 M) * THE INTEGRATION OF LAST YEAR'S ACQUISITIONS IS GOING ACCORDING TO PLAN * THE FORECAST FOR 1999 AS A WHOLE REMAINS THE SAME WITH A PROFIT BEFORE TAX OF AROUND SEK 675 MILLION (SEK 602.6 M) Orders received Orders received by the Getinge Group increased by 24.7% and totalled SEK 1,250.3 million (SEK 1,002.7 m) for the first three months of the year. Organic growth for comparable units and in local currency, amounted to 5.1%. Invoiced sales Invoiced sales improved over the period by 26.2% to SEK 1,183.1 million (SEK 937.2m). Adjusted for company acquisitions, disposals and exchange rate fluctuations, invoiced sales rose 5.4 %. Profit The Getinge Group's operating profit before items affecting comparability rose 17.2% to SEK 177.4 million (SEK 151.4 m) which corresponds to15.0% (16.2%) of invoiced sales. Net financial items totalled - SEK 16.0 million (-SEK 12.9 m),of which net interest items made up -SEK 15.5 million (-SEK 12.4 m). The Group's profit before tax rose by 6.9% to SEK 161.1 million (SEK 150.7 m), which corresponds to 13.6% (16.1%) of invoiced sales. Return on capital employed was 25.5% (24.3%). Financial position and equity/assets ratio The Group's net debt at the end of Q1 was SEK 1,619.7 million (SEK 1,152.1 million) and the Group's cash flow after investments and disposals was SEK 129.9 million (-SEK 68.9 million). Shareholders equity on 31 March was SEK 1,332.3 million (SEK 1,484.7 m) giving an equity/assets ratio of 30.1% (38.4 %). Investments Net investments in machinery, equipment and buildings totalled SEK 43.5 million (SEK 19.1 m). Staff The number of employees was 3,765 (3,107), of whom 798 (785) are in Sweden. The business areas - operations and result Scientific SEK Million Mar 99 Mar 98 Orders received 147.3 109.6 Invoiced sales 105.4 125.6 Operating profit 9.8 25.8 as a percentage of invoiced sales 9.3% 20.5% The business area's orders received rose by 34.3% over the first three months. Organic growth for comparable units and in local currency, amounted to 30.9 %. Orders received have continued to be good on the American market. Over the period, invoiced sales fell by 16.1 %. The business area Scientific works on a market where invoiced sales fluctuate significantly from one quarter to the next and from year to year. The 62% drop in the operating profit is mainly an effect of lower invoicing. In comparable units and adjusted for currency fluctuations, invoiced sales fell by 19.2%. Sterilization Health Care SEK Million Mar 99 Mar 98 Orders received 296.0 302.7 Invoiced sales 312.9 285.6 Operating profit 15.8 21.1 as a percentage of invoiced sales 5.0% 7.4% The business area's orders received slipped by 2.2% in Q1. In comparable units and adjusted for currency fluctuations, orders received fell by 22.5%. The decline in orders received is mainly attributable to the North American health care market. Invoiced sales over the period rose by 9.5% and the operating profit fell by 25.2 %. The poorer operating profit is an effect of weaker sales in the North American market. The integration of the acquisitions in Italy, France and the Netherlands is going according to plan. The activity programme started last year aimed at underpinning long-term profitability, has intensified as a consequence of the deteriorating demand. In comparable units and adjusted for currency fluctuations, invoiced sales fell by 7.4%. Disinfection SEK Million Mar 99 Mar 98 Orders received 219.5 212.9 Invoiced sales 201.0 175.7 Operating profit 42.3 34.8 as a percentage of invoiced sales 21.0% 19.8% The business area's orders received rose by 3.1% in Q1. In comparable units, currency-adjusted orders received are at the same level as last year. Orders received have continued to progress strongly in the laboratory market and pharmaceutical industry in North America. Demand has been weaker in Northern and Central Europe in Q1. Invoiced sales rose over the period by 14.4% and the operating profit increased by 21.6%. In comparable units and adjusted for currency fluctuations, invoiced sales climbed by 10.9 %. Hygiene Systems SEK Million Mar 99 Mar 98 Orders received 203.0 200.8 Invoiced sales 196.6 175.5 Operating profit 22.1 29.2 as a percentage of invoiced sales 11.2% 16.6% The business area's orders received were at the same level in Q1 as they were last year. Invoiced sales rose over the period by 12.0% and operating profit fell by 24.4%. The deterioration in the operating profit is related to an adverse product mix and a break in the production of sit-baths for the North American market. In comparable units and adjusted for currency fluctuations, invoiced sales rose by 9.7%. Patient Handling SEK Million Mar 99 Mar 98 Orders received 368.1 160.8 Invoiced sales 350.4 158.1 Operating profit 85.7 39.3 as a percentage of invoiced sales 24.5% 24.9% The business area's orders received surged by 129.0% over the first three months. Organic growth amounted to 34.7 %. The volume trend continued to be positive on the American market. The Pegasus group that works in the pressure sore prevention and treatment sector, continued to progress well. Invoiced sales also rose by 129.0 % and the operating profit increased by 118.0 %. In comparable units and adjusted for currency fluctuations, invoiced sales rose by 37.2 %. Other The Medical product line, which includes the LIC Audio and NeuroMédica companies, reported invoiced sales of SEK 17.0 million (SEK 16.6 m) and an operating profit of SEK 1.8 million (SEK 1.5 m). Forecast The full year forecast made earlier still stands, with a profit before tax of around SEK 675 million (SEK 602.6 m). The next report The next report from the Getinge Group (the interim report) will be published on 6 August 1999. Getinge, 21 April 1999 Johan Malmquist President Tel: +46 35 15 55 00 Income Statement SEK Million 3 months 3 monthsFull year 1 Jan 99 1 Jan 98 1998 31 Mar 99 31 Mar 98 Invoiced sales 1,183.1 937.2 4,345.0 Cost of goods sold and services -639.7 -518.6 -2,405.1 Gross profit 543.4 418.6 1,939.9 Costs for sales, research/ development and administration -366.0 -267.2 -1,287.0 Operating profit prior to items affecting comparability 177.4 151.4 652.9 Operations divested 1) - 12.5 15.9 Operating profit 177.4 163.9 668.8 Interest income 4.6 5.4 23.4 Interest expense -20.1 -17.8 -86.1 Other financial items -0.5 -0.5 -2.3 Associated companies' profit/loss -0.3 -0.3 -1.2 Profit before tax 161.1 150.7 602.6 Tax 2) -40.2 -31.8 -125.9 Net profit 120.9 118.9 476.7 1) The line "Operations divested" refers to the operating profit for Lifco (Business area Distribution). A dividend in kind of the shares in Lifco was implemented at the AGM in1998 and it was part of the Group up to 30 April 1998. 2) For 31 March 1999 tax is estimated at 25% of the profit before tax and for 1998 the Group's full tax cost is estimated at 20.9% of the profit before tax. Summarised Balance Sheet SEK Million 31 Mar 99 31 Mar 98 1998 Assets Goodwill 1,041.3 891.2 1,034.2 Fixed assets 716.4 598.9 760.2 Stock-in-trade 837.6 905.1 770.7 Receivables 1,591.7 1,271.4 1,665.0 Liquid assets 245.2 199.3 196.6 Total assets 4,432.2 3,865.9 4,426.7 Shareholders' equity & Liabilities Shareholders' equity 1,332.3 1,484.7 1,221.0 Interest bearing liabilities 1,864.9 1,351.4 1,919.0 Non-interest bearing liabilities 1,235.0 1,029.8 1,286.7 Total Equity & Liabilities 4,432.2 3,865.9 4,426.7 Statements of source and application of funds SEK Million 31 Mar 99 31 Mar 98 1998 Operations Operating profit 177.4 163.9 668.8 Depreciation 46.0 36.5 149.7 Financial items -16.0 -12.9 -65.0 Share in associated companies' profit/loss -0.3 -0.3 -1.2 Taxes paid -37.2 -23.8 -111.0 Cash flow prior to changes in working capital, investments and disposals 169.9 163.4 641.3 Changes in working capital Stock-in-trade -66.8 -73.4 -39.0 Current receivables 137.8 -12.5 -337.5 Current operating liabilities -39.1 -93.8 -18.6 Restructuring reserves, utilised -9.7 -29.8 -118.3 Cash flow prior to investments and divestments 192.1 -46.1 127.9 Investments and disposals Direct net investments in machinery, equipment and buildings -43.5 -19.1 -141.4 Net of company acquisitions and disposal of operations -18.7 -3.7 -579.6 Dividend in kind, Lifco - - 622.5 Cash flow after investments and disposals 129.9 -68.9 29.4 Financial activities Change in long-term receivables 1.0 -0.1 -1.3 Change in deferred tax -4.2 -0.2 -9.7 Dividend paid - - -124.9 Dividend in kind, Lifco - - -510.5 Other items Translation differences -24.0 -7.1 -29.5 Decrease +/Increase - in net debt 102.7 -76.3 -646.5 Key figures 31 Mar 99 31 Mar 98 1998 Return on capital employed, per cent 25.5 24.3 25.0 Shareholders' equity per share, SEK 29.33 32.69 26.88 Equity/assets ration, per cent 30.1 38.4 27.6 Earnings per share after full tax, SEK 2.66 2.62 10.50 Number of employees at the period's end 3,765 3,107 3,724 Definitions Capital employed Total assets minus liquid assets and minus non-interest bearing liabilities. Calculated as an average for the period. Return on capital employed Operating profit in relation to capital employed. Equity/assets ratio Shareholders' equity in relation to balance sheet total. Earnings per share after full tax Profit for the period divided by number of shares. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/04/21/19990422BIT00020/bit0001.PDF The full report