Integration and restructuring of Siemens' LSS

Integration and restructuring of Siemens' Life Support Systems (LSS) Getinge today announces the essential parts of the planned restructuring that will secure stable, long-term profitability for Siemens' LSS, which was acquired in autumn 2003. The structural initiative that further underpins LSS' profitability falls into three categories: a new, more effective sales organization, phasing out the anesthesia product range and coordinating production and product development in the Medical Systems business area between the units at Solna and Lund in Sweden. New sales organization As previously announced, the Medical Systems (formerly Surgical Systems) business area will coordinate the sales organizations for the existing product range with the acquisitions of Jostra and LSS. Because of this, countries where Medical Systems is represented will have a joint sales company consisting of three divisions: Surgical Workplaces (surgical tables, surgical lights and ceiling service units), Cardio-Pulmonary (formerly Jostra, heart/lung apparatus) and Critical Care (formerly LSS, ventilators and anesthesia systems). The companies will have joint management, administration and service organization. The new sales organization will result in higher cost-efficiency and strong customer relations. The acquisitions of Jostra and LSS also mean that the business area has dramatically increased its market penetration in those countries where the business area is represented via wholly- owned companies. New companies are set up in Switzerland, Austria, Spain, Scandinavia, Portugal, China, Singapore, Brazil, India, Russia and Hong Kong. Other countries are addressed through agents and distributors. The stronger market presence will strengthen every division's long-term business development. Phasing out the anesthesia product range Negotiations will begin today to phase out LSS' anesthesia activities. The anesthesia product range (KION and SYMEON), despite comprehensive investment, has produced losses for some time and the forecast is that its market share is too small to create profitable business in the long- term. The anesthesia product range has annual sales of EUR 30 million. Coordinating production in the Medical Systems business area Medical Systems currently runs similar production and product development of medical technology equipment at the business areas' Centres of Excellence for Cardio-Pulmonary machines in Lund and for Critical Care's (formerly LSS) products at the unit in Solna. To get the best out of the business area's resources for product development and production, negotiations begin today to move the Cardio-Pulmonary activities from Lund to Solna, thus phasing out activities in Lund. Profit prospects - Critical Care (formerly LSS) As previously announced, the Getinge Group expects the LSS acquisition to provide a profit contribution before tax of around EUR 10-12 million this year, and a contribution before tax of around EUR 17-20 million for 2005 (profit after depreciation of goodwill and acquisition financing). However, volume growth in 2004 is expected to be somewhat lower than previously expected, because of lower sales activities at LSS in 2003 when Siemens LSS was in the process of being sold. Nevertheless, measures being taken and the greater focus on the LSS business following the takeover, will lead to planned volumes being reached from 2005. Due to the deteriorating short-term volume prospects that have appeared when analysing LSS, the acquisition price for activities has been renegotiated with the seller and led to the acquisition price being cut by around EUR 20 million. Getinge, 12th January 2004 Johan Malmquist, President and CEO GETINGE is a leading provider of equipment and systems to customers within health care, extended care and pharmaceutical industries/laboratories. Equipment, services and technologies for infection control, operating theatres, patient hygiene, patient handling and wound care are supplied to customers throughout the world. In 2002 the Getinge Group had net sales of approx. SEK 8.6 billion with 5.600 employees. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2004/01/12/20040112BIT00030/wkr0001.doc http://www.waymaker.net/bitonline/2004/01/12/20040112BIT00030/wkr0002.pdf