GETINGE AB ANNUAL REPORT 2007 - Alle jaarverslagen

Comments by the CEO | 32007 was yet another strong year forthe Getinge Group and a year in whichwe could clearly see the effects of significantinvestments in new products,new markets and new productionstructures implemented during recentyears. In 2007, sales increased by 27%to SEK 16.4 billion, corresponding toan organic volume increase of 7.9%.EBITA (before integration and restructuringcosts) increased by 33% to SEK2.7 billion, while the EBITA marginimproved from 15.5% to 16.3%. Salesand profitability rose in all businessareas.MARKET TRENDThe market trend and demand weregenerally good in 2007. Orders receivedrose in all regions, but the increase wasparticularly evident in the increasinglyimportant emerging markets. Organicgrowth of orders received for ExtendedCare totalled 5%. Excluding the effect ofthe sizable order from the Canadianhealthcare authorities in early 2006,organic growth amounted to a favourable8.6%. The trend for Infection Controlremained favourable following a strong2006 with organic growth of 8.2%.Organic growth for Medical Systemswas slightly lower and amounted to3.5% on the back of a particularly strong2006, when orders received for thebusiness area rose by nearly 14%. Onthe whole, the Group continued to growat a more rapid pace than the markets inwhich it operates.STRATEGIC EXPANSIONThrough the acquisition of the Britishcompany Huntleigh and the Cardiac andVascular Surgery divisions from BostonScientific, Getinge has establishedworld-leading positions in areas thatwere considered to be the Group’sweaker fields in the past. Both acquisitionsare also in line with Getinge’s overridingambition to be an increasinglyattractive partner to its customers in thehealthcare market, where size is becomingan increasingly important factor,through a continuous expansion of theproduct and service offering. The acquisitionsalso create particularly healthyconditions for a continued favourableorganic trend in the Group through distributionsynergies. The two acquisitionsentailed a significant expansion ofGetinge’s operation and the Group isnow one of the largest suppliers of medicaltechnology devices in the world.Acquisition of British HuntleighThe acquisition of the British companyHuntleigh was finalised in January 2007and the management of Extended Careworked intensively with the integration ofthe new operation during the year. Todate, the work has focused on efficiencyenhancements and cost adaptationsand followed two main approaches: theintegration of Extended Care’s andHuntleigh’s market organisations andstreamlining of Huntleigh’s productionstructure. In terms of work related to themarket organisation, this entailed suchmeasures as the fusion of sales companiesin some 15 markets and the planningof a new joint brand and customeroffering. Huntleigh’s production underwentsignificant streamlining in 2007 andthe beginning of 2008. The bulk of manufacturingat Huntleigh’s UK and USplants was relocated to the businessarea’s plant in Poznan, Poland. In thesecond half of 2008, plans are in placeto relocated remaining production inLuton to Extended Care’s new productionplant in Suzhou, China, which isunder construction and scheduled forcompletion in the autumn of 2008.In 2008, the emphasis of the integrationwork will shift from cost synergiesto realizing the major sales synergies,thereby establishing a higher and moresustained level of organic growth forExtended Care. The business area’sgoal is to maintain organic growth of 7%and an EBITA margin of 19% from 2009and onwards.To summarize, the acquisition ofHuntleigh means that Extended Care willassume a highly effective position inboth the elderly care and hospitals segments,at the same time as the businessarea establishes a leading position in thewound-care area, which was its weakestsegment in the past.The acquisition of the Cardiac andVascular Surgery divisions fromBoston Scientific is an important stepin Getinge’s efforts to establish a leadingposition in the attractive cardiac surgerymarket. The acquisition broadensGetinge’s customer offering aimed atcardiac surgery in a decisive manner,while it also distinctly strengthens thedistribution of the Group’s perfusionThe acquisition createsunique possibilities to builda world-leading business inthe cardiac surgery area