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Research Tree provides access to ongoing research coverage, media content and regulatory news on GETINGE AB-B SHS. We currently have 7 research reports from 1 professional analysts.
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GETINGE AB-B SHS
GETINGE AB-B SHS
10 Feb 17
Getinge’s disappointing run continued in Q4, with both the top- and bottom-line coming below consensus expectations. Both sales (SEK9.5bn) and order intake (organic basis) contracted 2.3% and 1.1%, respectively, primarily due to weak Surgical Workflows following the subdued infection control and integrated workflow businesses. Organic sales declined by 0.9% at the Patient & Post-Acute Care (P&PAC) segment on account of the dip in hygiene-related products; sales of medical beds added further to the weakness. Fortunately, the Acute Care Therapies segment remained resilient (+2.5% vs. 1.3% in Q3 16, positive momentum in cardiac surgery, vascular interventions, cardiopulmonary and critical care), offering the lone bright spot in an otherwise overall weak performance. Currency tailwinds contributed c.3ppt to revenue growth. The adjusted operating profit expanded 3%, supported by the ongoing cost savings (SEK140-150m), but the restructuring and integration expenses (SEK321m vs. SEK174m in Q4 15) outweighed, contracting reported operating profit by 6%. A rather vague FY 17 outlook with a “slightly positive” organic sales growth but no margin details makes the situation only worse for Getinge. Additionally, management expects a negative SEK50m impact on operating profit from the consent decree with the FDA and a positive currency transaction impact of SEK200m on earnings. After maintaining the dividend per share at SEK2.80 in the last two years, management has cut it to SEK2 for FY 16 which, in our view, is likely to spook investors further (investor confidence has already taking a beating amid a host of issues such as remediation charges and weakening underlying growth among others) and indicates the continuation of a challenging environment (last time when management cut the dividend in FY 14, FDA troubles had started to appear on the horizon).
Q2 16 offers little respite
25 Jul 16
Getinge’s Q2 16 performance, although a significant improvement over the disastrous first quarter, continued to be tepid, with the company under-delivering on all counters against consensus expectations (c.3% and c.43% miss on top-line and bottom-line, respectively). Q2 16 sales were down 0.3% yoy to SEK6.9bn, mainly due to the continued weakness in the Patient & Post-Acute Care segment (erstwhile Extended Care); this, despite a resilient performance by Acute Care and a trend reversal in the Surgical Workflows segment. Unfavourable currency movements further pulled down reported growth to -3.5% yoy. However, benefits from the ongoing cost savings programme (c.SEK80-90m of cost savings realised in the quarter) reflected in the improved profitability, with adjusted operating income increasing c.18% to SEK606m (margin up 150bp to 8.7%). Net profit was up 28% to SEK227m, mainly on account of lower interest expenses (margin up 80bp to 3.3%). Another positive came in the form of an improved order intake (3% organic growth yoy vs. a 2% decline in the previous quarter). Following the results, management has ‘reworded’ its sales guidance for FY 16 – the company now expects a moderate organic sales growth for the year vs. the earlier expectation of a positive revenue growth. It also declined to comment on the Brexit impact (c.7.5% of total revenue came from the UK in 2015), stating that it’s too early to assess any long-term repercussions. The company also announced the appointment of Jens Viebke as the new president of Acute Care Therapies segment, replacing Heinz Jacqui.
Soft start to the year; still no clarity on Hechingen plant
24 May 16
Getinge reported another poor quarter, with Q1 16 numbers (both top line and bottom line) coming well below consensus estimates. Net sales were down 5% yoy to SEK6.4bn (-3% on an organic basis), while the order intake declined 4% to SEK6.9bn (-2% on an organic basis) mainly due to the continued weak demand for the capital goods business. The order intake in both Surgical Workflows and Patient & Post-Acute Care segments decreased 5%, while the sales decline was 7% and 5%, respectively (on an organic basis). The Acute Care Therapies was the only segment in the positive territory with order intake growth of 2% and sales growth of 1% (both in organic terms). Despite the support from the two-year suspension of the medical devices tax in the US, favourable product mix, savings from the restructuring programme (SEK75-80m) and positive currency impact (SEK50m), profitability remained under pressure, with adjusted operating profit plummeting 14% to SEK443m. However, excluding SEK76m of gain recognised in Q1 15 on account of the divestment of Pulsion’s perfusion operations, adjusted operating profit showed flat growth. Management has maintained its rather vague FY 16 outlook of positive revenue growth.
No abating of near-term headwinds
01 Apr 16
Disappointing Q4 15 and FY 15 results for Getinge (ahead of consensus on top-line but profitability missing market expectations). Full-year net sales (sales and order intake growth rates are on an organic basis, unless specified otherwise) were up 1.8% yoy (13.4% in SEK) to SEK30.2bn (in line with our estimate), while Q4 15 sales increased 4.3% (11.3% in SEK) to SEK9.4bn. Profitability remained under pressure, with adjusted EBIT declining 11.1% for the full year to SEK3.4bn (margin deteriorated c.3ppts yoy to c.11.2%) and 4% for the quarter to SEK1.7bn (margin deteriorated c.3ppts to c.18.3%), primarily impacted by the unfavourable product mix in the Medical Systems’ surgical workplaces division, pricing pressure in the Extended Care’s DVT (Deep Vein Thrombosis) and rental businesses, and loss of revenue and costs associated with the consent decree with the FDA. However, excluding SEK110m of provision recognised in relation to the ongoing litigation in the US in the Medical Systems’ segment and the SEK108m of loss recognised in connection with the disposal of MK Metallkomponenten, adjusted EBIT was up 7.8% in Q4 15 to SEK1.9bn. Net profit for the full year came in at SEK1.5bn, slightly below our expectation of SEK1.6bn. Management has proposed a per share dividend of SEK2.80 for FY 15 (unchanged from 2014). Pernille Fabricius joined as CFO in February 2016, replacing Ulf Grunander. For 2016, management expects organic sales growth to be within its 2016-19 target of 2-4%. It sees positive growth from the EMEA and North America regions and weak demand from the Latin America region. Restructuring charges are expected to be SEK800m (per earlier guidance) while the consent decree is expected to have a negative SEK130m impact (excluding costs associated with the remediation programme) on operating profit.
Solid order intake but margins continue to concern
02 Dec 15
In its first results following the announcement of the restructuring plan, Getinge announced better than expected Q3 15 numbers (ahead of consensus estimates), reporting its best quarterly performance in terms of order intake (5.2% organic growth vs. a 0.2% decline in Q3 14) since Q4 13. Net sales, however, were more subdued, increasing 1.1% organically (11.2% reported) to SEK6.9bn, driven by a revival in demand from the North American market and robust returns from the rest of the world. Segment-wise, both Medical Systems and Infection Control chalked in encouraging numbers, 5.9% and 14.8% increase in order intake, 2% and 6% improvement in sales growth, respectively. However profitability remained constrained (adjusted EBITDA and EBIT down c.2% and c.14%, respectively) due to lower utilisation as well as negative currency transaction effects (although margins were better than market expectations). Key highlights include a reduction in costs related to the consent decree (from SEK500m previously to now SEK375m, SEK275m already charged in the first three quarters of the year) as well as an increase in restructuring expenses in FY15 from SEK540m to SEK630m (following management’s decision to expedite certain restructuring activities, SEK213m recorded in Q3, including an SEK50m payment to the US government). Management now expects the net currency exchange effect to be in the range of SEK50m (from the earlier SEK10m).
All for One ‘Getinge’
14 Sep 15
Five months after assuming his role as CEO of Getinge, Alex Myers finally presented the long-awaited transformation/ restructuring plan for the group, with a primary focus on consolidating and streamlining group functions under “One Getinge” (in sharp contrast to its historical federation-type structure). Courtesy its ‘big five’ initiatives, the 3-4 year plan (2016-19) aims at restoring growth and profitability through cost optimisation (by delayering the group, supply chain and procurement management), portfolio rebalancing and customer-centricity. With effect from 1 January 2016, the business would be reorganised into – Surgical Workflows (a mix of Medical Systems and Infection Control, c.35% of sales), Acute Care (primarily Medical Systems, c.40% of sales) and Patient & Post-Acute Care (Extended Care, c.25% of sales). The programme is expected to translate into an SEK2.5–3bn EBITA savings by 2019, but will cost the company upwards of c.SEK1.5bn in restructuring expenses, with an anticipated headcount reduction of 1,000 (primarily in the office/ admin functions). The management also aims at significantly deleveraging its balance sheet, improving net debt/EBITDA from the current 4.3x to 1.5x by 2019. The new financial targets for 2016–19 on CMD were: annual organic growth of 2–4% (before currency and acquisition impacts); EBITA improvement of >10% yoy and dividend payout of 30–50% (currently c.33%). In addition to its focus on organic growth, the company has also made clear its intentions to continue to look out for attractive targets, to facilitate its expansion plans.
N+1 Singer - Morning Song 22-02-2017
22 Feb 17
CORETX (COR LN) Contract wins and new Lifestyle facility | Gooch & Housego (GHH LN) Solid Q1 trading plus earnings enhancing acquisition of StingRay Optics | NCC Group (NCC LN) Further issues in Assurance | PCI-PAL (PCIP LN) Strong H1 underpins positive outlook | UBM (UBM LN) Results | Verona Pharma (VRP LN) Phase IIa RPL554 add-on trial to tiotropium commenced
Interim results – adhering to international growth strategy
23 Feb 17
Interim results showed a strong performance for Tristel, 6% ahead of its AGM statement on 12 December at which it indicated adjusted pre-tax profits to be no less than £1.6m. Revenues increased by 22% (16% at constant exchange rates – CER or 12% CER excluding the impact of the Australian acquisition) and adjusted pre-tax profits were up 15% to £1.71m. Despite the strong half, we leave our full-year forecasts unchanged, given FX uncertainty and a one-off stocking order in H1 from the NHS, although at current FX rates the risk to our forecasts is considered to be to the upside. However, we raise our target price by 10% to 165p to reflect the solid progress as well as rolling forward our multiples to calendar-adjusted 2017.
N+1 Singer - Morning Song 21-02-2017
21 Feb 17
Abzena (ABZA LN) Contract bookings strong; US costs higher than expected | City of London Investment Group (CLIG LN) Earnings and interim dividend in line, some modest growth in FuM | dotdigital Group (DOTD LN) Good H1; broadening avenues of growth | Grafenia (GRA LN) Weak print volumes | Vernalis (VER LN) Interims highlight increasing Tuzistra™ scrip volume
N+1 Singer - Morning Song 23-02-2017
23 Feb 17
Genus (GNS LN) Interim results: R&D step-up, disappointing ABS performance | Howden Joinery Group (HWDN LN) Prelims and net cash better than expected but conditions weaken | Oxford Pharmascience Group (OXP LN) Encouraging interim OXPzero™ Ibuprofen exploratory PK data | StatPro Group (SOG LN) Increased majority shareholding in Infovest Consulting | Wilmington Group (WIL LN) Interims slightly ahead, move to focus on 3 verticals
Panmure Morning Note 20-02-2017
20 Feb 17
Chi-Med has announced the initiation of a Phase II study of savolitinib in locally advanced or metastatic pulmonary sarcomatoid carcinoma (PSC) in China. This is a disease where patients are usually diagnosed by normal pathology (i.e. not via molecular diagnostics methods) but given that 20-30% of PSC patient show c-Met gene amplification this potentially represents a very rich patient pool for savolitinib as a highly selective and potent oral c-Met inhibitor. The continued strength of Chi-Med’s clinical momentum is further demonstrated by today’s news and we consider this represents further upside potential against our existing investment case. We repeat our Buy recommendation.
13 Dec 16
Tristel has announced in its AGM statement that it expects to report first half adjusted (share-based payments) pre-tax profits to be no less than £1.6m. This compares with £1.5m in the 6 months to December 2015 and is in line with management’s expectations and stated strategic financial goals: (i) revenue growth within a range of 10% to 15% as an annual average over the 2016-19 period, (ii) maintaining a minimum pre-tax profit margin of 17.5% and (iii) distributing cash that is not required for the operational and investment needs of the business to shareholders in the form of dividends. Our forecasts for the full year are for adjusted pre-tax profits of £3.6m, and include a contribution from the acquisition of its previous Australian distributor for its Wipes System from 21 July 2016 (ie 11 months contribution in the full year). Our forecasts also include £0.5m of US development expenses for the full year (incremental £370k), which impacts margins by c190bps. We make no changes to either our forecast or target price; however, note that risks to both of these are on the upside.