Q4 REPORT J O A C I M L I N D O F F, C E O & R E I N H A R D M AY E R, C F O J A N U A R Y 2 6,

Transcription

1 Q4 REPORT J O A C I M L I N D O F F, C E O & R E I N H A R D M AY E R, C F O J A N U A R Y 2 6,

2 OVERVIEW GENERAL BUSINESS J O A C I M L I N D O F F, C E O

3 Q4 IN BRIEF E B I T A * C O N T I N U I N G T O G R O W Organic top line growth: Order intake: -1.1%; Net sales: -2.3% Gross margin: -1.1 pp due to unfavorable product and country mix Efficiency enhancements: saved SEK M in Q4 due to Big 5 EBITA-growth*: +2.6% to SEK 1,970 M (1,920) Restructuring cost: SEK 321 M (174) Strong Cash Flow from operations: + 20% to SEK 1,783 M and Cash Conversion increased to 80.4% FDA update: New governance model for sites under Consent Decree enhancing remediation progress and level of control Distribution of Patient & Post-Acute Care: Progress according to plan Proposed dividend per share: SEK 2.00 (2.80) *Before restructuring, acquisition and integration costs 3

4 TOP LINE DEVELOPMENT N E T S A L E S A F F E C T E D B Y W E A K O R D E R I N T A K E I N Q 3 Organic order intake -1.1% Weak performance in SW and EMEA ACT +5.4% PPAC +1.4%, SW -9.2% APAC +5.5%, Americas +2.4%, EMEA -6.9 % Organic net sales -2.3% Affected by SW and negative order intake growth in Q3 (-3.2%) ACT +2.5%, PPAC -0.9%, SW -7.2% EMEA -0.8%, APAC -1.0%, Americas -4.8% * Before restructuring, acquisition and integration costs 4

5 Q4 BCU UPDATE SURGICAL WORKFLOWS W E A K T O P L I N E D E V E L O P M E N T C O M PA R E D T O S T R O N G Q Organic order intake: -9.2% Infection Control and Integrated Workflow Solutions did not meet strong Q APAC grew slightly while EMEA and Americas showed significant decrease Organic net sales: -7.2% Infection Control and Integrated Workflow Solutions driving the decline, mitigated by strong delivery from Life Science All regions reported a decline, most significant in Americas Gross profit -11.5% and EBITA* -7.7% Higher restructuring costs: Write-offs of intangible assets and on-going transformation A plan to reignite growth has been activated Several product launches in 2017 Q Q Y T D YT D 2015 S e g m e n t O v e rv ie w, m S E K S u rg ic a l W o rk f lo ws % S u rg ic a l W o rk f lo ws % Order Intake, external ,7% ,4% Net Sales, external ,7% ,6% C o st o f Go o ds/services so ld ,0% ,9% G ro s s P ro f it ,5 % ,3 % Gro ss m argin, % 3 8,0 % 41,0% -3,0% 3 7,7 % 38,8% -1,1% EB IT A befo re restructuring-, integratio n and acquisitio n co sts ,7% ,1% EB ITA margin, % 19,8 % 20,5% -0,7% 12,2 % 11,3% 0,9% R estructuring-, integratio n and acquisitio n co sts ,6% ,9% E B IT ,4 % ,0 % EB IT margin, % 16,3 % 18,8% -2,5% 9,5 % 9,7% -0,2% Q 4 Q4 Y T D YT D O rder Intake, external %* %* EM EA ,6% ,3% A mericas ,0% ,3% APAC ,4% ,3% S urgical wo rkflo ws ,2 % ,1% * Adjusted for currency, acquisitions and divestments * Before restructuring, acquisition and integration costs 5

6 Q4 BCU UPDATE ACUTE CARE THERAPIES B R O A D G R O W T H P U S H E D T H E E B I T A * - M A R G I N I N T H E R I G H T D I R E C T I O N Organic order intake: +5,4 % Strong performance in Cardiopulmonary and Vascular Interventions Organic net sales: +2,5 % Cardiac Surgery and Vascular Interventions demonstrate strong growth All regions increased order intake & net sales Gross margin declined 1.2 pp Due to low margin deals for Ventilators in EMEA EBITA*-growth of 11.9% EBITA*-margin up 1.0 pp to 25.3% Q Q Y T D YT D 2015 S e g m e n t O v e rv ie w, m S E K A c u t e C a re T h e ra p ie s % A c u t e C a re T h e ra p ie s % Order Intake, external ,7% ,6% Net Sales, external ,3% ,0% C o st o f Go o ds/services so ld ,2% ,0% G ro s s P ro f it ,0 % ,9 % Gro ss m argin, % 5 4,5 % 55,7% -1,2% 5 5,5 % 55,5% 0,0% EB IT A befo re restructuring-, integratio n and acquisitio n co sts ,9% ,2% EB ITA margin, % 2 5,3 % 24,3% 1,0% 19,7 % 19,7% 0,0% R estructuring-, integratio n and acquisitio n co sts ,7% ,3% E B IT ,3 % ,7 % EB IT margin, % 19,3 % 17,5% 1,8% 8,5 % 11,6% -3,1% Q 4 Q4 Y T D YT D O rder Intake, external %* %* EM EA ,3% ,3% A mericas ,7% ,0% APAC ,3% ,7% A c u t e C a re T h e ra p ie s ,4 % ,1% * Adjusted for currency, acquisitions and divestments * Before restructuring, acquisition and integration costs 6

7 Q4 BCU UPDATE PATIENT & POST-ACUTE CARE G R O W T H I N O R G A N I C O R D E R I N T A K E Organic order intake: +1.4 % Strong development of Capital Goods, driven by good performance in Americas and APAC. EMEA affected negatively by weak performance in Hygiene and Medical Beds Organic net sales: -0.9% A mixed picture with weak performance in Hygiene and Medical Beds and strong performance in several other segments Decline in APAC and EMEA while Americas increased its organic net sales Gross Profit: +3.5% EBITA*: +3.5% Q Q Y T D YT D 2015 S e g m e n t O v e rv ie w, m S E K P a t ie n t & P o s t - A c u t e % P a t ie n t & P o s t - A c u t e % Order Intake, external ,9% ,4% Net Sales, external ,3% ,0% C o st o f Go o ds/services so ld ,4% ,1% G ro s s P ro f it ,5 % ,1% Gro ss m argin, % 4 5,9 % 45,4% 0,5% 4 4,6 % 45,2% -0,6% EB IT A befo re restructuring-, integratio n and acquisitio n co sts ,5% ,5% EB ITA margin, % 17,3 % 17,1% 0,2% 12,8 % 11,4% 1,4% R estructuring-, integratio n and acquisitio n co sts ,3% E B IT ,8 % ,1% EB IT margin, % 10,2 % 13,9% -3,7% 8,9 % 7,4% 1,5% Q 4 Q4 Y T D YT D O rder Intake, external %* %* EM EA ,8% ,1% A mericas ,4% ,6% APAC ,7% ,7% P a t ie n t & P o s t - A c u t e C a re ,4 % ,4 % * Adjusted for currency, acquisitions and divestments * Before restructuring, acquisition and integration costs 7

8 8 FDA & REMEDIATION UPDATE I M P R O V E M E N T M E A S U R E S C O N T I N U E S Utilized approximately SEK 70 M in Q4 New governance model for entities covered by the Consent Decree To enhance control and to meet time schedule in remediation Management reporting directly to Getinge Executive Team Background: The Consent Decree Signed between Maquet and FDA in February 2015 Legal agreement entered into voluntarily Focusing on completing required improvements 4 legal entities covered by the CD The Consent Decree consists of 3 phases All Getinge sites are in phase 1 An ongoing dialogue with the FDA Annual inspections Accordingly, we cannot rule out additional requirements, sanctions or costs We will provide an update when we have new material information

9 9 UPDATE ON PROPOSED SPIN-OFF M O V I N G F O R W A R D A H E A D O F P L A N Progress in line with plan in a structured process Executive Team appointed and effective from April 1 st Internal recruitments except for CFO Financial targets and strategy being reviewed Patient & Post-Acute Care The New Getinge Presented when the preparation of the proposal to the shareholders is finished

10 10 COST EFFICIENCY PROGRAM E F F I C I E N C Y P R O G R A M D E L I V E R E D O N P L A N I N : BIG 5 cost efficiency program Savings amounted to SEK M in Q4 Accumulated savings FY 2016 amount to SEK M 2017: Efforts to enhance efficiency continue in both entities Patient & Post-Acute Care, which is being prepared for proposal of listing and distribution to shareholders The New Getinge

11 11 R&D AND LAUNCHES IN 2017 F O C U S E D R & D F O R L O N G T E R M P R O F I T A B L E G R O W T H A large number of launches Important launches in 2016 bringing positive effects in 2017 A large pipeline for 2017, especially within Surgical Workflows Long term plan for the value segment R&D spending in future growth Increase our total R&D investments going forward Focus on R&D in areas of strength

12 OVERVIEW FINANCIALS R E I N H A R D M AY E R, C F O

13 Results

14 PERFORMANCE C O N T I N U E D C O S T R E D U C T I O N S Order intake organically Slight decline in the quarter and for the FY Net sales organically Decline in Q4, due to weak order intake in Q3 FY affected by decline in Q3-Q4 Gross margin Declined in Q4 due to product mix and regional S&A admin expenses increased in Q4 Mainly due to strengthening of the Quality Organization Adjusted for currency effects S&A was flat (0.2%) compared to Q Operating expenses declined 3.9% in Q4 and 4.9% FY 2016 EBITA*-growth Q4: 2.6 % and the margin increased to 20.7 % SEK M Q Q C hange Q 4 Q4 O rder Intake, external %* EM EA ,9% ,1% A m ericas ,4% ,0% APAC ,5% ,2% G ro u p T o t a l ,1% ,8 % * Adjusted for currency, acquisitions and divestments % Y T D Y T D YT D 2015 Change % Order intake, SEK M ,1% ,0% Organic -1,1% -0,8% FX-effects 3,9 pp -0,2pp A cquisitio ns / divestments 0,3 pp 0,0 pp N et Sales ,1% ,6% Organic -2,3% -1,5% F X-effec ts 3,1 pp -0,2pp A cquisitio ns / divestments 0,3 pp -0,1 pp Gro ss M argin, % 4 6,1 47,2-1,1 4 6,5 46,8-0,3 Selling expenses (in % o f net sales) 17,0 17,2-0,2 2 1,0 21,8-0,8 A dmin expenses (in % o f net sales) 9,1 8,2 0,9 11,3 10,9 0,4 EB IT A *, SEK M ,6% ,9% EB IT A * m argin, % 2 0,7 20,4 0,3 14,6 13,8 0,8 * Before restructuring-, integration and acquisition costs YT D 2015 %* FY: 3.9 % and the margin increased to 14.6 % * Before restructuring, acquisition and integration costs 14

15 15 RESTRUCTURING & INTEGRATION COSTS M A I N LY N O N C A S H R E L AT E D I N Q 4 Q4 Write-down, intangible assets Other restructuring and integration costs Total SEK 170 M SEK 151 M SEK 321 M Reported FY 2016 restructuring costs SEK 1,313 M

16 FX EFFECTS N E G AT I V E E X C H A N G E R AT E E F F E C T S I N Q 4 Negative effects in the quarter Exchange-rate effects had a negative impact of SEK 20 M on EBITA* in the quarter, of which transaction effects accounted for SEK -14 M and translation effects for SEK -6 M M SEK T ra n s a c t io n e f f e c t T ra n s la t io n e f f e c t T o t a l Gro ss P ro fit EB IT A * EB IT Positive full year effects Currency transaction effects had a positive impact of approximately SEK 106 M (273) on the Group s 2016 earnings Outlook transaction effects FY17 Approximately SEK 200 M on the Group s earnings * Before restructuring, acquisition and integration costs 16

17 Balance Sheet

18 18 BALANCE SHEET F O C U S O N N E T D E B T D E V E L O P M E N T Net debt development Adjusted change in net debt for the period decreased to SEK 1,359 M Net debt to equity ratio Decrease 4.9 pp to % Net debt to EBITDA before restructuring Leveraging from 3.89 to 3.88 for the period A s s e t s, M SEK D e c D ec Intangible as s ets T angible fixed as s ets F inanc ial fixed as s ets Inv ento ry A c c o unts rec eiv able Other c urrent rec eiv ables C as h and c as h equiv alents T o t a l a s s e t s C h a n g e in n e t d e b t, m SEK D e c D ec C hange in net debt C urrency effect A cquisitio ns/d ivestm ents A ctuarial gains/lo sses pensio ns, gro ss A d ju s t e d c h a n g e in n e t d e b t N et debt to equity ratio 111,8 % 116,7% N et debt to EB IT D A befo re restructuring 3,8 8 3,89 S h a re h o ld e rs ' e q u it y & lia b ilit ie s, M SEK D e c D ec Shareho lders ' equity P ens io n pro v is io n Other interes t bearing liabilities Other pro v is io ns A c c o unts payable Other no n interets -bearing liabilities T o t a l e q u it y & lia b ilit ie s

19 Cash Flow

20 20 CASH FLOW I M P R O V E D C A S H C O N V E R S I O N & C A S H F L O W F R O M O P E R AT I O N S Operational Cash Flow for the quarter increased by SEK 300 M (+20%) Cash Conversion for the quarter amounted to 80.4% and increased by 6.9 pp to 73.6% for the FY 2016 Cash Flow after Net Investments increased by 113% in Q4 and 12.6% on a FY basis M S E K Q Q Y T D YT D 2015 EB IT D A Restructuring co st expenses A djustm ent fo r item s no t included in cash flo w F inancial item s Taxes paid C a s h f lo w b e f o re c h a n g e s in wo rk in g c a p it a l C h a n g e s in wo rk in g c a p it a l C a s h f lo w f ro m o p e ra t io n s C ash C o nversio n 8 0,4 % 68,5% 7 3,6 % 66,7% C ash flo w fro m investm ents C a s h f lo w a f t e r n e t in v e s t m e n t s C ash flo w fro m financial activities C a s h f lo w f o r t h e p e rio d

21 OUTLOOK J O A C I M L I N D O F F, C E O

22 22 OUTLOOK G E T I N G E G R O U P We expect slight growth in organic net sales in 2017 Currency transaction effects FY 2017 are expected to have a positive impact of approximately SEK 200 M on the Group s earnings The financial consequences of the Consent Decree with the FDA, excluding costs for the remediation program, are expected to have a negative impact of approximately SEK 50 M on the Group s 2017 operating profit

23 SUMMARY

24 Q&A

25 THANK YOU

26 FORWARD LOOKING INFORMATION This document contains forward-looking information based on the current expectations of the Getinge Group s management. Although management deems that the expectations presented by such forward-looking information are reasonable, no guarantee can be given that these expectations will prove correct. Accordingly, the actual future outcome could vary considerably compared with what is stated in the forward-looking information, due to such factors as changed conditions regarding business cycles, market and competition, changes in legal requirements and other political measures, and fluctuations in exchange rates.