ANNUAL REPORT 2003 CONTENTS
FOCUS AND STRATEGY The year in brief ...... 3 Consolidated balance sheet ...... 58 Group overview ...... 5 Changes in shareholders’ equity...... 59 Five-year summary...... 7 Consolidated cash flow statement ...... 60 Comments by the CEO ...... 9 Operating cash flow statement ...... 61 Aims and strategies ...... 13 Notes to the consolidated accounts ...... 62 Getinge’s shares...... 17 Income statement for the Parent company . . . 74 Balance sheet for the Parent company...... 75 Changes in shareholders’ equity BUSINESS ACTIVITIES – Parent Company ...... 76 Business area Medical Systems ...... 19 Cash flow statement for the Parent company . 77 Business area Infection Control...... 29 Notes to the Parent company accounts ...... 78 Business area Extended Care...... 39 Auditors’ report ...... 82 Getinge in society...... 49
OTHER INFORMATION FINANCIAL INFORMATION Definitions ...... 83 Directors’ report ...... 53 The Board...... 84 Proposed allocation of profits ...... 56 Group management and auditors...... 86 Consolidated income statement ...... 57 Addresses 2004...... 88
Annual General Meeting 2004. The Annual General Meeting will be held on Wednesday 21 April 2004 at 4 p.m. in Kongresshallen, Hotel Tylösand, Halmstad. Shareholders wishing to participate at the Annual General Meeting should be registered in the shareholders’ register kept by Värdepapperscentralen VPC AB, (the Swedish Central Securities Depository), no later than 8 April 2004 (the record date is 11 April 2004, but due to the intervening weekend, registering must take place on 8 April 2004) and notify Getinge’s head office at Getinge AB, Information Dept, Box 69, SE-310 44 Getinge, Tel: +46 35 15 55 00 of their intention to participate, no later than 15 April 2004. Shareholders whose shares are registered in the name of a nominee must have temporarily registered their shares in their own name with VPC, to be able to participate at the Annual General Meeting, well in advance of 8 April 2004. Shareholders wishing to be represented must send a relevant power of attorney to the company before the meeting. Those representa- tives representing legal entities must have a copy of the registration certificate or a corresponding authorization document that shows the proper authorized signatory.
Dividend. The Board of Directors and President propose that a dividend of SEK 1.35 (1.06) per share be paid, totalling SEK 272.5 (214.5) million. The Board’s proposed record date is 26 April 2004. VPC anticipates being able to forward the dividend to shareholders on 29 April 2004.
Reports for 2004. Getinge AB will be publishing the following reports in Swedish and English during the year: The report for Q1 2004 will be issued in conjunction with the Annual General Meeting on 21 April. Interim report for the first six months of 2004: 15 July 2004. The report for Q3 2004: 18 October 2004. Release of the financial statements for 2004: January 2005. Annual Report for 2004: April 2005. The reports can be ordered from: Getinge AB, Information Dept. Box 69, SE-310 44 Getinge. Tel: +46 35 15 55 00.
Information about this Annual Report. The Getinge Group is referred to in this Annual Report as Getinge. Figures in brackets refer, unless otherwise specified, to 2002’s activities. Swedish krona is used (SEK) throughout this document. Millions of kronor are written as SEK xx million. All amounts are given in SEK million, unless otherwise specified. Information given in the Annual Report concerning markets, competition and future growth constitutes Getinge’s assessment based mainly on material compiled within the Group.
This document is essentially a translation of the Swedish language version. In the event of any discrepancies between this translation and the original Swedish document, the latter shall be deemed correct.
The cover photo shows the product, MYWIRE Temporary Pacing Electrode, which is used in heart surgery. The year in brief
Orders received – rose by 4% to SEK 9,153.8 million (8,772.9) Net sales – increased by 6% to SEK 9,160.2 million (8,640.1) The profit before tax – climbed by 25% to SEK 1,095.4 million (875.6) Medical Systems – Strategic expansion through the acquisition of Jostra and Siemens LSS – Improved profit due to continuing synergies from the Heraeus acquisition – Profit improvement in the American operation Infection Control – Strong effects from improvement measures have meant that operating profit has improved by 46.2% – Continued restructuring work is expected to further strengthen the operating margin Extended Care – A review of costs carried out during the year will have its full effect in 2004 – Intensified product development provides the basis for strong organic growth Strong cash flow – SEK 1,386 million (1,211) from current activities Dividend – Proposal to raise dividend to SEK 1.35 (1.06)
3 Business area Medical Systems
Business activities Complete systems for surgical workstations, heart surgery and intensive care. The product range covers surgical tables, surgical lights, ceiling service units for various types of medical equipment, heart-lung machines and ventilators, as well as related consumables.
Strategy PRODUCT LEADERSHIP. The business area will be a leader in quickly meeting new customer demands with adapted products, in a sector characterized by rapid change. INTEGRATED SOLUTIONS. To provide integrated solutions in which the individual products combine to create the best in ergonomics, efficiency and safety. SERVICE. The industry’s best and fastest service coupled with top-quality products, will guarantee maximum availability of operating rooms.
Prioritized areas Evaluate new attractive expansion areas in Medical Systems. Develop distribution synergies. Product leadership in image-guided surgery, endoscopy and integrated workplaces for surgery and radiology. Increase market shares in the US and Asia. Integration of Jostra and Siemens LSS.
Business area Infection Control
Business activities Complete systems to prevent the onset and spread of infection for health care, long-term care and the pharmaceutical and medical techical industries. The product range covers disinfectors, sterilizers, documentation systems and ancillary equipment, as well as service and consulting. World-leading position with own representation in all its important markets.
Strategy COST LEADERSHIP. To utilize the business area’s world-leading position to maintain the sector’s lowest manufacturing costs through efficient production and effective distribution. INTEGRATED SOLUTIONS. To position the Getinge brand as the sector’s best solution provider, where Getinge’s broad product range and expertise will benefit customers. SERVICE. To utilize Getinge’s well-developed service network as a competitive advantage, through actively bundling and marketing innovative services.
Prioritized areas Strengthen and position Getinge as a system supplier. Improve the manufacturing structure. Enhance the distribution structure. Increase investments in developing products for material handling, ergonomics, low-temperature sterilization and disinfection. Expand the service organization.
Business area Extended Care
Business activities Systems for hygiene routines and the transfer of the elderly and disabled, as well as products that prevent and treat pressure sores. The product range covers bath and shower products, support equipment for patient handling, and clinically-tested mattresses for the treatment and prevention of pressure sores.
Strategy PRODUCT LEADERSHIP. To continuously develop and expand the market through product development. INTEGRATED SOLUTIONS. The business area’s broad product range and well-developed market organization with a consultative focus, will enable a wider range of responsibility to be taken for the working environment and quality of care. DOCUMENTED CUSTOMER BENEFITS. The documented positive effects for caregivers and care recipients will be the basis for Getinge’s offering to customers and enable new financing and payment solutions, in which Getinge and customers share the risk.
Prioritized areas Greater market penetration via an expanded sales organization and educational customer programmes. Geographical expansion – Japan and developing markets. Develop the hospital market. Product development – lightweight patient lifters. 4 Koncernöversikt Distribution synergies – wound care. GROUP OVERVIEW A world-leading supplier of medical technical equipment
The Getinge Group is a world-leading supplier of medical technical equip- ment for surgery, intensive care and infection control, as well as a provider of ergonomic solutions for geriatric care. Net sales in 2003 amounted to SEK 9.2 (8.6) billion and the sales volumes is equivalent of SEK 11 billion annualized. The Group has 6,600 employees, working at some 90 compa- nies in 30 countries. The Group’s production is run at 20 plants in eight countries and distributed globally, mainly through its own sales organiza- tion. Over the past 10 years, Getinge has made a number of important acquisitions and now consists of a broad enterprise organized in three busi- ness areas as follows:
CEO
Group management consisting of CEO, CFO and management of the respective business areas
BA Medical Systems BA Infection Control BA Extended Care
Getinge’s history Getinge was founded in 1904 by Olander Larsson to manufacture equip- ment for the agricultural sector. The fi rst step towards the present business orientation was taken in 1932, when the fi rst sterilizer was produced. In the 1940s and 50s, Getinge built up its business in health care and food-service equipment. During the 1960s, operations were focused on sterilization and disinfection equipment. The 1980s and 90s were marked by rapid expan- sion, both in terms of geographical spread and the range of products and services.
Group overview 5 Lunatronic 1999 Parker Bath 2000 Maquet & ALM 2000-2001 Hereaus 2002 Siemens & Jostra 2003
The Group 1999 2000 2001 2002 2003 Net sales SEK m 4 884.7 5 253.5 8 148.2 8 640.1 9 160.2 of which overseas sales,% 94.5 95.0 96.9 96.9 97.2 EBITDA 880.4 892.2 1 341.3 1 437.6 1 687.3 EBITDA margin,% 18.0 17.0 16.5 16.6 18.4 Operating profit before goodwill depreciation 752.9 762.8 1 130.2 1 214.6 1 448.7 Operating profit margin before goodwill depreciation,% 15.4 14.5 13.9 14.1 15.8 Operating profit SEK m 692.2 697.03) 974.0 1 049.5 1 256.5 Operating margin,% 14.2 13.33) 12.0 12.1 13.7 Profit before tax, SEK m 636.2 623.7 750.4 875.6 1 095.4 Net profit for the year, SEK m 477.7 467.8 525.3 621.7 777.7 Operating capital, SEK m 2 988.2 3 356.8 6 592.8 6 528.7 6 430.4 Shareholders’ equity, 31 December, SEK m 1 560.8 1 931.0 2 952.9 3 158.2 3 530.4 Return on operating capital,% 23.2 20.83) 14.8 15.9 18.6 Return on equity,% 35.1 27.6 20.4 21.1 23.9 Cash flow from current activities 604.5 199.8 89.9 1 211.4 1 386.1 Net debt/equity ratio, multiple 0.97 1.92 1.36 1.07 1.37 Equity/assets ratio,% 35.7 24.2 30.8 33.3 29.3 Interest cover, multiple 9.2 6.8 4.2 5.9 7.3 Net investments in fixed assets, SEK m 1) 167.4 110.3 180.9 149.6 215.6 No. of employees, 31 December 3 812 5 298 5 330 5 556 6 598 Profit per share, SEK 4) 2.56 2.50 2.65 3.08 3.85 Cash flow, SEK per share 4) 2.34 0.48 -0.46 5.26 5.80 Shareholders’ equity, SEK per share 4) 8.35 10.33 14.63 15.64 17.49 Dividend, SEK per share 4) 0.88 0.88 0.94 1.06 1.352) Market price 31 December, SEK per share 24.00 28.12 43.00 44.50 69.00 Dividend yield,% 3.6 3.1 2.2 2.4 2.0 No. of shares, 31 December, million 45.4 45.4 50.5 50.5 201.9
1. Excluding equipment hired out. 2. As per the proposal by the Board and President. 3. Excluding the refund from SPP of SEK 23.2 million 4. A new share issue was carried out at the beginning of April 2001. For information per share for the time prior to this, the bonus issue element in the new share issue was calculated by converting it using a factor of 0.9717. In 2003 , a split was implemented on a 4:1 basis. The number of shares before the split was 50,468,480 and after the split 201,873,920. In 2001, the average number of shares was 198,150,704 after the split. Share-related key ratios have been corrected using the new number of shares after the split.
See page 83 for definitions.
Net sales, SEK m Operating profit, SEK m Operating margin,%
10000 1500 15
8000 1200 12
6000 900 9
4000 600 6
2000 300 3
0 0 0 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003
Cash flow from current activities, SEK m Net debt/equity ratio, multiple Equity/assets ratio,%
1500 2,0 40
35 1200 1,5 30
900 25 1,0 20
600 15
0,5 10 300 5
0 0,0 0 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003
6 Five-year summary FIVE-YEAR SUMMARY Successful expansion & good profit trend
The Getinge Group has made 11 acquisitions in the last five years. Within Extended Care, three companies were acquired in 2000. Gestion Techno-Médic of Canada and Parker Bath Ltd of UK were acquired to widen the business area’s product range, whereas the Irish company, Lenken, was acquired to strengthen the distribution network. Infection Control acquired parts of the Danish company, Lunatronic, in 1999 to get access to their software for operating sterilization centres. In December 2000, the business area Surgical Systems (now Medical Systems) was established through the acquisition of the German surgical table manufacturer, MAQUET. The French com- pany, ALM, which produces surgical lamps, was acquired in January 2001, and HERAEUS was acquired in 2002 to further strengthen Surgical Systems’ product range. As part of the work to broaden the business area’s operations, two acquisitions were made in 2003: JOSTRA’s activities involving equipment and consumables for open heart surgery, and SIEMENS LSS, which manu- factures ventilators. During the year, Medical Systems also acquired distributors in the Netherlands and Switzerland to strengthen the business area’s market organization. The Getinge Group’s net sales have grown from SEK 4,884.7 million in 1999 to SEK 9,160.2 million in 2003, which is the equivalent of an annual sales rise of 17%. The expected sales volume is SEK 11 billion annualized. The considerable net sales increase in 2001 can be attributed to the acquisition of MAQUET and ALM. Organic growth in 2003 was 5%. The profit before tax has grown from SEK 636.2 million in 1999 to SEK 1,095.4 million in 2003, equivalent to 15% annual growth, which is in line with the Group’s long-term financial objectives. The substantial increase in 2001 is due to a large extent to the acquisition of Maquet and ALM, whereas the strong profit in 2003 is mainly attributable to structural improvements within Infection Control and Medical Systems. The acquisitions of Jostra and Siemens LSS in 2003 have had less effect on profit. The Group’s cash flow from current activities has improved in recent years. A long-term capital rationalization project was started in 2002, and this has already led to considerable improvements. The Group’s net debt/equity ratio varies to a relatively high degree due to the significant acqui- sitions that have been made in the last five years. The aim is that the net debt/equity ratio shall be between 1 and 1.5. The Group’s equity/assets ratio has been good during the period. The relatively large variations are attributable to implemented acquisitions. The aim is that the equity/assets ratio shall exceed 30%. In the spring of 2001, 337,554 Class A shares and 4,709,294 Class B shares were issued as part of the financing of the Maquet and ALM acquisitions and to strengthen the financial position. Capital received amounted to SEK 490.1 million.
Five-year summary 7 Johan Malmquist President and CEO
8 Koncernchefen har ordet COMMENTS BY THE CEO Strategic expansion & strong profit despite adverse conditions
2003 was yet another strong year in which we advanced our positions considerably, both stra- tegically and in terms of profit. This was achieved despite health care being in a sluggish phase of the business cycle in Europe, our most important region, and despite the fact that we have faced negative exchange rate effects of SEK 140 million. On the hospital side, which is now our main market accounting for around 70% of net sales, we have improved our strategic position considerably by acquiring two world-leading companies, Jostra and Siemens LSS. With these acquisitions, the Group’s product range has been strengthened with heart-lung machines and ventilators respectively, and the sales volume has grown to about SEK 11 billion on an annual basis. In the past, Getinge has focused on products for health care’s infrastructure, but we now have more patient-oriented products with a higher technological con- tent in our range. Both companies were integrated in the Surgical Systems business area, which has been renamed Medical Systems in order to better describe its activities. Business area Medical Systems has shown positive profit development during the year, which is mainly due to the successfully implemented integration work involving the companies acquired in 2001 and 2002. Good increases in sales were reported by business area Infection Control and this, together with continued improvements in the structure, has led to strong profit growth during the year, not least in the US, where efforts to increase efficiency and competence within the organization have been very successful. Business area Extended Care made a weak start to the year, something that was to a large extent counterbalanced by good cost control. The management function of the business area has been strengthened and a more integrated approach has been established for the business area. Several products developed for the high-volume segment of the market have been launched in recent months. The year’s final quarter was strong, not least in the North American market and the busi- ness area is now well positioned for 2004. The Group’s net sales increased by 6% to SEK 9.2 billion and profit before tax was SEK 1.1 billion, which is an increase of 25%. This positive profit trend means that we can propose to the Annual General Meeting an increase in the dividend to SEK 1.35 (1.06) per share.
The Getinge Group’s markets. The health care market is characterized by stable long-term demand. The demographic trend of an ageing population will in itself lead to an increased need for care in most medical disciplines. To this can be added life-style-related diseases, especially the rapid increase in diseases related to obesity. Advances in knowledge and methodology mean that more and more diagnoses can be treated. Taken together, this leads to an imbalance within health
8 Koncernchefen har ordet Comments by the CEO 9 care: the need for care is greater than the available resources and the care sector is facing a challenge to provide care in a considerably more cost-effective way. It is from this perspective that the Getinge Group should be viewed. Our business is aimed at helping the health care sector to deliver more and better care at the same, or lower, cost than previously. We try to do this by being a strong and competent supplier of integrated solutions and systems, and take long-term responsibility for our customers’ investments through our aftermarket organizations. Financial strength, global distribution and both a broad and deep product range will be decisive factors in the future when the major private players in the health care market choose suppliers. Those suppliers with limited geographical coverage or a small range of products and services will fi nd it diffi cult to become key suppliers to the care sector of the future.
Strategy for continued expansion. Within the Getinge Group, we have therefore maintained high ambitions for our continued development, both in terms of organic growth and acquisition- led expansion. Organic growth will primarily be created through a continued focus on product development and deepened market penetration with a clear orientation towards system sales and a strong organization for the aftermarket. There will continue to be attractive acquisition opportunities to complement or broaden the Group’s activities. We will proceed on the established path of acquiring our way to world-leading positions that increase Getinge’s competitiveness in the market and which help us to build our critical mass. To be able to act on acquisition opportunities, the Group is working on long-term fi nancial planning. As part of this planning, we ran a concentrated project during the year to achieve effective use of our working capital. This project will continue at full intensity throughout 2004. In Q4 of 2003, a private placement was made with institutional investors. The volume is USD 250 million and is divided up over fi ve, seven and ten years. The Group’s fi nancial readiness will therefore be good when the time comes for further acquisitions.
Medical Systems – the Group’s fastest growing business area. In 2000, the acquisition of the German company, Maquet, created the basis for a new business area in the Getinge Group: Surgical Systems. In 2001 and 2002, the business area continued to grow through a number of acquisitions and today we have a globally leading position within surgical workstations. Expansion continued in 2003 with the acquisition of Jostra (heart-lung machines) and Siemens LSS (ven- tilators). With these acquisitions, the business area’s activities have broadened and become more patient-oriented than previously. In late 2003, work began on integrating the new companies into the business area’s structure. This work is expected to be complete during the fi rst half of 2004. During the year, the business area’s market organization expanded considerably from 7 to 22 sales companies, which will create a more effective market penetration. Medical Systems’ present activi- ties will have a strong focus on product development and a further strengthening of marketing to achieve good levels of profi tability and organic growth. The importance of consumables will also increase, which leads to more stable earnings. The ambition is that a large part of the Group’s future expansion will be achieved through the acquisition of complementary or closely related operations within this business area.
Infection Control – considerably improved profi tability.A number of activities were pursued on both the production and market side in 2002 to position the business area for increased profi tability and higher organic growth. In 2003, we have seen the results of this work in an organic net sales increase of 8% and an improvement in the operating margin from 9 to just over 13%. In 2004,
10 Comments by the CEO work will continue on the enhancement of competitiveness. Among other activities, the business area’s logistics project will create fewer storage points and simplifi ed administration, and thereby considerably reduce the business area’s tied up capital and distribution costs. The focus on organic growth will be further intensifi ed, with initiatives that include investment in product development and measures to strengthen the business area’s position as a system supplier. Prioritized areas for product development will be point-of-use applications (disinfectors and sterilizers situated close to the user), effective solutions for temperature-sensitive instruments, and solutions that optimize goods handling with a focus on logistics and ergonomics.
Joint organization in the US. In the US, the Group has a joint organization for Infection Control and Surgical Workplaces within Medical Systems in order to utilize distribution synergies and be an attractive partner to the major hospital chains and purchasing organizations. The new manage- ment of the American business, appointed in early 2002, has used the improvement programme, Operational Excellence, to turn round the previously weak income trend. The business now reports good profi tability, and during the current year the emphasis will be on boosting growth.
Extended Care – consolidation of operations. 2003 was a year of consolidation for the business area. This can be partly attributed to weak market growth. In Canada, the expansion programme within geriatric care has ended and sales slowed as a result. In the US, demand for wound care products has diminished somewhat, and in Germany we noted a slackening off in the will to invest due to the weak German economy. Another reason for the relatively weak 2003 is that several of the business area’s patient handling products have been developed and positioned for the top seg- ment of the market, whereas the major volume growth has been in the mid-range segment. The new management has therefore taken a number of measures during the year to position the busi- ness area for stronger organic growth. The cost level has been reduced and development of several products for the market’s high-volume segment has been accelerated. With the new products, which were launched in recent months, we will be able to compete effectively in the high-volume segment, at the same time as margins for top-of-the line products can be maintained. Extended Care will continue to focus on organic growth, and a combination of product development and gradual expansion of the sales force will provide more stable growth in the next few years.
Outlook for 2004. The market situation for 2004 is assessed as being very similar to 2003 with good growth possibilities in North America and the developing countries, whereas demand in Europe will be more subdued. Both Extended Care and Infection Control are planning for good organic growth, while growth for Medical Systems’ surgical workstations with its high depend- ency on the western European market is expected to be lower. A lot of emphasis will be placed on the integration of Jostra and Siemens LSS, and further acquisitions within Medical Systems will be considered at the earliest during the second half of the year. Both Jostra and Siemens LSS will contribute considerably to profi t in 2004. In Infection Control, the continuing structural work will further improve competitiveness. For Extended Care, the implemented cost review will have its full effect in 2004, which together with the large number of interesting product launches, will lead to a strong improvement in profi t. Exchange rate effects will be on a similar level to 2003. The overall assessment for the Groups’ profi t growth in 2004 continues to be positive.
Johan Malmquist President and CEO
Comments by the CEO 11 Summary of Getinge’s development since becoming a listed company in 1993
1993: Listing on stock exchange SEK m % Net sales 919.8 Profi t before tax 130.4 Market value 31 December 1 215
1994: Acquisition of the French company, Lancer Net sales 1 103.9 +20 % Profi t before tax 177.2 +36 % Market value 31 December 1 248 +3 %
1995: Merger with the Swedish company, Arjo Net sales 3 222.9 +192 % Profi t before tax 388.9 +119 % Market value 31 December 4 274 +242 %
1996: Acquisition of the American company, MDT Net sales 3 799.4 + 18 % Profi t before tax 497.1 + 28 % Market value 31 December 5 701 +33 %
1997: Business area Distribution distributed to shareholders Net sales 4 600.6 +21 % Profi t before tax 501.5 +1 % Market value 31 December 5 340 -6 %
1998: Rationalization scheme Net sales 4 345.0 -6 % Profi t before tax 602.6 +20 % Mkr Mkr Market value 31 December 5 171 -3 % 10 000 1 000
1999: Strengthened product portfolio, reduced costs Net sales 4 884.7 +12 % 9 000 900 Profi t before tax 636.2 +6 % Market value 31 December 4 069 - 21 % 8 000 800
2000: Acquisition of the German company, Maquet Net sales 5 253.5 +8 % 7 000 700 Profi t before tax 623.7 -2 % Market value 31 December 4 768 +17 % 6 000 600
2001: Acquisition of ALM Net sales 8 148.2 +55 % 5 000 500 Profi t before tax 750.4 +20 % Market value 31 December 8 100 +70 % 4 000 400
2002: Structural improvements within Infection Control 3 000 300 Net sales 8 640.1 +6 % Profi t before tax 875.6 +17 % Market value 31 December 8 383 +3 % 2 000 200
2003: Acquisition of Jostra and Siemens LSS 1 000 100 Net sales 9 160.2 +6 % Profi t before tax 1 095.4 +25 % Market value 31 December 12 998 +55 % 0 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
The average profi t growth since becoming a listed company in 1993 is 24%.
Net sales
Profi t before tax AIMS AND STRATEGIES A consistent niche strategy focused on organic growth
Business concept – a competent solution provider. The demographic trend of an ageing popu- lation is leading to an increased demand for good and efficient health care. Factors such as our common lifestyle-related diseases and the problem of obesity in society are also contributing to the increased demand for care. The market for medical technical products is therefore characterized by stable demand and low sensitivity to the business climate. Given the large and continuously increas- ing demand, one of the care sector’s biggest challenges is to find ways to create more and better care at the same, or lower, cost. The Getinge Group can be an important factor in this equation. Getinge’s mission is, through its products and services, to be a competent solution provider with a clear focus on customer benefits. The Group’s products, services and competence shall contribute in a quantifiable way to quality enhancement and improved productivity for customers.
The financial objectives of the Group have for a long time been formulated as follows: Profit growth, measured as profit before tax, shall amount to 15% per year on average and shall be achieved by a combination of organic growth and acquisitions. Growth through acquisitions averaging 10% per year shall largely be financed by the Group’s own cash flow.
Strategy for organic growth and high profitability. As a strategic goal, Getinge aims to establish and maintain market-leading positions – i.e. be number one or two in the niche markets in which the Group is active – by offering complete systems and knowledge-based solutions. Getinge pro- vides broad solutions that cover products, services, consulting, training and maintenance within specific areas such as infection control, surgery, intensive care and care ergonomics. A consistent and long-term utilization of scale advantages will contribute to continued strong development of the Group’s profitability. Organic growth is the basis of the Group’s business and a precondition for the Group’s capability to carry on successful expansion through acquisitions. In order to maintain and further strengthen organic growth and profitability, the Group is focusing on the development of key areas within the existing operations: Product development. Active product development is a cornerstone in the Group’s strategy for organic growth. Getinge complements its own product development by cooperating with compe- tent, external partners. Acquisition is an additional way to gain access to new technology and new products. Production. The Getinge Group’s production is currently carried out at 20 manufacturing facili- ties in eight countries. Business units’ manufacturing is directed towards value-creating produc-
Aims and strategies 13 tion. Non-critical components are outsourced to subcontractors and internal resources are devoted to development, design, assembly and quality assurance. The supplier base for the business areas Infection Control and Medical Systems is mainly in Northern and Central Europe, whereas the business area Extended Care has a signifi cant and growing proportion of its suppliers in the Far East and Eastern Europe as a result of an active pursuit of countries with lower cost levels. Distribution. Active marketing to further deepen penetration of existing markets is achieved by the Group’s consistent approach of establishing its own sales channels when the market conditions are right. About 95% of the Group’s sales are made through its own sales companies, which ensures that knowledge and competence is maintained at a high level, and that marketing takes on a more long-term character. The Group is also working continuously to expand the geographical base for its business. At present there are 70 sales companies. Aftermarket. By having a strong presence in the market with its own sales organizations, the Group also gains access to the profi table aftermarket. Originally, the focus was exclusively on vari- ous forms of technical service, but now there is rapid development in this segment towards more diverse service production, such as training activities and different types of business relations in which Getinge shares the fi nancial risk with its customers. By focusing on customer benefi ts in terms of qualitative and quantitative improvements, these services become less price-sensitive.
Strategy for acquisition-led expansion. The Group’s acquisition strategy is aimed either at establishing new business areas that are of interest from a growth or sector perspective, or to broaden existing business areas. The objective is that acquired companies will increase the Group’s attractiveness as a global supplier of high-quality, medical technical products, and re-inforce the position as world leader within the different activities, i.e be number one or two compared to competitors. Potential acquisitions are evaluated continuously and at present it is companies in business area Medical Systems’ sector that are of most interest. In the past 10 years, Getinge has made 26 acquisitions and has developed the competence needed to make interesting deals and integrate the acquired companies into the Getinge business structure and thereby realize the potential synergies.
Getinge’s organization. The Getinge organization is adapted to be able to respond quickly to market changes. To achieve this, resources and decision-making are concentrated to the opera- tive businesses close to the market. Overall decisions on strategy and orientation are made by the Getinge Board and Group management, whereas operative decisions are made at company or busi- ness area level. From having been a company with a very narrow product range, today’s Getinge Group consists of three business areas – Infection Control, Medical Systems and Extended Care. Each business area is independently responsible for product development, production and distribu- tion of specifi c product lines. For North America, the Group has a joint market organization for Infection Control and the Surgical Workplaces division within Medical Systems, which both have health care as their most important customer. The Group currently has about 90 operative units. Medical Systems. The business area offers complete systems for surgical workstations, heart-lung machines with related consumables, and ventilators. These systems create streamlined, effi cient and ergonomically sound working environments for various types of surgery and intensive care. The range covers products for open surgery as well as the growing market for minimally-invasive procedures (keyhole surgery). The products are marketed under the MAQUET brand and are represented in some 150 markets. The majority of sales are made through the business area’s own sales companies. Infection Control. The business area supplies customers in the health care and long-term care
14 Aims and strategies sectors with complete solutions to prevent the onset and spread of infections. Using the business area’s IT support, T-Doc, customers can gain access to a quality-assured process for handling sterile goods. Customers in the pharmaceutical and medical technical industry are offered customer- specifi c washer disinfectors and sterilizers for production and research. Products are marketed primarily under the GETINGE brand. Extended Care. The business area offers systems, products and various types of service that aim to improve the working environment by reducing the occurrence of strain-related injuries among staff and thereby also reducing care costs. At the same time, use of the business area’s transfer and hygiene solutions lead to improved quality of life for residents in long-term care. The business area also supplies products to prevent and treat pressure sores, which are one of the consequences of patients’ restricted mobility. Long-term care is currently the most important customer category, but health care has good growth potential, especially in the areas of patient handling and wound care. The products are marketed primarily under the ARJO brand.
Risk management in the Getinge Group. The biggest single risk for Getinge is political. Changes in different reimbursement systems in the health care sector can have major effects on individual markets. As Getinge is active in a large number of geographical markets, this risk is limited for the Group as a whole. The risk of other companies copying our products is limited, either due to patents or because manufacture of the products requires heavy investments in relation to the mar- ket’s size and growth. New EU norms can mean that customers may perceive little difference in product performance between the various manufacturers. Knowledge, service and partnership will therefore become decisive competitive parameters in the future. Getinge is already well positioned in these areas, and is continuously developing the scope of what it can offer customers.
Future expansion. The acquisitions that have characterized much of Getinge’s expansion in recent years, primarily in Medical Systems, are an important complement to internally-generated growth. However, the basis of the Group’s growth shall be organic. This means a continued focus on sales of complete systems, active product development and innovative marketing programmes. The Getinge Group has rapidly taken a world-leading position in the expansive Medical Systems area, and the Group sees good opportunities to broaden this business area’s scope with products in complementary or closely related areas.
Aims and strategies 15 Data per share
Amount in SEK per share unless otherwise stated 1999 2000 2001 2002 2003 Profit per share after full tax 2.56 2.50 2.65 3.08 3.85 Market price for Class B shares 31 December 24.0 28.1 43.0 44.5 69.0 Cash flow from current activities 3.23 1.1 0.5 6.0 6.9 Dividend, SEK per share 0.88 0.88 0.94 1.06 1.35 Dividend growth, % 7.7 0.0 6.8 12.8 27.4 Direct yield, % 3.6 3.1 2.2 2.4 2.0 Price/earnings ratio 9.4 11.2 16.2 14.4 17.9 Dividend as profit percentage, % 34.4 35.2 35.5 34.4 35.0 Equity 8.35 10.33 14.63 15.64 17.49 Average number of shares (million) 187.0 187.0 198.2 201.9 201.9 Number of shares 31 December (million) 187.0 187.0 201.9 201.9 201.9
A 4:1 split was implemented in 2003. The number of shares before the split was 50.468.480 and after the split 201.873.920. The key ratios above have been recalculated based on the number of shares after the split. See page 83 for definitions.
Ownership structure of Getinge AB on 31 December 2003 1
Holding Ownership% Shareholding,% 1-500 48.7 1.2 501-1.000 20.3 1.6 1.001-10.000 27.3 7.4 10.001-100.000 5.5 7.7 100.001-10.000.000 1.0 61.9
Development of share capital
Year Transaction Number of shares after transaction Share capital after transaction 1990 Formation 500 50.000 1992 Split 50:1, nom SEK 100 to SEK 2 25.000 50.000 1992 Directed new issue 5.088.400 10.176.800 1993 Directed new issue 6.928.400 13.856.800 1995 Non-cash issue 15.140.544 30.281.088 1996 Bonus issue 2:1 45.421.632 90.843.264 2001 New issue 1:9 at SEK 100 50.468.480 100.936.960 2003 Split 4:1, nom SEK 2 to SEK 0.50 201.873.920 100.936.960
Largest shareholders as of February 2004, including known changes 1
Company Class A shares Class B shares % of capital % of voting rights Carl Bennet companies 13 502 160 15 020 124 14.1 46.4 Robur equity funds 14 537 136 7.2 4.5 Fourth Swedish National Pension Fund 5 092 000 2.5 1.6 SHB equity funds & Life Assurance 4 315 553 2.1 1.3 SHB 4 050 396 2.0 1.3 Third Swedish National Pension Fund 3 558 000 1.8 1.1 Skandia 3 377 504 1.7 1.0 Pioneer 2 297 795 1.1 0.7 First Swedish National Pension Fund 2 257 320 1.1 0.7 Östersjöstiftelsen 2 008 444 1.0 0.6 Others 131 857 488 65.4 40.8 Total 13 502 160 188 371 760 100.0 100.0
Share capital breaks down as follows:
Type of share Number of shares Number of votes % of capital % of voting rights A 13 502 160 135 021 600 6.7% 41.8% B 188 371 760 188 371 760 93.3% 58.2% Total 201 873 920 323 393 360 100.0% 100.0%
1. Source: VPC and SIS owner service
Original Getinge share certificate GETINGE’S SHARES Strong price performance during increased trading
Getinge’s Class B shares have been listed on Stockholmsbörsen’s A list since 1993. A round lot consists of 400 shares. The issue-adjusted highest price paid in 2003 was SEK 77.00 (21 October 2003) and the lowest was SEK 37.75 (27 February 2003). The final price paid for 2003 was SEK 69. The number of shares traded in 2003 was 43,799,737 (issue-adjusted 140,708,128), the number during 2002 was 27,150,112. There are approximately 19,000 shareholders. The percentage of for- eign-owned shares amounts to 34.6% (33.2). The percentage of institutional ownership is 40.3% (41.5), of which equity funds constitute 14% (14.8).
Share capital and ownership structure. The share capital in Getinge at year-end 2003 was SEK 100,936,960 divided between 201,873,920 shares. Each share has a nominal value of SEK 0.50. All shares carry an equal right to dividends. Every Class A share carries 10 votes, and every Class B carries one vote.
Dividend policy. Future dividends will be adjusted in keeping with Getinge’s profit level, financial position and future development potential. The aim of the Board is that dividends will comprise, in the long-term, approximately one-third of the profit after financial items at a standard rate of 28% tax.
Getinge is analysed by ABG Sundal Collier, Alfred Berg, Carnegie, Cazenove, Danske Bank, Handelsbanken, Enskilda, Kaupthing Bank, Nordea, Swedbank, UBS Warburg and Öhman.
Market value 31 December 1993-2003, SEK billion Share performance since 1993
ShareB-Aktien GeneralAfv Generalindex index 300 15 250
12 200
150 9
100 6
3
50
0 40 1993 1995 1997 1999 2001 2003 93 94 95 96 97 98 99 00 01 02 03
(c) SIX
Getinge’s shares 17 Heribert Ballhaus, Vice President, business area Medical Systems, and Michael Rieder, Vice President Sales and Marketing for the business area, comment on the financial year as follows: During 2003, we have radically expanded our product offering and our marketing organisation and have become an even more attractive partner to our customers.
World market
Product line Values SEK m Growth % Share % Operating tables 4 200 5 42 Surgical lights 2 100 5 39 Ceiling Service Units 1 100 10-15 17 Heart-lung machines 800 3-5 30 Oxygenators 4 200 5 13 Ventilators 5 000 5 30
Market trend
Orders received 2003 2002 Change* Western Europe 1 790.0 1 469.6 2.2 % USA and Canada 562.8 548.7 -0.9 % Asia and Australia 575.3 392.7 2.3% Rest of the world 209.8 178.6 -13.7% Business area total 3 137,9 2 589,6 0,3 % * Adjusted for acquisitions and exchange rate effects
Sales per market
2003 2002 Western Europe 58 % 58 % USA and Canada 20 % 20 % Asia and Australia 16 % 16 % Rest of the world 6 % 6 %
Sales per customer segment
Acute care 100 %
Distribution
Own sales companies 71 % Distributors 29 %
18 Medical Systems Medical Systems 19 BUSINESS AREA MEDICAL SYSTEMS 2003 Strategic expansion & continuing synergies
The overriding aim for the Medical Systems business area is to supply ergonomically designed medical-technology products for faster, more efficient and safer treatment of patients. The busi- ness area is a world-leading supplier of surgical workplaces, ventilation equipment and heart-lung machines and related disposables. The business area was formed in 2000 and following a series of acquisitions it became the largest business are in the Getinge Group in 2003. During the year Jostra and Siemens LSS were acquired and the business area changed its name from Surgical Systems to Medical Systems to better reflect the nature of operations. With an extended product range for operating theatres and intensive-care units, Medical Systems emerged as a world-leading supplier to all types of hospital. Market shares for the different product lines vary between 30% and 40%. Sales are managed by a global sales and marketing organisation with operations in over 100 coun- tries. The global market for the business area’s products is valued at around SEK 17 billion.
Performance in 2003. The year was yet another important one for Medical Systems, in terms of both strategic strength and financial results. Sales increased to SEK 3,238.3 million (2,520.8 m) and the operating profit soared 47% to SEK 375.1 million (254.9 m). Two strategic acquisitions were completed during the year, Jostra and Siemens LSS. The business area has thus added heart- lung machines and ventilation products to its product range. The acquired businesses bring Point- of-Care (POCT) products, which have a high technology content and represent a breakthrough into the intensive-care market. Integration of the acquired companies began in 2003 and will be completed during the first half of 2004. This process will involve concentration on fewer production facilities and a greatly expanded market organisation. The expansion of the market organisation from 7 to 22 companies, will enable much improved market coverage and open up an attractive aftermarket. The anaesthetic equipment that was included in the acquisition of Siemens LSS has suffered from poor profitability and will therefore be closed down as a product line. Commitments to customers in the form of spare parts and service will be fulfilled.
Four-year summary
2000 2001 2002 2003 Orders received, SEK m 157.8 2 262.8 2 589.6 3 137.9 Net sales 146.6 2 223.4 2 520.8 3 238.3 Share of Group net sales, % 2.8 27.3 29.2 35.4 Gross profit 44.4 1 106.2 1 200.5 1 593.6 Gross margin, % 30.3 49.8 47.6 49.2 Operating costs, SEK m -45.4 -877.8 -945.6 -1 218.5 Operating profit before goodwill depreciation -1.0 304.7 338.6 493.0 Operating profit margin before goodwill depreciation, % -0.7 13.7 13.4 15.2 Operating profit -1.0 228.4 254.9 375.1 Share of Group’s operating profit, % -0.1 23.4 24.3 29.9 Operating margin, % -0.7 10.3 10.1 11.6 No. of employees 76 1 372 1 499 2 727
18 Medical Systems Medical Systems 19 Review of 2003. The business area has created a powerful and well-positioned activity due, among other factors, to strategic acquisitions and a forceful expansion of its sales organisation. Strategic Acquisitions. As part of the business area’s expansion strategy two significant acquisi- tions were completed in 2003: Jostra in Q3 and Siemens LSS in Q4. With these world-leading activities, Medical Systems extends its product range with heart-lung machines and associated disposable items for heart surgery, and with ventilation products. Expansion of Sales Organisation. During the year a major expansion of the sales and marketing organisation was completed. The number of sales companies was increased from 7 to 22. New companies were formed in Austria, Brazil, China, Hong Kong, India, Portugal, Russia, Sweden, Singapore, Spain and Switzerland. To ensure maximum strength and specialisation, three separate sales divisions have been set up at most companies: Surgical Workplaces (surgical tables, surgical lights and ceiling service units), Cardio-Pulmonary (heart-lung machines) and Critical Care (ven- tilation products). The introduction of divisions within sales enables deep and knowledge-based relationships with customers. To minimise costs, management, administration and the service organisation are shared. Also during the year a new company was formed in the US for the distri-
The acquisitions has broadend the business area’s operational basis strategically
bution of Critical Care’s product range, while in Japan the business area’s distribution network has been further improved. Improved Structure. The German company, Hereaus Med, was acquired in 2002 to extend the product range and win greater market share for surgical workplaces. Hereaus Med was fully integrated in the business area’s structure during 2003 and its products are now marketed together with the business area’s other products. Production has been moved from Hanau in Germany to the business area’s production site at Ardon in France. The integration of Jostra’s and Siemens LSS’ activities started in 2003 and should be completed by the end of the first half of 2004. Production of disposables for heart surgery was concentrated during the year to Hirrlingen, Germany, and the production of heart-lung machines in Lund has been concentrated to the Solna site. Product Development. World-leading products have been added to the range via the acquisition of Jostra and Siemens LSS. Regular product development continued with undiminished vigour in 2003. At the MEDICA exhibition a new version was launched of the advanced transport, diagnosis and operations systems, AWIGS and VIVAS, with extended integration possibilities, along with one new surgical light (Axcel X10), a new endoscopy solution and a new ventilation product, Servo-s.
20 Medical Systems Medical Systems 21 The market for Medical Systems. The market for Medical Systems is hospitals, clinics, day sur- gery etc. Since its formation in 2000 the business area has marketed surgical tables, surgical lights and ceiling service units for medical equipment. During the year the product range was extended with the addition of heart-lung machines and ventilation products. By selling the Siemens LSS ventilation products the business area greatly reinforces its position in the intensive-care market, which is an important sector in hospitals with close links to operating theatres. The business area’s customers are doctors and other staff at hospitals across the world.
Driving forces and trends. Demographic trends such as an ageing population coupled with an increase in lifestyle diseases, are resulting in growing demands for surgical treatment. Technical and competence advances also mean that more diagnoses can be treated. Investment in medical technical equipment is primarily limited by social economic factors and political decisions. For example, slow progress in the German market is due to changes in the health care system rather than to lower demand. Growing demand is creating an imbalance between supply and demand for healthcare, which is resulting in intensifying demands for greater efficiency. A good example here is image-based technology, which has made minimally invasive surgery a possibility. This has radically reduced the amount of aftercare and rehabilitation that is required. An increasing focus on cost control in the public sector is another clear market trend. Investments are made in medical technical products to reduce staff costs, ensure safe treatment of patients and prevent injuries (e.g. pressure sores that can form during a long operation) and safeguard hygiene. It is also important to make sure that operating theatres are used efficiently and that preparation before surgery is optimised. In these areas there is also growing demand for staff training. Surgical Workplaces Division. The global market for the Surgical Workplaces division is esti- mated as being worth SEK 7.4 billion. Western Europe is currently the largest market and accounts for around 60 % of sales. There is high penetration in this market and business conditions are cur- rently not strong. The US/Canada and Asia/Australia represent 34%. Business conditions in these regions are much stronger than they are in Europe. A rise in volumes is expected in North America in 2004. Cardio-Pulmonary Division. Around one million heart operations were performed during 2003 throughout the world. The global market for heart-lung machines and related disposables is estimated at SEK 4.5 billion and is expected to grow by around 5% per year. Western Europe is at present the division’s the largest market. North America and Asia/Australia are equally big. Growth in 2004 is expected to be strongest in Asia/Australia. Critical Care Division. The global market for this division is estimated at SEK 5 billion with market growth of around 5%. North America is the largest market, followed by Western Europe. On the supplier side this market is still fragmented, although consolidation has started.
The demographic development and the need to improve efficiency are strong driving forces for the business area
20 Medical Systems Medical Systems 21 General. Hospitals all over the world are seeking partnerships with suppliers of medical technical solutions so that they can establish cost-effective and safe activities. High-performance medical technical equipment, a broad product range and professional technical service will be the decisive factors when care providers select suppliers in the future.
Strategy for the market. Product leadership is one of the cornerstones of the business area’s strategy and this is reflected in the fast pace of innovation in all the divisions and the large number of patents owned by the business area. Around 7% of sales is invested in R&D and the overall aim is to deliver products that make healthcare more efficient while also being ergonomically designed so that staff have a good work environment, and contribute to improved treatment of patients. The aim of the business area is to be the first choice for customers regarding products for operating theatres and intensive-care units. This will be achieved by being the market leader in terms of innovative, reality based solutions. Distribution and aftermarket. An investment in medical technical equipment has a long life- length. During this period the product requires service, related disposables and technical upgrades. Providing these services requires direct contacts with the market. The major expansion of the sales organisation, from 7 to 22 market companies, in 2003 has improved market coverage and access to the attractive aftermarket. Expansion into adjoining product areas. Opportunities for expanding into adjoining product areas are assessed continually. In future, critical mass will be needed for the product and service range as well as geographic proximity to be an attractive partner to both national and global health care suppliers. The new sales organisation makes the business area an attractive distribution channel for other manufacturers of medical technical equipment. Including OEM (original equipment manufacturer) products in the range strengthens the business area’s market position and means that administration and distribution costs are further diluted.
Brand strategy. Since the formation of Surgical Systems (now Medical Systems) through the acquisition of Maquet in 2000, additional businesses have also been acquired to complement and extend the business area’s range. As a result there was a varied flora of brands. To avoid expensive and ineffective communication with customers a uniform brand strategy was launched in 2003. Maquet is now the primary brand in the business area under which all products and services will be marketed.
Competitors. Following the recent acquisitions, the business area now competes directly with companies such as Dräger-Siemens and General Electric within the ventilation area. Other com- petitors include Trumpf and the American company, Steris, in the market for surgical equipment. Sorin and Medtronic compete on the market for disposables for heart-lung machines.
22 Medical Systems 22 Medical Systems Medical Systems 23 Medical Systems organization. To incorporate Jostra’s and Siemens LSS’s businesses in the most effective way, the business area has been organised into three integrated divisions.
Medical Systems Management
Product development & production Sales & marketing
Surgical Workplaces Surgical Workplaces Service
Cardio-Pulmonary Cardio-Pulmonary
Critcal Care Critcal Care
The Surgical Workplaces Division develops, produces and markets surgical tables, surgical lights and ceiling service units for medical equipment, as well as pre-fabricated modular operating theatres. The Cardio-Pulmonary Division develops, produces and markets heart-lung machines, oxygenera- tors (artifi cial lungs) and related disposables for heart surgery. The Critical Care Division develops, produces and markets ventilation products.
Product development. Product development follows the same divisional structure as the rest of the organisation. The pace of innovation is well illustrated by the fact that over 50 patents were registered in 2003. Products under development must actively contribute to better utilisation of the hospital’s resources, be ergonomically designed so that hospital staff have a good working environment, and contribute to better treatment results. 7% of sales invested annually in product development.
Production. The business area’s production structure is based on fi ve production units. The Surgical Workplaces and Cardio-Pulmonary divisions have two production units each: Rastatt in Germany and Ardon in France, as well as Lund in Sweden and Hirrlingen in Germany. Each unit specialises on specifi c parts of the division’s product range. All production for the Critical Care division is located at Solna in Sweden. The focus for all units is on assembly, design and quality assurance. Large parts of other production areas are contracted to suppliers.
Global sales organisation. Each sales company has a division-based sales force to ensure that the products from each division are marketed professionally. Total costs for the organisation are minimised by having a joint team for management, administration and service. By establishing in Brazil, Singapore, Russia and India the business area will reduce its dependence on the European market. The business area now has over 200 sales people and 400 service engineers in daily contact with the market. By forming its own sales outlets on more markets, profi tability in product sales can be increased and access to the attractive aftermarket established. On markets where the busi- ness area does not have its own sales outlets it currently works with around 200 distributors and agents. Both Surgical Workplaces and Infection Control share the market organization in the US to utilise distribution synergies while remaining an attractive partner to the large hospital chains and purchasing organizations on this market. Critical Care products are sold in the US through a separate company.
24 Medical Systems Medical Systems 25 Quality and environment. All production units in the business area are working according to ISO 9001:2000 certification and follow the Medical Device Directive. In 2004 all plants will gain ISO 14001 certification.
Logistics. A project was started in 2003 aimed at harmonising the IT structures within the busi- ness area and establishing an integrated system for orders, invoices and delivery. This work is expected to continue throughout 2004. When complete it will provide efficient communication between the sales companies and the factories, considerably reduced stocks and direct deliveries from factory to end-user.
Activities in 2004. Work aimed at integrating the recently acquired companies and reinforcing the structure of the business area will continue during 2004. Production of heart-lung machines will be moved from Lund to Solna, which is the business area’s biggest unit for life support products. The anaesthetics product line, including the Kion/Kion I and Symeon systems, will be phased out. Despite signifi- cant investment, anaesthetics products have made losses and it has been concluded that the market share is too low to sustain profitability. The business area also plans to extend its product range with OEM products to strengthen its position as a strategic partner to hospitals.
24 Medical Systems Medical Systems 25 Surgical Workplaces Division offers an extensive product range covering operating tables for all surgical disciplines; the modular prefabricated operating suite system VARIOP; a wide range of surgical lights, that may be supplemented with cameras and are compatible for tele- medicine applications; ceiling service units for different medical technical equipment.
Cardio-Pulmonary Divison is responsible for hardware and consumables for open-heart sur- gery. The product range includes the heart-lung machines Jostra-HL 30 and Jostra-HL 20; oxygenators to enrich blood with oxygen; Heater-Cooler units HC 20 and HC 30; consuma- bles for open-heart surgery such as catheters, cannulas and filters.
Critical Care Division manufactures and markets ventilators for operating theatres and inten- sive care units. These include ventilation systems such as the product family SERVO, which is available in a number of different versions for adults and children; software and consumables for the ventilation products.
Medical Systems 27 MEDICAL SYSTEMS PRODUCT OVERVIEW
Medical Systems 27 Christophe Hammer, Vice President Sales and Marketing, and Mats Ottosson, Vice President Supply, comment on the financial year as follows: 2003 was a positive year for Infection Control. The structural measures have led to increased profitability for the business area. At the same time there is a lot of positive activity in the market, which makes us believe there will be good progress in the next few years.
World market
Business unit Value SEK m Growth % Share % Sterilization 6 500 4 24 Disinfection 3 500 5 27
Market development
Orders received 2003 2002 Change* Western Europe 1 533.0 1 546.1 1.0 % USA and Canada 1 164.4 1 346.3 3.9 % Asia and Australia 450.3 368.4 25.5 % Rest of the world 223.2 179.5 26.8 % Business area total 3 370.9 3 440.3 6.1 % * Adjusted for acquisitions and exchange rate effects
Net sales by market
2003 2002 Western Europe 45 % 46 % USA and Canada 36 % 38 % Asia and Australia 12 % 10 % Rest of the world 7 % 6 %
Net sales by customer segment
Acute care 60 % Elderly care 10 % Pharmaceutical industry 30 %
Distribution
Own sales companies 90 % Distributors 10 %
28 Infection Control Infection Control 29 BUSINESS AREA INFECTION CONTROL 2003 Strong improvement in profitability & good organic growth
The overall task of the business area is to supply its customers in health care, geriatric care and the pharmaceutical industry with integrated solutions that in a cost-effective way prevent the onset and spread of microorganisms and infection. The product range covers sterilizers (autoclaves), disinfectors, loading systems and IT support to document and quality-assure the flow of critical goods. The service side is dominated by the business area’s technical service organization, but new offerings in the form of training, preventive maintenance and validation services are in increas- ing demand. The business area’s roots stretch a long way back: the first sterilizer was sold in 1932. Today’s customers are offered the market’s broadest and most sophisticated range of products and services. The business area’s market share is about 25% of a global equipment market with an estimated global value of SEK 10 billion. The global market organization sells in more than 80 countries.
Review of 2003. 2003 saw a trend reversal for Infection Control in the development of net sales and profit. Net sales were SEK 3,343.7 million (3,359.3), which corresponds to organic growth of 8 %. Due to the structural improvements carried out in 2002 and 2003, the operating margin has risen during the year to 13.4% (9.1). The operating profit has accordingly increased substantially to SEK 447.2 million (305.9). Work on positioning the business area as a system supplier carried on with undiminished intensity in 2003 and included an intensified focus on T-Doc software. The production structure has undergone further efficiency enhancements. New products were launched during the year, including a new generation of flusher disinfectors in composite mate- rial with a totally unique design. Measures have also been taken to strengthen the business area’s service organization.
Five-year summary
1999 2000 2001 2002 2003 Orders received, SEK m 2 884.5 2 887.0 3 404.1 3 440.3 3 370.9 Net sales 2 811.1 2 934.6 3 204.3 3 359.3 3 343.7 Share of Group’s net sales, % 57.5 55.9 39.3 38.9 36.5 Gross profit 1 084.6 1 142.7 1 142.7 1 215.8 1 286.7 Gross margin, % 38.6 35.7 35.7 36.2 38.5 Operating costs, SEK m -719.3 -821.9 -821.9 -909.9 -839.5 Operating profit before goodwill depreciation 402.0 406.3 363.3 351.2 490.4 Operating profit margin before goodwill depreciation % 14.3 13.8 11.3 10.5 14.7 Operating profit 365.4 368.5 320.8 305.9 447.2 Share of Group’s operating profit, % 52.8 52.9 32.9 29.1 35.6 Operating margin, % 13.0 12.6 10.0 9.1 13.4 No. of employees 2 371 2 327 2 312 2 364 2 204
28 Infection Control Infection Control 29 Activities in 2003. The business area initiated a number of projects in 2003 that will also character- ize 2004 and lead to further enhancements in competitiveness. Position Getinge as a system supplier. A number of activities were implemented in 2003 to strengthen Getinge’s profile as a system supplier. In France, Getinge is involved in a joint venture running a sterilization centre that supplies several hospitals in the Paris region with disinfected and sterilized instruments on a contractual basis. This installation makes it possible to develop and refine the business area’s system package under realistic conditions, so that the best possible solution can be offered to service providers and large hospitals. Sales of T-Doc software, which documents and quality-assures the flow of sterilized goods within a hospital, continue to develop well and it is an example of how the business area offers total solutions for sterilization centres. The sales tools that support system sales have been refined. Improved production structure. The change process that started in 2002 continued during 2003. Production in France and parts of production in the US have moved to Sweden. The unit in the US is now purely an assembly plant and integrated in the overall production structure. The degree of modularization in manufacturing has increased, which has made assembly work more efficient. Taken together, these measures have led to considerable cost savings.
Ninjo, the new flusher disinfector, had a good reception from the market, and sales of T- Doc software continue to progress well.
Organizational development. During the year, a new process for innovation and product develop- ment was established as an element in the business area’s efforts to grow organically. Two distinct competence centres with global responsibility for sterilization and disinfection have been estab- lished in Getinge and Växjö respectively. The respective units are responsible for development and production. The sales force has been complemented with specialists in T-Doc in order to support sales of this strategically important product. Product development. Ninjo, a new flusher disinfector made in composite material was launched early in the year. The product, which is sold both to the elderly care and hospital markets, has been well received by the market. A major part of the year’s development work has been aimed at standardization, which has produced good results. In addition to this, T-Doc has been adapted to the specific requirements of different countries. A new generation of washer disinfectors will be ready for launch during 2004.
The market for Infection Control. The business area’s customers are in health care, the institu- tional geriatric care sector, the pharmaceutical and medical device industry and the research sec-
30 Infection Control Infection Control 31 tor. The emphasis is on the health care segment, which accounts for 60% of net sales. What these different customers have in common is the need to disinfect and sterilize various types of goods and instruments.
Driving forces and trends. The basic driving force of the business area is the demographic trend, which is leading to increased demand for good health care. In the wake of this rising demand, some clear trends can be discerned in the market. Increasing efficiency. One of the clearest driving forces in the market is the requirement for increased efficiency within health care, which in simple terms can be expressed as demand for more care for the money. For the business area, this means that customers are seeking ways to reduce staff and capital needs at sterilization centres through fewer, larger centres. This can be seen most clearly in the establishing of large units, which are located so that they can serve several hospitals. One example is in the UK, where there are plans to build more than 50 large sterilization centres, which will be responsible for the supply of sterile goods to multiple hospitals on a regional basis. The first pilot project has been tendered for, and the total value for the business area’s products for all 50 installations is estimated at SEK 750-1,000 million between 2004 and 2007. In France, the UK and Germany, there are also several initiatives in which health care hands over responsi- bility for disinfection and sterilization to external players that provide the various hospitals with the sterile goods they need. In the long-term, the increasingly large centres will raise demands on products in terms of performance and quality, as well as the service that is offered. Quality assurance and standardization. A consequence of the demand for increased efficiency is an intensified focus on quality assurance and standardization. Those products that do not meet cur- rent standards are replaced at an increasingly rapid rate, while demand for validation services and maintenance service is increasing. IT support, which controls the flow of sterile goods, reduces the risk of user errors and provides good traceability on instruments, will also become an increasingly important component in sterilization centres’ operations. In the American market there is a clear shortfall in capacity within acute health care and several new hospitals are under construction. Quality of care will become an even stronger competitive weapon for American hospitals, which will lead to investment in quality-enhancing and effi- ciency-improving medical technical equipment.
30 Infection Control Infection Control 31 The research sector and pharmaceutical industry. Within research and the pharmaceutical industry, the precision and reliability of sterilization processes is decisive to ensure that research results can be trusted and that pharmaceuticals have been produced under safe conditions. This segment is also marked by substantial customization of products. The terrorist acts of recent years have also led to intensive research into protection against biological weapons. Developments in this research are happening very rapidly at present and have led to increased demand for the business area’s products.
Strategy for the market. Following a period in the 1990s when a large number of acquisitions were made, the business area has in recent years been going though a consolidation phase, with a focus on improved production and market structures. The previous acquisition strategy has, after consolidation of the market in the 1990s, changed to a strategy focused primarily on organic growth and improved profitability through the utilization of large-scale advantages. Cost leadership. Given the strong drive for rationalization in the market, the business area will continue to utilize its world-leading position to heighten the efficiency of production and distribu- tion, and thereby maintain the sector’s lowest production costs. Integrated solutions. The growing demand for efficient care production will change conditions in the market. The business area will develop its scope and flexibility in order to meet customers’ expectations. In future, its scope will cover not only high-quality products and systems, but also a number of services such as maintenance services, outsourcing and several others. The focus will shift from the price of individual products to the total cost for producing sterile goods. Distribution and aftermarket. A strong presence in the market is a precondition for being a strong and competent supplier and partner. The business area has worked consistently to establish its own market organizations, which comprise of sales as well as consulting and technical service. The consulting element in the business area’s operations will gradually increase. Opportunities for geographical expansion are continuously evaluated. Brand strategy. Today, the business area has a distinct and refined brand strategy, with Getinge as the dominant brand. The refinement of multiple brands carried out in 2001 has in 2003 pro- duced a good result in the form of clear and cost-effective communication with the market.
32 Infection Control Infection Control 33 Competitors. There is really only one company, Steris of the US, which can measure up to Getinge in terms of size and broad product range. The company is market-leading in North America. Of Steris’ total sales, around 80% are to customers in North America. Other competi- tors in sterilization are MMM in Germany, Johnson & Johnson in the US, and Sakura in Japan. Steris and Fedegari of Italy are the biggest competitors in the industry segment. In the disinfection business unit, Miele and Meiko of Germany are the main competitors, along with Steris.
32 Infection Control Infection Control 33 The Infection Control organization. The business area structure consists of a supply organization, which is responsible for product development, production and logistics, and a market organization, which is responsible for marketing and sales. In terms of structure, the supply organization follows the business area’s two business units – disinfection and sterilization.
Infection Control Management
Product development & production Sales & marketing
Sterilization Sales & consulting
Disinfection Service
Product development and production. In the past two years, production of sterilization equip- ment has been concentrated to the main plant in Getinge, where the focus is on key competencies; pressure vessel production and assembly. Assembly of the products is done in Getinge or at one of the local assembly plants in the US, Germany, UK or South Africa. This new production structure, which combines centralization of key expertise and local assembly plants, has proved to be very cost-effective. The possibility of opening an assembly plant in China, to serve the Asian market, is currently being assessed. The business area’s table-top autoclaves, which are aimed at the dental market and small clinics, are produced at the plant in Skärhamn, while Getinge Water Systems in Denmark produces distillation units for production of high-purity water for the pharmaceutical industry. Production of disinfection products is mainly carried out at plants in Växjö, Sweden, which focus on disinfection products for the hospital market, and at Lancer in France, which concentrates on products for laboratories and the pharmaceutical industry. In 2003, a project was started to make structural improvements in the production organization for disinfection products. The project is expected to be complete during the fi rst half of 2005.
Global market organization. The business area is represented by its own sales companies in 18 markets, which account for 90% of net sales. The rest of the world is covered by 65 distributors. Through 200 sales representatives and 600 service technicians, the business area has a large and direct contact interface with the market. In the US, Infection Control and Surgical Workplaces within Medical Systems have a joint market and sales organization.
Quality and environmental work. All manufacturing units in the business area have ISO 9001: 2000 certifi cation and follow Medical Device Directives. In 2004, all plants will be environmen- tally certifi cated according to ISO 14001. Production for the pharmaceutical industry complies with GAMP 4.
Logistics. At present, deliveries of products to our customers are from market companies’ local warehouses. The business area has initiated a project to simplify current handling and centralize the logistics structure. The aim of the project is also to establish higher delivery precision and shorten lead times. In 2004, a logistics solution will be formulated in detail and implementation
34 Infection Control Infection Control 35 will be planned. The implementation itself is expected to run through 2005 and 2006. When the project is complete, stock levels will be reduced by 20%, providing an annual cost saving of SEK 50 million.
Activities in 2004. During the year, a number of activities will be carried out to further improve the business area’s competitiveness, including: Improved distribution structure in Europe to enhance the business area’s cash flow and profitability. Strengthened purchasing organization. Establishment of an assembly plant in China to serve the Asian market. Efficiency improvements in the production structure for disinfection products. Strengthened product range for the pharmaceutical industry and loading systems. Certification of all factories in accordance with the ISO 14001 environmental standard. Increased sales force in the US. Increased investment in the Japanese hospital market. Expanded activities aimed at customers in the pharmaceutical industry.
34 Infection Control Infection Control 35 The business area’s products and systems aim to prevent contact infections, i.e. that bacteria or viruses are transferred to patients and staff via objects such as surgical and dental instru- ments, bedpans and hand basins. The two processes used are disinfection and sterilization. Disinfection kills active microorganisms, but not spore-creating types, while sterilization kills both active microorganisms and spore-creating microorganisms.
Flusher and washer disinfectors. The business area has an extensive range of flusher and washer disinfectors adapted for hospitals, elderly care facilities, and pharmaceutical and medical technical industries. Examples of goods that need to be disinfected are bedpans, urine bottles, and kidney dishes. Flusher disinfectors are used for bedpans and urine bottles, while washer disinfectors are used to clean and disinfect various instruments.
Sterilizers. Sterilization kills both active and spore-creating microorganisms using steam under pressure or gas. Instruments that require sterilization include surgical and dental instru- ments. Temperature sensitive goods is sterilized with etylene oxide gas or formalin.
T-Doc. Today, there are increasing requirements to be able to plan, control, document and quality-assure the work of sterilization centres. Getinge has therefore developed T-DOC software, which enables hospitals to have control at all times over its sterile goods and thereby achieve effective planning of its operations. Other areas of great importance to customers are the technical service the business area offers (a sterilization centre must be in continuous operation) and the consulting services it can provide, for instance in the planning of new sterilization centres. INFECTION CONTROL PRODUCT OVERVIEW
Infection Control 37 Albrecht Knauf, Vice President of business area Extended Care, comments on the financial year as follows: 2003 was a year of consolidation in which we became a much more customer-oriented and effective organization. A number of measures have been implemented and we are now well positioned for profitable growth – in a growing market.
World market
Business unit Value SEK m Growth % Share % Hygiene Systems 1 700 5 60 Patient Handling 2 000 8-10 40 Wound Care 8 000 5 6
Market development
Orders received 2003 2002 Change* Western Europe 1 684.5 1 661.5 6.2 % USA and Canada 821.8 934.0 1.8 % Asia and Australia 77.1 79.1 3.6 % Rest of the world 18.4 28.5 -32.5 % Business area total 2 601.8 2 703.1 4.2 % * Adjusted for acquisitions and exchange rate effects
Net sales by market
2003 2002 Western Europe 65 % 60 % USA and Canada 31 % 36 % Asia and Australia 3 % 3 % Rest of the world 1 % 1 %
Net sales by customer segment
Acute care 30 % Elderly care 55 % Special care & home care 15 %
Distribution
Own sales companies 97 % Distributors 3 %
38 Extended Care BUSINESS AREA EXTENDED CARE 2003 Effective measures for high profitability & organic growth
The overall aim of the Extended Care business area is to provide various products and services that will improve the working environment for care givers, enhance the quality of care and increase the efficiency. The business area’s solutions shall actively contribute to a better total cost situation for customers. The product range includes hygiene systems and lifting and transfer aids for the institutional care sector, as well as specialized mattresses for wound care. Looking back, the busi- ness area’s roots lie in the 1960s, when the first hygiene systems and lifters were developed. Today, the business area provides the widest and most sophisticated range of products and services on the market. The total world market for the three business units is estimated at SEK 12 billion, and the business area’s total market share is 20%, with 60% for hygiene systems, 40% for patient lifters and 6% for specialized wound care mattresses. The business area’s global market organization consists of 24 market companies and some 40 distributors, which are active in those markets where the business area lacks its own representation.
Review of 2003. 2003 was an off year for Extended Care in terms of net sales and profit develop- ment. Net sales amounted to SEK 2,535.1 million (2,720.0). A large part of the fall in volume has been counterbalanced by cost control – operating costs were reduced by 12.4% to SEK 788.5 million (900.3). The operating profit was accordingly SEK 435.2 million (487.6). During the year, business area management was strengthened and a more integrated and market-focused approach was established, which led to effective measures and high intensity in key areas such as product development, production and marketing. In the last quarter of the year, somewhat earlier than expected, results from the intensive work that had been carried out became evident, with a clear trend reversal in orders received, which increased by close to 12%. Especially pleasing was the strong volume growth in North America, where orders received increased by 28% in Q4. The business area is now well positioned for stronger organic growth and continued high profitability in 2004.
Five-year summary
1999 2000 2001 2002 2003 Orders received, SEK m 1 981.6 2 137.7 2 643.9 2 703.1 2 601.8 Net sales 2 007.7 2 110.9 2 655.5 2 720.0 2 535.1 Share of Group’s net sales, % 41.1 40.2 32.6 31.5 27.7 Gross profit 1 051.6 1 042.3 1 307.1 1 387.9 1 223.7 Gross margin, % 52.4 49.4 49.2 51.0 48.3 Operating costs, SEK m -731.2 -719.3 -885.8 -900.3 -788.5 Operating profit before goodwill depreciation 344.5 351.0 458.7 523.7 466.3 Operating profit margin before goodwill depreciation, % 17.2 16.6 17.3 19.3 18.4 Operating profit 320.4 323.0 421.3 487.6 435.2 Share of Group’s operating profit, % 46.3 46.3 43.3 46.5 34.6 Operating margin, % 16.0 15.3 15.9 17.9 17.2 No. of employees 1 383 1 559 1 594 1 647 1 621
38 Extended Care Extended Care 39 Activities in 2003. The business area implemented a number of activities in 2003 and planned activities for 2004 that will lead to improved competitiveness. Product development. During the year, a large number of new or improved products have been developed. In the field of shower solutions, a totally new product, Carino, has been developed for the high-volume segment of the market. Carino will be launched in Q2 and Q3 of 2004. Work began in late 2003 on the development of the next generation of shower trolleys. On the shower product side, it can also be reported that the Carendo shower and hygiene chair is continuing to sell well. Two new patient handling products were developed; Sara 3000, an active lifter for the market’s high-volume segment, and a ceiling hoist. Both products were launched in the second half of the year and have been well received by the market. A number of other products have been reviewed in terms of design and cost structure. Marketing and training programmes. In 2003, the business area’s most important marketing instrument for project sales – The Guidebook for Architects and Planners – was updated with new infor- mation and will be launched during 2004. In connection with this, thorough training in project sales will be given to all those in the business area’s sales force. The business area’s own Business
With a strategic marketing programme and new products for the market’s high-volume segment, the business area is positioned for strong organic growth. Carino Sara 3000 Bravo
Freedom Bath Century Guidebook for architects Business Academy
Academy for the training of sales managers and sales personnel was established in 2003. In the US, the business area markets the ergonomic measures programme DILIGENT. The programme runs under several years and offers a combination of the business area’s products and continuous training of nursing staff. The programme has grown considerably during the year, and is now one of the most important drivers of development in the American market. In the UK and Netherlands, the CORPUS programme for training in ergonomics for the care sector has continued to be highly successful and a similar operation started at the end of the year in the German market. Geographical expansion. The business area’s aim is to establish a strong organization for organic growth in Japan and China. The situation is currently being assessed and a decision on how to proceed will be made in 2004. The business area will step by step establish an own sales force that gradually will address the countries that will join the EU in 2004. Distribution synergies – wound care. Wound care products have been successfully integrated in the business area’s sales channels in Italy and Spain. This integration work will continue with increased intensity in 2004 and will be widened to new markets in Central Europe.
40 Extended Care The market for Extended Care. The business area’s customer base comprises of various types of institutions for elderly care, institutions for the care of the physically and mentally handicapped, and hospitals. Responsibility for these institutions differs between the various markets, but an estimated 50% are run in the public sector, while charitable organizations such as the Red Cross account for 30%, and remaining 20% are privately run. Market growth is estimated at between 6 and 8%. The most expansive product segment is patient lifters, where not least the ceiling hoist segment (fixed installations of ceiling-mounted lifters) has grown considerably in recent years. Good growth is also reported in the aftermarket and consulting services. The global market for the business area’s products and services is estimated at about SEK 12 billion.
Driving forces and trends. The most fundamental driving force for the development of the busi- ness area is the demographic development towards an ageing population, which leads to more and more people needing care and professional nursing. The underlying need for the business area’s products and services is consequently large, and will continue to increase for the foreseeable future. There are also other driving forces that are having a positive effect for the business area. The consequences of a bad working environment. Working in the care sector is still to a large extent marked by heavy manual lifting and injurious working postures. As a consequence, personnel suf- fer various types of work-related injuries. This is a contributory factor in increasing difficulties to recruit and retain care staff, and as a result there is a serious shortage of personnel. Another con- sequence of a bad working environment is the considerable cost for compensation paid to nursing staff with strain injuries, primarily in the English and American markets. Obesity. The problem of an overweight population continues to grow and is confronting the care sector with new challenges, not least the lack of equipment dimensioned for these patients. This is particularly evident in the US, where more than 20 % of the population are estimated to suffer from obesity. The trends that appear limiting for the business area are social-economic and political factors. In 2003, we have noted weak growth in several markets that have been due to limited appropriations, and this has led to an increase in price-cutting. This has meant that parts of the business area’s prod- uct range, primarily patient lifters, have been wrongly positioned and not been able to compete in the market’s middle segment where large volumes are sold. In countries such as Germany and the US, we have seen reduced investment in new production of nursing homes and similar institutions, which has resulted in falling demand for the business area’s hygiene systems. Specific trends in the business units. In the hygiene systems business unit, there has been a trend for several years towards the increased use of shower products, whereas bathing systems have remained at a constant level. There is also a clear trend towards private bathrooms at the expense of large central bathing facilities. In recent years, there has also been considerable expansion in the market for ceiling hoists.
The demographic trend and investments to improve the working environment in the care sector are strong drivers for the business area.
40 Extended Care Extended Care 41 Strategy for the market. The business area operates in a market with good growth, and the strat- egy is based on market-adapted product development and active market penetration. Product leadership is one of the cornerstones in the business area’s long-term strategy. Product development in the business area is characterized to a high degree by system thinking: the prod- ucts shall quite simply work together. Another basic concept is that products are developed with a focus on specific customer segments and mobility levels. Care recipients shall get exactly the help they need, but not more, as they then risk losing the mobility they still possess. In order to meet increased demand for shower products, the business area has in recent years developed two new shower concepts, Carendo and Carino. Together with the existing shower trolleys, these products provide an optimal solution for all mobility levels. In 2004, an initial study will be carried out on the private bathroom, which is an area with good growth potential. On the patient lifter side, 2004 will be marked by intensive work on developing a new range positioned for the market’s high- volume segment. In 2003, work began on developing products adapted for obese people, and the first product launches in this range will be made in the first half of 2004. Integrated solutions. Mechanical aids, such as patient lifters and the various hygiene solutions, are an important element in efforts to improve the working situation for staff and quality of life for patients. However, if this work is to be truly successful, more investment is required. The busi- ness area’s strong market organization contributes with assessments of geriatric care institutions to ensure that investments are made in the right type of equipment. The business area also contributes with training courses on the correct use of the products and on ergonomics. In the new production of nursing homes and other institutions, the business area can also act as a strong expert partner by providing in-depth knowledge on the importance of designing working areas in the right way, something which is clearly documented in The Guidebook for Architects and Planners. Documented customer benefits. Documented positive effects for nurses and patients shall be the basis for Getinge’s offering and make possible financing and payment solutions in which Getinge and the customer share the risk. An example of this is DILIGENT SERVICES in the US. The DILIGENT sales division offers customers an ergonomic measures programme that extends over several years and covers both products and training of personnel with a guaranteed reduction of costs for work-related injury compensation to staff. Distribution and aftermarket. A strong presence in the market is clearly a precondition for being a strong and competent supplier and partner. The business area has worked consistently to establish its own market organizations, which cover sales, consulting and technical service. Consulting serv- ices are most developed in the Netherlands, UK and US, whereas technical service has advanced most in Canada, the Netherlands and UK. Other markets will implement a corresponding way of working that is in line with local market conditions. Both types of operation are profitable and contribute in a clear way to improve customer benefits. Brand strategy. There are currently a number of brands within the business area, even though ARJO is the dominant name. Other brands are Meditechnik, which is mainly aimed at the pri- vately-financed market segment in Germany; Medibo/Medibol, which is active in the Netherlands and Belgium; and finally Pegasus, which represents the business area’s wound care products. A review will be made, aiming to refine brand multiplicity within the business area. This will lead to more effective marketing and strengthen synergies for the distribution of wound care products.
Competitors. In the hygiene segment, the business area has a very strong position with an esti- mated market share of 60 %. In net sales terms, the biggest competitor is Sakai/OG Giken, whose sales are mainly in Japan, with some exports to the rest of Asia. In Europe, there are competitors
42 Extended Care Extended Care 43 such as Chiltern and France Reval. As a rule, products from these competitors are positioned in the lower price segments and the companies work with distributors to a large extent. The business area also has a high market share of 40% in patient handling, but the competitors are assessed as stronger than in the hygiene segment. The Swedish company, Liko, is active with either its own sales force or distributors in the EU, North America and Japan. Liko has a strong product range, not least on the ceiling hoist side. Other competitors are Sunrise and Invacare, which both have a strong position in the American market. Guldman of Denmark is strong in the ceiling hoist segment. In the wound care segment, the business area has a weaker position, with an estimated market share of 6%. This field is dominated by companies such as Hill-Rom and KCI in the US and Huntley Technologies in the UK.
42 Extended Care Extended Care 43 The Extended Care organization. During 2003, there was successful consolidation of the busi- ness area’s organization. The management function has been strengthened and a more integrated approach has been established.
Extended Care Management
Product development & production Sales & marketing
Hygiene Systems Sales
Patient Handling Service
Wound Care Consulting services
Product development. The business area’s product development is divided into two distinct func- tions: concept development and construction. The organization for concept development spans all three business units and has the task of developing new product concepts in close cooperation with the business area’s market companies and customers. When a project has progressed to the point where it can be transferred to a purely construction phase, it is handed over to the construction department at one of the business area’s competence centres. The engineering work is thereby car- ried out at the unit that will manufacture the product. Production. Production is organized according to the business area’s three business units. Hygiene systems are made in Eslöv, Sweden, and Wetzlar, Germany. During the year, the produc- tion unit Parker Bath Ltd in New Milton, UK, was closed, and production was moved to Eslöv. Annual cost savings are estimated at SEK 20 million. Patient handling products are made at the plants in Gloucester, UK; Hamont-Achel, Belgium and Quebec, Canada. The Wound Care prod- ucts are manufactured at the plant in Waterlooville, UK. Market organization. Extended Care currently has 24 market companies organized in fi ve regions. Its own organization accounts for 97 % of total sales, while the rest of sales are achieved via a network of distributors, primarily in Asia and Central Europe. With 330 sales representatives and 370 service technicians, the business area has broad and deep contacts with customers and thereby gains fi rst-hand knowledge of market developments. In the UK and Netherlands, the business area operates commercial ergonomics courses for the care sector. In addition to this operation being profi table in itself, the increased knowledge on ergonomic matters in the market contributes to increased demand for the business area’s products and other services. DILIGENT SERVICES was established in the US at the end of 2001 and offers an ergonomic measures programme for hospitals and nursing homes. The programme offers both the introduction of ergonomic products into care routines and the continuous training of personnel in working methods with a guaranteed reduction of the injury rate among the staff.
Quality and environmental work. High and reliable quality is central to the business area’s opera- tions, and structured quality management work has been carried out for a long time. The produc- tion facilities in Eslöv, Gloucester, Quebec and Waterlooville are certifi cated in accordance with ISO 9001 and ISO 13485. In 2004, the plant in Belgium will work towards ISO certifi cation. The Getinge Group uses ISO 14001 as the basis for its environmental work. The production units
44 Extended Care Extended Care 45 in Waterlooville (Wound Care), Gloucester (Patient Handling) and Eslöv (Hygiene Systems) are ISO 14001 certificated.
Logistics. During the year, a logistics council was set up with the task of pushing through the business area’s logistics strategies and supervising the Group’s project to improve cash flow. The issues that will be particularly focused on in the European markets are: further development of direct delivery from the factory to the customer, market-adapted delivery times, and improved order and invoicing processes.
Activities in 2004. Market conditions are assessed as good, not least in the North American market, and the business area is planning for good organic growth in 2004. The most important activities during the year will be: Continued development of the patient handling range. Launch of the new products, including the shower solution, Carino. Launch of the updated Guidebook for Architects and Planners. Continued training of sales managers and sales force. Investment in the business area’s service organizations. Continued efficiency-enhancement of the business area’s logistics function.
44 Extended Care Extended Care 45 Hygiene Systems. The business area’s hygiene systems are made up of different types of specially adapted bath and shower solutions. What the products have in common is that they are developed for patients’ differing mobility levels, and can be integrated with other types of lifter to ensure that personnel do not need to perform heavy and injurious lifts. Freedom Bath is an example of a product developed for people with relatively good mobility, whereas the Rhapsody bath in combination with the Miranti bath trolley, creates a system for people with highly diminished mobility. The business area’s shower range has in recent years gained two important additions, Carendo and Carino. Carendo is one of the business area’s most sophisti- cated products and among its features is a function that makes it possible to carry out dressing and undressing as well as changing incontinence pads. Carino has been developed for people with greater mobility and lacks some of Carendo’s most sophisticated functions. All products are designed for system integration and with an emphasis on safety.
Patient Handling. The business area’s patient lifters can be divided into two categories: active and passive. Active lifters are designed for people who have some strength in their legs and torso. The intention is that these lifters, in addition to eliminating heavy lifting for the staff, will also stimulate patients to be as active as possible. Getting up into a standing position several times a day has very positive effects on aspects such as sense of balance and blood pressure. The active lifters are used for toilet visits, as they are excellent aids for dressing and undressing and for short transfers. The passive lifters are designed for patients who cannot actively participate in lifting situations. Passive lifters can be divided into two categories: mobile lifters and ceiling hoists. Due to the sharp rise in patients suffering from obesity, demand for specially adapted equipment has also increased considerably. The Tenor heavy duty lifter is the business area’s first product in this segment of the market.
Wound Care. Pressure sores are a common problem in elderly care. Sores arise due to outer pressure restricting the oxygen supply in the musculature. This situation occurs, for example, when bedridden people for some reason lack the capability to turn themselves. Pressure sores are generally deep, very painful and costly to treat. In its range, the business area has a number of specialized mattresses and specially adapted beds. There is also increasing demand in this product area for solutions adapted for people suffering from obesity.
46 Extended Care EXTENDED CARE PRODUCT OVERVIEW
Freedom Bath Century Miranti Rhapsody
Carino Carendo Concerto Prelude
Sarita Sara 3000 Chorus Encore
Trixie Lift Tenor Opera Bravo
46 Extended Care Extended Care 47 Openness, sustainability, pride and confidence are the values that will characterize Getinge’s business
Getinge in society 49 GETINGE IN SOCIETY Clear values strengthen the business
A company that is developing and changing rapidly. Since it became a listed company in 1993, Getinge has experienced expansive development. The number of employees has grown from 1,000 to 6,600. In 1993, the Group consisted of some 20 companies, by year-end 2003 that number had risen to about 90. A large part of this development is due to the Group having made a number of major acquisitions, including Lancer in 1994, the merger with Arjo 1995, Castle 1996, Maquet 2000, ALM 2001, Heraeus 2002, and Jostra and Siemens LSS 2003. This expansive development means that today’s Getinge Group is a different and considerably larger company than it was ten years ago. The business is now global, with sales through the Group’s own companies in all parts of the world. Production is run in eight countries and the Group’s subcontractors are in Europe, North America and Asia. Getinge’s impact on the world around us is therefore far greater than before, and more aspects are involved. Consequently, the Group’s responsibility is also greater than previously. That is why long-term work started in 2003 to establish a common value system for the Group. The program- me is called Action for Corporate Trust – ACT. Four key areas have been identified in which Getinge will work for continuous improvements and annually measure the outcome of implemented acti- vities. These four key areas are relations with our customers, relations with our personnel, relations with our subcontractors and the Getinge Group’s environmental impact. The values that will guide the Group’s work are openness, sustainability, pride and confidence. To ensure these values are converted into practical measures, the Group will use the relevant ISO standards and certifications. Each operative unit will also formulate its own activity plans for all key areas. The details of this work are currently being drawn up and Getinge expects to start implementation of this programme in the second half of 2004. The basic points will continue to be people’s equal rights and equal value; customer focus, commitment, participation and cooperation; an open and honest approach; and the meeting of standards, rules and legislation relating to human rights, equality, diversity, working environment, business ethics, etc.
Getinge’s customers. Getinge’s customers are in different parts of the health care sector and our products play a central role in various forms of treatment and daily care. The products are impor- tant both to create a good working environment for staff and for the patients’ treatment outcomes and quality of life. Product quality is in a broad sense decisive for relations with our customers. All main plants within the Group are therefore certificated according to the ISO 9001:2000 quality system. In 2005, long-term work will begin on ISO certification of all the market companies. The overall goal is to create high confidence among our customers by supplying high-quality products and by being a competent, professional and businesslike partner.
Getinge in society 49 Getinge’s associates. Relations between personnel and company management shall be marked by openness and dialogue. Getinge shall be a responsible employer with a focus on both the company’s and personnel’s long-term well-being. It is only the personnel who can create value for the company and represent the company’s values. The areas that will be particularly focused on in continuing work include discrimination issues, a working environment that promotes safety for all employees and protects their health, competence development.
Employees – An Overview 2003 2002 Total number of employees on 31 December 6 598 5 556 Number of employees in Sweden on 31 December 1 403 877 Added value per employee* in the financial year, SEK K 710 720 Number of men employed, % 77 79 Number of women employed, % 23 21 Number of employees aged 20-30, % 16 16 Number of employees aged 31-40, % 34 35 Number of employees aged 41-50, % 29 28 Number of employees aged 51-60, % 19 18 Number of employees aged 61-70, % 2 2 Number of employees per business area, % Infection Control 34 39 Extended Care 25 30 Medical Systems 41 31 Geographical distribution of employees, % Western Europe 78 74 USA & Canada 18 22 Asia & Australia 3 3 Rest of the world 1 1 * See page 83 for definition.
Getinge’s subcontractors. The selection of subcontractors is a very strong instrument for influ- encing how society develops. By setting the same requirements for its subcontractors as the Group sets for itself, Getinge contributes in an active way to the development of a sustainable and tolerant society. The same requirements for ISO certification that Getinge sets for itself, and the same basic values concerning issues such as discrimination, also apply to the Group’s subcontractors. In addi- tion to this, relations with subcontractors shall be characterized by total professionalism. In order to minimize the risk of corruption, it is forbidden to take any form of gift from a subcontractor.
Environmental work at Getinge – the company’s environmental policy. The Group’s aim is to be a leader in both long-term environmental work and daily management. The overall objective is to minimize products’ impact on the environment throughout their life cycles, by utilizing resour- ces efficiently in product development, manufacturing processes and in operation. In practice this means:
Environmental considerations are instilled right from the start in product development activities. The use of lifecycle analyses to understand our products’ effects on the environment and optimize the balance between environmental impact and product performance. Continual improvement of our processes and their efficiency. Reduced use of raw materials in all processes and promotion of recycling and the use of recycled materials where it can be justified for environmental, technical and financial reasons. Increased efficiency regarding energy consumption, as well as sound handling of natural resources within the entire business.
50 Getinge in society Getinge in society 51 In February, ARJO in the Netherlands was named as the best workplace in the country. The study, carried out by the American ”The Great Place to Work Institute”, takes into account all the opp- ortunities that companies offer employ- ees. Pictured left are some of the staff taking a closer look at the award.
Compliance with, and where suitable, exceeding of, requirements in all applicable environmental legislation, regulations and guidelines. Local legal requirements shall be regarded as a minimum level.
The basis of Getinge’s environmental work is ISO 14001, and in 2004 all the Group’s main plants will be certificated in accordance with this environmental standard. In all ongoing development projects, products are examined in order to maximize recyclability. Recycling stations for waste from manufacturing are installed at all producing companies, and discharges from the Group’s surface finishing plants are far below the permitted authorized values. To sum up, Getinge works from the standpoint of creating the greatest possible benefit at the lowest possible cost from the financial perspectives of both the company and society as a whole.
50 Getinge in society Getinge in society 51 Financial information
Directors’ report...... 53 Proposed allocation of profits ...... 56 Consolidated income statement ...... 57 Consolidated balance sheet ...... 58 Changes in shareholders’ equity ...... 59 Consolidated Cash flow statement ...... 60 Operating Cash flow statement ...... 61 Notes to the consolidated accounts ...... 62 Income statement for the Parent company ...... 74 Balance sheet for the Parent company ...... 75 Changes in shareholders’ equity – Parent company ...... 76 Cash flow statement for the Parent company ...... 77 Notes to the Parent company accounts ...... 78 Auditors’ report ...... 82
Other information
Definitions ...... 83 The Board ...... 84 Group management and auditors ...... 86 Addresses 2004 ...... 88
52 Directors’ report
The Getinge Group is active in three business areas. Infection Control sells disinfection and sterilization equipment that prevents the emergence and spread of diseases in the health care and geriatric care sectors and in the pharmaceutical and food industries. Extended Care sells systems for hygiene and lifting for the elderly and disabled and products to prevent and treat pressure sores. Medical Systems (previously Surgical Systems) sells surgical workstations, heart-lung machines and ventilation equipment. Orders received. Orders received by the Getinge Group climbed by 4.3% (4.7) and reached SEK 9,153.8 million (8,772.9 m). Adjusted for acquisitions and exchange rate fluctuations, orders received were up by 3.9% (4.2). Sales and profits.Net sales climbed by 6% to SEK 9,160.2 million (8,640.1 m). Adjusted for acquisitions and exchange rate fluc- tuations, net sales rose by 5%. The Getinge Group’s operating profit rose by 19.7% to SEK 1,256.5 million (1,049.5 m), which is equivalent to 13.7% (12.1%) of net sales. Net financial items totalled SEK –161.1 million (–173.9 m), of which net interest items made up SEK –152.2 million (–169.9 m). The Group’s profit before tax rose 25.1% to SEK 1.095.4 million (875.6 m) corresponding to 12% (10) of net sales. Tied-up capital. Stocks amounted to SEK 1,763.6 million (1,638.6 m), which corresponds to 136.1 (148.1) days in relation to costs of sold goods. Accounts receivable amounted to SEK 2,746.4 million (2,489.6 m), which represents 72.3 (76.7) days in rela- tion to sales. Capital employed within the Group was SEK 6,430.4 million (6,528.7 m). The return on capital employed was 18.6% (15.9). Goodwill totalled SEK 4,262.4 million (2,803.6 m) at the end of the financial year. Investments. Net investments in machinery, equipment and buildings, but excluding equipment for renting out, amounted to SEK 215.6 million (149.6m). Investments mainly refer to investments in production facilities, tools and IT. Acquisitions. On 22 May an agreement was reached regarding the acquisition of 100% of the votes and capital in Jostra AG, on condition that the German competition authorities approved the deal. The acquisition was approved on 24 June and Jostra is included in the Group from Q3 2003. Jostra is a market-leading manufacturer of equipment and disposables for heart surgery and is expected to boost the Group’s profit before tax by SEK 50 million in 2004. The acquisition means a strategic expansion of the Medical Systems (previously Surgical Systems) business area’s activities and product range. Jostra’s activities in the US were not included in the acquisition. Group goodwill in the balance sheet was increased by SEK 308.7 million due to Jostra. Integration of the company began in the autumn of 2003. The sales organisation is now integrated with the business area’s existing organisation and forms a product line entitled Cardio-Pulmonary. A production move from Værløse in Denmark to Hechingen/Hirrlingen in Germany was completed in Q1 2004. A decision has been made to move production of heart-lung machines from Lund to Solna. The move should be completed by the end of June 2004. The expansion of Medical Systems continued on 15 August with the acquisition of Siemens LSS, a division within Siemens Medical Solutions. The competition authorities announced their approval of the deal on 10 September. The acquired activities, company and, where appropriate, staff and assets, were transferred to Getinge during the last quarter in those countries where Siemens LSS was active. Transfer of activities in France and India is planned for early 2004. Siemens LSS is a market-leading manufacturer of ventilation equipment and, at the time of the acquisition, anaesthetics equipment. The acquisition further strengthens the strategic expansion of Medical Systems’ business and product range. Siemens LSS is expected to boost the Group’s profit before tax by around SEK 100 million in 2004. Group goodwill in the balance sheet was increased by SEK 1,424.4 million due to Siemens LSS. The structural activities that will drive profit performance in 2004 and 2005 fall within two main areas: the co-ordination of the sales organisation with the business area’s existing structure and the closure of the unprofitable anaesthetics activity. Both of these activities should be completed by the end of Q2 2004. On 31 March Getinge acquired 100% of the votes and capital in the Dutch company, Copharm B.V., which has been the Medical Systems agent on the Dutch market since the 1960s. Market shares for the company’s main products in the Netherlands, surgical tables, surgical lamps and ceiling service units, are around 75%. The acquisition of Copharm will boost the Group’s profits before tax in 2004. On 19 October Getinge acquired 100% of the votes and capital in a Swiss company that has been the agent of the Medical Systems business area since 1981. The acquisition strengthens the position on the Swiss market and gives Medical Systems the cor- rect business structure for integrating the activities of Siemens LSS in Switzerland. Financing for all of the acquisitions during the year was completed using Getinge’s existing credit facilities. Product development. Product development is one of the cornerstones of the Group’s organic growth. Getinge does not intend to perform all development in-house, and is happy to co-operate with competent external partners. In this way the Group has access to new and commercially viable technology. Global development is continuously monitored and a large number of poten- tial projects are evaluated annually. Acquisition of suitable companies is also a complement to internal product development. In 2003 SEK 48.5 million in development costs were activated as intangible assets because it is considered that they will generate eco- nomic benefits in the future. A small amount of research is carried out. Environmental issues. Four of the Group’s Swedish subsidiaries run production and permit-required activities according to the Swedish Environmental Code. Permits are valid for the products that each company is responsible for. Besides a general permit for the engineering industry, permits have also been acquired for spray-painting, transporting waste and storing bottled gas. The external environmental impact consists of emissions and discharges into the air and water, as well as noise from the plants. All of the Swedish production facilities’ external environmental impact lies well below the relevant authority’s and permit requirements.
Directors’ report 53 All of the facilities in Sweden will achieve ISO 14001 certification by the end of 2004. Taxes. The Group’s total taxes amounted to SEK 317.7 million (253.9 m), corresponding to 29% (29.0%) of the pre-tax profit (see note 9). Paid tax amounted to SEK 236.4 million (232.2), which represents 22% (26) of the profit before tax. Financial position and equity/assets ratio. The Group’s net debt was SEK 4,852.1 million (3,376.1 m) and the cash flow after investments in tangible fixed assets was SEK 1,170.5 million (1,061.8 m). Shareholders’ equity at year-end was SEK 3,530.4 mil- lion (3,158.2 m) giving an equity/assets ratio of 29.3% (33.3%). To strengthen loan financing a private placement to institutional investors was carried out in the autumn of 2003. The volume is USD 250 million divided over five, seven and ten years. A con- firmed loan facility of USD 200 million with a group of banks that falls due in the spring of 2004, has been refinanced during Q1 2004. The new facility amounts to EUR 210 million and falls due in 2009. Personnel. There were 6,598 (3,158.2) employees on 31 December 2003, of whom 1,403 (877) were employed in Sweden. The work of the Board and ownership issues. The Getinge Board consists of seven members, without deputies, elected by the AGM and two members with deputies chosen by the employees. Other company employees participate at Board meetings to make presentations or perform administration. In accordance with the Companies Act regulations the Board establishes a programme each year for its work including instructions concerning the division of work within the Board, division of responsibility between the Board and the CEO and financial reporting to the Board. The fixed procedures for the Board were not changed during the year. During 2003, Getinge’s Board held nine minuted meetings. The Board also held a meeting in January 2004 at which the results for 2003 were addressed and thereafter published. The Board addressed the stated points that were taken up at each Board meeting in accordance with Board procedures such as state of the business, budgets, annual accounts and interim reports. Furthermore, compre- hensive issues were addressed concerning company acquisitions and other investments, long-term strategies, structural and organisa- tional changes. Individual Board members also assisted Group management in various strategic issues. Nominations committee. Previously, Getinge’s nominations procedures involved the Chairman, in good time ahead of the AGM, gathering together the major shareholders to propose and support candidates for Board election and the fees paid to Board mem- bers. Ahead of the AGM in April 2004 the Chairman has asked the following people to join a nominations committee headed by himself: Marianne Nilsson, Robur; Caroline af Ugglas, Skandia; Joachim Spetz, Handelsbanken funds; Björn Franzon, Fourth Swedish National Pension Fund; Thomas Nicolin, Third Swedish National Pension Fund and Olle Törnblom, The Swedish Shareholders’ Association. Remuneration committee. The Board has set up a remuneration committee comprising Board members to handle employment and pension conditions for certain leading executives. Up to the 2004 AGM this committee consists of Fredrik Arp, Carl Bennet and Bo Damberg. This committee also deals with issues concerning the rewards system Auditing committee. Previously all the members of the Board were members of the auditing committee. To achieve more efficient working methods the Board intends, at the first meeting of the Board after the AGM in April 2004, to appoint three Board members who will constitute the Board’s auditing committee. Instructions for the auditing committee will be drawn up by the Board for one year at a time. Extraordinary General Meeting. The Extraordinary General Meeting of Getinge AB on 10 November 2003 decided, in accordance with the Board’s proposal, to carry out a 4:1 split of the company’s shares. This decision was carried out by VPC AB on 27 November 2003. The meeting also decided in accordance with the Board’s proposal to make a change to the articles of associa- tion whereby the object of the company’s activities shall be – directly or indirectly via subsidiaries – to carry out manufacturing and sales of medical technical equipment and associated activities. Effect of exchange rate changes on profits. The table below indicates the actual effects of exchange rates in 2003 and the forecast for 2004.
SEK million 20041 2003 Medical Systems ...... - 30 - 50 Infection Control ...... - 80 - 30 Extended Care ...... - 25 - 60 Total - 135 - 140
1) The exchange rate in 2004 is calculated using forecast volumes and results in foreign currency taking into consideration the currency hedging that has been carried out.
Sensitivity analysis. Getinge’s results are affected by a series of external factors. The table below shows how changes to some of the important factors would have affected the Group’s profit before tax in 2003. No consideration is given to the effect of the vari- ous risk management measures that Getinge applies in accordance with its established policy.
Change in profit before tax SEK m Price change +/-1% +/-91.6 Cost of sold goods +/-1% +/-50.5 Salary costs +/-1% +/-30.5 Interest rates +/-1 percentage point -/+39.7
The effect on the Group’s profits before tax of a change in interest rates of +/- 1 percentage point was calculated based on the Group’s loans to credit institutions at the end of 2003.
54 Directors’ report International Financial Reporting Standards. According to a decision by the EU Commission, all listed companies within the European Union shall, starting from 2005, draw up their consolidated accounts in accordance with International Financial Reporting Standards, IFRS. For the Getinge Group the conversion deadline is 1 January 2004, as the Group in its annual report for 2005 shall produce comparable figures in accordance with IFRS for a comparable year. This means that financial reports for 2004 will be re-calculated in accordance with IFRS as these reports will be included in the 2005 annual report. In 2003 Getinge started an IFRS project to identify significant differences between accounting practices in Sweden and those in line with IFRS. Plans have been drawn up to ensure that IFRS are implemented correctly and efficiently. However, some uncertainty still remains in some areas as the International Accounting Standards Board, IASB, has not yet completed all the pro- jects that will affect IFRS recommendations to be applied in the 2005 annual report. These uncompleted projects may have a sig- nificant impact both on the accounts and on additional information. Getinge set up its IFRS project to identify current differences between accounting practices in Sweden and IFRS and to iden- tify and consider differences that arise when the new IFRS recommendations are presented. This process involves discussions with external IFRS experts and the development of proposals for how the effects of IFRS recommendations can be addressed in a cor- rect way. During Q3 2004 all IFRS differences will have been identified and the process of re-calculating quarterly information for 2004 will have started. The effects of the conversion to IFRS will be presented in the interim report published on 31 March 2005, provided that these effects are not so extensive that they must be included in the financial statement in January 2005.
Significant differences in accounting practices based on the current IFRS arise in the following areas: Depreciation of goodwill is not permitted and is replaced by ongoing assessment of the write-down requirements Share-related remunerations: assessments are made at cost value at the time of allocation and the amount is reported in shareholders’ equity with the cost reported over the income period Financial instruments: reported as cost value with value changes reported in the income statement, or in shareholders’ equity if conditions for hedge accounting are fulfilled.
Significant differences concerning additional information based on current IFRS affect the following areas: Company acquisitions: more detailed information is required. Financial instruments: more detailed information is required for all financial instruments including embedded derivatives. Getinge will implement IAS 19/RR29, Remunerations to employees, as of 1 January 2004.
Outlook. The market position and volume trends for 2004 are estimated to be in line with last year, but with weaker growth in Europe and good growth in North America and developing markets. The Group’s order book is generally healthy. Orders rose by around 5% compared to last year, adjusted for currency exchanges and acquisitions, with healthy orders for Infection Control and Extended Care. Volume trends for Infection Control are judged to be good, combined with continued improvement to its production structure leading to improved profit and strengthened operating margins. Extended Care expects good volume trends over the year with several product launches in 2004 and an improved North American market. Measures carried out to increase competitive strength in 2003 will peak in 2004, which will lead to a good overall profit growth this year. Medical Systems expects strong profit growth from the acquisition of Jostra and LSS as previously published. The Surgical Workplaces division (surgi- cal tables, surgical lamps and ceiling service units), with most of its sales in Western Europe, is expected to have weaker volume growth. Effects of a stronger Swedish krona and a weaker US dollar are expected to burden this year’s profit to the same extent as in 2003, i.e. around SEK 135 million. Overall the profit outlook for the Group remains good.
Directors’ report 55 Getinge AB (publ) 556408-5032 Proposed allocation of profits
The Group’s unrestricted shareholders’ equity, as per the Consolidated Balance Sheet, totals SEK 1,599.5 million.
The following Parent Company earnings are at the disposal The Board and the Chief Executive Officer propose that of the Annual General Meeting: a dividend of SEK 1.35 per share should be Net profit for the year 275.6 distributed to shareholders 272.5 Profit carried forward 353.5 that the following sum should be carried forward 356.6 Total 629.1 Total 629.1
With regard to the Group’s and the Parent Company’s profits and position in general, reference is made to the following Account documents.
Getinge, 11 March 2004
Fredrik Arp Carl Bennet Bo Damberg
Anders Frick Carola Lemne Cecilia Schelin Seidegård
Bent Carlsen Johan Malmquist Karl-Göran Olofsson Managing Director
Our Auditors Report was submitted on 15 March 2004
Mats Fredricson Jan Nilsson Authorized Public Accountant Authorized Public Accountant Deloitte & Touche AB
56 Proposed allocation of profits Consolidated income statement
SEK M Note 2003 2002 Net sales 2, 3 9 160.2 8 640.1 Cost of goods sold -5 045.1 -4 825.0 Gross profit 4 115.1 3 815.1
Selling expenses -1 851.8 -1 731.5 Administrative expenses -808.6 -774.3 Research & Development costs -209.5 -248.2 Other operating income 26.8 34.3 Other operating expenses -15.5 -45.9 Operating profit 2, 4, 22 1 256.5 1 049.5
Interest income and similar profit items 6 19.2 23.5 Interest expenses and similar loss items 7 -180.3 -197.4 Profit after financial items 1 095.4 875.6
Tax on profit for the year 9 -317.7 -253.9 Net profit for the year 777.7 621.7
Earnings per share, SEK 8 3.85 3.08 Dividend per share (according to the Board’s proposal for 2003) 1.35 1.06
Consolidated Income Statement 57 Consolidated balance sheet
SEK M Note 2003 2002 ASSETS FIXED ASSETS Intangible fixed assets 4, 5 4 310.3 2 803.6 Tangible fixed assets 4, 5, 17 1 367.4 1 252.5 Long-term receivables 62.2 43.4 Deferred tax asset 9 688.3 526.1 Total fixed assets 6 428.2 4 625.6
CURRENT ASSETS Stock-in-trade 10 1 763.6 1 638.6 Advances to suppliers 6.4 5.0 Accounts receivable 2 746.4 2 489.6 Tax receivable 5.0 – Other receivables 27 451.8 182.9 Prepaid expenses and accrued income 11 126.7 123.2 Liquid funds 12, 13, 24 504.2 412.8 Total current assets 5 604.1 4 852.1 TOTAL ASSETS 12 032.3 9 477.7
SHAREHOLDERS’ EQUITY, PROVISIONS AND LIABILITIES SHAREHOLDERS’ EQUITY Share capital 100.9 100.9 Restricted reserves 1 830.0 1 936.8 Total restricted shareholders’ equity 1 930.9 2 037.7 Profit brought forward 821.8 498.8 Net profit for the year 777.7 621.7 Total unrestricted shareholders’ equity 1 599.5 1 120.5 Total shareholders’ equity 3 530.4 3 158.2
PROVISIONS Provisions for pensions, interest-bearing 13, 18 1 388.7 1 211.0 Provisions for pensions, non interest-bearing 18 146.1 130.7 Deferred tax liability 9 19.7 61.7 Restructuring reserves 19 193.1 253.5 Other provisions 20 543.9 347.5 Total provisions 2 291.5 2 004.4
LONG-TERM LIABILITIES Interest-bearing long-term loans 13, 17 3 245.1 2 415.3 Other long-term liabilities 19.7 26.2 Total long-term liabilities 3 264.8 2 441.5
CURRENT LIABILITIES Interest-bearing short-term loans 13, 14, 17 722.6 162.6 Advance payments from customers 170.9 188.9 Accounts payable 671.6 513.9 Tax liabilities 9 304.4 159.1 Other liabilities 344.0 229.5 Accrued expenses and prepaid income 15 732.1 619.6 Total current liabilities 2 945.6 1 873.6 TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 12 032.3 9 477.7
Pledged assets 16 77.8 76.0 Contingent liabilities 16 166.6 167.5
58 Consolidated Balance sheet Changes in shareholders’ equity for the Group
SEK M Share capital Restricted reserves Unrestricted reserves Total Shareholders’ equity 31 December 2001 100.9 1 861.4 990.6 2 952.9 Dividend -189.3 -189.3 Profit for the year 621.7 621.7 Adjustments between restricted and unrestricted shareholders’ equity 338.8 -338.8 – Exchange rate differences -263.4 36.3 -227.1 Shareholders’ equity 31 December 2002 100.9 1 936.8 1 120.5 3 158.2 Dividend -214.5 -214.5 Profit for the year 777.7 777.7 Adjustments between restricted and unrestricted shareholders’ equity 249.9 -249.9 – Exchange rate differences -356.7 165.7 -191.0 Shareholders’ equity 31 December 2003 100.9 1 830.0 1 599.5 3 530.4
Total translation difference 31 December 2002 39.8 -28.1 11.7 Total translation difference 31 December 2003 -316.9 137.6 -179.3
The Swedish krona’s strengthening against the US dollar and GBP is the main reason why the exchange rate difference has fallen. Exchange rate differences in hedging instruments on foreign net assets raised the translation difference by SEK 158.4 m (143.4). The tax effect on the translation difference has been taken into account.
Changes in shareholders’ equity for the Group 59 Consolidated cash flow statement
SEK M Note 2003 2002 CURRENT ACTIVITIES Operating profit 1 256.5 1 049.5 Items not included in cash flow – -2.3 Depreciation 430.8 388.1 1 687.3 1 435.3 Interest received and similar income 19.0 21.3 Interest paid and similar expenses -186.5 -201.5 Taxes paid -236.4 -232.2 Cash flow before changes in working capital 1 283.4 1 022.9
CHANGES IN WORKING CAPITAL Stock-in-trade 186.9 164.4 Rental equipment -21.8 -32.6 Current receivables 207.0 328.3 Current liabilities -79.4 -113.5 Restructuring reserves utilised -190.0 -158.1 Cash flow from current activities 1 386.1 1 211.4
INVESTMENT ACTIVITIES Acquisition of subsidiaries 24 -2 190.7 -313.3 Investments in intangible fixed assets -51.8 – Investments in tangible fixed assets -215.6 -149.6 Cash flow from investment activities -2 458.1 -462.9
FINANCING ACTIVITIES Change in interest-bearing loans 1 015.0 -748.8 Interest-bearing loans in acquired subsidiaries 24 552.5 143.2 Change in long-term receivables -185.3 65.7 Dividend paid -214.5 -189.3 Cash flow from financing activities 1 167.7 -729.2
Cash flow for the period 95.7 19.3 Liquid funds at period’s start 412.8 364.4 Translation differences -4.3 29.1 Liquid funds at period’s end 24 504.2 412.8
60 Consolidated cash flow statement Operating cash flow statement
SUPPLEMENTARY DISCLOSURE
SEK M 2003 2002 BUSINESS ACTIVITIES Operating profit 1 256,5 1 049,5 Adjustment for items not included in cash flow – -2,3 Depreciation 430,8 388,1 1 687,3 1 435,3
CHANGES IN OPERATING CAPITAL Stock-in-trade 186,9 164,4 Rental equipment -21,8 -32,6 Current receivables 207,0 328,3 Current liabilities -79,4 -113,5 Operating cash flow 1 980,0 1 781,9
Interest received and similar income 19,0 21,3 Interest paid and similar expenses -186,5 -201,5 Taxes paid -236,4 -232,2 Business activities’ cash flow 1 576,1 1 369,5
STRUCTURAL EXPENSES AND INVESTMENTS Investments in intangible fixed assets -51,8 – Investments in tangible fixed assets -215,6 -149,6 Restructuring reserves utilised -190,0 -158,1 Acquisition of subsidiaries -2 190,7 -313,3 Cash flow after structural expenses and investments -1 072,0 748,5
Dividend paid -214,5 -189,3 Change in long-term long-term receivables -185,3 65,7 Translation differences -4,3 29,0 Change in net debt -1 476,1 653,9
Net debt at period’s start 3 376,1 4 030,0 Net debt at period’s end 4 852,2 3 376,1
Over the past few years, the Getinge Group has been working continually to improve its cash flow in all business areas.. This intensified in 2003 and led to significant improvements in the operating cash flow. It is therefore thought valuable to report the operating cash flow in a separate disclosure.
Operating cash flow statement 61 Notes to the consolidated accounts
1 ACCOUNTING PRINCIPLES
The accounts have been drawn up in accordance with the Swedish Annual Accounts Act and the Swedish Financial Accounting Standards Council’s recommendations and statements. New accounting principles. Several new recommendations from the Swedish Financial Accounting Standards Council came into effect on 1 January 2003. The changes, together with previous years’ recommendations, represent an adaptation of Swedish accountancy praxis to the International Financial Reporting Standards (IFRS). The recommendations that came into force in 2003 and apply to Getinge are: RR2:02 Stock-in-trade, RR22 Presentation of financial statements, RR 25Segment reporting – business area and geographic area, RR26 Events after the balance sheet date and RR27 Financial instruments: disclosure and presentation. When applying the transition regulations as a result of the above mentioned recommendations there will be no retroactive effect on Getinge’s accounts for previous financial years. Application of these recommendations have not meant any effect on the Group’s results and position, besides affecting the format and supplementary information in the Annual Report Consolidated Accounts. Getinge’s accounts comprise the Parent Company and all companies in which Getinge AB owns more than half of the shares’ voting rights or where Getinge alone has a significant influence via agreements. The accounts have been drawn up in accordance with the Swedish Financial Accounting Standards Council’s recommendations. Companies acquired during the year have been included in the Consolidated Income Statement from the date of acquisition. Acquired companies are consolidated in the Consolidated Accounts in accordance with the acquisition method, which means that the acquisition value of the shares in subsidiaries is eliminated against their shareholders’ equity at the date of acquisition. The shareholders’ equity in the subsidiaries is determined from a market value of assets, liabilities and allocations at the time of the acquisition. If required, in accordance with the acquisition analysis, provision for restructuring costs is made. Acquired activities that are not part of the Group, shall not be consolidated. These activities are taken up at the estimated liquidity effect for the Group as a receivable or a provision. Arjo is reported from the 1995 merger in accordance with the pooling method. An assessment of deferred tax on acquired untaxed reserves is made in conjunction with the acquisition. Deferred tax on the difference between the calculated market values of assets and liabilities and the fiscal residual value is calculated to the extent that the difference is not included in untaxed reserves. For cases where the acquisition value of shares exceeds the acquired shareholders’ equity, calculated as above, the difference is accounted for as goodwill, which is written off according to plan. The internal transactions and internal profits have been eliminated in the consolidated accounts. When eliminating internal transactions, the fiscal effect is also calculated on the basis of rates of taxation applicable . Untaxed reserves earned after the acquisition are, in the Consolidated Balance Sheet, divided into deferred tax liability and restricted shareholders’ equity, employing the effective rate of taxation in the respective country. Reporting of shares in associated companies. Companies in which the Group owns 20 - 50% of the voting rights and has significant influence are termed as “Associated companies”. Holdings in associated companies are reported according totheequity method, meaning that investments are booked as the Group’s share of the companies’ shareholder’s equity calculated according to the Group’s principles, and the Group’s share of profit for the year and tax in associated companies. Liquid assets. Liquid assets comprise cash and bank balances as well as short-term investments that are readily convertible into cash assets (within three months). Foreign currencies Translation of foreign activities. All foreign subsidiaries are classified as independent. Getinge applies the current method for translation of foreign subsidiaries’ balance sheets and income statements. This means that all assets and liabilities in subsidiaries are translated at closing rates, and all income statement items are translated at average annual exchange rates. Translation differences arising in this context are due to the discrepancy between the average exchange rates and closing day rate, and to the net assets being translated to a different exchange rate at year-end than at the start of the year. Translation differences are booked directly under shareholder’s equity. External loans reported in order to reduce the translation differences in exposed currency to meet the net assets in foreign subsidiaries are reported as hedging. Exchange rate differences for these loans are booked directly under consolidated shareholder’s equity. Receivables and liabilities in foreign currencies. Receivables and liabilities in foreign currencies are valued at closing day rates, and unrealised exchange rate profits and losses are included in the results. Exchange rate differences regarding operations-related recei- vables and liabilities are reported as other operating income (operating expenses). Exchange rate differences regarding financial assets and liabilities are reported under “Other financial items”. Receivables and liabilities currency hedged with currency derivatives are valued at the hedged rate. Advances from customers are booked at the exchange rates applying when each advance was received, since a liability to refund is not envisaged. Revenue recognition. Income is primarily reported when all risks and rights connected with ownership have been transferred to the buyer. This usually occurs in connection with delivery, after the price has been set and collection of the receivable is appropriately secured. If delivery of finished goods is postponed at the buyer’s request, but the buyer assumes the proprietary rights and accepts the invoice (a “bill and hold” sale), the income is recognised when the proprietary rights are transferred. Income is normally recognised once the buyer has accepted delivery and after installation and final inspection. However, income is recognised immediately after delivery if the installation and final inspection are of a simple character, and after making provision for estimated residual expenses. Income recognition for services occurs as and when the services are performed. Income from rental is allocated to a particular period over the term of the rental agreement. Dividend received is reported after the right to the dividend is deemed secure. Loan expenses. Loan expenses from operations are booked during the period in which they arise. Tangible fixed assets.Tangible fixed assets, primarily including machinery, equipment and properties, are reported at their acquisition cost with deductions for accumulated depreciation according to plan. Depreciation according to plan. Depreciation according to plan is based on the assets’ acquisition cost and predicted economic lifespan. DEPRECIATION ACCORDING TO PLAN Land ...... 0% Land improvements...... 3% Buildings ...... 3% Machines...... 7% Equipment ...... 10% Production tools ...... 20% Equipment for rental ...... 20% Vehicles ...... 25% Computer equipment...... 33%
62 Notes to the consolidated accounts Intangible assets. Research costs burden profits as they arise. Identifiable costs for new product development are capitalized according to their predicted future financial benefits. Otherwise, development costs are carried as expense as they arise. Development costs booked in the income statement for a given period are never capitalized during future periods. Capitalized expenses are depreciated linearly over a period of 3 - 15 years from the commencement of the asset’s commercial use until the end of its estimated economic lifespan. Consolidated goodwill ascribable to corporate acquisitions is depreciated linearly over its anticipated economic life according to the plan drawn up for each acquisition. A 20-year depreciation period applies for long-term strategic corporate acquisitions. Acquired intangible assets are booked at their acquisition cost. Write-downs. When there is indication that an asset has dropped in value, its recyclable value is established. If the recyclable value falls below the booked value, a write-down of assets is made. Write-downs are reversed once the basis for the write-down is wholly or partially eliminated. Stock-in-trade. Stock is valued at the lowest of the acquisition cost and production cost according to the first in/first out (FIFO) principle, and its true value. The stock includes a share of indirect costs related to this. Financial securities. Actual value. Reported actual values are based on market prices and generally accepted methods. Valuation is based on official mar- ket quotations on the balance sheet date. Translation into SEK is based on the quoted exchange rate on the balance sheet date. Short-term investments. Short-term investments comprise securities with a term of 3 - 12 months. All short-term investments are booked in the balance sheet at their acquisition cost on the settlement date and valued at the lowest of the acquisition value and the actual value on the balance sheet date. Interest income is allocated to a particular period and posted under other financial items. Current liabilities. Current liabilities comprise short-term loans from credit institutions. Current liabilities are booked in the balance sheet at their acquisition cost on the settlement date, including accrued interest. Interest expenses are allocated to a particular period and booked in the income statement as they arise. Long-term liabilities. Long-term liabilities comprise loans to credit institutions and bonds issued over the year to institutional investors through private placements. Long-term liabilities are booked in the balance sheet at their acquisition cost on the settlement date, including accrued interest. Any premiums and discounts are included in the acquisition cost on the settlement date and allocated to a particular period during the term of the loan. Interest expenses are allocated to a particular period and reported in the income statement as they arise. Financial derivative instruments. Getinge’s financial derivative instruments comprise currency forward contracts, currency options, interest swap agreements and interest/currency swap agreements (combined instruments). Their purpose is to hedge against opera- tions-related currency and interest exposure. Currency derivatives serving to hedge against currency exposure in projected commercial net flows are reported as hedging, mea- ning that effects on profit/loss (currency and interest effects) ascribable to the derivative instruments affect the results at the time the currency effects on the underlying commercial flow are realised. Effects due to extension of currency futures contracts for hedging purposes are booked in the balance sheet under assets and liabilities, respectively, and posted as income in the same period as the underlying (hedged) transaction. By year-end, the application of this principle had generated a liability of SEK 11.3 m (liability of SEK 17.9 m). In the income statement, forward-covered purchase cost and net sales are booked to the forward rate. Outstanding currency derivatives that do not meet the criteria for being reported as hedging are calculated at their actual value, and unrealised losses are booked directly under other financial items in the income statement. Currency options entered into for hedging purposes are booked under profit/loss as currency futures contracts as described above. Option premiums are brought forward and reported in the results on the maturity date. Interest derivatives entered into to achieve the desired fixed interest term in the interest-bearing liabilities are reported as hedging, meaning that effects on profit/loss ascribable to derivatives are booked under profits at the same time as the underlying item. Interest derivatives that do not meet the criteria for being reported as hedging are valued according to their actual value, and unrealised losses are booked under net financial items. Receivable. Accounts receivable are reported net after making provision for uncertain debts. Provisions for uncertain debts are based on individual assessments of the accounts receivable, taking into account expected losses, and are booked in the period when they are identified. Pensions. All pension commitments that are not taken over by insurance companies or otherwise hedged through funding by external parties are booked as liabilities in the balance sheet. Provisions. Provisions are defined as liabilities that are uncertain as regards amount or timeframe because of an undertaking due to a specific event, and because it is probable that a flow of resources will be required to regulate the undertaking, and that a reliable estimation can be made. Pensions, deferred tax liabilities, restructuring measures, guarantee commitments, close-down provision for non-consolidated activities and similar items are recorded as provisions in the balance sheet. Taxes. All expected tax on the recorded results is booked in the income statement. This tax is estimated according to each country’s tax regulations and booked under “Taxes”. Tax legislation in Sweden and certain other countries allows allocation to special reserves and funds. Companies can thus, within certain limits, dispose and retain reported profits without being taxed immediately. However, the Group reports deferred tax ascribable to such untaxed reserves. The Group also reports deferred tax on other discrepancies between the booked value and tax value of assets and liabilities. Deferred tax receivables are only reported if they are expected to be utilised in the foreseeable future. Current tax rates are used for each individual country when calculating deferred tax. Leasing. Leasing is classified in the consolidated accounts as financial or operational leasing. Financial leasing occurs when the financial risks and benefits associated with ownership in all essential matters are assigned to the lessee. All other cases are operational leasing. For financial leasing, the present value of the minimum leasing charge, or the actual value if this is lower, is reported as a fixed asset. The remaining payment liability is reported under liabilities. Financial agreements for company cars, copying machines etc. are reported as operational agreements for materiality reasons. Property rental is classified as operational leasing. Segment reporting. Getinge’s activities are controlled and reported primarily by business area and secondarily by geographic area. Each segment is consolidated according to the same principles as the overall Group. In 2003, work was initiated to distribute operative assets and liabilities, investments, depreciation and additional expenses not ascribable to payments according to business area and geographic area. The extensive corporate acquisitions carried out in 2003 prevented this distribution from being done in a satisfactory manner, and consequently, only sales and profits have been reported by business area and geographic area. Work is in progress to achieve a satisfactory and reliable distribution, and the results will be presented in the next annual report at the latest.
Notes to the consolidated accounts 63 2 NET SALES AND PROFIT PER BUSINESS AREA AND GEOGRAPHIC MARKET, SEK M
BUSINESS AREA. Getinge’s business activities are run and report primarily by business area. The business areas’ consolidation is done according to the same principles as for the Group as a whole.
NET SALES PER BUSINESS AREA 2003 2002 Business area Infection Control 3 343.7 3 359.3 Business area Medical Systems 3 238.3 2 520.8 Business area Extended Care 2 535.1 2 720.0 Other 43.2 40.0 Total 9 160.2 8 640.1
OPERATING PROFIT PER BUSINESS AREA 2003 2002 Business area Infection Control 447.2 305.9 Business area Medical Systems 375.1 254.9 Business area Extended Care 435.2 487.6 Other -1.0 1.1 Total 1 256.5 1 049.5
GEOGRAPHIC MARKET. Getinge’s business activities are run and report secondarily by geographic area. The geographic areas’ consolidation is done according to the same principles as for the Group as a whole.
NET SALES PER GEOGRAPHIC MARKET 2003 2002 Western Europe 5 095.1 4 686.9 USA and Canada 2 634.6 2 761.4 Asia and Australia 979.7 818.5 Rest of the World 450.8 373.3 Total 9 160.2 8 640.1
OPERATING PROFIT PER GEOGRAPHIC MARKET 2003 2002 Western Europe 960.4 791.9 USA and Canada 241.5 191.0 Asia and Australia 49.3 53.5 Rest of the World 5.3 13.1 Total 1 256.5 1 049.5
3 NET SALES PER INCOME AREA, SEK M 2003 2002 Product sales 7 903.8 7 320.2 Service and installations 1 050.3 1 038.4 Renting out equipment 206.1 281.5 Total 9 160.2 8 640.1
4 DEPRECIATION ACCORDING TO PLAN, SEK M SPECIFICATION 2003 2002 Buildings and land improvements -37.5 -37.5 Machines and other technical plant -56.3 -56.8 Equipment, tools and installations -123.0 -107.4 Rental equipment -21.4 -21.3 Total depreciation, tangible fixed assets -238.2 -223.0
Goodwill -192.2 -165.1 Capitalised development costs -0.4 – Total depreciation, intangible fixed assets -192.6 -165.1
Total depreciation fixed assets -430.8 -388.1
DEPRECIATION IS REPORTED AS: Cost of goods sold -125.7 -116.5 Sales expenses -215.5 -182.8 Administration expenses -78.4 -79.4 Research and development costs -11.2 -9.4 Total -430.8 -388.1
64 Notes to the consolidated accounts 5 INTANGIBLE AND TANGIBLE FIXED ASSETS, SEK M ACQUISITION VALUE Value according to balance sheet 2003 Translation differences Reclassifications In new companies on acquisition Sales/disposals Investments Value according to balance sheet 2002
INTANGIBLE FIXED ASSETS Goodwill 3 398.4 1 772.1 -3.8 9.4 – -169.7 5 006.4 Capitalised development costs – 48.5 – – – -0.2 48.3 Total 3 398.4 1 820.6 -3.8 9.4 – -169.9 5 054.7
TANGIBLE FIXED ASSETS Buildings & land 1 074.9 22.5 -85.4 91.7 -0.2 -39.8 1 063.7 Machinery and other technical plant 723.5 70.7 -94.0 166.0 6.4 -25.5 847.1 Equipment, tools and installations 963.1 160.4 -111.0 155.6 5.2 -50.3 1 123.0 Rental equipment 215.0 25.9 -17.6 – – -26.3 197.0 Construction in progress 0.9 36.3 – 2.5 -1.1 – 38.6 Advance for tangible fixed assets 13.7 6.3 – 1.6 -6.7 -0.1 14.8 Total 2 991.1 322.1 -308.0 417.4 3.6 -142.0 3 284.2
ACCUMULATED DEPRECIATION Value according to balance sheet 2003 Translation differences Reclassifications In new companies on acquisition Sales/disposals Depreciation for the year Value according to balance sheet 2002
INTANGIBLE FIXED ASSETS Goodwill -594.8 -192.2 3.7 -6.2 – 45.5 -744.0 Capitalised development costs – -0.4 – – – – -0.4 Total -594.8 -192.6 3.7 -6.2 – 45.5 -744.4
TANGIBLE FIXED ASSETS Buildings & land -406.6 -37.5 24.1 -29.8 0.5 16.7 -432.6 Machinery and other technical plant -518.2 -56.3 79.2 -106.1 -1.0 21.8 -580.6 Equipment, tools and installations -671.1 -123.0 106.5 -113.3 -3.1 34.1 -769.9 Rental equipment -142.7 -21.4 13.5 – – 16.8 -133.8 Total -1 738.6 -238.2 223.3 -249.2 -3.6 89.4 -1 916.9
The total tax assessment value of the Group’s properties in Sweden was SEK 82.2 million (80.9 m) of which 14.3 million (14.3 m) is for land.
6 INTEREST INCOME AND SIMILAR PROFIT ITEMS, SEK M 2003 2002 Interest income 15.4 10.4 Currency profit – 10.4 Other 3.8 2.7 Total 19.2 23.5
7 INTEREST EXPENSES AND SIMILAR LOSS ITEMS, SEK M 2003 2002 Interest expenses -167.6 -180.3 Currency losses -0.6 – Other -12.1 -17.1 Total -180.3 -197.4
8 EARNINGS PER SHARE The number of shares in the company in 2003 amounted to 201 873 920. In 2003 a 4:1 split of the company’s shares was carried out. The number of shares before the split amounted to 50 468 480. When calculating the EPS, the time before the split has been taken into consideration. There is no dilution effect.
Notes to the consolidated accounts 65 9 TAXES, SEK M TAX COST: 2003 2002 Actual tax cost -318.9 -326.4 Deferred tax 1.2 72.5 Total tax cost -317.7 -253.9
THE RELATIONSHIP BETWEEN THE YEAR’S TAX COSTS AND THE REPORTED PROFIT BEFORE TAX Reported profit before tax 1 095.4 875.6 Tax according to current tax rate, 28% -306.7 -245.2 Adjustment for tax costs from previous year -48.3 -29.1 Tax effect of non tax-deductible costs: Depreciation of consolidated goodwill -52.5 -46.5 Other non-deductible costs -27.3 -32.0 Non-taxable income 15.2 5.4 Utilized loss carry-forwards 1) 44.8 65.9 Changed value of temporary differences2) 85.8 46.8 Adjustment for tax rates in foreign subsidiaries -28.7 -19.2 Reported tax cost -317.7 -253.9
1) The item consists of a loss carry-forward regarding companies that have reported losses previously, but generated a profit in 2003. 2) The item includes a reduction in a temporary difference due to the new legislation for a Group company (SEK 17.9 m). In addition deductible goodwill was generated in relation to an internal transfer of a Group business (SEK 23.4 m)
DEFERRED TAX ASSETS NET RELATE TO THE FOLLOWING TEMPORARY DIFFERENCES AND LOSS CARRY-FORWARDS: Deferred tax assets relating to: Temporary differences in fixed assets 220.3 148.7 Temporary differences in current assets 58.6 33.0 Temporary differences in provisions 162.1 98.2 Transfer to restructuring reserve 18.8 31.8 Loss carry-forward 254.8 331.2 Other temporary differences 75.6 16.3 Deferred tax liabilities relating to: Temporary differences in fixed assets -30.3 -8.0 Deferred tax on untaxed reserves -34.3 -56.1 Other temporary differences -37.3 -69.0 Deferred tax assets, net 688.3 526.1
The increase in deferred tax assets is due mainly to the tax assets in conjunction with the acquisition of Group companies.
DEFERRED TAX LIABILITIES, NET RELATE TO THE FOLLOWING TEMPORARY DIFFERENCES AND LOSS CARRY-FORWARDS: Deferred tax assets relating to Transfer to the restructuring reserve 1.3 0.3 Loss carry-forward 0.9 – Deferred tax liabilities relating to: Deferred tax on untaxed reserves -0.9 -41.0 Other temporary differences -21.0 -21.0 Deferred tax liability, net -19.7 -61.7
The balanced deficits are judged to be motivated because the companies they relate to are expected to generate profits in the near future.
NON-REPORTED TAX ASSETS: Temporary differences 81.7 122.6 Loss carry-forwards 250.0 226.6 Total 331.7 349.2
It has been assessed that the non-reported tax assets cannot be utilised in the foreseeable future.
Taxable temporary differences exist for shares in subsidiaries. Because there are no plans to sell the companies in the foreseeable future the deferred tax item has not been reported.
10 STOCK-IN-TRADE, SEK M 2003 2002 Raw materials 804.9 773.3 Work in progress 278.2 229.6 Finished products 680.5 635.7 Total 1 763.6 1 638.6
66 Notes to the consolidated accounts 11 PREPAID EXPENSES AND ACCRUED INCOME , SEK M 2003 2002 Accrued income 5.4 6.1 Short-term part of Alecta funds 1.9 13.5 Prepaid financial expenses 9.2 3.9 Prepaid rental expenses 8.5 7.1 Accrued interest income 13.0 1.4 Other prepaid expenses and accrued income 88.7 91.2 Total 126.7 123.2
12 UNUTILIZED OVERDRAFT FACILITIES AND CREDIT FACILITIES The granted, unutilized overdraft for the Group was SEK 103.8 million (75.3 m). In addition to this, on 31 December 2003, there were outstanding short-term credit facilities of SEK 2,192.8 million (1,034.2 m) and committed, unused facilities for medium-term credit which can be utilized without qualification, of EUR 150 million, corresponding to SEK 1,364.1 million (1,704.5 m) at the closing rate of exchange. A commitment fee is payable for committed facilities, usually not in excess of 0.315 % of the unutilized part.
13 THE GROUP’S INTEREST-BEARING NET DEBT, SEK M 2003 Change 2002 Change 2001 Current liabilities to credit institutions 722.6 560.0 162.6 -1 008.5 1 171.1 Long-term liabilities to credit institutions 3 245.1 829.8 2 415.3 281.8 2 133.5 Pensions liabilities, interest-bearing 1 388.7 177.7 1 211.0 121.2 1 089.8 Less liquid funds -504.2 -91.4 -412.8 -48.4 -364.4 Total 4 852.2 1 476.1 3 376.1 -653.9 4 030.0
Maturity structure of the Group’s interest-bearing liabilities to credit institutions <=12 months 1-2 years 2-5 years Over 5 years Liabilities to credit institutions 722.6 – 2 153.7 1 091.3
At the end of 2003 the Group’s long-term interest-bearing liabilities amounted to SEK 3 245.1 million, which corresponds to the company’s average, confirmed, credit facility of EUR 150 million, the private placement of USD 232.5 million and EUR 15million respectively, completed during the year and other medium-term credit facilities that are available to the Group.
14 INTEREST-BEARING SHORT-TERM LOANS, SEK M 2003 2002 Liabilities to credit institutions 722.6 162.6 Total 722.6 162.6
15 ACCRUED EXPENSES AND DEFERRED INCOME, SEK M 2003 2002 Salaries 321.3 222.9 Payroll overheads 86.6 71.1 Commission 40.2 41.9 Interest expenses 29.5 23.8 Other accrued expenses and deferred income 254.5 259.9 Total 732.1 619.6
16 PLEDGED ASSETS AND CONTINGENT LIABILITIES, SEK M PLEDGED ASSETS 2003 2002 Property mortgages – 9.4 Floating charges 33.1 20.0 Assets burdened with retention of title 44.7 46.6 Total 77.8 76.0
CONTINGENT LIABILITIES Guaranteed 145.4 161.8 Discounted fluctuations in exchange rates 14.3 – Other contingent liabilities 6.9 5.7 Total 166.6 167.5
The assets burdened with retention of title are security for interest-bearing liabilities to credit institutions.
Notes to the consolidated accounts 67 17 LEASING, SEK M Leasing costs for assets held via operational leasing such as leased premises, machines and mainframe computers and office equipment are recorded among operating costs and for the Group amount to SEK 95.3 million (the variable cost included is SEK 5.6 million). No significant leasing agreements were signed in 2003 and the increase in leasing includes leasing agreements in acquired companies. Future minimal leasing agreements for non-annullable leasing contracts are as follows:
Financial leasing agreements Operational leasing agreements 2004 4.1 80.0 2005-2008 14.8 125.6 2009 and later 18.3 19.4 Less interest -4.0 Current minimum payment in line with financial leasing agreements 33.2 Less short-term part -4.0 Long-term part of financial leasing agreement 29.2
FIXED ASSETS HELD THROUGH FINANCIAL LEASING Buildings & land Machinery & plant Equipment & tools Acquisition value 49.9 0.9 4.1 Accumulated depreciation -7.6 -0.8 -1.8 Book value 42.3 0.1 2.3
18 PROVISIONS FOR PENSIONS, SEK M Provisions for pensions, non interest-bearing Provisions for pensions, interest-bearing Value according to balance sheet 2002 130.7 1 211.0 Provisions 3.8 108.6 Utilized funds -2.4 -63.0 In new companies on acquisition 0.2 161.8 Reclassifications 15.2 -11.4 Translation differences -1.4 -18.3 Value according to balance sheet 2003 146.1 1 388.7
19 RESTRUCTURING RESERVES, SEK M Value according to balance sheet 2003 Translation differences Reclassification Unutilized funds, restored Restored funds Provisions in conjunction with acquisitions Provisions Value according to balance sheet 2002
Restructuring reserves in current activities 0.5 5.9 -0.4 – – – 6.0 RESTRUCTURING RESERVES IN CONJUNCTION WITH ACQUISITIONS Siemens LSS – – 25.2 -4.2 – – 0.2 21.2 Heraeus 231.4 – – -128.7 -31.51) – -2.3 68.9 Jostra – – 128.5 -38.4 – – -0.4 89.7 Other 21.6 – 5.2 -18.2 – – -1.3 7.3 Total 253.5 5.9 158.9 -189.9 -31.5 – -3.8 193.1
The majority of the remaining restructuring reserves are estimated to be implemented in 2004.
1) The unutilized part (SEK 31.5 m) of the restructuring reserve has been adjusted against goodwill.
20 OTHER PROVISIONS, SEK M Guarantee reserve Anaesthetics 1) Other Total Value according to balance sheet 2002 115.4 – 232.1 347.5 Provisions 65.9 205.1 103.4 374.4 Restored funds -69.1 -23.0 -138.0 -230.1 In new companies on acquisition 28.9 – 45.0 73.9 Unutilized funds, restored -2.5 – -12.0 -14.5 Reclassifications 18.4 – -16.0 2.4 Translation differences -7.3 0.9 -3.3 -9.7 Value according to balance sheet 2003 149.7 183.0 211.2 543.9
1) Close-down reserve for non-consolidated business.
Other provisions mainly consist of a reserve for a part-time pension in the German companies. The size of the provisions is decided in line with technical insurance terms 80.6. Other items consist of many smaller types of liabilities that are uncertain regarding timing or amount.
68 Notes to the consolidated accounts 21 AVERAGE NUMBER OF EMPLOYEES 2003 2002 The Group Male Female Total Male Female Total Algeria 3 – 3 – – – Australia 73 14 87 65 12 77 Austria 26 3 29 14 2 16 Belgium 58 7 65 36 5 41 Brazil 3 2 5 – – – Canada 90 23 113 57 15 72 China 22 7 29 13 4 17 Czech Republic 7 2 9 7 2 9 Denmark 83 40 123 65 8 73 Finland 9 2 11 8 2 10 France 455 129 584 458 114 572 Germany 1 088 342 1 430 1 121 276 1 397 Hong Kong 8 5 13 7 4 11 Ireland 32 18 50 30 18 48 Italy 69 32 101 68 26 94 Japan 43 11 54 36 11 47 Luxemburg 1 – 1 7 4 11 Netherlands 116 51 167 106 62 168 Norway 13 4 17 12 3 15 Poland 12 4 16 12 5 17 Russia 8 5 13 – – – South Africa 14 5 19 22 7 29 Spain 19 8 27 11 7 18 Sweden 1 014 250 1 264 730 130 860 Switzerland 31 11 42 13 5 18 UK 584 165 749 579 166 745 USA 771 268 1 039 885 239 1 124 Total 4 652 1 408 6 060 4 362 1 127 5 489
Break-down of executive management on the closing date 2003 2002 FEMALE: Board members 2 1 Other members of the Group company’s management including the CEO 14 9 MALE: Board members 4 5 Other members of the Group company’s management including the CEO 144 102 Total 164 117
Notes to the consolidated accounts 69 22 STAFF COSTS, SEK M 2003 2002 Board and CEO Other Total Board and CEO Other Total Salaries and remuneration 124.1 2 304.3 2 428.4 103.9 2 170.8 2 274.7 Payroll overheads 21.8 484.3 506.1 21.1 495.7 516.8 Pension costs 12.8 105.9 118.7 9.2 90.4 99.6 Total 158.7 2 894.5 3 053.2 134.2 2 756.9 2 891.1
Salaries and remuneration per country 2003 2002 Board Of which, Board Of which, and CEO bonus Other Total and CEO bonus Other Total Algeria – – 0.2 0.2 Australia 1.2 0.4 18.9 20.1 1.1 0.3 17.4 18.5 Austria 2.5 0.8 7.5 10.0 0.9 0.2 5.4 6.3 Belgium 4.4 1.8 23.9 28.3 1.0 – 16.4 17.4 Brazil – – 0.1 0.1 – – – – Canada 3.4 0.8 28.6 32.0 2.1 0.6 21.2 23.3 China – – 2.9 2.9 – – 2.5 2.5 Czech Republic 0.5 – 0.7 1.2 0.6 0.2 1.0 1.6 Denmark 3.3 0.2 51.7 55.0 1.9 0.2 32.2 34.1 Finland 0.8 0.1 3.1 3.9 0.8 0.2 2.9 3.7 France 17.6 5.5 166.0 183.6 18.2 3.7 174.8 193.0 Germany 19.8 7.5 606.7 626.5 17.5 5.4 510.5 528.0 Hong Kong 2.1 0.4 3.6 5.7 2.4 0.4 3.7 6.1 Ireland 1.1 0.3 16.3 17.4 1.4 0.5 14.4 15.8 Italy 2.4 0.2 33.4 35.8 2.2 0.7 31.2 33.4 Japan 4.0 0.6 29.9 33.9 3.6 – 23.0 26.6 Luxemburg 0.5 – 4.3 4.8 0.8 – 6.7 7.5 Netherlands 9.5 2.2 66.4 75.9 6.8 1.7 53.9 60.7 Norway 1.0 0.2 9.1 10.1 1.1 0.2 8.2 9.3 Poland 0.8 0.2 3.2 4.0 0.7 0.1 3.7 4.4 South Africa 0.4 – 2.7 3.1 0.4 – 2.1 2.5 Spain 1.4 – 5.9 7.3 1.1 – 4.5 5.6 Sweden 20.7 5.3 366.9 387.6 16.8 2.9 249.7 266.5 Switzerland 4.1 – 20.6 24.7 – – 12.0 12.0 UK 12.4 3.6 285.9 298.3 12.1 3.2 298.6 310.7 USA 10.2 1.6 545.8 556.0 10.4 2.0 674.8 685.2 Total 124.1 31.7 2 304.3 2 428.4 103.9 22.5 2 170.8 2 274.7
Remuneration to Senior Management Principles: The Annual General Meeting decides on remuneration to the Chairman of the Board and its members. There is no specific remuneration for committee work. Employee representatives do not receive Board remuneration. Remuneration to the CEO and other senior management is made up in the form of basic pay, variable remuneration, other benefits and pensions. Other senior management are the 6 people, who together with the CEO, make up the Group management. For management structure see pages 86-87.
The division between basic pay and variable remuneration should be in proportion to the manager’s level of responsibility and authority. The CEO’s variable remuneration is a maximum 50% of the basic pay. Other managers’ variable is based on the result in relation to the individually set goals.
There are no benefits or remuneration in the form of financial instruments.
Remuneration and other benefits Basic pay/ Variable re- Other Pension Other re- Total during the year (SEK 000) Board fees muneration benefits costs muneration Chairman of the Board 450 – – – – 450 Board members 1 125 – – – – 1 125 Chief Executive Officer 4 380 2 190 397 3 345 644 10 931 Other senior management* 11 620 8 061 489 3 372 287 23 829 Total 17 575 10 251 886 6 717 858 36 360
*6 people
Comments to the table • Variable remuneration refers to the 2003 financial year’s cost-accounted bonus, paid out in 2004. For information how bonuses break-down, please see below • Other benefits refer to company car and house supplied. • The Chairman of the Board has not received any remuneration other than his Board fee.
The CEO has health insurance totalling 24.5% of the pension-based pay between 20-30 basic amounts and 32.5% of the pension-based pay that exceeds 30 basic amounts. The agreement is independent in relationship to other pension benefits. Bonus: The CEO’s bonus for 2003 was based on the individual goals set by the Board. The bonus sum for 2003 was equivalent to 49% of basic pay. Other senior managers’ bonus for 2003 was based on a combination of the result of the individual business area and individual goals. Pensions: Pension benefits for the CEO, except the applicable ITP pension are as follows: The CEO has the right to a pension from the age of 60. The pension will be 70% of the pension-based pay between 60 and 65 years. At 65 and thereafter the pension will be 50% of
70 Notes to the consolidated accounts the pension-based pay in excess of 20 basic amounts that the CEO had at age 60 from the company. Pension-based pay is considered to be the basic pay. Survivor annuity is 16.25% of the pension-based pay in excess of 20 basic amounts. Other senior management’s pension age varies between 60 and 65. Pension agreements state that the pension premium should be 20 -70% of the pension-based pay. All pension benefits are transferable, i.e. non-conditional of future employment. Severance pay: There is a mutual period of notice of 6 months between the company and the CEO. If termination of employment is on the part of the company then severance pay will be awarded of 12 months’ pay. Severance pay is not off-set against any other income. If termination of employment is on the part of the CEO there will be no severance pay. Upon termination of employment of any other executive managers they have the right to severance pay of a minimum of 6 months and a maximum of 12. Drafting and decision making: During the year the remuneration committee has given the Board its recommendations concerning remuneration principles for the remuneration of the executive management. The recommendations have included the proportion between fixed and variable remuneration and the size of possible pay increases. The remuneration committee has also proposed criteriafor deciding bonuses, dividends and the size of the pension conditions and severance pay. The Board has discussed the remuneration committee’s proposals and decided in line with the remuneration committee’s recommendations. Remuneration to the CEO for the 2003 financial year has been decided by the Board without the remuneration committee’s recommendations. Remuneration to other executive management has been decided by the CEO in consultation with the Chairman of the Board. During 2003, the remuneration committee met three times. The committee’s work has been carried out with the support of external experts in issues concerning remuneration levels and structures. Options scheme for executive management in the US: In January 2000, the US subsidiary introduced a synthetic options scheme for its executive management. The scheme covers around 20 executives and totals 310,000 options. The scheme runs from 25 January 2000 until 25 January 2005. The options’ exercise price will be calculated as the difference between the initial value of SEK 23.66 and the Getinge share price in force on the day of the redemption. The guaranteed value has been adjusted from SEK 97.55 to SEK 94.62 due to the bonus share element of the new share issue in 2001 and from 94.62 to 23.66 due to the split in 2003. The options holder has the right to redeem a part of the issued options for each full year of employment over a five-year period. The Getinge Group has signed an insurance contract that fully covers any possible price surge (but not a fall below 23.66) during the options’ duration. Getinge pays an annual fee for this insurance. When Getinge entered this agreement a sum was deposited in a bank account, in conjunction with the redemption payments, part of which is in proportion to the number of redeemed options. Allocation has been made for payroll overheads.
The number of options in the table below have been calculated on the number of shares after the split in 2003.
The holders of these options on 31 December 2003 were as follows:
Country Number of options Executive management of American subsidiaries USA 203 171 Total 203 171
In 2003 the following options were utilized: Number Exercise day Exercise price Difference between the guaranteed value, SEK 000 28 352 03-04-02 39.63 453 87 776 03-07-10 53.25 2 597 30 928 03-10-07 64.38 1 259 26 400 03-12-31 70.50 1 237 173 456 5 546
In 2003 a further synthetic options scheme was introduced, consisting of 120 000 options, to the executive management. The scheme runs from 2003 to 2005. The options value is calculated as the difference between SEK 40 and the Getinge share price at the time of redemption. The option holders have the right to exercise one third of the options after every full year of employment over a period of three years. The value of the options and payroll overheads will be taken up as income on a running basis as the options are utilized. No options were utilized during the year. The scheme has no dilution effects.
23 AUDITING FEES AND REMUNERATION, SEK M FEES TO DELOITTE & TOUCHE AB 2003 2002 Auditing assignments 9.5 5.1 Other assignments 20.4 4.4
FEES TO ERNST & YOUNG AB 2003 2002 Auditing assignments – 2.4 Other assignments – 1.2
Deloitte & Touche is the Company’s auditor. Auditing assignments refer to the auditing of the annual report and accounts, as well as the Board’s and the CEO’s administration, other assignments that the company’s auditors are required to perform and advice or other support brought about by observations from auditing or carrying out similar tasks. Other assignments refer mainly to advice given about auditing and taxation issues plus assistance in connection with corporate acquisitions.
Notes to the consolidated accounts 71 24 SUPPLEMENTARY INFORMATION TO THE CASH FLOW STATEMENT, SEK M ACQUISITION OF SUBSIDIARIES 2003 2002 Goodwill 1 777.2 387.6 Other fixed assets 366.9 52.9 Stock-in-trade 311.9 84.4 Receivables 560.0 193.4 Liquid assets 174.1 3.5 Provisions for pensions, interest-bearing -163.9 -130.3 Interest-bearing liabilities -388.6 -12.9 Non interest-bearing liabilities -825.3 -405.0 Paid purchase price 1 812.3 173.6 Net debt in acquired companies 378.4 139.7 Effect on the Group’s net debt 2 190.7 313.3
LIQUID ASSETS Cash and bank 504.2 412.8 Liquid assets 504.2 412.8
25 TRANSACTIONS WITH RELATED PARTIES GROUP COMPANIES. When supplying products and services between Group companies, market conditions and pricing are applied. Intra-Group sales amounted to SEK 4,581 million and SEK 3,545 million for 2003 and 2002. No board member or executive manager has, or has had, any direct or indirect participation in any business transactions, between themselves and the Company, that are or were unusual in character , regarding terms or conditions.
26 FINANCIAL RISK MANAGEMENT AND FINANCIAL DERIVATIVE INSTRUMENTS Most of the Getinge Group’s operations are located outside Sweden. This situation entails exposure to different types of financial risks that may cause fluctuations in results, cash flow and shareholders’ equity due to changes in exchange rates and interest rates. In addition, the Group is exposed to refinancing and counter-party risks. The primary role of the parent company’s treasury unit is to support business activities and identify the best way of managing the Group’s financial risks in line with the Board’s established policy. Getinge’s financial activities are centralised to benefit from economies of scale, ensure good internal control and to facilitate follow-up of risks. Currency risks. Currency risks are made up of exchange rate fluctuations having a negative impact on the Group’s profits and shareholders’ equity. Currency exposure occurs in connection with payments in foreign currency (transaction exposure) and when translating foreign subsidiaries’ balance sheets and income statements into SEK (translation exposure). Effects of a stronger SEK and a weaker USD had a negative impact on profits for the year of around SEK 140 million. Similar currency effects are also expected in 2004.
Transaction exposure. Payments as a result of sales income and expenses for goods sold in foreign currencies causes currency exposure that affects Group profits in the event of exchange rate fluctuations. The Group’s flow of foreign currencies consists mainly of the income generated by export sales. The most important currencies are USD, EUR and GBP. Getinge’s finance policy states that expected net invoicing in foreign currency for the coming 6-12 months shall be hedged in its entirety, but hedging up to 18 months must be approved by the Board. Hedging is carried out with the help of currency derivatives. Deferred gains for currency derivatives from hedging of transaction exposure was SEK 115.9 million on 31 December 2003. The effects of the outstanding currency deriva- tives will affect profits in 2004 and 2005. Conversion risk – income statement. When converting foreign subsidiaries’ results into SEK currency exposure occurs, which when exchange rates fluctuate, affect the Group’s profits. In accordance with the Group’s finance policy the budgeted operating profit after amortisation of goodwill in USD, EUR and GBP is hedged up to 90% with the help of currency derivatives. This hedging activity nor- mally occurs at the end of the fourth quarter the previous year and during the first quarter of the financial year in question. Conversion risk – balance sheets. When converting foreign subsidiaries’ net assets into SEK currency exposure occurs, which can affect the Group shareholders’ equity. To minimise the effects of this conversion the exposure arising shall, in accordance with the Group’s finance policy, be hedged with loans or currency derivatives in the subsidiaries’ relevant currency. Interest rate risks. Interest rate risks are the changes in market interest rates that negatively affect the Group’s net interest. How quickly interest rate changes have an affect on net interest depends on the fixed interest term of the loans. On 31 December 2003 the average fixed interest term for Group borrowings was around 7.1 months, which is well within the Group’s finance policy, which states that the fixed interest term in borrowings should be no more than 2 years. In order to reach the desired fixed interest term for borrowings interest derivatives are used. If the average interest rate for currencies represented in the Group’s borrowings at the end of the year changed momentarily by 1 percentage point this would affect profits by SEK +/- 20.2 million on an annual basis. The fixed interest term on the Group’s interest-bearing assets and liabilities:
SEK m <=12 months >1-<=2 years >2-<=5 years Over 5 years Financial assets Liquid assets 504.2 – – – Financial liabilities Financial liabilities including derivative instruments 3 852.4 – 155.1 -39.9
Interest-bearing pension liabilities are excluded from the table above. Financing and liquidity risk. Financing risk is seen as the risk to the cost being higher with limited financing opportunities as the loan is prolonged and that the ability to pay cannot be met as a result of insufficient cash-in-bank or difficulties in securing finance. The Group’s liquid assets are committed over the short-term to use the profit for amortizing loans. The financial policy of the Group states that refinancing risks are managed by signing long-term committed credit agreements. At the start of 2003 the Group had a committed loan facility of USD 200 million with a group of banks. The agreement matures in the spring of 2004. This agreement was refinanced during Q1 2004. The new facility is expected to amount to EUR 210 million. In addition the Group has a further EUR 150 million in a medium-term loan facility with a group of banks. This agreement matures in the spring of 2007. In Q4 the Group issued bonds worth USD 250 million in a Private Placement to institutional investors. These bonds have a maturity of five, seven and ten years respectively. In addition to these credit facilities the Group uses short-term uncommitted credit lines.
72 Notes to the consolidated accounts Credit and counter-party risk. The Group’s financial transactions cause credit risks with regards to financial counter-parties. Credit risks or counter-party risks are the risks of losses accruable upon the counter parties not complying with their commitments. Getinge’s finance policy states that the credit risk shall be limited through only creditworthy counter parties being accepted and through limited involvement with the said parties. On 31 December 2003 the total counter-party risk in derivative instruments was SEK 40.2 million. Credit risks in outstanding derivatives are limited by the off-set rules agreed with the respective counter-party. The Group’s liquidity is placed in bank accounts and thus has negligible credit risks. Commercial credit risks are limited by a diverse creditworthy customer base. The accounts receivable considered to be of risk have been reserved and affected the operating profit. Financial derivative instruments. Getinge uses financial derivative instruments to manage interest and currency exposure arising in its business. All outstanding financial derivative instruments on 31 December 2003 were held for hedging purposes and subsequently hedge accounting was applied with respect to these instruments.
Outstanding derivative instruments on 31 December 2003, SEK m
Capital amount Book value Actual value Interest derivative 818.4 0.7 0.4 Currency derivative 3 881.8 – 114.1 Interest/currency derivative (combined instrument) 1 485.3 1.8 -74.3 Total 6 185.5 2.5 40.2
For capital amounts the following figures make up the basis for calculating the derivatives’ actual value. The book value of the interest derivatives and combined instruments make up accrued interest.
Division of currency for outstanding derivative instruments, SEK m EUR 2 143.6 USD 2 059.1 GBP 318.0 JPY 165.3 CAD 109.1 AUD 54.0 CHF 34.2 DKK 25.7 HKD 11.6 NOK 10.4 PLN 7.4 ZAR 6.5 CZK 5.6 SEK 1 235.0 Total 6 185.5
The capital amount is shown in the table above. The combined instruments are booked in the currency paid in theses swaps.
Maturity structure of derivative instrument SEK m 2004 2005 2006 2007 2008 2009* Interest derivative 218.2 145.5 – – 181.9 272.8 Currency derivative 3 491.1 390.7 – – – – Interest/currency derivative (combined instruments) – – – – 627.0 858.3
* or later
27 OTHER RECEIVABLES Other receivables consist of the advanced price paid for the acquisition of Siemens LSS (112.2) and the advanced price paid for Siemens LSS’ net assets for France and India (73.7), to be acquired at the beginning of 2004.
28 EVENTS AFTER THE YEAR END The Swedish Financial Accounting Standards Council’s recommendation No. 29 for Employee’s Remuneration will be applied in financial reports from 2004. The ITP plan, financed through hedging in Alecta, is a benefit-based pension plan covering a number of employers. The effects on this pension plan from the new recommendations are that companies usually have to report their proportional share of the benefit-based pension commitment and the administrative assets and expenses linked to the pension plan. The accounts should also include information required for benefit-based pension plans. The above accounting method requires information according toRR29. Alecta does not currently have the ability to provide this information, which is why there is a degree of uncertainty surrounding how the accounts’ main regulation for benefit-based pension plans will affect the company’s and Group’s profits and financial position. Until such time as necessary information is received from Alecta the above named pension plan will be booked as a fee-based pension plan according to point 31 of RR29. This means that premiums paid to Alecta on an ongoing basis will also be shown as costs in future.
A confirmed loan facility of USD 200 million with a group of banks that falls due in the spring of 2004, has been refinanced during Q1 2004. The new facility amounts to EUR 210 million and falls due in 2009.
No other items of interest have occurred since the closing day but before the signing of this annual report. The balance sheet total, income statement and allocation of profit will be decided upon at the AGM on 21 April 2004.
Notes to the consolidated accounts 73 Income statement for the Parent company
SEK M Note 2003 2002 Administrative expenses 1 -73.2 -45.4 Other operating income – 0.1 Operating profit 1, 14, 15 -73.2 -45.3
Income from participations in Group companies 3 347.3 242.1 Interest income and similar profit items 4 164.8 187.7 Interest expenses and similar loss items 5 -166.9 -186.5 Profit before appropriations 272.0 198.0
Appropriations 6 -5.3 3.8 Profit before tax 266.7 201.8
Tax on profit for the year 7 8.9 12.8 Profit for the year 275.6 214.6
74 Income statement for the Parent company Balance sheet for the Parent company
SEK M Note 2003 2002 ASSETS FIXED ASSETS Tangible fixed assets 1, 2 34.2 23.6 Shares in Group companies 8 3 106.5 2 902.5 Long-term financial receivables 3.0 1.1 Deferred tax asset 7 0.2 – Total fixed assets 3 143.9 2 927.2
CURRENT ASSETS Receivables from Group companies 5 649.3 5 220.8 Other receivables 150.6 – Prepaid expenses and accrued income 9 23.7 6.5 Liquid assets 150.0 147.6 Total current assets 5 973.6 5 374.9 TOTAL ASSETS 9 117.5 8 302.1
SHAREHOLDERS’ EQUITY AND LIABILITIES SHAREHOLDERS’ EQUITY Share capital 100.9 100.9 Reserve fund 1 825.1 1 825.1 Share premium reserve 699.6 699.6 Total restricted shareholders’ equity 2 625.6 2 625.6 Unrestricted reserves 353.5 300.1 Profit for the year 275.6 214.6 Total unrestricted shareholders’ equity 629.1 514.7 Total shareholders’ equity 3 254.7 3 140.3
Untaxed reserves 6.5 1.1
LONG-TERM LIABILITIES Interest-bearing long-term loans 3 189.8 2 405.4 Total long-term liabilities 3 189.8 2 405.4
CURRENT LIABILITIES Interest-bearing short-term loans 10 2 598.2 2 707.6 Accounts payable 8.0 4.9 Tax liabilities 7 11.3 0.4 Accrued expenses and prepaid income 11 49.0 42.4 Total current liabilities 2 666.5 2 755.3 TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 9 117.5 8 302.1
Pledged assets – – Contingent liabilities 12 149.6 34.2
Balance sheet for the Parent company 75 Changes in shareholders’ equity – Parent company
SEK M Share capital Reserve fund Share premium Unrestricted Total reserve reserves Shareholders’ equity 31 December 2001 100.9 1 825.1 699.6 460.9 3 086.5 Dividend -189.3 -189.3 Profit for the year 214.6 214.6 Group contribution after deduction for tax effect 28.5 28.5 Shareholders’ equity 31 December 2002 100.9 1 825.1 699.6 514.7 3 140.3 Dividend -214.5 -214.5 Profit for the year 275.6 275.6 The Group contribution after deduction for tax effect 53.3 53.3 Shareholders’ equity 31 December 2003 100.9 1 825.1 699.6 629.1 3 254.7
Each share’s nominal value is SEK 0.50 . The share capital consists of 13,502,160 A shares carrying 10 voting rights per share and 188,371,760 B shares carrying one voting right per share, totalling 201,873,920 shares.
76 Changes in shareholders’ equity – Parent company Cash flow statement for the Parent company
SEK m Note 2003 2002 CURRENT ACTIVITIES Operating profit -73.2 -45.3 Depreciation 6.5 1.9 -66.7 -43.4 Payments from participations in Group companies 236.8 182.1 Interest received and similar income 152.4 187.7 Interest paid and similar expenses -161.4 -186.5 Taxes paid -1.0 -3.1 Cash flow before changes in working capital 160.1 136.8
CHANGES IN WORKING CAPITAL Current receivables -459.3 262.7 Current liabilities 4.0 3.7 Cash flow from current activities -295.2 403.2
INVESTMENT ACTIVITIES Acquisitions of subsidiaries -233.9 -31.4 Sale of subsidiary 50.4 – Investment in tangible assets -17.0 -8.9 Cash flow from investment activities -200.5 -40.3
FINANCING ACTIVITIES Change in interest-bearing loans 675.1 -241.8 Change in long-term receivables -1.9 19.2 Dividend paid -214.5 -189.3 Group contributions received from subsidiaries 39.5 90.9 Cash flow from financing activities 498.2 -321.0
Cash flow for the period 2.4 41.9 Liquid funds at period’s start 147.6 105.7 Liquid funds at period’s end 150.0 147.6
Cash flow statement for the Parent company 77 Notes to Parent company accounts
Accounting principles A statement of Getinge’s accounting principles is found on pages 62-63. Reporting the Group contribution has been in accordance with the Swedish Financial Accounting Standards Council’s statement. Group contributions are accounted according to the financial consequence.
1 DEPRECIATION ACCORDING TO PLAN, SEK M SPECIFICATION 2003 2002 Buildings and land improvements -0.1 -0.1 Equipment, tools and installations -6.5 -1.8 Total depreciation fixed assets -6.6 -1.9
Depreciation reported as Administration expenses -6.6 -1.9
2 TANGIBLE FIXED ASSETS, SEK M ACQUISITION VALUE TANGIBLE FIXED ASSETS
Value according to balance sheet 2002 Investments Value according to balance sheet 2003 Buildings & land 4.3 – 4.3 Equipment, tools and installations 22.5 17.0 39.5 Total 26.8 17.0 43.8
ACCUMULATED DEPRECIATION TANGIBLE FIXED ASSETS
Value according to Depreciation Value according to balance sheet 2002 for the year balance sheet 2003 Buildings & land -0.5 -0.1 -0.6 Equipment, tools and installations -2.7 -6.4 -9.1 Total -3.2 -6.5 -9.7
3 INCOME FROM PARTICIPATIONS IN GROUP COMPANIES, SEK M 2003 2002 Dividend Group companies 326.8 250.0 Write-down of shares in Group companies -17.1 -7.9 Profit from sale of Group companies 37.6 – Total 347.3 242.1
4 INTEREST INCOME AND SIMILAR PROFIT ITEMS, SEK M 2003 2002 Interest income from Group companies 138.8 151.8 Interest income 24.1 6.1 Currency gains 1.9 29.8 Total 164.8 187.7
5 INTEREST COSTS AND SIMILAR LOSS ITEMS, SEK M 2003 2002 Interest costs, Group companies -37.2 -26.2 Interest costs -98.3 -108.5 Currency losses -24.8 -40.4 Other -6.6 -11.4 Total -166.9 -186.5
6 APPROPRIATIONS AND UNTAXED RESERVES, SEK M APPROPRIATIONS 2003 2002 Change to tax allocation reserve – 3.9 Difference between recorded depreciation and depreciation according to plan -5.3 -0.1 Total -5.3 3.8
UNTAXED RESERVES Accelerated depreciation 5.5 0.2 Tax allocation reserve 0.9 0.9 Total 6.4 1.1
78 Notes to Parent company accounts 7 TAXES, SEK M TAX COST: 2003 2002 Actual tax cost 8.7 12.8 Deferred tax 0.2 – Total tax cost 8.9 12.8
THE FOLLOWING CURRENT TAX ITEMS RELATE TO ITEMS THAT HAVE BEEN ACCOUNTED FOR DIRECTLY AGAINST SHAREHOLDERS’ EQUITY: Group contribution 20.7 11.1
THE RELATIONSHIP BETWEEN THE YEAR’S TAX COSTS AND THE REPORTED PROFIT BEFORE TAX: Reported profit before tax 266.7 201.8 Tax according to current tax rate, 28% -74.7 -56.5 Adjustment for tax costs from previous year -8.3 3.3 Tax effect of non tax-deductible costs Other non-deductible costs -10.7 -4.0 Non-taxable income 1) 102.6 70.0 Reported tax costs 8.9 12.8
1) The item consists of a tax-free dividend from a subsidiary and a tax-free capital gain from the Group’s internal sale of a subsidiary.
The applicable tax rate has been calculated on the basis of the tax rate that applies to the Parent company and in this case is 28% for both 2003 and 2002.
DEFERRED TAX ASSETS NET RELATE TO THE FOLLOWING TEMPORARY DIFFERENCES AND LOSS CARRY-FORWARDS: Loss carry-forward 0.2 – Deferred tax assets net 0.2 –
NON-REPORTED TAX ASSETS: Temporary differences – -45.1 Total – -45.1
8 SHARES IN SUBSIDIARIES Swedish company Number of Book value Book value Parent company’s holding Registered office reg. no. shares SEK m 2003 SEK m 2002 Arjo AB Eslöv 556473-1700 23 062 334 2 008.6 2 008.6 Getinge Sterilization AB Halmstad 556031-2687 50 000 452.2 452.2 Getinge Surgical Systems AB Halmstad 556535-6317 100 234.0 0.1 Getinge Airship AB Halmstad 556535-6309 100 0.1 0.1 Getinge Disinfection AB Halmstad 556042-3393 25 000 117.7 117.7 Getinge Letting AB Halmstad 556495-6976 1 000 0.1 0.1 Getinge Skärhamn AB Tjörn 556412-3569 1 000 5.7 5.7 LIC Audio AB Solna 556058-7460 1 000 5.6 5.6 Getinge Australia Pty Ltd Australia 39 500 8.6 8.6 Getinge-Arjo Holding GmbH Austria – – – Arjo GmbH Austria 1 273 0.4 0.4 Getinge D.S.E. NV Belgium 600 1.5 1.5 Getinge Sterilizing Equipment Inc Canada 1 230 100 1.3 1.3 Getinge Industries Zhuhai (Ltd) China 1 000 1.1 1.1 Getinge/Arjo A/S Denmark 525 3.3 3.3 Getinge Lunatronic ApS Denmark 399 000 14.5 14.6 OY Getinge AB Finland 15 – – Getinge/Arjo France SA France 150 250 216.3 216.3 Getinge & Castle International Ltd Greece 100 1.6 1.6 Getinge Scientific KK Japan 10 000 0.6 0.6 Getinge Norge A/S Norway 4 500 5.0 5.0 Getinge Poland Sp Zoo Poland 500 12.7 12.7 Getinge South Africa (Pty) Ltd South Africa 500 – 17.1 NeuroMédica SA Spain 40 000 15.6 15.6 Getinge Reinsurance AG Switzerland 2 000 – 12.7 Total book value 3 106.5 2 902.5
The parent company’s holding of shares in the subsidiaries constitutes the entire capital and voting rights of the respective company. In Getinge Lunatronic ApS the Group’s votes and capital are 75%. After the acquisition the Group owns 75% of the shares. Due to the basis of the existing agreement for the acquisition of the remaining 25%, these have been taken up as Group interest by entering the expected future redemption price as a liability. Shares in Getinge South Africa have been written down in 2003. Getinge Reinsurance AG has been sold internally within the Group.
Subsidiaries of sub-Groups: The Getinge Group, with its business in many countries, is organised into sub-Groups in several categories, and the legal structure cannot therefore be reflected in a tabular presentation. The following is a list of the companies, which were a part of Getinge’s sub-Groups as of 31 December 2003. The ownership interest is 100% except in certain cases. The Group’s voting rights and share of the capital is 76% in Lequeux Algérie. Jostra Italy, which was included in the acquisition of Jostra is 40% owned externally.
Notes to Parent company accounts 79 Sweden Algeria Denmark Maquet Sales & Service GmbH Getinge Luxembourg Sàrl Maquet AG Arjo Ltd Med AB Getinge Algérie S.A. Getinge Watersystems A/S MediKomp GmbH Netherlands UK 556473-1718 Eslöv Australia Polystan A/S Meditechnik GmbH Arjo Nederland BV Arjo Ltd Arjo Holding AB Arjo Hosp Equipm Pty Ltd Australia France Hong Kong Copharm B.V. Arjo Ltd Branch 556402-6663 Eslöv Austria ALM SA Arjo Ltd Hong Kong Getinge/Arjo Holding Netherlands Buchanan Leasing Ltd Arjo Hospital Equipment AB Maquet Medizintechnik Vertrieb und Arjo Equipm Hosp SA Getinge/Castle Asia Ltd BV Getinge Disinfection Ltd 556090-4095 Eslöv Service GmbH Filance SA Maquet Hong Kong Ltd Getinge B.V. Getinge Industrier Holding UK Ltd Arjo International AB Belgium Getinge Production France SAS Ireland Lancer Holland BV Getinge Surgical Systems Ltd 556528-1440 Eslöv Arjo Hospital Equipment NV SA Jostra France S.A.R.L. Arjo Ireland Ltd Medibol Beheer BV James Industries Ltd Arjo Scandinavia AB Maquet & ALM Belgium N.V. Lancer SNC Italy Medibol Medical Products BV Jostra UK Ltd 556528-4600 Eslöv Medibo NV Getinge France SAS Arjo Italia Spa Polystan Netherland Parker Bath Ltd Fjärrbilar Lastbils AB Medibol Holding NV Peristel SA Getinge Surgical Systems Italia Spa Poland Pegasus Ltd 556496-6728 Göteborg Brazil Stérilisation Médical International SA Getinge S.p.A. Arjo Poland Sp.z.o.o. Rowan Leasing Ltd Getinge International AB Getinge Brasil Ltda Germany Getinge Surgical Systems Russia Getinge UK Ltd 556547-8780 Halmstad Maquet Brazil Arjo Holding Deutschland GmbH Holding Srl Maquet LLC USA Getinge Scientific AB Canada Arjo Systeme GmbH Jostra Italien SpA Singapore Arjo Inc 556547-8798 Halmstad Arjo Canada Inc Getinge Maquet Germany Holding Maquet Italia Spa Maquet South East Asia Ltd Arjo Manufacturing Co Getinge Sverige AB Gestion Techno-Médic Inc GmbH THE Getinge Service S.p.A. Singapore Getinge Holding USA Inc. 556509-9511 Halmstad Getinge/Castle Canada Ltd Getinge Maquet Verwaltungs GmbH Japan Spain Getinge USA Inc Jostra AB Jostra Canada Inc Getinge Produktions GmbH Arjo Japan KK Arjo Spain S.A. Getinge Sourcing LLC 556304-2026 Lund China Getinge Van Dijk Medizintechnik Jostra Japan K.K. Getinge Iberica SL Grand Traverse Technologies Inc Maquet Critical Care AB Maquet (Shanghai) International GmbH Maquet-Getinge KK Jostra Bentley Spain S.L. Hereaus Medical Inc 556604-8731 Solna Trading Co., Ltd. Jostra AG Luxemburg Switzerland Lancer USA Inc Maquet Nordic AB Czech Republic Lancer Industrie GmbH Arjo International Sàrl Arjo AG Maquet Inc 556648-1163 Solna Arjo Hospital Equipment sro Maquet GmbH & Co KG Getinge Finance Sàrl Arjo International AG Pegasus Airwave Inc
9 PREPAID EXPENSES AND ACCRUED INCOME , SEK M 2003 2002 Prepaid financial expenses 9.2 3.9 Accrued interest income 12.5 – Other prepaid expenses and accrued income 2.0 2.6 Total 23.7 6.5
10 INTEREST-BEARING SHORT-TERM LOANS, SEK M 2003 2002 Liabilities to credit institutions 534.8 – Liabilities to subsidiaries 2 063.4 2 707.6 Total 2 598.2 2 707.6
11 ACCRUED EXPENSES AND PREPAID INCOME , SEK M 2003 2002 Salaries 5.7 5.1 Payroll overheads 2.2 2.1 Interest expenses 29.3 23.7 Other accrued expenses and prepaid income 11.8 11.5 Total 49.0 42.4
12 PLEDGED ASSETS AND CONTINGENT LIABILITIES, SEK M CONTINGENT LIABILITIES 2003 2002 Guarantees FPG/PRI 120.8 - Other guarantees 28.8 34.2 Total 149.6 34.2
Besides the above contingent liabilities and pledged assets Getinge AB has issued parent company guarantees to subsidiaries within the Group, which include performance bonds to clients and payment guarantees to landlords. The guarantees are of a general character and the amounts are not fixed.
13 AVERAGE NUMBER OF EMPLOYEES 2003 2002 Male Female Total Male Female Total Sweden 8 4 12 7 3 10
Break-down of executive management on the closing date 2003 2002 FEMALE: Board members 2 1 Other members of the Group company’s management including the CEO – – MALE: Board members 4 5 Other members of the Group company’s management including the CEO 1 1 Total 7 7
There was no sick leave taken from 1 July 2003 to 31 December 2003
See Note 22 in the Notes to the consolidated accounts regarding information about remuneration to executive management.
80 Notes to Parent company accounts 14 STAFF COSTS, SEK M 2003 2002 Board and CEO Other Total Board and CEO Other Total Salaries and remuneration 9.2 9.1 18.3 7.1 6.7 13.8 Payroll overheads 3.8 3.6 7.4 2.8 2.7 5.5 Pension costs 3.4 1.3 4.7 1.4 1.7 3.1 Total 16.4 14.0 30.4 11.3 11.1 22.4
15 AUDITING: FEES AND REMUNERATION, SEK M FEES TO DELOITTE & TOUCHE AB 2003 2002 Auditing assignments 0.8 0.8 Other assignments 2.9 0.4
Deloitte & Touche is the Company’s auditor. Auditing assignments refer to the auditing of the annual report and accounts, as well as the Board’s and the CEO’s administration, other assignments that the company’s auditors are required to perform and giving advice or other support brought about by observations from auditing or carrying out similar tasks. Other assignments refer mainly to advice given about auditing and taxation issues plus assistance in connection with company acquisitions.
16 TRANSACTIONS WITH RELATED PARTIES
No board member or executive manager has, or has had, any direct or indirect participation in any business transactions, between themselves and the Company, that are or were unusual in character, regarding terms or conditions.
For other transactions see Note 25 in Notes to the consolidated accounts.
Notes to Parent company accounts 81 Auditors’ Report
To the Annual General Meeting of Getinge AB, company registration number 556408-5032:
We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the board of directors and the managing director of Getinge AB for the year 2003. These accounts and the administration of the company are the responsibility of the board of directors and the managing director. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on our audit. We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated accounts are free of mate- rial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the board of directors and the managing director, as well as evaluating the overall presentation of information in the annual accounts and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we examined significant decisions, actions taken and circumstances of the company in order to be able to determine the liability if any, to the company of any board member or the managing direc- tor. We also examined whether any board member or the managing director has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below. The annual accounts and the consolidated accounts have been prepared in accordance with the Annual Accounts Act, and, thereby, give a true and fair view of the company’s and the group’s financial position and results of operations in accordance with generally accepted accounting principles in Sweden. We recommend to the general meeting of shareholders that the income statements and balance sheets of the parent company and the group be adopted, that the profit of the parent company be dealt with in accordance with the proposal in the administra- tion report and that the members of the board of directors and the managing director be discharged from liability for the financial year.
Getinge, 15 March 2004.
Mats Fredricson Jan Nilsson Authorized Public Accountant Authorized Public Accountant Deloitte & Touche AB
82 Auditors’ report Definitions
Cash flow per share Cash flow after investments in material fixed assets divided by the number of shares.
Dividend yield Dividend in relation to the market share price on 31 December.
Equity/assets ratio Equity plus minority interests in relation to balance sheet total
EPS Net profit for the year divided by the average number of shares
Interest cover Profit after net financial items less interest costs in relation to interest expenses
Net debt/equity ratio Interest-bearing liabilities including pension liabilities, less liquid assets in relation to shareholders’ equity.
Operating capital Total assets, less liquid funds and non-interest-bearing provisions and liabilities, based on the average, calculated over the year.
Operating margin Operating profit in relation to net sales
Operating profit before depreciation, Operating profit before depreciation in relation to net sales. marginal percentage
Operating profit before depreciation Operating profit before goodwill depreciation in relation to net sales. of goodwill, marginal percentage
P/E ratio Share price (final price) divided by the EPS
Return on equity Net profit for the year in relation to average shareholders’ equity.
Return on operating capital Operating profit in relation to average operating capital.
Value added per employee Operating profit less staff costs, divided by the average number of employees
Definitions 83 Carl Fredrik Bent Bennet Arp Carlsen
Bo Anders Leif Damberg Frick Holmgren
Carola Johan Christer Lemne Malmquist Mårdh
Karl-Göran Cecilia Olofsson Schelin Seidegård The Getinge Group’s Board
Carl Bennet, born 1951. Chairman of the Board since 1997. Chairman of Elanders AB, Lifco AB, and Sorb Industri AB. Vice Chairman of Boliden AB, SNS and TeliaSonera. Member of the National Labour Market Board (AMS). Other appointments: Member of the Swedish Government’s Research Advisory Board. Holds 13,502,160 class A and 15,020,124 class B shares via a privately-owned company.
Fredrik Arp, born 1953. Vice Chairman since 2002. Board Member since 1998. President and CEO of Trelleborg AB. Board Member of SSK AB and Trelleborg AB. Holds 6,664 class B shares.
Bent Carlsen, born 1948. Representative Board Member on behalf of the Swedish Metalworkers’ Union since 2000. Employed by Getinge Sterilization AB. Holds 444 class B shares.
Bo Damberg, born 1937. Board Member since 1999. Former Deputy CEO of Handelsbanken Bank and advisor to the bank’s Chairman. Chairman of Sandrew Metronome AB and the Åhlén Foundation. Board Member of the Swedish Securities Council, Isaberg Rapid AB, the Sandrew Foundation and Jan Wallander’s and Tom Hedelius’ foundation. Holds 12,000 class B shares
Anders Frick, born 1945. Board Member since 1997. Former President and CEO of Arjo AB. Chairman of AB Fagerhult and ProstaLund AB. Vice Chairman of Sweco AB. Board Member of Securitas AB. Holds 36,000 class B shares.
Leif Holmgren, born 1947. Deputy Representative Member on behalf of the Swedish Metalworkers’ Union since 1989. Employed by Getinge Disinfection AB.
Carola Lemne, born 1958. Board member since 2003. Chief Executive of Danderyd University Hospital AB and associate professor of the Karolinska Institute. Board Member of the Swedish Foundation for Strategic Research and of the Stockholm University. Also a member of the Scientific Advisory Board of the Swedish Industrial Development Fund.
Johan Malmquist, born 1961. President and CEO. Board Member of Capio AB. Employed since 1990. Holds 32,000 class B shares.
Christer Mårdh, born 1952. Deputy Representative Member on behalf of the Swedish Union of Clerical and Technical Employees in Industry, SIF, since 2001. Employed by Getinge Disinfection AB.
Karl-Göran Olofsson, born 1957. Representative Member on behalf of the Swedish Union of Clerical and Technical Employees in Industry, SIF, since 2001. Employed by Getinge Sterilization AB. Holds 1,800 class B shares.
Cecilia Schelin Seidegård, born 1954. Board Member since 2003. Hospital Director at Karolinska University Hospital. Chairman of Royal Institute of Technology – KTH. Board Member of Karolinska Development and Stockholm Care AB.
The Getinge Group’s Board 85 Johan Heribert Charles Malmquist Ballhaus Carrier
Ulf Christophe Albrecht Grunander Hammer Knauf
Mats Fredricson
Mats Michael Jan Ottosson Rieder Nilsson Group Management and Auditors
Group Management Johan Malmquist, born 1961. President and CEO. Board Member of Capio AB. Employed since 1990. Holds 32,000 class B shares.
Heribert Ballhaus, born 1952. Vice President business area Medical Systems and President of Maquet GmbH & Co, KG. Employed since 2001. Holds 15,692 class B shares.
Charles Carrier, born 1958. President of Getinge USA. Employed since 2002. Holds synthetic options relating to 120,000 class B shares. Member of Group Management from 1 April 2004.
Ulf Grunander, born 1954. Chief Financial Officer. Employed since 1993. Holds 20,000 class B shares.
Christophe Hammer, born 1958. Vice President business area Infection Control and President of Lancer S.A. Employed since 1992.
Albrecht Knauf, born 1951. Vice President business area Extended Care and President of Arjo International. Employed since 1980. Holds 13,332 class B shares
Mats Ottosson, born 1962. Vice President business area Infection Control and President of Getinge Sterilization AB. Employed since 2001. Holds 2,000 class B shares
Michael Rieder, born 1952. Vice President business area Medical Systems. Employed since 2001.
Auditors Mats Fredricson, born 1944. Authorized Public Accountant. Company’s auditor since 1989.
Jan Nilsson, born 1962. Authorized Public Accountant. Deloitte & Touche AB. Company’s auditor since 2000.
Group Management and Auditors 87 Addresses 2004
AUSTRALIA FRANCE MEDITECHNIK GMBH ARJO HOSPITAL EQUIPMENT PTY LTD GETINGE CANADA LTD ALM S.A. Ernst-Befort-Str.4, Wetzlar, DE-355 78 154 Lytton Road, Bulimba Qld, 4171 1575 South Gateway Road, Unit C, Mississauga Parc de Limère, Avenue de la Pomme de Pin E-Mail: [email protected] E-Mail: [email protected] Ontario, L4W 5J1 Ardon, Orléans Cedex 2, FR-45074 Phone: +49 64 41 97 81-0 Phone: +61 7 3399 3311 E-Mail: [email protected] E-Mail: [email protected] Fax: +49 64 41 9781 50 Fax: +61 7 3395 6712 Phone: +1 905 629 8777 Phone: + 33 2 38 25 88 88 President: Dietmar Klas President: Philip McLaughlin Fax: +1 905 629 8875 Fax: + 33 2 38 25 87 13 President: Robert Bothwell President: Dominique Lagouge
HONG KONG GETINGE AUSTRALIA PTY LTD JOSTRA CANADA INC. ARJO EQUIPEMENTS HOSPITALIERS S.A. ARJO FAR EAST LTD 154 Lytton Road, Bulimba Qld, 4171 Unit 16, Brampton, 72 Devon Road, Ontario , 45, Avenue de l´Europe, Eurocit B.P.133, Roncq 1001-03 APEC Plaza, 49 Hoi Yuen Road, Kwun E-Mail: [email protected] L6T 5B4 Cedex, FR-59436 Tong, Kowloon, Hong Kong, Phone: + 61 7 3399 3311 E-Mail: [email protected] E-Mail: [email protected] E-Mail: [email protected] Fax: + 61 7 3395 6712, Phone: + 1 905 792 7888 Phone: + 33 320 281 313 Phone: +852 2508 9553 President: Philip McLaughlin Fax: + 1 905 792 0159 Fax: + 33 320 281 314 Fax: +852 2389 5797 President: Christine Fleming President: Frank Robeers President: Samuel Wong
AUSTRIA CHINA ARJO GMBH GETINGE INTERNATIONAL AB BEIJING GETINGE FRANCE SAS GETINGE INTERNATIONAL ASIA LTD Föhrenweg 5, Thaur, AT-6065 OFFICE BP 49, avenue du Canada, ZA de Courtaboeuf, Rm.1104, 11/F, China Aerospace Technology E-Mail: [email protected] Room 512, Beijing Jinru Business Bldg. A 13 Les Ulis, FR-91942 Centre 143 Hoi Bun Rd, Kwun Tong Kowloon, Phone: +43 522 349 3350 FuWai BeiYingFangDongLi, Xi Cheng District, E-Mail: [email protected] Hong Kong, Fax: +43 522 349 3350 75 Beijing, 100037 Phone: + 33 164 868 900 E-Mail: [email protected] President: Robert Deschler E-Mail: [email protected] Fax: + 33 164 868 989 .com Phone: +86 10 6831 7523 President: Alain Sayag Phone: +852 2572 8032 Fax: +86 10 6831 7543 Fax: +852 2838 4003 President: Schilling Luo President: Dag Leff-Hallstein
MAQUET MEDIZINTECHNIK VERTRIEB UND GETINGE INTERNATIONAL AB GUANGZHOU LANCER SAS MAQUET HONG KONG LIMITED SERVICE GMBH OFFICE 30 Bd de l’Industrie, ZI Pahin, Tournefeuille, 1105-1107 Grand Century Place 1, 193 Prince IZ NÖ-Süd Strasse 16, Objekt 69 E 5 Rm. 1808, 18/F, Guanzhou Exchange Square, FR-31170 Edward Road West, Mongkok, Kowloon, Hong Wiener Neudorf, A-2355 No. 268, Dong Feng Zhong Road, Guangzhou, E-Mail: [email protected] Kong, Phone: + 43 / 2236 677 393-0 510030 Phone: +33 561 151 111 E-Mail: [email protected] Fax: + 43/ 2236 677 393-77 E-Mail: [email protected] Fax: +33 561 151 616 Phone: + 852 23939 511 President: Friedrich Zinner Phone: +86 20 8351 1065 President: Christophe Hammer Fax: + 852 23939 512 Fax: +86 20 8351 1066 President: Florian Mond President: Schilling Luo BELGIUM INDIA ARJO HOSPITAL EQUIPMENT NV/SA GETINGE INTERNATIONAL AB SHANGHAI PERISTEL SA MAQUET MEDICAL INDIA PVT. LTD. Ternesselei 248, Wommelgem, BE-2160 OFFICE 7, avenue du Canada - BP 49, Courtaboeuf, 102, Pressman House, 70A, Nehru Road C.T.S. E-Mail: [email protected] Rm.1203A, Xin Cheng Building, No.167, Jiang Cedex, FR-91942 No. 76 & 87, Vile Parle (East), Mumbai, 400 099 Phone: + 32 3 353 91 00 Ning Road, Shanghai, 200041 E-Mail: [email protected] E-Mail Fax: + 32 3 353 91 01 E-Mail: [email protected] Phone: +33 1 64 86 89 70 Phone: + 91 22 2498 7352 President: Frank Robeers Phone: + 86 21 6253 9091 / 6253 9092 Fax: +33 1 64 86 89 75 Fax: + 91 22 2498 7362 Fax: + 86 21 6253 9093 President: Alain Sayag President: Ashim Purohit President: Schilling Luo
GERMANY IRELAND GETINGE NV MAQUET (SHANGHAI) INTERNATIONAL ARJO SYSTEME FÜR REHABILITATION GMBH MAQUET CRITICAL CARE IRELAND Nijverheidsstraat 2, Wommelgem, BE-2160 TRADING CO. LTD. Christof-Ruthof-Weg 6, Mainz-Kastel, DE-55252 B6 Calmount Park, Ballymount Industrial Estate, E-Mail: [email protected] 1305 Maxdo Center, No. 8 Xing Yi Road, E-Mail: [email protected] Dublin, 12 Phone: +32 335 428 65 Shanghai, 200336 Phone: +49 6134 186-0 E-Mail: [email protected] Fax: +32 335 428 64 E-Mail: [email protected] Fax: +49 6134 186 209 Phone: +353 1 426 0032 President: Dirk De Decker Phone: +86 21 5208 1122 President: Robert Deschler Fax: +353 1 426 0033 Fax: +86 21 5208 1310 President: Gerry Walsh President: Florian Mond
CZECH REPUBLIC MAQUET & ALM BELGIUM N.V. ARJO HOSPITAL EQUIPMENT SRO GETINGE PRODUKTIONS GMBH NORTHERN IRELAND Brusselstraat 182 - 184, Groot - Bijgaarden, Strma 35, Brno, CZ-616 00 Zechenstrasse 12, Peiting, DE-86971 ARJO HEALTH CARE LTD BE- 1702 E-Mail: [email protected] E-Mail: [email protected] 19 Heron Road, Sydenham Business Park, E-Mail: [email protected] Phone: +420 5 49 25 42 52 Phone: +49 8861 689-0 Belfast, BT3 9LE Phone: + 32 2 467 85 85 Fax: +420 541 213 550 Fax: +49 8861 689-99 E-Mail: [email protected] Fax: + 32 2 463 3288 President: Milan Sovadina President: Alfred Heider Phone: +44 - 2890 502000 President: Julien Bergmans Fax: +44 - 2890 502001 President: Trevor Kennedy
DENMARK MEDIBO NV GETINGE DANMARK A/S GETINGE VAN DIJK MEDIZINTECHNIK GMBH SOUTHERN IRELAND - ARJO (IRELAND) Heikant 5, Hamont-Achel, BE-3930 Firskovvej 23, Lyngby, DK-2800 Postfach 1125, Boekholter Weg 1B, Straelen, B6 Calmount Park, Ballymount, Dublin 12, E-Mail: [email protected] E-Mail: [email protected] DE-47638 E-Mail: [email protected] Phone: +32 118 020 40 Phone: +45 459 327 27 E-Mail: [email protected] Phone: +353 1 4565565 Fax: +32 118 016 26 Fax: +45 459 341 20 Phone: +49 283 491 330 Fax: +353 1 4565575 President: Els Stienaers President: Ole Mortensen Fax: +49 283 491 33 66 President: Trevor Kennedy President: Joacim Lindoff
BRAZIL ITALY MAQUET DO BRASIL EQUIPAMENTOS GETINGE LUNATRONIC APS JOSTRA AG ARJO ITALIA SPA MEDICOS LTDA. Tordenskjoldsgate 27, Copenhagen K, DK-1055 Hechinger Strasse 38, Hirrlingen, DE-721 45 Via Poggio Verde, 34, Roma, IT-00148 Rua Said Aiach, 161, Paraiso, Sao Paolo, SP E-Mail: [email protected] E-Mail E-Mail: [email protected] 04003-20 Phone: + 45 33 33 88 55 Phone: + 49 74 78 921-0 Phone: +39 066 5 663 56 E-Mail: [email protected] Fax: + 45 33 33 88 70 Fax: +49 7478 921 444 Fax: +39 066 5 663 212 Phone: +55 11 21 26 2500 President: Michael Lunau President: Heinz-Josef Schmies President: Silvio Dinale Fax: +55 11 21 26 2501 President: Norman Günther
CANADA ARJO CANADA INC GETINGE WATER SYSTEMS A/S MAQUET GMBH & CO.KG GETINGE SPA 1575 South Gateway Road, Unit C, Mississauga Industrivej 6-8, Lynge, DK-3540 Kehler Strasse 31, Rastatt, DE-76437 Via Poggio Verde, 34, Roma, IT-00148 Ontario, L4W 5J1 E-Mail: [email protected] E-Mail: [email protected] E-Mail: [email protected] E-Mail: [email protected] Phone: +45 4816 3333 Phone: +49 7222 932-0 Phone: + 39 0665 6631 Phone: +1 905 238 7880 Fax: +45 4818 9104 Fax: +49 7222 932 855 Fax: + 39 0665 663 203 Fax: +1 905 238 7881 President: Claus Bengtsson President: Heribert Ballhaus President: Silvio Dinale President: John Thiessen
FINLAND GESTION TECHNO-MÉDIC GETINGE FINLAND Ab MAQUET VERTRIEB UND SERVICE GETINGE SURGICAL SYSTEMS ITALIA S.P.A. 6900 Av. Choquette, St. Hyacinthe/Quebec, Hallonnäsgatan 23A, Helsinki, FI-00210 DEUTSCHLAND GMBH Via della Provetta 1, Cardano al Campo (Va), G2S 8L1 E-Mail: [email protected] Kehler Strasse 31, Rastatt, D-76437 I-21011 E-Mail: [email protected] Phone: +358 968 241 20 E-Mail: [email protected] E-Mail Phone: +1 450 774 7948 Fax: +358 968 241 222 Phone: + 49 7222 9 32-0 Phone: +39 0331 262066 Fax: +1 450 774 2335 President: Peter Axberg Fax: + 49 7222 932 648 Fax: +39 0331 262151 President: Pierre Turner President: M. Sandfort/R. Kühnle President: Andreas Kunze
88 Addresses PORTUGAL JOSTRA ITALIA S.P.A. MAQUET PORTUGAL LDA GETINGE INTERNATIONAL AB GETINGE UK LTD Via Aldo Moro 1/A, Felino, IT-43035 Praceta Anselmo Braancamp Freire,4,C/V E, P O Box 69, Getinge, SE-310 44 Orchard Way, Calladine Park E-Mail Póvoa de Sto Adriao, 2620-401 E-Mail: [email protected] Sutton-In-Ashfield, Notts, NG 17 1JU Phone: +39 0521 337267 E-Mail Phone: + 46 35 15 55 00 E-Mail: [email protected] Fax: +39 0521 338626 Phone: +49 7222 932 -0 Fax: + 46 35 16 63 92 Phone: +44 1623 510 033 President: Rossanna Giampaoli Fax: +49 7222 932 855 President: Harald Castler Fax: +44 1623 440 456 President: Heribert Ballhaus President: Stephen Parrish
RUSSIA MAQUET ITALIA S.P.A. - CRITICAL CARE MAQUET LLC GETINGE SKÄRHAMN AB MAQUET LTD. Viale P.e.A. Pirelli, 10, Milano, I-20126 17, Vorontsovskaya Street, Moscow, 109004 Industrivägen 5, Skärhamn, SE-471 31 14-15 Burford Way, Boldon Business Park, E-Mail E-Mail: [email protected] E-Mail: [email protected] Sunderland, Tyne & Wear, NE35 9PZ Phone: + 39 02 243 636 91 Phone: +7 095 514-0055 Phone: +46 304 60 02 00 E-Mail Fax: + 39 02 243 634 10 Fax: +7 095 514-0056 Fax: +46 304 60 02 29 Phone: + 44 191 519 6200 President: Piero Nagni President: Andrej Ovtchinnikov President: Gert Linder Fax: + 44 191 519 6201 President: Andrew Cserey
SINGAPORE THE GETINGE SERVICE SPA MAQUET SOUTH EAST ASIA PTE. LTD. GETINGE STERILIZATION AB PEGASUS LTD Via Poggio Verde, 34, Roma, IT-00148 No. 20 Bendemeer Road, Unit 06-01/02, P O Box 69, Getinge, SE-310 44 Pegasus House, Waterberry Drive, Waterlooville, E-Mail: [email protected] Cyberhub Bldg., Singapore, 339914 E-Mail: [email protected] Hampshire, PO7 7XX Phone: + 39 0665 6631 E-Mail: [email protected] Phone: + 46 35 15 55 00 E-Mail: [email protected] Fax: + 39 0665 663 203 Phone: +65 6 296 1992 Fax: + 46 35 549 52 Phone: +44 23 92 784200 President: Silvio Dinale Fax: +65 5 296 1937 President: Mats Ottosson Fax: +44 23 92 78442 President: Torsten Schlüter President: Mark Harwood/Nicholas Bracey
JAPAN SOUTH AFRICA STORBRITANNIEN USA MAQUET-GETINGE K.K. GETINGE SOUTH AFRICA (PTY) LTD GETINGE SVERIGE AB ARJO INC. TFT Building East Wing 8th Floor, 3-1-22 Ariake, P O Box 48492, Hercules, Pretoria, SA, 0030 P O Box 69, Getinge, SE-310 44 50 N. Gary Avenue, Roselle, IL 60172 Koto-ku, Tokyo, 135-0063 E-Mail: [email protected] E-Mail: [email protected] E-Mail: [email protected] E-Mail: [email protected] Phone: +27 12 372 1370 Phone: + 46 35 15 55 00 Phone: +1 630 307 6123 Phone: +81 3 3599 8366 Fax: +27 12 372 1282 Fax: + 46 35 549 52 Fax: +1 630 307 6195 Fax: +81 3 3599 8365 President: Alain Sayag President: Peter Ekolind President: Ross Scavuzzo President: Yuji Maeno
NETHERLANDS SPAIN ARJO NEDERLAND BV ARJO SPAIN S.A. LIC AUDIO AB GETINGE SOURCING LLC De Blomboogerd 8, 4003 BX TIEL Calle San Rafael n 6, Alcobendas, Madrid, P O Box 603, Upplands Väsby, SE-194 26 1777 East Henrietta Road, Rochester, NY Postbus 6116, HCTiel, NL-4000 ES-28108 E-Mail: [email protected] 14623-3133 E-Mail: [email protected] E-Mail: [email protected] Phone: +46 8 590 00 450 E-Mail: [email protected] Phone: +31 344 640 800 Phone: +34 9149 00 636 Fax: +46 8 590 00 490 Phone: + 1 585 475 1400 Fax: +31 344 640 885 Fax: +34 9149 00 637 President: Claes Lund Fax: + 1 585 272 5033 President: Robert Burgers President: Ernesto Stieger President: John Aymong
COPHARM-MAQUET B.V. GETINGE IBERICA SL MAQUET CRITICAL CARE AB GETINGE USA INC. Rijksstraatweg 37-39, 1396 JD Baambrugge C/ San Rafael, 6. Nave 8, Pol.Ind. de Röntgenvägen 2, Solna, SE- 17195 1777 East Henrietta Road, Rochester, NY P O Box 2, AA Abcoude, NL-1390 Alcobendas, Alcobendas, Madrid, ES-28108 E-Mail 14623-3133 E-Mail E-Mail Phone: + 46 8 730 7300 E-Mail: [email protected] Phone: + 31 294 291 555 Phone: +34 91 661 10 15 Fax: + 46 8 98 57 75 Phone: + 1 585 475 1400 Fax: + 31 294 293 181 Fax: +34 91 661 10 42 President: Mikael Strindlund Fax: + 1 585 272 5033 President: Rob Stoopman President: Omar Cameron President: Charles E. Carrier
GETINGE B.V. MAQUET SPAIN S.L. MAQUET NORDIC AB LANCER SALES USA INC Fruiteniersstraat 27, P.O. Box 1004, CA P.E. San Fernando, Avda Castilla 2, Edificio Röntgenvägen 2, Solna, SE-17195 3543 State Road 419, Winter Springs, FL 32708 Zwijndrecht, NL-3330 Francia Planta Baja, San Fernando de Henares, E-Mail E-Mail: [email protected] E-Mail: [email protected] Madrid, ES-28830 Phone: +46 8 730 7272 Phone: +1 407 327 8488 Phone: + 31 78 6102 433 E-Mail Fax: +46 8 29 55 32 Fax: +1 407 327 1229 Fax: + 31 78 6101 582 Phone: + 34 916 78 16 52 President: Thomas Lindström President: James Fry President: Ronald J.A. van Franck Fax: + 34 916 78 16 53 President: Eligio Garcia
SWEDEN SWITZERLAND LANCER HOLLAND B.V. ARJO HOSPITAL EQUIPMENT AB ARJO AG MAQUET INC. P O Box 33, ZG Wamel, NL-6659 P O Box 61, Eslöv, SE-241 21 Florenzstrasse 1 D, Postfach, P.O. Box 1140 Route 22 East, Suite 202, Bridgewater, E-Mail: [email protected] E-Mail: [email protected] Basel, CH-4023 NJ 08807 Phone: +31 4875 18088 Phone: +46 413 645 00 E-Mail: [email protected] E-Mail Fax: +31 4875 17978 Fax: +46 413 64 583 Phone: + 41 61 337 9777 Phone: +1 732 321 - 0 President: Karel N Rietveld President: Johan Kåreby Fax: + 41 61 311 97 84 Fax: +1 732 321 8786 President: Robert Deschler President: Timmo Bressler
MEDIBOL MEDICAL PRODUCTS BV ARJO SCANDINAVIA AB ARJO INTERNATIONAL AG PEGASUS AIRWAVE INC Peperstraat 3-5, Valkenswaard, NL-5554 EG P O Box 61, Eslöv, SE-241 21 Florenzstrasse 1 D, Postfach, Basel, CH-4023 791 Park of Commerce Blvd, Suite 500, E-Mail: [email protected] E-Mail: [email protected] E-Mail: [email protected] Boca Raton, FL-3487 Phone: + 31 4020 44296 Phone: +46 413 645 00 Phone: +41 61 337 97 97 E-Mail: [email protected] Fax: + 31 4020 19183 Fax: +46 413 64 583 Fax: +41 61 331 47 80 Phone: +1 561 989 9898 President: Els Stienaers President: Jan Löfving President: Albrecht Knauf Fax: +1 561 989 9640 President: Ross Scavuzzo
NORWAY MAQUET AG GETINGE NORGE AS GETINGE AB Rütihofstrasse 1, Niederteufen, CH-9052 Enebakk vn. 117, Oslo, NO-0680 P O Box 69, Getinge, SE-310 44 E-Mail: [email protected] E-Mail: [email protected] E-Mail: [email protected] Phone: + 41 71 333 2622 Phone: +47 98 28 1150 Phone: +46 35 15 55 00 Fax: + 41 71 333 2603 Fax: +47 23 05 11 99 Fax: +46 35 15 56 40 President: Werner Kies President: Arne Corneliussen President: Johan Malmquist
POLAND UK GETINGE POLAND GETINGE DISINFECTION AB ARJO LTD Ul. Lirowa 27, Warsaw, PL-02-387 P O Box 1505, Växjö, SE-351 15 St. Catherine Street, Gloucester, GL1 2SL E-Mail: [email protected] E-Mail: [email protected] E-Mail: [email protected] Phone: +48 22 882 06 26 Phone: +46 470 77 98 00 Phone: + 44 1452 428 200 Fax: +48 22 882 06 27 Fax: +46 470 208 32 Fax: + 44 1452 428 337 President: Jurek Bartos President: Roland Karlsson President: Mark Harwood/Neil Carden
Addresses 89 Getinge AB (publ) Box 69 SE-310 44 Getinge Sweden GETINGE AB is a world leading supplier of equipment and systems which actively contribute to quality Phone: +46 35 15 55 00 enhancements and cost savings within health care and elderly care. Equipment, system solutions, Fax: +46 35 549 52 technical service for infection control, surgery, intensive care, patient hygiene, patient handling, and Email: [email protected] wound care are marketed under the brand names GETINGE, MAQUET and ARJO . www.getinge.com
This Annual Report is produced by Getinge AB in cooperation with Columbi Communications in Lund, Sweden. Multi Group in Denmark has done the pre-press and Elanders in Malmö, Sweden have printed the report. Translation: Cannon Språkkonsult, Halmstad.