Getinge Industrier AB Annual Report 2000 Getinge Industrier AB Business concept Getinge is a medical technical Group that acts as a competent problem-solver, through its products and services, for customers in the health care, geriatric care and industry sectors. The Group's products, services and competence will contribute, in a tangible way, to quality enhancement and the reduction of customers' costs. Financial objectives • Profit growth, measured as the profit before tax, will be 15% annually over one business cycle, and this shall be attained through a combination of organic growth and acquisitions. • Growth through acquisitions averaging 10% per year will be mainly financed by the Group's own cash flow. Strategy The Getinge Group strives to attain and maintain market-leading positions in its chosen niche markets. Organic growth will be the basis for the Group's expansion. This means: • Focused efforts on sales of complete systems – in which the breadth and depth of the Group's competence benefits customers – through the Group's own sales companies. • Active product development. • Strong focus on developing sales of maintenance and services. Getinge provides broad solutions comprising of products, services, consulting, training and maintenance in specific areas, such as infec- tion control, surgery or ergonomics. By focusing on customer benefits in terms of qualitative and quantitative improvements, the price of services diminishes in importance. Acquisition of closely related or complementary operations represents an important addition to organic growth. The focus will be on three areas: • Geographic expansion. • Product acquisitions as a complement to internal product development. • Acquisitions as a way of establishing and broadening new business areas that are assessed as being of interest from a growth or sector perspective. Synergies with existing areas of operation are decisive in this context. 2000 in brief Orders received totalled SEK 5,243.3 million (4,932.2) Net sales totalled SEK 5,253.5 million (4,884.7) The operating profit for the full year, excluding the SPP refund, was at last year’s level Earnings per share after full tax was SEK 10.30 (10.52) Dividend per share proposal is SEK 3.50 (3.50) Infection Control Business Area Extended Care Business Area Surgical Systems Business Area • The acute health care customer • Gradual increase in sales volumes in the • Foundation laid for the new business segment's volume trend was good in US improved demand in the UK during area, Surgical Systems. Acquisitions of the US, Scandinavia and Far East the second half of the year Maquet (Germany) and ALM (France) makes Getinge a world-leader in • Sales success for Getinge's new • New product launches have been very Surgical Systems inspection system, AGS well received. Decisive investments in product development coupled with • The recently-established Surgical product acquisitions means that the Systems business area is expected to product portfolio is very strong make a positive contribution to the EPS during the coming year 1 Contents Annual General Meeting and reports The year in brief 1 The Annual General Meeting will be held on Monday Annual General Meeting 23 April 2001 at 4 p.m. in Getingehallen and reports for 2001 2 Five-year summary 3 Notification Shareholders wishing to participate at the Annual General Meeting should be registered Getinge – a presentation 4 in the shareholders' register kept by Värdepapperscentralen VPC AB, (the Swedish Central Securities Depository & Clearing Organization), no later than 12 April 2001, and Comments by the President 6 should notify Getinge Industrier's head office, at the address below, of their intention to participate, no later than 17 April 2001. Group overview: Getinge Industrier AB Infection Control 8 Information Dept. Box 69 Extended Care 16 S-310 44 Getinge Tel: +46 35 - 15 55 00 Surgical Systems 22 Shareholders whose shares are registered in the name of a nominee must have temporari- Getinge's personnel 28 ly registered their shares in their own name with VPC , to be able to participate at the Annual General Meeting, well in advance of 12 April 2001. Getinge's shares 29 Dividend IT strategies 30 The Board of Directors and President propose that a dividend of SEK 3.50 (3.50; 3.25) per share be paid, totalling SEK 159.0 million. The proposed record date is 26 April Getinge and the environment 31 2001. VPC anticipates being able to forward the dividend to shareholders on 2 May 2001. Financial risk management 32 Reports for 2001 Getinge Industrier AB will be publishing the following reports in Swedish and English Directors’ report 33 during the year: Proposed allocation of profits 35 • The 1st quarterly report for 2001 will be issued in conjunction with the Annual General Meeting on 23 April 2001 in Getinge Income statements 36 • Interim report for the first six months of 2001: 16 July 2001 • 3rd quarterly report for 2001: October 2001 Balance sheets 37 • Press release of the financial statements for 2001: January 2002 • Annual Report for 2001: April 2002 Funds statement 38 The reports can be ordered from: Comments and notes 39 Getinge Industrier AB Information Dept. Audit report 49 Box 69 S-310 44 Getinge The Board, auditors and Tel: +46 35 - 15 55 00 Group management 50 Information about this Annual Report Addresses The Getinge Industrier Group is referred to in this Annual Report as Getinge. Figures in brackets refer, unless otherwise specified, to 1999's activities and after a semicolon to corresponding figures for 1998. Swedish krona is abbreviated (SEK) throughout this doc- ument. 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. 2 Five-year summary The Group 1996 1997 1998 1999 2000 Net sales SEK m 1) 2,961.2 3,661.0 4,345.0 4,884.7 5,253.5 of which overseas sales, % 1) 93.8% 94.1% 94.5% 94.5% 95.0% Operating profit SEK m 1) 497.2 547.9 652.9 692.2 697.0 4) Operating margin, % 1) 16.8% 15.0% 15.0% 14.2% 13.3% 4) Profit before tax, SEK m 497.1 501.5 602.6 636.2 623.7 Net profit for the year, SEK m 392.8 401.3 476.7 477.7 467.8 Operating capital, SEK m 1,809.9 2,535.2 2,610.6 2,988.2 3,356.8 Shareholders' equity, 31 December, SEK m 1,093.0 1,372.8 1,221.0 1,560.8 1,931.0 Return on operating capital, % 29.6% 23.4% 25.0% 23.2% 20.8% 4) Return on equity, % 42.3% 36.4% 39.1% 35.1% 27.6% Net debt/equity ratio, multiple 1.02 0.78 1.41 0.97 1.98 Equity/assets ratio, % 31.3% 36.5% 27.6% 35.7% 24.2% Interest cover, multiple 7.5 7.8 8.0 9.2 6.8 Net investments in tangible fixed assets, SEK m 2) 103.3 126.2 131.8 167.4 110.3 No. of employees, 31 December 3,495 3,481 3,724 3,812 5,298 EPS after full tax, SEK 8.65 8.83 10.50 10.52 10.30 Cash flow per share, SEK per share 3.53 2.67 -0.30 9.62 1.96 Shareholders' equity, SEK per share 24.06 30.22 26.88 34.36 42.51 Dividend, SEK per share 2.50 2.75 3.25 3.50 3.50 3) Market price, 31 December, SEK per share 134.50 126.00 122.00 96.00 112.50 Dividend yield, % 1.9% 2.2% 2.7% 3.6% 3.1% 1) This line of figures does not include the Distribution business area (Lifco) disposed of in 1998. 2) Excluding rental equipment. 3) As per the proposal by the Board and President. 4) Excluding the refund from SPP of SEK 23.2 million Definitions Cash flow per share/Cash flow after investment in tangible fixed assets divided by the average number of shares. Dividend yield/Dividend in relation to the market share price on 31 December. EPS after full tax/Net profit for the year divided by the average number of shares. Equity/assets ratio/Equity plus minority interests in relation to balance sheet total. Interest cover/Profit after net financial items plus interest costs in relation to interest expenses. Net debt/equity ratio/Interest-bearing liabilities and pension provisions less liquid founds in relation to shareholders’ equity. Operating capital/Total assets, less liquid funds and non-interest-bearing provisions and liabilities, based on the average for the year. Operating margin/Operating profit in relation to net sales. 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. 3 Getinge – a presentation THE GETINGE GROUP The foundation for Getinge was laid in Extended Care Getinge is an expansive medical technical 1904 by Olander Larsson. The company The Patient Handling and Hygiene Systems Group active in three areas: systems for manufactured and sold equipment for business units provide systems and prod- infection control, products and aids for use in agriculture. The first step ucts to customers in the acute and geriatric hygiene and lifting for use in the care of towards the current business orienta- care sectors that enable labour-saving lift- the elderly and disabled, plus equipment tion came in 1932 when the first steril- ing and more comfortable hygiene care for for surgical workplaces.