PRESS RELEASEMarch 7, 2014
Getinge announces outlook for first quarter 2014
Medical Systems business area makes significant investments in quality management system
As announced earlier, the Medical Systems business area is currently implementing significant efforts to strengthen its quality management system. The measures are the result of observations received in connection with several inspections by the US Food and Drug Administration (FDA) during the second half of 2013 and the business area’s own internal evaluations and observations.
External consultants have been retained to enhance the quality management system for the business area at its manufacturing facilities around the world. The costs of consultant support for both the business area management and the manufacturing units affected are expected to amount to approximately SEK 125 million per quarter from the first quarter of 2014. Consulting costs are anticipated to remain for a period of six to seven quarters and will be reported separately in future.
Outlook for the first quarter of the year
As well as the additional costs related to the strengthening of Medical Systems’ quality management system, the profit trend for the current quarter will be weak due to a lower level of invoicing. Getinge’s invoicing varies considerably between the quarters due to customers’ requests regarding the timing of deliveries of ordered capital goods, which represent about 50% of Getinge’s sales. In addition to the weak invoicing for capital goods during the quarter, the Cardiovascular division was impacted by disruptions to production resulting from a change in raw materials specification from a subcontractor. The negative earnings effect of the production disruption is estimated to amount to approximately SEK 60 million.
Taking into consideration the above and the more challenging currency situation, it is estimated that Getinge’s pretax profit for the first quarter will amount to approximately SEK 160 million (252).
Apart from the additional costs resulting from the strengthening of the quality management system in Medical Systems and SEK 60 million pertaining to the disruptions to production in the Cardiovascular division, the outlook presented in the most recent Year-end Report stands firm.
This announcement will be followed by a conference call at 11.00 AM CET today, hosted by Johan Malmquist, CEO Getinge Group and Ulf Grunander, CFO Getinge Group.
Getinge will issue its full Q1 report for 2014 on April 16.
To participate, please call:
Sweden: +46 (0)8 5065 3936
UK: +44 (0)20 3427 1909
US: +1 212 444 0896
10.45 Call the conference number
12.00 End of conference
A recorded version of the conference will be accessible for five working days at the following number:
Sweden: +46 (0)8 5051 3897
UK: +44 (0)20 3427 0598
US: +1 347 366 9565
For more information, please contact:
CEO, Getinge Group
Tel: +46 10 335 00 00
The Getinge Group is a global leading medical technology company that operates in the areas of surgery, intensive care, infection control, care ergonomics and wound care. The Group is divided into three business areas: Medical Systems, Extended Care and Infection Control and operates under the brands ArjoHuntleigh, Getinge and Maquet.