• Order Intake Growth: 7.1% total growth, 2.9% organic growth.
• Net Sales Increase: 10.7% total increase, 6.2% organic growth.
• Adjusted Gross Margin: Improved by 0.8 percentage points.
• Adjusted EBITDA Margin: Improved by 1 percentage point to 12.1%.
• Adjusted Gross Profit: Increased by SEK 0.5 billion to SEK 4.337 billion.
• Adjusted EBITDA: SEK 1.003 billion.
• Free Cash Flow: Decreased to SEK 0.2 billion.
• Net Debt: SEK 9.7 billion; SEK 7.3 billion when adjusted for pension liabilities.
• Leverage Ratio: 1.4 times adjusted EBITDA; 1.1 times when adjusted for pension liabilities.
• Cash Position: Approximately SEK 4.2 billion.
• Recurring Revenue Share: 65% of sales.
• High-Margin Products: Make up about two-thirds of sales.
• 2025 Outlook: Organic net sales growth expected to be 2% to 5%.

• Warning! GuruFocus has detected 5 Warning Signs with GNGBF.

Release Date: April 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Getinge AB (GNGBF) reported a solid quarter with a 7.1% increase in order intake and a 10.7% rise in net sales, with 6.2% organic growth.
• The company's adjusted gross and EBITDA margins improved by about 1-percentage-point, driven by volume leverage, acquisitions, price increases, and a positive mix.
• The acquisition of Paragonix has been successful, with the KidneyVault product launch receiving positive feedback.
• Getinge AB (GNGBF) achieved EU MDR approval for the majority of its products, facilitating expansion outside the US.
• The company maintains a strong financial position with a leverage of 1.4 times adjusted EBITDA, well below its internal threshold of 2.5 times.

Negative Points

• Currency fluctuations negatively impacted the EBITDA margin by 1.1-percentage-point in the quarter.
• Free cash flow decreased to SEK0.2 billion, affected by volume-driven inventory increases and lower operating liabilities.
• Life Science order intake was significantly down due to weak orders in the Bio-Processing subsegment.
• The intended phaseout of the Surgical Perfusion product category negatively impacted organic order intake and net sales.
• There is ongoing uncertainty related to tariffs and geopolitical factors, which could impact future financial performance.

Q & A Highlights

Q: Can you elaborate on the strong performance in the Americas for Acute Care Therapies and any potential stocking due to flu season or tariffs? A: Mattias Perjos, CEO: The strong performance is mainly due to ventilators and ECLS. We don't believe it's related to stocking but rather a shift towards remaining ventilator suppliers. For ECLS, there might be a flu effect, but no evidence of stocking.

Q: Could you explain the softer margin development in Surgical Workflows despite growth in Americas and recurring revenues? A: Agneta Palmer, CFO: Adjusted for currency, margins are in line with last year. The softer margin is due to adverse product mix on the capital side, with currency being the major effect.

Q: How do you see the sales development in ECMO consumables going forward? A: Mattias Perjos, CEO: We've added capacity and stabilized output, reducing backlog. We expect this robust operation to continue, reflecting real end market demand in our order intake and sales.

Q: Can you provide more details on the Life Science segment's margin volatility and outlook? A: Agneta Palmer, CFO: The margin is heavily influenced by volume. Strong volumes in Q4 led to good leverage, while Q1 saw the opposite. The margin trajectory depends on volume fluctuations.

Q: What is the impact of tariffs on your operations, and how are you mitigating this? A: Mattias Perjos, CEO: It's too early to quantify the impact due to ongoing negotiations and potential exemptions. We are in constructive dialogues with customers and may adjust prices where possible.

Q: Could you elaborate on the drivers behind the 25% decline in Life Science in the US? A: Mattias Perjos, CEO: The decline is mainly due to NIH funding holds, which have impacted order intake. About half of these holds have been released, but future impacts are uncertain.

Q: How is the work on solving quality issues progressing? A: Mattias Perjos, CEO: We are making steady progress with positive trends in leading indicators like medical device reporting and field actions, indicating improvements in quality.

Q: Can you quantify the potential impact of current FX rates on margins for the year? A: Agneta Palmer, CFO: If current FX rates hold, there will be a slight negative impact on margins, but not as significant as in Q1, as the major effect was due to revaluation from rapid currency movements.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.