07.22.14
$3.90 Billion
KEY EXECUTIVES:
Johan Malmquist, President & CEO
Heinz Jacqui, Exec. VP, Medical Systems
Anders Grahn, Exec. VP, Infection Control
Harald F. Stock, Exec. VP, Extended Care
Ulf Grunander, Chief Financial Officer
Raoul Quintero, President and CEO, North America, Maquet U.S.
NO. OF EMPLOYEES: 15,000
GLOBAL HEADQUARTERS: Getinge, Sweden
Johan Malmquist has set some rather lofty goals for his company. The Getinge Group president/CEO wants to double sales, improve EBITA and grow profits 15 percent annually over the next several years in an attempt to transform the 110-year-old company into a global medtech powerhouse.
Achieving such a feat indubitably will be challenging as governments worldwide curb healthcare spending and payers seek outcomes-oriented solutions, but Getinge executives have developed a new long-term growth strategy that incorporates new decision-makers (hospital management and central procurement, among others) and customizes products to the rapidly developing mid-segment of emerging markets.
Bigwigs also hope to accomplish their mission by developing products with superior clinical results; streamlining the firm’s supply chain; and increasing collaboration between business units.
With such a comprehensive growth plan, Malmquist might want to reconsider the timeframe for delivering results, particularly in light of Getinge’s 2013 performance: Full-year net sales rose 4.8 percent to $3.9 billion (ratios are based on Swedish krona), but profits before taxes fell 7.8 percent to $486.3 million and net profits tumbled 9 percent to $354 million. The chief executive blamed the losses on volatile exchange rates as well as $61.7 million (400 krona) in charges for streamlining measures at Getinge’s Infection Control unit and the integration of Kinetic Concept Inc.’s Therapeutic Support Systems (TSS) business, acquired for $275 million in the final quarter of 2012. TSS manufactures therapeutic beds, mattress replacement systems and patient mobility devices.
“2013 was a challenging year for the Getinge Group,” Malmquist admitted to shareholders in the company’s 2013 annual report. “The improvements in demand and volume growth noted during the year were not reflected in earnings to the extent we expected at the start of the year.”
Those improvements were apparent only in the Extended Care unit, where proceeds surged 8.6 percent to $1 billion on the strength of the TSS acquisition. Data show the Kinetic Concepts castoff boosted revenues in Western Europe, the United Kingdom, Canada and Austria, with the latter country posting a staggering 177 percent sales hike.
Neither of the two other business units at Getinge matched their sister segment’s success in 2013 (year ended Dec. 31). Sales in the Medical Systems unit—which comprised more than half (52.6 percent) of Getinge’s total revenues last year—remained largely flat, climbing a mere $40 million over its 2012 gross. Operating profit and EBITA were down as well, both sliding 1.7 percent to $360 million and $446.4 million, respectively.
Executives attributed Medical Systems’ poor performance to unfavorable product and market mix, unstable foreign exchange rates, the 2.3 percent medical device tax in the United States, and significant investments in the company’s quality management systems. Getinge worked diligently last year to improve those systems at two U.S. production units that were targeted by the U.S. Food and Drug Administration (FDA) in 2010 and 2012. Both of the facilities belonged to businesses Getinge purchased to expand its portfolio of cardiovascular products.
Several new product introductions and the $189 million purchase of Pulsion Medical Systems AG helped Getinge limit the losses in its Medical Systems unit. The acquisition, announced in December, broadens the company’s medical monitoring system portfolio and “reinforced” the commercial roll-out of its Eirus solution for continuous glucose and lactate monitoring.
Pulsion’s revenues reached $47 million in 2012, of which 82 percent originated in Europe. The company provides specialty monitoring solutions for critically ill patients, including cardiac output measurement through its PiCCO brand. Getinge noted that cardiac output monitoring accounts for 83 percent of Pulsion’s sales, of which 77 percent relates to disposables.
Medical Systems sales drivers (or saviors) in 2013 included the multi-faceted Otesus 1160 operating table, Volista surgical lights, Eirus monitoring system and Servo-U ventilator platform. The Eirus system is described by Getinge as a continuous monitoring platform for both glucose and lactate that was designed specifically for use in critical care settings. It features second-by-second monitoring and a multipurpose central venous catheter that provides normal venous access and microdialysis monitoring, thereby reducing the need for additional CVC lines.
Getinge touted the Servo-U, designed for advanced intensive care settings, as a next-generation ventilator platform with a customizable interface and touch screen controls that help clinicians tailor treatments to individual patients. The system also accounts for “alarm fatigue,” a common but critical concern in hospital intensive care units.
“We have created an easier access to alarms that help staff to identify the causes for the alarm, and Servo-U can suggest solutions for the conditions triggering the alarm,” Jens Viebke, CEO of the Maquet-Getinge Group, said when the system was released.
Such product introductions were noticeably absent in the Infection Control unit, where sales slipped 1 percent to $785.9 million and operating profit plummeted 30 percent to $66.4 million, according to the annual report. Fluctuating currency rates and the U.S. device tax took its toll on profits, though strong sales in Western Europe and the United States/Canada minimized losses.
The unit’s most significant contribution to gross company sales was the launch of its four-year efficiency enhancement program. The effort is designed to streamline production by concentrating manufacturing in facilities with the greatest resources in competitive economies and outsourcing component production to external suppliers. The program also will entail a comprehensive review of functions including distribution, logistics and administration. In addition, the unit’s existing product range will be evaluated and unprofitable product lines phased out.
To further augment future growth, Getinge opened a new office in Shanghai, China, and a consumable manufacturing plant in Brazil, the seventh-largest market for its Medical Systems unit (the country contributed $85.4 million to 2013 net sales). Executives said the move will bring the company closer to its Brazilian customers, increase its emerging market flexibility, simplify regulatory submissions and improve its competitive advantage.
KEY EXECUTIVES:
Johan Malmquist, President & CEO
Heinz Jacqui, Exec. VP, Medical Systems
Anders Grahn, Exec. VP, Infection Control
Harald F. Stock, Exec. VP, Extended Care
Ulf Grunander, Chief Financial Officer
Raoul Quintero, President and CEO, North America, Maquet U.S.
NO. OF EMPLOYEES: 15,000
GLOBAL HEADQUARTERS: Getinge, Sweden
Johan Malmquist has set some rather lofty goals for his company. The Getinge Group president/CEO wants to double sales, improve EBITA and grow profits 15 percent annually over the next several years in an attempt to transform the 110-year-old company into a global medtech powerhouse.
Achieving such a feat indubitably will be challenging as governments worldwide curb healthcare spending and payers seek outcomes-oriented solutions, but Getinge executives have developed a new long-term growth strategy that incorporates new decision-makers (hospital management and central procurement, among others) and customizes products to the rapidly developing mid-segment of emerging markets.
Bigwigs also hope to accomplish their mission by developing products with superior clinical results; streamlining the firm’s supply chain; and increasing collaboration between business units.
With such a comprehensive growth plan, Malmquist might want to reconsider the timeframe for delivering results, particularly in light of Getinge’s 2013 performance: Full-year net sales rose 4.8 percent to $3.9 billion (ratios are based on Swedish krona), but profits before taxes fell 7.8 percent to $486.3 million and net profits tumbled 9 percent to $354 million. The chief executive blamed the losses on volatile exchange rates as well as $61.7 million (400 krona) in charges for streamlining measures at Getinge’s Infection Control unit and the integration of Kinetic Concept Inc.’s Therapeutic Support Systems (TSS) business, acquired for $275 million in the final quarter of 2012. TSS manufactures therapeutic beds, mattress replacement systems and patient mobility devices.
“2013 was a challenging year for the Getinge Group,” Malmquist admitted to shareholders in the company’s 2013 annual report. “The improvements in demand and volume growth noted during the year were not reflected in earnings to the extent we expected at the start of the year.”
Those improvements were apparent only in the Extended Care unit, where proceeds surged 8.6 percent to $1 billion on the strength of the TSS acquisition. Data show the Kinetic Concepts castoff boosted revenues in Western Europe, the United Kingdom, Canada and Austria, with the latter country posting a staggering 177 percent sales hike.
Neither of the two other business units at Getinge matched their sister segment’s success in 2013 (year ended Dec. 31). Sales in the Medical Systems unit—which comprised more than half (52.6 percent) of Getinge’s total revenues last year—remained largely flat, climbing a mere $40 million over its 2012 gross. Operating profit and EBITA were down as well, both sliding 1.7 percent to $360 million and $446.4 million, respectively.
Executives attributed Medical Systems’ poor performance to unfavorable product and market mix, unstable foreign exchange rates, the 2.3 percent medical device tax in the United States, and significant investments in the company’s quality management systems. Getinge worked diligently last year to improve those systems at two U.S. production units that were targeted by the U.S. Food and Drug Administration (FDA) in 2010 and 2012. Both of the facilities belonged to businesses Getinge purchased to expand its portfolio of cardiovascular products.
Several new product introductions and the $189 million purchase of Pulsion Medical Systems AG helped Getinge limit the losses in its Medical Systems unit. The acquisition, announced in December, broadens the company’s medical monitoring system portfolio and “reinforced” the commercial roll-out of its Eirus solution for continuous glucose and lactate monitoring.
Pulsion’s revenues reached $47 million in 2012, of which 82 percent originated in Europe. The company provides specialty monitoring solutions for critically ill patients, including cardiac output measurement through its PiCCO brand. Getinge noted that cardiac output monitoring accounts for 83 percent of Pulsion’s sales, of which 77 percent relates to disposables.
Medical Systems sales drivers (or saviors) in 2013 included the multi-faceted Otesus 1160 operating table, Volista surgical lights, Eirus monitoring system and Servo-U ventilator platform. The Eirus system is described by Getinge as a continuous monitoring platform for both glucose and lactate that was designed specifically for use in critical care settings. It features second-by-second monitoring and a multipurpose central venous catheter that provides normal venous access and microdialysis monitoring, thereby reducing the need for additional CVC lines.
Getinge touted the Servo-U, designed for advanced intensive care settings, as a next-generation ventilator platform with a customizable interface and touch screen controls that help clinicians tailor treatments to individual patients. The system also accounts for “alarm fatigue,” a common but critical concern in hospital intensive care units.
“We have created an easier access to alarms that help staff to identify the causes for the alarm, and Servo-U can suggest solutions for the conditions triggering the alarm,” Jens Viebke, CEO of the Maquet-Getinge Group, said when the system was released.
Such product introductions were noticeably absent in the Infection Control unit, where sales slipped 1 percent to $785.9 million and operating profit plummeted 30 percent to $66.4 million, according to the annual report. Fluctuating currency rates and the U.S. device tax took its toll on profits, though strong sales in Western Europe and the United States/Canada minimized losses.
The unit’s most significant contribution to gross company sales was the launch of its four-year efficiency enhancement program. The effort is designed to streamline production by concentrating manufacturing in facilities with the greatest resources in competitive economies and outsourcing component production to external suppliers. The program also will entail a comprehensive review of functions including distribution, logistics and administration. In addition, the unit’s existing product range will be evaluated and unprofitable product lines phased out.
To further augment future growth, Getinge opened a new office in Shanghai, China, and a consumable manufacturing plant in Brazil, the seventh-largest market for its Medical Systems unit (the country contributed $85.4 million to 2013 net sales). Executives said the move will bring the company closer to its Brazilian customers, increase its emerging market flexibility, simplify regulatory submissions and improve its competitive advantage.