Mattias Perjos, President and CEO
Reinhard Mayer, CFO
Frédéric Pette, Acting President, Surgical Workflows
Jens Viebke, President, Acute Care Therapies
Joacim Lindoff, President, Patient and Post-Acute Care
Carsten Blecker, President, EMEA
Raoul Quintero, President, Americas
Paul Lyon, President, Asia/Pacific
NUMBER OF EMPLOYEES: 15,582
GLOBAL HEADQUARTERS: Gothenburg, Sweden
Replacing a CEO is more than enough to disrupt a corporation’s flow, but replacing the head honcho twice within two years? That has to be quite a difficult environment to adapt to—just as the company has adjusted to one regime, suddenly the corporate culture and mission completely changes again under a new leader.
It all began in March 2015, when Alex Myers was appointed president and CEO, replacing two decades of leadership from Johan Malmquist. In the wake of U.S. Food and Administration (FDA) disciplinary actions, Myers devoted the beginning of his reign to a quality overhaul. All signs pointed to a rebuilding—full-scale production resumed in a biosurgical mesh facility that had incurred previous FDA wrath (even passing FDA inspection the next time around). Myers introduced a “transformation plan” that sought to stimulate growth via business reorganization. The previous business units of Medical Systems, Extended Care, and Infection Control became Acute Care Therapies, Patient & Post-Acute Care, and Surgical Workflows respectively, and most everyone seemed to be on board with the changes.
However, in August 2016, a mere 18 months after Myers had taken the throne, the Board of Directors announced its intent to replace him. In the meantime, Joacim Lindoff (who was then president of Getinge’s Surgical Workflows business) assumed the role of acting president and CEO. According to Bloomberg, Getinge’s stock dropped as much as 6.3 percent that day.
“The Board of Directors and Alex Myers have different views on the future direction of the Getinge Group and the board has therefore concluded that a replacement of the president and CEO is necessary,” Carl Bennet, Getinge’s board chairman, said in a company statement explaining Myers’ departure.
What exactly were Myer’s contentious views? According to Bloomberg, the ambitious restructuring program Myers had initiated might have resulted in attempted divestment of under-performing businesses and assets that didn’t align with Getinge’s strategy. The advantages from that program wouldn’t have been noticed until 2018 at the earliest, but Myers’ directive was crippling orders and revenue in the short-term. But the difference of opinion between Myers and the board concerning Getinge’s future ultimately led to his replacement.
“It’s probably a logical decision when you come to that type of situation,” Myers told Bloomberg. Apart from that, he didn’t offer specific details about the disagreements or the company’s future.
ANALYST INSIGHTS: Getinge is in the midst of a strategic break-up of the company. As they spin off the Patient & Post-Acute Care Group, it is yet to be determined if this is a benefit for the company. While most companies are doing everything to get bigger, Getinge is going the other direction. The question will be whether the increased focus will win or will they lose out by not having the size needed for maximum leverage with their customers?
—Dave Sheppard, Co-Founder and Principal, MedWorld Advisors
Lindoff held down the fort as president and CEO until November 2016, when it was revealed former CEO of Coesia Industrial Process Solutions Mattias Perjos would take the reins. He began his tenure in May of this year.
“It is a great honor to be given the opportunity to lead Getinge Group towards the future,” Perjos said in a company press release detailing the appointment. “Getinge is a great company and I have closely followed its performance over many years. I am aware that the company is undergoing an extensive transformation and I look forward to meeting the challenges and to building a strong Getinge together with its employees.”
The company also underwent a few other notable executive changes during the year. In June 2016, Acute Care Therapies Chief Technology Officer Jens Viebke was promoted to president of the division, succeeding Heinz Jacqui. Reinhard Mayer, formerly president of supply chain and chief financial officer (CFO) of the departed Medical Systems business, became CFO of the Group. And upon Perjos’ installment, Lindoff began a new role as president of Getinge’s newly-established Patient & Post-Acute Care division.
The company’s Patient & Post-Acute Care business (formerly known as Extended Care), which offers solutions for daily tasks of lifting and transferring patients, posted FY16 (ended Dec. 31) revenues of SEK 7.4 billion, falling 4 percent from the previous year. This division supplied 25 percent of Getinge’s SEK 29.7 billion ($3.3 billion) annual sales, which represented a 2 percent loss from 2015. SEK 156 million in restructuring and integration costs for the new business (which were primarily related to measures implemented as part of the ongoing corporate transformation program) had a slight impact on this division’s operating profit, partially accounting for the drop in revenue. This division also completed the acquisition of 1st Call Mobility Ltd., a U.K.-based company that specializes in the sale and rental of medical beds and mattresses for bariatric patients, during 2016’s second quarter. 1st Call historically generated yearly sales of about SEK 100 million, and the purchase consideration amounted to SEK 223 million. The sale is expected to expand Getinge’s U.K. coverage and serve the increasing demand of this fast-growing care sector.
Also during the year, the company’s executive management team began drafting a proposal for potential listing and distribution of the Patient & Post-Acute Care division to shareholders. The final proposal is planned to be presented at the company’s general meeting in autumn, and the listing completed by 2018. Following the possible split, Getinge will be able to concentrate on its remaining Acute Care Therapies and Surgical Workflows businesses.
In 2016, the company’s former Surgical Workplaces and Infection Control segments were merged to form the Surgical Workflows division. The new business develops solutions for infection control, operating rooms, and advanced IT systems for traceability and management of the flow of sterile equipment as well as for optimal use of resources. The Group’s Life Science segment is also included in this business area. Surgical Workflows achieved earnings of SEK 10.5 billion in FY16, dropping 3.6 percent from the year prior. The loss was partially attributed to SEK 253 million in restructuring and integration costs diminishing the operating profit.
During the year, Getinge had major releases in a number of different product segments in this division as well. The company’s Maquet brand released the Meera OR table, awarded the 2016 iF Design Award in the Medicine/Healthcare category. The mobile operating table combines the benefits of Maquet’s Alphastar Pro and Betastar OR tables and adds motorized longitudinal shift, which permits nearly unrestricted radiolucency. Maquet also released a number of new offerings in its Volista surgical light technology during the year, and began distributing TSO3’s Sterizone VP4, a low-temperature sterilizer, in the United States.
The Acute Care Therapies division (formerly Medical Systems) produces solutions for life support in acute care conditions, including products for cardiac, pulmonary, and vascular therapies as well as a broad offering of products and therapies for intensive care units (ICU). Although Acute Care Therapies’ 2016 performance had been strongly affected by Getinge’s previous quality management system woes and the 2015 Consent Decree with the FDA, the division incurred the company’s only revenue gain, exhibiting a 2 percent increase over the previous year with sales of SEK 11.8 billion. The primary fuel for this gain came from the 2016 launch of a new range of ventilators (Servo-U, Servo-n, and Servo-air) that captured market shares.
Servo-U is an intuitive ICU ventilator designed to enhance user confidence in tailoring treatments to individual patients. Servo-U’s set of tools supports protective ventilation strategies, provides context-based guidance and therapeutic workflows, and offers an upgradeable platform. It creates an environment in which more patients in all phases of ventilation—controlled, supported, non-invasive, and during spontaneous breathing trials—can benefit from advanced lung protective strategies. Servo-n brings the Servo technology to the neonatal unit, enabling diaphragm electrical activity monitoring and a NAVA (Neurally Adjusted Ventilatory Assist) ventilation mode that matches assistance to newborns’ irregular breathing patterns based on neural respiratory output. Servo-air is completely independent of wall gas, making quality ventilation accessible in multiple care settings—from ICU to intermediate care, and for both invasive and non-invasive ventilation.
Echoing the company’s mantra of “passion for life,” Getinge’s technology set the stage for high school rower Blake Haxton’s eventual success in the 2016 Paralympics. Haxton finished fourth in Rio de Janeiro last year in the Paralympic single sculls, which differs from traditional leg-driven rowing, requiring athletes to have a different type of balance and focus more on upper-body strength.
In 2009, Haxton’s sore calf following a high school basketball game quickly escalated into necrotizing fasciitis, an ailment more commonly known as “flesh-eating disease.” Within a few days, he had endured amputation of his left leg up to the hip, and of his right leg to above the knee. The infections spread and his heart, lungs, kidneys, and liver began to shut down.
Haxton’s number appeared to be up to the point that doctors wouldn’t even put a percentage on his survival chances. During his multiple organ failure, Dr. Michael Firstenberg, assistant professor of surgery and integrative medicine at Northeast Ohio Medical University, coordinated Haxton’s care using Getinge’s Servo-i ventilator and Quadrox-D extracorporeal support technology. During his stay, Haxton endured over a month in a coma, 100 days in the hospital, and about 20 surgeries. After four years, he was able to pick up his rowing career again and begin his successful Paralympic career.
“I am amazed by what people have been willing to do for me,” Blake told Getinge in an interview detailed in the company’s annual report. “And believe it or not, I’m as healthy as a horse. I don’t have a single prescription in my name.”