Getinge AB (GNGBF) Q1 2025 Earnings Call Highlights: Strong Sales Growth Amid Currency Challenges

In This Article:

  • 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%.

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.