Getinge AB (publ)

Welcome to the Getting A Q2 Report 2024. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star 5 on their telephone keypad. Now I will hand the conference over to the speaker's CEO Matthias Purgos and CFO Agnita Parma. Please go ahead.

Thank you very much. Thanks for joining today's conference. With me, I have our CFO, Netta Palmer, who will present the financials in a moment. But let's get started. We can move directly over to page number two, please. And let's start by looking at some of the highlights and key takeaways from the second quarter of 2024. Net sales increased by 15.7% in the second quarter, and the organic growth part of this was 8.9%. Jan-Willem Wasmann, Order Intake for getting increased by 14.4% and the organic part here was 7.8% thanks to positive development in all our three business areas. Jan-Willem Wasmann, Adjusted gross margins improved in all business areas and the adjusted EBITDA margin for the group improved 4.9 percentage points year on year. This is mainly coming from the weak comp from last year plus healthy growth, mix and price, mitigating the negative effects from inflation that we still see. These are effects that we continuously address through productivity improvements and structural changes when and where needed. All in all, this contributes to a solid financial position that enables investments in profitable growth also going forward. We can then move over to page number three, please. So let's take a look at some of the key activities that will drive future growth and profitability. So when it comes to our offering and customers, I'd like to mention that in the quarter we launched Palladus 150. It's an advanced low temperature stellarizer that meets an important need for our customers. From a regulatory perspective, we received 510 clearance for our advanced clinical guidance digital offering, which enables digital clinical decision support And we also had a EUMDR approval for our coverage tent system, Advanta V12. Within life science, the GEW888 Neo washer was launched, which contributes to increased efficiency in the clean room, and it also reduces water consumption by 20%. And in addition to this, we had a new version of our DPT beta bag launched. And this is a version that is made from a larger portion of renewable materials. In the quarter as well, on the May 15th, we had a capital market update, presenting an updated adjusted earnings per share target of an average growth of over 12% in the years 2024 through 2028. When it comes to sustainability and quality, the quality improvement work linked to the balloon pump CardioSave and the ECLS system CardioHelp, we have, as previously communicated, post-active promotion in the US of these products, but we are still able to sell and deliver if our customers see no good alternative. We are in close dialogue with customers and authorities, but it's too early to single out any specific trend in sales when it comes to this. In the quarter, we also submitted an application for CE marking of the new packaging for the ECMO therapy consumables HLS and PLS sets. We can then move over to page number four, please. So as I mentioned earlier, the order intake grew by 14.4%, where of 7.8% organically, and net sales increased by 15.7%, where of 8.9% organically. Organic order intake grew strongly in EMEA and Asia Pacific, and the decline in organic order intake in Americas is mainly due to a softer quarter for life science and for surgical workflows. all regions grew net sales organically in the quarter mainly driven by an improvement in acute care therapies compared with the challenging q2 of last year we can then move over to page five please so all this combined takes us to the outlook where we reiterate our previous guidance for 2024 that we expect organic net sales growth to be two to five percent and in addition to this we expect recent acquisitions to contribute with three to five percentage points of growth. And this is unchanged. We can move to page number six, please. And we'll take a closer look into the order intake of the second quarter. So per business area, in acute care therapies, we had 8% organic growth. This increase is mostly driven by critical care, cardiopulmonary and cardiac surgery. Life science had an 18.4% organic growth and this was after a strong quarter in sterile transfer and the development in bioprocessing was still weak as you've seen in earlier quarters as well. In surgical workflows the growth was 3.4% organically and increase in all product categories except for digital health solutions. So in summary for the group, this means 7.8% organic order intake growth and in actions 14.4%. We can then move to page number seven, please. And then from a sales perspective, acute care therapists organic net sales increased sharply following higher sales of consumables in both cardiopulmonary and cardiac assist compared to the difficult Q2 last year. Life science organic net sales decreased by 13.1% in the quarter, mainly due to washer disinfectors, sterilizers, and sterile transfer. However, sales from High Purity New England in the quarter makes up for almost all of this. When it comes to surgical workflows, organic net sales decreased slightly, mainly due to lower sales in infection control. The acquisition of Healthmark continues to contribute to growth in a material way. Overall for the group, acquisitions contributed to an increase in net sales of 499 million SEK in the quarter. Currency had a minus 5 million SEK impact on net sales for the group in the quarter. And when it comes to revenue from consumables, this was strong in the quarter, contributing to high growth in recurring revenue. Let's then move over to page number eight. And if we take a closer look at the gross margin and gross profit, gross profit increased by 837 million SEK to 4,151,000,000 SEK in the quarter, where FX effects impacted by plus 35 million SEK. All business areas improved their adjusted gross margin leading to a 3.8 percentage point increase for the group versus last year's low comps. Mixed price absorption and effects had a positive impact while cost inflation still eats its way into the margin and this is something we continue to address for acute care therapists we adjust the gross margin improved by 3.6 percentage points mainly due to increased sales the product mix inside the business area and currency this was partly offset by higher costs for input goods employees and ongoing quality improvement efforts with regards to cardiac assist and to cardio pulmonary For life science, the adjusted gross margin increased by 2.8 percentage points as a result of favorable mix, price improvements, and currency. And this was partly offset by lower volumes and low absorption. In surgical workflows, the adjusted gross margin increased by 2.8 percentage points, mainly as a result of acquisitions and price increase. And with that, we'll move over to page number nine, and I hand over to you, Agneta.

Okay, thank you, Mattias. Let's have a look at adjusted EBITDA, which improved by 486 million Swedish kronor, and the margin came in 4.9 percentage points higher than last year. Adjusted gross profit had a positive effect on the margin by 3.3 percentage points due to those factors that were just mentioned by Mattias. So volume, mix, price, favorable absorption, partly offset then by inflationary effects. OPEX, adjustable currency, had a positive impact of one percentage point on the margin in the quarter, coming from operating leverage and positive contribution from acquisitions. Depreciation and amortization adjustable currency had a positive effect of 0.5 percentage points on the margin. And finally, FX had a slightly positive impact on the margin. So all in all, this resulted in an adjusted EBITDA of 981 million Swedish kronor and a margin of 11.8%. Over to page 10, please. Free cash flow amounted to 0.3 billion SEK roughly. Higher operating profit had a positive effect while higher level of working capital impacted negatively. And the higher working capital is to a large extent related to seasonally higher levels of receivables and inventory. Even so, working capital days continue to be well below 100. We are now at 91.6 days. We remain below trend on operating return on invested capital with 11.1% on a rolling 12-month basis, which is still above the cost of capital. Let's move to page 11. The change in net debt year-over-year is due to the acquisitions that were finalized in the fourth quarter of 2023, taking us to $9 billion in net debt at the end of this quarter. If we adjust for pension liabilities we are at 6.3 billion. This brings us to a leverage of 1.5 times EBITDA. If we adjust for pension liabilities the leverage is at 1.1 times EBITDA. Cash amounted to approximately 2.3 billion SEK at the end of the quarter. So all in all we can conclude that the financial position continues to be Let's then move to page 13, please, and back to you, Mattias.