Getinge AB (publ)

Welcome to the Getinge Q4 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 pound key five on their telephone keypad. Now I will hand the conference over to speakers, CEO Mattias Perius and CFO Agneta Palmeir. Please go ahead.

Thank you very much and welcome everyone today to today's earnings call. With me, I have our CFO, Agnetha Palmer. Today's conference will start by looking at the performance of Q4 and then do a bit of a recap of some of the key events of 2024. So we can move directly over to page number two, please. So the key takeaways when it comes to performance for the quarter, let's start with that. So looking back now at a strong quarter consistent through the three months, order intake grew by 11%, of which organic growth amounted to 7.4%, thanks to positive development in all regions and all business areas, except for life science, which was basically flat. Net sales increased by 11.8% in the quarter and there was 9.2% organic growth when it came to sales. If you look at the adjusted gross and the beta margins, they improved significantly in the quarter. This was mainly due to healthy price increases coming through. We had good leverage from the high volume. We had a positive product mix and also good traction from our productivity efforts. And when we talk about financial leverage, our financial position remains solid and even if the leverage has increased somewhat after the acquisition of Paragonix, it is trending down and our financial position remains solid thanks to the strong free cash flows that we generate. The proposed dividend amounts to 4.60 sec per share and this represents 38% of the free cash flow per share. We can move over to page number three, please. So this page is focused on some of the other key events in the quarter. Let's start with the sustainability and quality. On November 15th, the FDA published a letter to healthcare providers on its website, repeating the information about the voluntary medical device recall and supply concerns related to getting its VASOVU hemoproendoscopic vessel harvesting systems. and actions are being taken as agreed with FDA. So this is something that is ongoing. The progress has continued related to the previously communicated field actions for the CardioSafe balloon pump. And the update here is that all required technical solutions are now identified and in different stages of implementation. This means that we have a time plan for this and therefore we've also made a provision of 297 million SEK in the quarter to cover these activities that will span across 2005, 26 and partly into 2027. If we then shift the focus to offering and customers, when it comes to our offering, Paragonics Technologies was acquired in Q3 of 2024. They received a FDA 510 clearance for its innovative kidney vault portable renal perfusion system. This is a system that is designed to protect donor kidneys, which is the most in demand organ during transportation to transplantation. Currently, there are more than 100,000 patients on the national transplant waitlist in the US, and 86% of those patients are waiting for a kidney. So this is a very much needed product that we're happy to bring to market. When it comes to the last bullet, we have a bit more information on the surgical perfusion withdrawal and we'll come to that on the next page. So let's move directly to page number four, please. After the end of the quarter, we have initiated a process with the strategic intention of facing out the surgical perfusion product portfolio, which is part of cardiopulmonary inside acute care therapies. We're proud of our legacy and the products within this field, but unfortunately, we have been challenged gradually during the last 10 years, actually, with a steadily decreasing market share and eroding margins. The main benefit of this intended phase out is that we can reallocate the resources to areas of more profitable growth, and this is mainly within ECLS and in transplant care. From a financial perspective, the exit is expected to have a marginally positive adjusted EBITDA contribution from 2025 and onwards. This intention has been shared with relevant employee representation bodies and employees in line with local labour regulations and the necessary steps have been initiated already. The final decision on the restructuring is dependent on the outcome of negotiations with the employee representation bodies. Just to put surgical perfusion into perspective, we had net sales of about 450 million SEC in 2024. And depending on the outcome of the negotiations with the MP representation bodies, restructuring costs are estimated to approximately 800 million SEC in total, of which 522 million SEC was recognized in the fourth quarter of 2024. And this is reported as an item affecting comparability. it consists primarily of write downs meaning that it has a very limited impact on cash flow we can then move over to page number five please so if we look at the top line performance in the quarter overall we had strong performance positive development in all the regions when it comes to order intake we had 11 growth of which 7.4 was organic growth. Acute care therapists had double digit organic growth, coming mainly from ventilators in critical care, ECLS in cardiopulmonary, and from cardiac assist. Despite the strong orders within sterile transfer, life science was slightly down, mainly due to weak orders for high purity in New England within bioprocessing. Surgical workflows had growth in all product categories, so that's really positive. When it comes to net sales, we had 11.8% growth and 9.2% of this was organic growth. And also net sales, acute care therapists deliver double digit organic growth coming from the same categories as orders along with healthy growth for our EVH products within cardiac surgery. Looking at life science, they had a very busy quarter and managed to show an impressive effectiveness when it came to deliveries in the quarter. So the business area was up by almost 13%, mainly on the back of significant sales of sterilizers and the continuing strong recovery in sterile transfers. Certica workflows had a particularly good performance within digital health solutions and infection control, where also Healthmark that we acquired a little bit over a year ago is continuing to make a substantial contribution in line with our strategy to increase sales within consumables. So with that, we can move over to page number six and I hand over to you for a moment Agneta.

Thank you Mattias. So this quarter clearly shows the leverage that we get on margins when sales volumes go up. And we are also pleased to see that the focus that we have on structural measures to enhance productivity and cost efficiency are starting to pay off. For the group, adjusted gross profit increased by about 1 billion SEK to 5.6 billion SEK in the quarter, primarily on the back of healthy price increases, volume and favourable geographical and product mix. If we then look at the adjusted EBITDA, the adjusted growth profit had a positive effect on the margin by 3.8 percentage point, thanks to those factors that I just mentioned. We continue to see a positive trend on the OPEC side, which adjusted for currency had a 0.7 percentage point positive impact on the margin in the quarter, mainly related to operating leverage. FX had a positive impact on the margin as well. And all in all, this resulted in an adjusted EBITDA of 2,143,000,000 and a margin of 19.4%. Let's move to page seven please. The strong performance in Q4 comes through also in the free cash flow and leverage. Free cash flow increased by more than 70% and amounted to around 1.7 billion. Compared with last year, free cash flow was positively impacted by the improved underlying business performance. Anna-Lena Almqvist- Working capital increased, but to a lesser extent compared to last year, and if we look at working capital days they continue to be be well below 100 we are now at 89 days. At the end of Q4, net debt was 10.5 billion. If we adjust for pension liabilities, we are at 7.8 billion SEK. And this brings us to a leverage of 1.6 times adjusted EBITDA, which is well below the 2.5 times which we have as an internal threshold. If we adjust propension liabilities, the leverage is at 1.2 times adjusted EBTA. So this signals that we remain in a solid financial position even after the recent acquisitions that we have made. Cash amounted to approximately 3 billion by the end of the quarter. So all in all, we can conclude that the financial position continues to be strong. Let's then move to page eight and back to you, Mathias.