Getinge AB (publ)

Welcome to the Jettinga Q2 Report 2026. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers, CEO Matthias Peerjus and CFO Agneta Palmer. Please go ahead. The live has now started.

Hi everyone and welcome to today's conference call. With me today I have Agneta Palmier, our CFO, and in today's conference we'll go through our performance and some highlights for the second quarter before opening up for a Q&A. So we can move over to page number two, please. And as usual, let's start by looking at the development of our strategic KPIs. We continue to clearly track in line with plan to increase the share of sales from recurring revenue, accelerating the share of sales from high-margin products like, for example, our ECLS offering, consumables in infection control, and beta bags in sterile transfer. This is all supported by solid and effective quality processes and sales from recurring revenue continue to make up about two thirds and high margin products are now at 70%. For quality, the number of field actions in relation to sales has decreased significantly and we're pacing a lot better than last year. These improvements should of course be achieved through responsible leverage and also an attractive long-term return on invested capital. With that we can move over to page number three, please. So if we zoom in on the second quarter and some of the financial key takeaways for the quarter. Overall, we deliver a healthy financial performance in the quarter with solid top line growth. Net sales grew 4.6% organically and with positive development in most of the business areas. Order intake increased by 6.2% organically. Adjusted gross and EBITDA margins were up in the quarter as a result of the tariff refund and also continued positive underlying performance in our business. This led to a strong cash flow and a strong financial position with financial leverage at 1.7 times, so well below the 2.5 times CBTA as we have as our internal threshold. We can then move over to page number four and some of the key events in the quarter. So we take a step back here and look at some of the key events in our business across the second quarter when it comes to the offering and customers. So we continue to be innovative and in the quarter we launched three products which will benefit customers and patients. We have launched the Aquatis Endo 110 which is the next generation of automated endoscope reprocessing while the Fluorbeam LS expands the fluorescence imaging portfolio for small incision surgery. We also launched VasiView Hemopro3, which is the latest evolution of our EVH platform, supporting coronary artery bypass grafting procedures. And in Hamburg, in Germany, we opened a digital OVAR innovation center with the purpose of accelerating the path to a more intelligent perioperative workflow. Furthermore in surgical workflows we strengthened our infection prevention offering in endoscopy by acquiring Penamed, a UK-based distributor of endoscopic consumables.

We of course also monitor the situation in the Middle East closely.

Our first priority remains to tend to our employees in the region and continue to support our customers. The region makes up about two percent of sales whereas Saudi Arabia is around half. And thanks to our team's diligent efforts to reroute shipments to implement sourcing initiatives and also take other mitigating actions, the impact on both top line and cost have been very limited so far. Naturally, this might become more of a headwind if the situation worsens, so we continue to follow this very closely. We then moved to sustainability and quality. We reached an important regulatory milestone in June when we submitted the 510K application to FDA for our CardioSave intradict balloon pump. I'm also happy to see that several of our sustainability KPIs are trending in the right direction. For example, when you look at the product quality KPI and the greenhouse gas emissions noted here on the slide. As briefly mentioned also, when it comes to our tariffs that we communicated separately, we did receive an IEPA refund in the quarter of approximately $36 million. We can then move over to page number five and we'll discuss our top line performance. So when it comes to top lines, we start with with order intake. The organic order intake in acute care therapies increased primarily in ECLS therapy consumables in our covered stance portfolio and within EVH. When it comes to life science, the organic water intake rose sharply during the quarter, following a double-digit growth in sterile transfer and in bioprocessing, which continued to decline as a result of the geopolitical uncertainty and the impact that this has on decision-making and the continued challenging investment climate for pharma. The organic order intake for surgical workflows increased slightly driven by a strong performance in infection control, while digital health solutions and surgical workflows places noted a decline in the quarter. Then when it comes to net sales, we had 4.6% organic growth. QK Therapies increased its net sales organically, primarily due to sales of stents, ECLS therapy consumables, as well as intralic balloon pumps and consumables in the cardiac assist subsegment. In life science, organic net sales fell slightly despite robust growth in all product categories except for WIS. And in surgical workflows, organic net sales increased following growth in surgical work bases as well as service and consumables in infection control. So with that, we can move over to page number six, please, and I hand over to you, Agneta.

Adjusted for currency, OPEX had a positive impact on the margin by about plus 1.1 percentage points in the quarter and FX impacted negatively by minus 0.4 percentage points. All in all, this resulted in an adjusted EBITDA of 1,478,000,000 SEK and a margin of 17.6%. Let's move to page seven, please. We remain in a solid financial position. Free cash flow in the quarter amounted to 1 billion SEK. Compared with last year, free cash flow was impacted by improved operating profit and changes in working capital. At the end of Q2, net debt increased to 11.5 billion SEK on the back of the final earn-out for Paragonics, the acquisition of Penamed and the dividend. If we adjust for pension liabilities, net debt is at 9 billion SEK. This brings us to a leverage of 1.7 times adjusted EBITDA, which is well below the 2.5 times which we have set as an internal threshold. If we adjust for pension liabilities, leverage is at 1.3 times adjusted EBITDA. Cash amounted to approximately 2.1 billion SEK at the end of the quarter. So all in all, we can conclude that the financial position continues to be strong. Let's move to page eight, please. And back to you, Mathias.

Okay, great. Thank you very much, Agneta. And besides the tariff refund, Q2 was the first quarter in a while with a little bit cleaner year-on-year comparison as there were tariffs also in Q2 2025. And even if there was still a headwind from FX in this quarter, it has eased. Looking then at the rolling 12-month development for adjusted EBITDA margin, we were at 12.7% two years ago, and we're now at 15.2%. normalized, which means that excluding tariffs, we are at 15.5%. If we go back to the capital market update that we had in May 2024, we guided for an adjusted EBITDA margin span of 16 to 19% by the end of 2028. We're about halfway to the end of 2021, to 2028 from then, and we are closing in on this span. The main drivers which will support us there in spite of continued tariffs are the gradual cost release from the second half of this year, primarily stemming from the regulatory submission and the future approval processes when it comes to CardioSave and also CardioHelp. There's also the mix shift to more recurring and high margin revenue. And there is also the results of our continuous productivity measures and some of the key product launches that we have ahead of us. With that, we can move to page number nine, please. So in terms of the financial outlook for 2026, I think we're all aware of that we live in uncertain time with a lot of geopolitical uncertainties that we need to navigate on a daily basis in our business. But based on the underlying demand that we see and our regular dialogue with customers, our expectation remains for an organic net sales growth to be in the range of 3-5%. This is adjusted for the phase-out of our surgical perfusion product category. Surgical perfusion is still expected to have some net sales in 2026, but declining from about 250 million sec to around 50 million sec. We can then move to page 11, please. So just to summarize the quarter before we head into Q&A. Overall, we had a robust financial performance with solid organic growth in top line. Margins came in healthy thanks to the tariff refund and also our improving underlying performance. cash flow in the quarter and our financial position remains strong. For 2026, we reiterate our guidance for organic net sales growth of 3-5% adjusted for the phase out of the surgical perfusion. Our priorities for 2026, they remain the same as they've been from the beginning of this year. We continue to have the number one priority of addressing the remaining challenges in acute care therapies. We have the sustainability productivity improvements that we're working on and the cost consciousness when it comes to navigating in this geopolitical uncertainty and also addressing the impact from tariffs. And number one priority, of course, is also continue to creating added value for our customers, which I think is something that we see on an everyday basis in our business. So with that, I open up for questions. Thank you very much.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Eric Castle from Danske Bank. Please go ahead.

Hi, good morning everyone. First, I wanted to ask about the composition of organic order growth, specifically for EMEA, obviously very strong at 16%. And you're saying that mainly it seems to do with ventilator orders. But I also wanted to ask you, is there any component of CardioSave return and early CardioHelp 2 units that you're seeing now in order intake, and also on the Polish-Italian ventilator tenders, where they sort of very significant and I guess non-recurring. Any color on both of those would be very helpful.

Yeah, right. Thanks, Eric. We don't disclose detailed numbers on product areas, area level, but we do have some sales of both categories that you mentioned here and also a bit of an impact from sales in Poland. But we don't disclose detailed numbers of this. So there's an impact. But, you know, it's early days when it comes to both Cardio Health 2 and also the shipments of CardioSafe.

Okay, thank you. And then I wanted to also ask about sub-segment products as well, I guess, but on the order quality in life science, super strong as well, especially Americas. I just wanted to see if you could say anything about, in part, what's happening with the market over there, and also if you can talk about the mix between cell transfers versus bioprocessing splits, if there's anything non-recurring in that order intake or if it's just seeing the U.S. market on a new higher level?

I'd say there is nothing non-recurring in there. It is sterile transfer continuing to trend very, very strongly as it has for a while. And also then in addition to this, we are seeing a bit of a better market climate when it comes to bioprocessing. And then on the negative side, as I mentioned, the call we have a slightly more challenging situation when it comes to the WISP business and the capital goods there. There's still some decision anxiety when it comes to our pharma customers, so that is a drag on the business, but there's nothing unusual or one of nature when it comes to the order intake otherwise there.

Okay, good. And just a quick one. If these types of orders, which I guess are most to consume, most looking at the mix, in life science, are they converting relatively fast, or is this order they take for long term?

Sorry, which category were you talking about then?

Mainly sterile transfer, but overall consumables within life science.

I think there's some lumpiness when it comes to order patterns in consumables in life science. But again, there's nothing that stands out dramatically here, I'd say. And when it comes to the sales, it is a lot more smooth when it comes to deliveries. So nothing out of the ordinary, I would say, in the quarter as such.

Perfect. Thank you very much. I'll jump back in queue.

Thank you.

The next question comes from Sten Gustafsson from ABG Sundal Collier. Please go ahead.

Good morning, guys. More product detailed questions then. I was wondering if you could share with us sort of growth rate and demand for your ECMO and Hintra Arctic Balloon Pump products. I guess we also... one of the competing products out there having some issues and weak sales momentum. So I was wondering if that has helped your products in the market?

Yes, thanks. We have no evidence of that to us. I can't talk about competitor positions here or anything that they've discussed in their earnings calls. But when it comes to our business, we basically continue to see the good trend that we've had for our ECLS business. And this is geographically, I think, very strong across the board also. And when it comes to the balloon pump business, we started to release shipments for sea markets and kind of ramping up the deliveries here as well. But I don't see a big connection between what other companies have communicated here and our growth. For us, it seems like normal, strong and demand-driven.

Great. Thank you. And then my second question is, and this is more of a clarification, I think you mentioned in your remarks cost releases in the second half related to the upcoming launches. I was wondering if you could perhaps quantify those.

We haven't put a number on this when it comes to the second half of this year. What we've said is really just reiterating what we've talked about for a few years now, that all the costs that go into remediating the two remaining categories in cardiopulmonary and in cardiac assist, will start to come down in the second half of this year. So the overall number I'm talking about here is the 800 million SEK of extraordinary quality costs that we said peaked in 2024. So we had a little bit of a lowering of these costs in 2025. We expect another lowering in 2026, mostly back-end loaded for 2026. and then a little bit of a rapid decrease of cost in 2027 and 2028.

Perfect. Thank you very much for the clarifications. Thanks.

The next question comes from Ludwig Germunder from Handelsbanken. Please go ahead.

Good morning, and thank you for taking my question. So first of all, I just want to follow up on the IABP ramp up in sea markets. Maybe you mentioned it, but would you say that there are any stocking effects in that at the moment since you're ramping up, or would you say that the sales and orders are very true to the underlying demand?

We are still supply constrained, so there's no possibility for anyone to stock any of the balloon pumps that we've started to ship here. We really have just been able to meet the most critical and urgent customer demand.

Okay, great. Thank you. Wonderful. Secondly, I just wanted to focus a bit on ACT margins here. So could you help us understand and maybe elaborate a bit on the underlying margin development for ACT specifically, if we're just for tariff-free funds? How should we think about that?

Go ahead, Anita.

The majority of the therapy fund is related to ACT, but underlying margin performance is rather strong, connected to those factors that Mattias also mentioned. It is a mixed shift, it is the high margin disposables that come through, it is continued pricing efforts and it is those productivity initiatives. The underlying margin developed is strong, but it is boosted by this refund.

Thank you. And then just a quick final one, if I may. So recently there have been some discussions regarding US hospital CapEx levels. I was just curious if you could share anything what you're currently seeing with the US. And if you have noticed any change recently in the customer dialogue

No, we have the same data as everybody else here, and we actually have seen this since almost a year back in some of the data from our customers as well. But we are very close to, I mean, strongly needed acute therapists, so we haven't had any real... demand impact from our perspective. And I think, as I alluded to in the call, the continued dialogue that we have on an everyday basis with our customers is still rather positive. And the customer seems to be willing to invest in the type of products and therapies that we offer because it's something that is needed to treat patients on an everyday basis.

Great. Alfa and Emil, thank you for taking my questions.

Thank you.

The next question comes from Christopher Liljeberg from DNB Carnegie. Please go ahead.

Hi, thank you. Two questions. First, could you just update us on the card you held to previous, hopefully, farm problem status? And also, I'm curious to hear your view here now about the potential to lift margin for the full year and also if we adjust for this tariff refund that you have then maybe somewhat more of that in the second half of the year. Thank you.

When it comes to the Cardio Help 2 limited market release, this issue that you mentioned has been resolved. So we are back into the final phase of that and then of course in the coming months then move into like a full market release. So that issue is behind us. When it comes to the margin guidance, we don't give detailed guidance for 2026, but we have mentioned earlier that our ambition is to improve the reported margin also this year. We have not changed that at all, but we're not prepared to give any more detailed guidance now. When it comes to the tariffs, we have, of course, reported what has been refunded to us and also how this is reported in the financial numbers. And we'll continue to report, forward-looking from here on, what tariffs we end up paying. But I would underline that as of next week, there is a new tariff regime coming into place. We don't know exactly what this is, so we'll continue to update you once we have clarity on this. Our intention is only to continue to report tariffs paid going forward.

Could I ask a follow-up on what you said about margin? Would you say that the second quarter underlying modern development was according to what you were planning earlier this year, or have you become more confident in this margin recovery we're seeing now after the second quarter?

Yeah, I think the drivers of the margin, if we disregard the tariffs, I think the other drivers of the margins when it comes to impact from leverage on growth, when it comes to the product mix, when it comes to the productivity improvements that we have, I think it's broadly tracking according to the plans that we have, so maybe some additional comfort from this, but to us, no major surprise. We can see this development on a day-to-day business as we follow up everything that we do.

Thank you very much.

Thank you.

The next question comes from Mattias Vadsten from SEB. Please go ahead.

Hi, thanks for taking my questions. First one, zooming out on APAC here in this quarter. Overall, dropping in orders and all of nothing material, but could you just describe maybe a climate that you see in the region, perhaps specifically covering gear drivers in China?

I think China, like we've said for some time now, we expect to be a challenging market for the foreseeable future. Last year, we did have around 2% growth in China. We don't guide on individual markets, but I think the headwinds are, I think, well known per category. They're quite well known by now. And there's no particular dynamic to call out. I think China was one of the weak points in the quarter from a geographic perspective. But it's also something that fluctuates between quarters. So I think we have no reason to revise our outlook or anything when it comes to evolution in Asia. in APEC overall or China in particular. I think the categories within ACT that we have strong positions in, they continue to have a good demand situation. Certificate workflows, on the other hand, we've had some strong competitive pressure for quite some time and that's also continued now and life science is a little bit more diverse depending on which product category you look at. So from a demand perspective in China, nothing to call out. We expect this to continue to be challenging, but I think our team locally is doing a very good job in navigating this also.

Good, thank you. The next question relates to ventilators. It seems to be doing well. How would you describe the comparison figures when you move in here to the second half of the year compared to what you have experienced in the first half? Are they easing up?

Yeah, we've had some positive boost, you know, from this ventilator conversion that was going on and impacted the comps last year. We had some of that remaining in Q2, but I think Q3 and Q4 are kind of cleaner from that perspective. And overall, the ventilation market has, I think, stabilized quite well after all this post-COVID turbulence. And we continue to protect and develop our market share effectively.

Good. Final question is, what is a reasonable timeline from now as to when you're able to sell CardioSave and the full ECMO offering in the US without restrictions, based on your knowledge?

Yeah, that is an important question, but very difficult to give a timeline on. When it comes to the timeline, the part that we can impact, which means the submissions of 510 applications, I think we're on top of that. So, as I mentioned, the caller and the We have submitted the 510 application for our intradict balloon pump. When it comes to the ECMO indication, it is second half of the year and we'll come back specifically when that happens as well. But no change to plans or I think the timeline when it comes to submissions either. And of course, approval process is a dialogue that we have with FDA and not something I can give you any guidance on.

The next question comes from Philip Wetterquist from SB1 Markets. Please go ahead.

Good morning, guys. Thank you for taking my questions. I'll take them one by one. First one, you mentioned price adjustments as a contributor to growth. So I'm kind of wondering how much did that contribute? You mentioned in Q4 that you expect prices to contribute about 2% for the full year. Does that still stand, or have you been able to increase prices further?

No, it's around the same level, so no change here.

All right, perfect. Thank you. And then on life science, growth declined despite solid development in all categories except WIS. So how big part of life science sales are WIS?

We don't disclose detailed numbers on the categories, but it is the legacy part of our portfolio. I think the longest offering that we've had in the market. And it consists of also capital and service close to around 50-50 for those. But no detailed numbers on exactly the size of the business. But it is the one with the strongest headwind in life science right now.

My last question is on field actions. You report field actions per SEK billion and it was up quarter over quarter by 0.1. What was the reason for that increase?

We don't disclose detailed field actions. The information that you can get is from what is officially published from regulatory authorities. So no other particular drivers to call out here. This is also something that can vary quite a bit over quarters. So nothing to call out here in terms of product categories or geographic markets.

Thank you. That was all from me.

All right. Thank you.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from David Adlington from JP Morgan. Please go ahead.

Morning, guys. First question just on the revenue guidance. You're on 2.7% year-to-date. I just wondered if the top end of the range at five is really in scope and what drives the acceleration in the second half to get there? Thanks.

Yeah, we're not going to break down the guidance span into any more detail here. We have fairly good momentum and reiterate the span as such. So when it comes to the demand drivers, I'd say it Overall, what we've talked about for a while, we do see good traction when it comes to the cardiopulmonary business and the ECLS therapy products that we have. We expect sterile transfer to continue to be a strong point as well within life science. But we can't give you any more details on where we expect to land and what's required in terms of the guidance plan here.

Okay, fair enough. And then just on margins, on the cost inflation side, is there anything you want to call out in terms of additional cost inflation, either the impact on the second half or into next year?

Yeah, this is something we're monitoring very, very closely. So far, we haven't seen any significant impact. I think the biggest individual impact has been when it comes to transport and transport surcharges. But again, not not material at this stage. We continue to monitor all different categories very closely. And as you know, we have a productivity program in place since quite quite a while. We were hoping maybe for some of these benefits to drop through to the bottom line. But right now they have more of a mitigating effect towards some of the inflationary pressures that we see. So definitely on our radar and thus far manageable and I think we will be able to offset hopefully most of this with the continued productivity improvements that we're working on.

That's good Carl, thank you. And then just finally on the IABP, you say you're supply constrained. Are you planning on ramping up capacity and if so when do you expect that to be able to meet demand?

I can't give you a timeline. We are continuously ramping up capacity here, but there are some constraints when it comes to components and also when it comes actually to labor and ramping up. And as you know, we've had a lot of capacity constraints because of the remediation program and having to do quite a lot of testing when it comes to products and so on. It is an upward trajectory, and I can't give you a timeline for when we will be kind of in balance. Okay, great. Thank you. Thank you.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

All right. Thank you very much. Thanks for tuning in. I think we already made this summary here. So I appreciate you taking the time to be with us today and wish you a great rest of the day. Thank you very much.