Gambro Six Month Report January-June 2001: Continued Good Growth and Geographical Market Expansion.Business Editors STOCKHOLM, Sweden--(BUSINESS WIRE)--July 25, 2001 Gambro AB -- Total revenues for the period increased by 22% (9%(a)) to SEK 12,799 M (10,514). Operating earnings, EBITDA, amounted to SEK 2,122 M (SEK 1,194 M incl. non-recurring items) corresponding to a margin of 16.6% (9.3% incl. non-recurring items). Earnings per share decreased by 36% to SEK 0.45 (-1.19 incl. non-recurring items) and cash earnings per share increased by 7% to SEK 4.26 (2.62 incl. non-recurring items). -- Second quarter group revenues increased to SEK 6,619 M (5,400) including a continued good revenue growth momentum of 23% (9%(a)). -- Gambro Healthcare expanded revenues by 28% (12%(a)) - in second quarter by 30% (13%(a)). Important clinics acquisitions and de novo development in the US, Latin America and Europe, reaching 50,000 patients in total. In the US provisions of USD 85 M (SEK 927 M) for unbilled laboratory receivables. A government subpoena received for documentation on Gambro Healthcare. -- Continued good sales growth, 15% (7%(a)) for Gambro Renal Products - second quarter 14% (4%(a)) - including good development in Europe and the Americas. New products rolled out. -- Good sales development for Gambro BCT, +23% (10%(a)) - second quarter +25% (12%(a)). Strong growth in the US. Blood bank product offering broadened by acquisition of Sanguistech (after period). -- Pathogen Eradication Technology (PET) process receives broad US patent approval (after period). (a) currency adjusted SIX MONTH REPORT JANUARY-JUNE 2001 In total, for the first six months 2001 revenues were SEK SEK In currencies, this is the abbreviation for the Swedish Krona. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 12,799 M (10,514) including a revenue growth of 22% (9%(a)). This includes an expansion in Gambro Healthcare with 28% (12%(a)). Gambro Renal renal /re·nal/ (re´n'l) pertaining to the kidney. re·nal adj. Of or in the region of the kidneys. Renal Relating to the kidney. Products had a good sales development with revenues growing by 15% (7%(a)) with a continued good development in Europe, good growth in prioritized areas in RoW as well as continuously increasing internal sales. For Gambro BCT BCT Brigade Combat Team BCT Basic Combat Training BCT Best Conventional Pollutant Control Technology (EPA) BCT Business Cards Tomorrow BCT Banque Centrale de Tunisie (Central Bank of Tunisia) revenues increased by 23% (10%(a)). The PET project organization has been strengthened and supported by R&D investments of SEK 59 M (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 5.9 M). Group revenues developed positively on main markets in Europe, the Americas and on prioritized markets in RoW. For the Group operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the period has been negatively affected by the changed laboratory revenue recognition methodology applied since April 1. Also currency effects and the increased R&D investments in the PET project negatively affected the operating margin (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ), which was 16.6% (9.3% incl. non-recurring items) for the Group. For the Group, the second quarter 2001 revenues were SEK 6,619 M (5,400) representing a growth of 23% (9%(a)). For Gambro Healthcare revenues grew by 30% (13%(a)) including a good growth in the US and RoW. For Gambro Renal Products revenues increased by 14% (4%(a)). Gambro BCT revenues increased by 25% (12%(a)) thanks to a good overall market development. The Pathogen Pathogen Any agent capable of causing disease. The term pathogen is usually restricted to living agents, which include viruses, rickettsia, bacteria, fungi, yeasts, protozoa, helminths, and certain insect larval stages. Eradication eradication extermination of an infectious agent so that no further cases of the related disease can occur. virtual eradication Technology (PET) developed according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. plan. US patent approval was received in July. Overall Group revenues developed positively on main markets in Europe and the US as well as on prioritized markets in RoW. The products businesses, Gambro Renal Products and Gambro BCT, continue to show a good performance with an operating margin of 21.1% including ambitious R&D investments in the PET project. In the clinics business, Gambro Healthcare, the EBITDA margin was 13.5%, a reduction due to the changed revenue recognition methodology. Based on prior methodology, the margin would have been approx. 2 percentage points higher. Operating margin, EBITDA, for the Group was 16.3% (2.2% incl. non-recurring items), a reduction due to changed laboratory revenue recognition methodology in the US. (a) currency adjusted
Key data, present structure (excluding non-recurring items)
----------------------------------------------------------------------
April - June Jan - June July 2000 Full year
SEK M 2001 2000 2001 2000 - June 2001 2000
----------------------------------------------------------------------
Revenues 6,619 5,400 12,799 10,514 24,530 22,245
Operating
earnings
before depr.
(EBITDA) 1,076 1,075 2,122 2,059 4,032 3,969
% 16.3 19.9 16.6 19.6 16.4 17.8
Operating
earnings
(EBIT) 390 502 809 934 1,444 1,569
% 5.9 9.3 6.3 8.9 5.9 7.1
Earnings before
tax (EBT) 209 360 472 681 774 983
Earnings per
share (EPS)
SEK (1) 0.13 0.43 0.45 0.71 0.70 0.96
Earnings per
share (EPS)
SEK (1)
including
non-recurring
items -1.52 3.31 -1.19 3.59 -1.93 2.85
Cash earnings
per share
(CEPS)
SEK (2) 2.12 2.09 4.26 3.98 8.20 7.92
Cash flow
from
operations(3) -300 84 -730 545 -172 1,103
Cash flow from
operations
per share(3) -0.87 0.24 -2.12 1.58 -0.50 3.20
Net debt 9,930 5,586 9,930 5,586 9,930 7,275
----------------------------------------------------------------------
1) After full tax
2) Net income plus depreciation and amortization divided by
number of shares
3) Cash flow before acquisitions and taxes
BUSINESS AREAS Gambro Healthcare The first half of 2001 included a revenue growth of 28% (12% currency adjusted) with revenues reaching SEK 7,689 M (6,011). Gambro Healthcare US had a good revenue growth of 27% (11% currency adjusted) as had the international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , which expanded by 34% (23% currency adjusted). The second quarter included a revenue growth of 30% (13% currency adjusted) and revenues rose to SEK 3,997 M (3,064). Operations in the US grew by 30% (12% currency adjusted) and the international operations by 36% (23% currency adjusted). During the period important clinics acquisitions were made in the US. The assets of the dialysis dialysis (dīăl`ĭsĭs), in chemistry, transfer of solute (dissolved solids) across a semipermeable membrane. Strictly speaking, dialysis refers only to the transfer of the solute; transfer of the solvent is called osmosis. center owned by Muhlenberg Regional Medical Center in the state of New Jersey were acquired. The dialysis center provides hemodialysis hemodialysis /he·mo·di·al·y·sis/ (-di-al´i-sis) removal of certain elements from the blood by virtue of the difference in rates of their diffusion through a semipermeable membrane while being circulated outside the body; the process and peritoneal dialysis peritoneal dialysis n. The removal of soluble substances and water from the body by transfer across the peritoneum, utilizing a solution which is intermittently introduced into and removed from the peritoneal cavity. treatments to about 150 patients. Gambro Healthcare will also provide acute renal treatments. Furthermore, substantially all of the dialysis-related assets owned by Renal Management, Inc. (RMI (Remote Method Invocation) A standard from Sun for distributed objects written in Java. RMI is a remote procedure call (RPC), which allows Java objects (software components) stored in the network to be run remotely. ) were acquired. This includes 21 clinics that serve 950 patients in Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , Nebraska,
Iowa, Missouri Missouri, state, United StatesMissouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. and Kansas. It also includes contracts to provide acute
dialysis. In June the dialysis related assets of Dialysis Service Group,
Savannah, Georgia Savannah is a city located in (and the county seat of) Chatham County, Georgia (USA). The city's population was 128,500 in 2005, according to the most recent U.S. Census estimate. Savannah was the first colonial and state capital of Georgia. were acquired. This includes five clinics that serve
260 patients. In the US 7 de novo [Latin, Anew.] A second time; afresh. A trial or a hearing that is ordered by an appellate court that has reviewed the record of a hearing in a lower court and sent the matter back to the original court for a new trial, as if it had not been previously heard nor decided. clinics were established during the
period and 11 clinics with about 560 patients were sold or closed. As
outlined in the table below, Gambro Healthcare now treats 50,000
patients. Treatment volume rose 11% (13% in the second quarter).
----------------------------------------------------------------------
June 30
2001 2000 Dec 31 2000
-----------------------------------------------
Number of clinics
US 531 496 508
Rest of the World 139 114 128
-----------------------------------------------
Total 670 610 636
Number of patients
US 39,870 37,030 38,330
Rest of the World 10,130 8,120 9,240
-----------------------------------------------
Total 50,000 45,150 47,570
----------------------------------------------------------------------
Q 2 Q 2 Q 1 Q 1 Full year
2001 2000 2001 2000 2000
--------------------------------------------------
Number of treatments
in consolidated
clinics (thousands)
US 1,497 1,372 1,426 1,348 5,564
Rest of the World 290 216 260 198 936
--------------------------------------------------
Total 1,787 1,588 1,686 1,546 6,500
Revenue per
treatment (in USD)
US 233 227 239 230 228
----------------------------------------------------------------------
Excluding laboratory operations, revenue per treatment development in the US was good during the period, primarily due to improved mix of treatments (acute, peritoneal dialysis and hemodialysis), a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. ancillary administration The settlement and distribution of a decedent's property in the state where it is located and which is other than the state in which the decedent was domiciled. Ancillary administration occurs in a state to enable an executor or administrator to collect assets or to commence , and a raise in the composite reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. . Labor costs have remained at a rather high level. The general shortage of care personnel will remain, resulting in high labor costs for the industry in the future. The international clinics operations had a continued good development, however at a somewhat lower financial performance level than previous quarter. Among other things this is due to the uncertain economic climate in Argentina with reduced public spending. Four clinics with about 180 patients have been acquired in Uruguay. Late June it was decided to make a provision of USD 85 M (SEK 927 M) for unbilled un·billed adj. 1. Not having been billed or charged for: unbilled medical charges. 2. Appearing, as in a movie, without being credited: an unbilled walk-on. receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed for laboratory services in the US including USD 12 M of revenues recognized in the first quarter 2001. Following a recent extensive analysis of unbilled receivables, and given a commitment to apply the most rigorous interpretation of standards for the underlying documentation for laboratory tests, it was concluded that Gambro may be unable to bill for tests performed prior to the ongoing implementation of a new order entry system. Effective April 1, 2001, Gambro has changed its laboratory revenue recognition methodology so that it will only record tests that have been billed, rather than recording revenue when tests have been performed. This means that revenues are recorded at lower levels than before. With the new methodology applied, revenues for the second quarter 2001 were about USD 10 M lower for the business area Gambro Healthcare and the corresponding operating (EBITDA) margin was about 2 percentage points lower. Gambro believes it will see reduced levels of revenues and margin from the laboratory operations until the end of 2002 compared to historical performance. However, improved performance is expected from third quarter 2001 and onwards on·ward adj. Moving or tending forward. adv. also on·wards In a direction or toward a position that is ahead in space or time; forward. Adv. 1. . In April 2001 the US Department of Justice notified Gambro Healthcare US Laboratory Division that it was conducting an investigation into its laboratory Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. billing practices for claims submitted after January 1, 2000. On June 18 Gambro Healthcare US received a subpoena subpoena (səpē`nə) [Lat.,=under penalty], in law, an order to a witness to appear before a court. A subpoena ad testificandum [Lat. from the United States Department of Justice “Justice Department” redirects here. For other uses, see Department of Justice. The United States Department of Justice (DOJ) is a Cabinet department in the United States government designed to enforce the law and defend the interests of the United States requesting information concerning its business activities and operations as part of an investigation by the US Attorney's CERTIFICATE, ATTORNEY'S, Practice, English law. By statute 37 Geo. III., c. 90, s. 26, 28, attorneys are required to deliver to the commissioners of stamp duties, a paper or note in writing, containing the name and usual place of residence of such person, and thereupon, on paying certain office in St. Louis, Missouri. Gambro Healthcare, Inc. intends to respond appropriately to the request for information as required by the Department of Justice. Gambro has met with the government and started to gather documentation, but has no further information concerning this matter at this time. On the whole the Gambro Healthcare US performance improvement program initiated late last year has progressed according to plan. The new, decentralized de·cen·tral·ize v. de·cen·tral·ized, de·cen·tral·iz·ing, de·cen·tral·iz·es v.tr. 1. To distribute the administrative functions or powers of (a central authority) among several local authorities. organization is operating in a more efficient, reliable, quality and cost conscious way. As a result, continued improvements during the second quarter have, to a considerable degree, offset the reduced revenue and profitability contributions from the laboratory operations. Gambro Renal Products For the first six months 2001 revenues amounted to SEK 4,707 M (4,104), which represents a growth of 15% (7% currency adjusted). Revenues for the second quarter 2001 increased by 14% (4% currency adjusted) to SEK 2,424 M (2,129). Sales and deliveries have been somewhat lower than previous quarter, mainly due to temporary limitations in production capacity for certain products. On the whole sales have continued to develop favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. in Europe and RoW. In Europe a particularly good sales development is reported from Italy, France, Spain and Benelux. Good sales are also reported from other important markets including the US, Japan and Korea as well as from markets in the Middle East and Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. . Internal sales continued to grow and were up by 37% currency adjusted. The intense activities in developing and launching new products have continued. The new machine for hemodialysis, Phoenix, is launched in full in Europe and Canada starting the second quarter and is planned to be launched in full in the US during the third quarter. Also the new peritoneal dialysis cycler, Serena, has started its market trial. It can be used on all automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. therapies and includes a unique technology of the flow control chamber that facilitates a fast, safe and smooth flow. The new advanced versions of the AK series of hemodialysis machines are also introduced on a broader scale. Hospal is introducing a new, advanced dialyzer dialyzer /di·a·lyz·er/ (di´ah-liz?er) hemodialyzer. di·a·lyz·er n. 1. A machine equipped with a semipermeable membrane and used for performing dialysis. 2. family, AN69ST, based on a bioactive bi·o·ac·tive adj. Of or relating to a substance that has an effect on living tissue. bioactive having an effect on or eliciting a response from living tissue. membrane membrane, structure composed mostly of lipid and protein that forms the external boundary of cells and of major structures within cells. Membrane organization is based on a sheet two molecules thick—a double layer of lipids aligned with their long hydrocarbon . Sales and demands for dialyzers continue to be very strong. This is supported by production capacity expansion at the sites in Hechingen, Germany and Meyzieu, France. The preparations for these expansions are proceeding according to plan. Also in other major product areas demand is increasing and new capacity is added. In Mirandola, Italy the production of bloodline blood·line n. The direct line of descent; a pedigree. cassettes is increased. In the solutions division substantial capacity for bicarbonate bicarbonate or hydrogen carbonate, chemical compound containing the bicarbonate radical, -HCO3. The most familiar of such compounds is sodium bicarbonate (baking soda). See carbonate. cartridges
Marketing and sales efforts will continue to be focused on strengthening the position on the main markets in Europe, Asia and the Americas combined with increasing efforts on new markets, mainly in Asia and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . These efforts will leverage on the strong portfolio of newly launched products and new products in the pipeline. The efforts will also be supported by the substantial new production capacity, which will come on stream this and the next few years. Gambro BCT For Gambro BCT the first six months of 2001 included a good revenue growth of 23% (10% currency adjusted) with revenues amounting to SEK 890 M (726). For the second quarter 2001 sales growth continued with revenues growing by 25% (12% currency adjusted) to SEK 468 M (373). The growth is primarily driven by increased sales in the US, growing over 13% currency adjusted. Sales in Europe as a whole for the quarter developed well, with particular strength in the major markets of UK and Germany. Strong sales growth continued in Canada and the emerging markets of Brazil and Korea. Blood Banking Technology Gambro BCT has a strong position in the blood banking technology market, through automated blood collection, leukoreduction and development of pathogen eradication technology. Over 600 Trima systems collect blood components in blood centers and blood banks throughout the world. The Trima system was successfully introduced in Korea this year. Gambro BCT's expansion in blood banking technology beyond Automated Blood Collection has been enhanced with the recent acquisition of Sanguistech AB's assets (after period). Sanguistech's Orbisac System automates the separation of manual whole blood collections in the blood center laboratory. Therapeutic Specialties Sales for BCT Therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. has been good. Highlights include an 11% revenue growth over the prior year. Advances were noted in all clinical applications including Therapeutic Plasma Exchange, Mononuclear mononuclear /mono·nu·cle·ar/ (-noo´kle-er) 1. having but one nucleus. 2. a cell having a single nucleus, especially a monocyte of the blood or tissues. mon·o·nu·cle·ar adj. Cell (Stem Cell stem cell In living organisms, an undifferentiated cell that can produce other cells that eventually make up specialized tissues and organs. There are two major types of stem cells, embryonic and adult. Collections) and Red Blood Cell red blood cell: see blood. exchange. Europe, Asia and the US all reported similar good sales results. Gambro BCT is the worldwide leader in cell separation and collection technologies that help clinicians deliver therapies, which require plasma separation and the collection of white blood cells White blood cells A group of several cell types that occur in the bloodstream and are essential for a properly functioning immune system. Mentioned in: Abscess Incision & Drainage, Bone Marrow Transplantation, Complement Deficiencies (adult stem cells Adult stem cells are undifferentiated cells found throughout the body that divide to replenish dying cells and regenerate damaged tissues. Also known as somatic (from Greek Σωματικóς, of the body ). This later segment showed particular strong increases, as physicians continue to develop "Cell Based Immunotherapy Immunotherapy The treatment of cancer by improving the ability of a tumor-bearing individual (the host) to reject the tumor immunologically. There are molecules on the surface of tumor cells, and perhaps in their interior, that are recognized as different from " applications. Transplantation transplantation /trans·plan·ta·tion/ (trans?plan-ta´shun) the grafting of tissues taken from the patient's own body or from another. of Peripheral Blood peripheral blood Cardiology Blood circulating in the system/body Stem Cells stem cells, unspecialized human or animal cells that can produce mature specialized body cells and at the same time replicate themselves. Embryonic stem cells are derived from a blastocyst (the blastula typical of placental mammals; see embryo), which is very young after high dose chemotherapy chemotherapy (kē'mōthĕr`əpē), treatment of disease with chemicals or drugs. One chemotherapeutic approach is the development of selectively toxic substances, i.e. for Hematological hematological, hematologic pertaining to or emanating from blood cells. hematological tests total and differential white cell counts, hematocrit estimation, erythrocyte count. Diseases has become a standard of care for many patients. Pathogen Eradication Technology (PET) Overall the PET program is progressing according to plan. The R&D spending during the second quarter was about SEK 31 M (6), SEK 59 M (7) year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. . In July Gambro BCT was awarded a US patent for its process for inactivation inactivation /in·ac·ti·va·tion/ (in-ak?ti-va´shun) the destruction of biological activity, as of a virus, by the action of heat or other agent. of pathogens in blood components. In June the PET team met with the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. to introduce the PET technology and discuss proposed clinical development plans for bringing the PET process for platelets Platelets Fragments of a large precursor cell (a megakaryocyte) found in the bone marrow. These fragments adhere to areas of blood vessel damage and release chemical signals that direct the formation of a blood clot. to the market in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Based on the pre-clinical work completed to date and the discussion with the FDA, BCT is on track to achieve its stated milestone of initiating Phase I clinical trials Noun 1. phase I clinical trial - a clinical trial on a few persons to determine the safety of a new drug or invasive medical device; for drugs, dosage or toxicity limits should be obtained phase I for platelets during the first quarter 2002. The global market size for pathogen inactivation of platelets, plasma, and red cells is estimated to be USD 2.4 billion. Pre-clinical work has progressed, demonstrating the efficacy of the Gambro BCT PET process to inactivate in·ac·ti·vate v. 1. To render nonfunctional. 2. To make quiescent. in·ac  ti·va a full spectrum of viral Meaning "related or caused by a virus," with regard to computers and information technology, the term refers less to a computer virus than it does to information that spreads quickly via the Internet. See viral marketing and viral video. and
bacterial bacterial /bac·te·ri·al/ (-al) pertaining to or caused by bacteria. bacterial pertaining to or caused by bacteria. bacterial adhesiveness see adhesins. species. The scope of investigation into PET efficacy for pathogen inactivation has been expanded to include blood-borne parasites. A cooperative research and development agreement “CRADA” redirects here. For other uses, see CRADA (disambiguation). A Cooperative Research and Development Agreement (CRADA) is an agreement between a government agency and a private company to work together. has been signed with Walter Reed Army Institute of Research This article is about the U.S. Army medical research institute (not the hospital). Otherwise, see Walter Reed (disambiguation). The Walter Reed Army Institute of Research (WRAIR) is the largest biomedical research facility administered by the U.S. to study the effectiveness of the PET process for neutralizing malaria malaria, infectious parasitic disease that can be either acute or chronic and is frequently recurrent. Malaria is common in Africa, Central and South America, the Mediterranean countries, Asia, and many of the Pacific islands. and other dangerous parasites found in donated do·nate v. do·nat·ed, do·nat·ing, do·nates v.tr. To present as a gift to a fund or cause; contribute. v.intr. To make a contribution to a fund or cause. blood products. INVESTMENTS Group investments during the period amounted to SEK 1,157 M (670). Included is SEK 97 M of development costs capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. (see also "Other" on page 6). Second quarter investments amounted to SEK 563 M (395), including development costs capitalized amounting to SEK 50 M. ACQUISITIONS Group acquisitions during the period amounted to SEK 1,309 M (819). Second quarter acquisitions amounted to SEK 971 M (532). FINANCIAL POSITION Net debt (loans and accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. for pension less cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments) amounted to SEK 9,930 M at the close of the period, which represents an increase of SEK 2,655 M for the period. The increase is explained by cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses SEK -730 M, acquisitions SEK -1,309 M, taxes refunded SEK 133 M, dividend paid SEK -379 M, divestitures SEK 159 M, currency effects SEK -780 M and other SEK 251 M. Average net debt during the period amounted to some SEK 8,600 M, resulting in an average interest rate of approximately 7% (adjusted for interest not attributable to items in the net debt). The equity/assets ratio at the close of the period was 57%. PERSONNEL The total number of employees in the Gambro group increased by 1,258 during the period, mainly due to acquisition of clinics. By the end of the period the total number of employees was 19,552. OTHER Since January 1, 2001 the Gambro group applies all recommendations by the Swedish Financial Accounting Standards Council. January 1, 2001 twelve new recommendations were introduced, five of which will not be mandatory until January 1, 2002. The introduction of the new recommendations has had a positive effect on the earnings of SEK 97 M (see "Investments" on page 5). Effective April 1, 2001 Gambro has changed its laboratory revenue recognition methodology so that it will only record tests that have been billed, rather than recording revenue when tests have been performed. With the new methodology applied, revenues for the second quarter 2001 were about USD 10 M lower. The contingent liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. and contingent assets Contingent Asset An asset in which the possibility of ownership depends solely upon future events uncontrollable by the company. Notes: An example might be a settlement from a lawsuit. See also: Asset, Balance Sheet, Contingent Liability, Liability of the Group have not changed significantly since year end. PARENT COMPANY The revenues of the parent company were SEK 35 M, earnings before appropriations and tax amounted to SEK 3,337 M and net income SEK 3,545 M. Liquid funds amounted to SEK 66 M. During the period Incentive Grosshandel AB, Gambro Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. AB, and Gambro Treasury AB have been merged into Gambro AB. AFTER THE CLOSING OF THE PERIOD In July Gambro BCT was awarded a US patent for the PET process and acquired Sanguistech AB. This report has not been subject to examination by the Company's auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together .
Revenues by business area
----------------------------------------------------------------------
Change in % Change in %
Jan. - June Jan-June April-June Full year
SEK M 2001 2000 Nominal Currency Nominal Currency 2000
adj. adj.
----------------------------------------------------------------------
Gambro
Healthcare 7,689 6,011 28 12 30 13 12,957
Gambro Renal
Products 4,707 4,104 15 7 14 4 8,481
Intra-Group -487 -327 49 32 63 37 -752
Total,
Renal Care 11,909 9,788 22 9 22 8 20,686
Gambro BCT 890 726 23 10 25 12 1,559
----------------------------------------------------------------------
Total 12,799 10,514 22 9 23 9 22,245
----------------------------------------------------------------------
Revenues by market
----------------------------------------------------------------------
Change in % Change in %
Jan. - June Jan-June April-June
SEK M 2001 2000 Nominal Currency Nominal Currency
adj. adj.
----------------------------------------------------------------------
Europe 3,423 2,988 15 7 18 7
United States 7,984 6,312 26 10 29 11
Asia, Pacific,
RoW 1,392 1,214 15 9 3 3
----------------------------------------------------------------------
Total 12,799 10,514 22 9 23 9
----------------------------------------------------------------------
GAMBRO GROUP INCOME STATEMENT
----------------------------------------------------------------------
April-June January-June July 2000 Full year
SEK M 2001 2000 2001 2000 - June 2001 2000
----------------------------------------------------------------------
Revenues 6,619 5,400 12,799 10,514 24,530 22,245
Cost of
sales -4,988 -3,976 -9,637 -7,759 -18,547 -16,669
----------------------------------------------------------------------
Gross
earnings 1,631 1,424 3,162 2,755 5,983 5,576
Operating
expenses -2,169 -857 -3,280 -1,756 -6,896 -5,372
----------------------------------------------------------------------
Operating
earnings
(EBIT)
(1)(2) -538 567 -118 999 -913 204
Financial
items, net -181 -142 -338 -253 -816 -731
----------------------------------------------------------------------
Earnings
after
financial
items
(EBT) -719 425 -456 746 -1,729 -527
Minority
interest -15 -15 -24 -35 -53 -64
Taxes 211 729 69 526 1,116 1,573
----------------------------------------------------------------------
Net
income(3) -523 1,139 -411 1,237 -666 982
----------------------------------------------------------------------
1) Earnings
before
depreciation
and
amortization
(EBITDA) 148 1,139 1,194 2,124 3,053 3,983
2)Of which,
non-recurring
items
impairment,
goodwill -1,241 -1,241
impairment,
other assets -138 -138
restructuring
GHC US -106 -106
reversal of
provisions 55 55
divestiture
of ABB
shares 628 628 628
provision
for
lab.
billing -927 -563 -927 -563 -927 -563
----------------------------------------------------------
-927 65 -927 65 -2,357 -1,365
amortization,
goodwill -275 -247 -529 -483 -1,067 -1,021
depreciation,
other
assets -411 -325 -783 -642 -1,520 -1,379
----------------------------------------------------------
-686 -572 -1,312 -1,125 -2,587 -2,400
3) Earnings
per share
before and
after
dilution
(SEK) -1.52 3.31 -1.19 3.59 -1.93 2.85
Total number
of shares
outstanding
344,653,288
(of which,
Series A:
250,574,090,
Series B:
94,079,198)
QUARTERLY DATA
PER SEGMENT
2001 2000
SEK M Q 1 Q 2 Total Q 1 Q 2 Q 3 Q 4 Total
----------------------------------------------------------------------
Revenues
Gambro Renal
Products 2,283 2,424 4,707 1,976 2,129 2,076 2,300 8,481
Gambro
Healthcare 3,692 3,997 7,689 2,948 3,064 3,313 3,632 12,957
Gambro BCT 422 468 890 352 373 388 446 1,559
Intra-group -217 -270 -487 -162 -166 -189 -235 -752
------------------------------------------------------
Total Revenues 6,180 6,619 12,799 5,114 5,400 5,588 6,143 22,245
Operating earnings
- before depr.
(EBITDA)
Products
(GRP + BCT) 561 609 1,170 452 517 468 441 1,878
Healthcare 537 539 1,076 538 527 543 511 2,119
Non recurring
items - -927 -927 - 65(1) - -51(1) 14(1)
Other -52 -73 -125 -5 30 -26 -27 -28(3)
------------------------------------------------------
Total operating
earnings
- before
depr.
(EBITDA) 1,046 148 1,194 985 1,139 985 874 3,983
Do margin % 16.9 2.2 9.3 19.3 21.1 17.6 14.2 17.9
Do excl non
recurring % 16.9 16.3 16.6 19.3 19.9 17.6 15.1 17.8
Operating earnings
- after depr.
(EBIT)
Products
(GRP + BCT) 355 367 722 275 333 284 252 1,144
Healthcare 131 91 222 168 144 130 73 515
Non recurring
items - -927 -927 - 65 - -1,430(2) -1,365(2)
Other -66 -69 -135 -11 25 -51 -53 -90(3)
------------------------------------------------------
Total operating
earnings
- after depr.
(EBIT) 420 -538 -118 432 567 363 -1,158 204
Do margin % 6.8 -8.1 -0.9 8.4 10.5 6.5 -18.9 0.9
Do excl non
recurring % 6.8 5.9 6.3 8.4 9.3 6.5 4.4 7.1
Financial net
Interest net -135 -163 -298 -111 -105 -169 -148 -533
Other financial
items -22 -18 -40 0 -37 -22 -139(4) -198(4)
------------------------------------------------------
Financial net -157 -181 -338 -111 -142 -191 -287 -731
------------------------------------------------------
Earnings before
tax (EBT) 263 -719 -456 321 425 172 -1,445 -527
----------------------------------------------------------------------
Q2 01 Q2 00 Q4 00 Total 2000
----- ----- ----- ----------
1) Divestitures of ABB shares 628 628
Provision for lab. billing -927 -563 - 563
Restructuring GHC US 0 0 - 106 - 106
Reversal of provisions 0 0 55 55
------ ----- ------ --------
-927 65 - 51 14
2) Asset impairment 0 -1,379 -1,379
----- ------ ------
65 -1,430 -1,365
---- ------ ------
3) Operating earnings includes income of SEK 46 M (SEK 42 M included
in Q2 2000 and SEK 4 M included in Q4 2000) representing the
nominal value of a receivable on the Swedish pension institution
SPP as a result of excess returns on pension fund management.
4) Other financial items include a write-down to market value at year
end of the shareholdings in HemaSure and Aastrom by SEK -116 M
(USD -12.6 M) and SEK -29 M (USD -3.2 M) respectively.
GAMBRO GROUP BALANCE SHEET
----------------------------------------------------------------------
June 30 June 30 December 31
SEK M 2001 2000 2000
----------------------------------------------------------------------
ASSETS
Fixed assets
Intangible assets (1) 19,443 16,940 16,540
Tangible assets 7,611 5,794 6,548
Shares and participations 200 341 202
Long-term receivables 2,794 720 853
----------------------------------------------------------------------
Total fixed assets 30,048 23,795 24,143
Current assets
Inventories 2,801 2,350 2,369
Trade receivables 6,658 5,934 6,446
Other current receivables 1,419 2,171 3,106
Liquid assets 635 489 600
----------------------------------------------------------------------
Total current assets 11,513 10,944 12,521
TOTAL ASSETS 41,561 34,739 36,664
SHAREHOLDERS' EQUITY AND
LIABILITIES
Shareholders' equity (2) 23,545 20,852 21,897
Minority interests 219 172 189
Provisions 2,626 2,892 2,523
Long-term liabilities 8,818 3,687 5,842
Current liabilities 6,353 7,136 6,213
----------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 41,561 34,739 36,664
AND LIABILITIES
NET DEBT 9,930 5,586 7,275
1) Of which goodwill 18,650 16,234 15,954
2) Total number of shares
outstanding 344,653,288
(of which, Series A:
250,574,090, Series B:
94,079,198)
Shareholders' equity:
Opening balance 21,897 19,655 19,655
Net income -411 1,237 982
Translation
difference 2,438 339 1,639
Dividend -379 -379 -379
-------------------------------------------
Closing balance 23,545 20,852 21,897
STATEMENT OF CHANGES IN FINANCIAL POSITION
----------------------------------------------------------------------
January - June Full year
SEK M 2001 2000 2000
----------------------------------------------------------------------
Operating activities
Earnings after financial items -456 746 -527
Adjustment for non-cash items
Depreciation and write-downs 1,312 1,125 3,808
Provisions 53 -93 -985
Unrealized exchange gains/losses -722 -672 -788
Capital gains/losses -2 -676 -722
Non-distributed earnings in
associated companies 25 47 178
Paid income taxes 133 -407 -1,435
----------------------------------------------------------------------
Cash flow from current operations
before changes
in operating capital 343 70 -471
Changes in operating capital: (1)
Inventories -431 -133 -152
Receivables -473 -70 -548
Liabilities 495 263 811
----------------------------------------------------------------------
Cash flow from operating activities -66 130 -360
Investment activities
Investments in financial
fixed assets -203 -180 -267
Disposals of financial fixed assets 22 766 812
Investments in intangible
fixed assets -1,289 -699 -874
Disposals of intangible
fixed assets 137 9 59
Investments in tangible
fixed assets -974 -670 -1,828
Disposals of tangible fixed assets 42 71 87
----------------------------------------------------------------------
Cash flow from
investment activities -2,265 -703 -2,011
Financing activities
Change in loans 2,797 832 2,769
Dividend paid -379 -379 -379
----------------------------------------------------------------------
Cash flow from
financing activities 2,418 453 2,390
Cash flow this period 87 -120 19
Liquid assets opening balance 600 606 606
Currency effect in liquid assets -52 3 -25
----------------------------------------------------------------------
Liquid assets at closing balance 635 489 600
----------------------------------------------------------------------
(1) Of which change in
operating working capital -1,371 -364 -553
Gambro is a global medical technology and healthcare company with leading positions in renal care - services and products - and blood component technology. Gambro Healthcare is one of the leading providers of kidney dialysis Dialysis, Kidney Definition Dialysis treatment replaces the function of the kidneys, which normally serve as the body's natural filtration system. services in the world with about 50,000 patients in 670 clinics worldwide. Gambro Renal Products comprises dialyzers, dialysis machines, blood lines Not to be confused with Blood Lines (novel). Blood Lines is a short story collection by British crime-writer Ruth Rendell, published in 1995. The title story features her detective Inspector Wexford, and the final story is the acclaimed novella "The Strawberry Tree". and dialysis concentrates. Gambro BCT includes products for the separation and handling of blood components. The group, with revenues of approximately SEK 22 billion (USD 2.4 billion), has approximately 19,500 employees in some 40 countries. Gambro's financial information is also available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the : www.gambro.com Coming reports and events: Nine month report January - September: October 25, 2001 |
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