Getinge pushes back margin goal on weak demand, US tax
STOCKHOLM (Reuters) - Swedish medical technology group Getinge (GETIb.ST) has pushed back its profit margin target by one to two years, blaming weaker-than-expected demand and a new tax in the United States.
The maker of surgical theatre equipment such as heart-lung support and anesthesia systems said on Friday it now expected to reach its target for a 22 percent margin on earnings before interest, tax and amortization (EBITA) in 2015.
"Market demand has experienced a weaker recovery than expected, the currency scenario has become more challenging and new costs have arisen due to the introduction of the so-called medical device tax in the U.S," Getinge said.
In 2012, the margin was 19.1 percent and the company had hoped to reach the 22 percent target in 2013 to 2014.
At 1115 GMT, Getinge shares were down 3.4 percent at 192.2 Swedish crowns.
Feeling the pain from government spending cuts in Europe, Getinge said profits in the current quarter would be lower than a year ago.
However, it stood by a full-year outlook for profit growth, excluding restructuring costs, helped by strong demand in emerging markets.
"(Profit) growth is expected to become stronger during the second half of the year compared with the first six months," it said.
Getinge said a restructuring program for its struggling infection control division - the group's smallest - aimed to boost the unit's EBITA margin to more than 17 percent within 3 to 5 years, from 12 percent currently.
The program would cost about 440 million crowns ($68.4 million) over four years, it said.
(Reporting by Anna Ringstrom; Editing by Mark Potter)