Getinge Makes Progress in Recovering From Production and Regulatory Issues

Sweden-based medical device and sterilization company Getinge has struggled through nearly a decade of operational and reputational challenges. The firm remains focused on improving operating efficiency, addressing product quality, and building back trust with customers and regulators. As part of this turnaround, Getinge has committed nearly SEK 2 billion to remediation and restructuring related to the 2015 consent decree imposed by the U.S. Food and Drug Administration and about SEK 1.8 billion in provisions for surgical mesh liability costs. The firm also sold its entire extended-care business in 2017. Although additional regulatory challenges remain a risk, we think Getinge could maintain a strong position in key markets (such as life science sterilization, advanced ventilators, and surgical capital equipment) and slowly improve margin with a focus on U.S. market expansion and cost restructuring.