Getinge AB: Navigating Tariffs and FX Challenges to Unlock Long-Term Value

In an era of geopolitical uncertainty, trade barriers, and volatile foreign exchange rates, Getinge AB (GETI.ST) has emerged as a standout performer in the medical technology sector. The Swedish medtech giant has demonstrated exceptional resilience in 2024–2025, maintaining margin stability and accelerating growth in high-margin recurring revenue streams despite significant macroeconomic headwinds. For investors seeking undervalued growth dynamics in a sector poised for long-term expansion, Getinge's disciplined cost management, strategic regionalization, and robust balance sheet present a compelling case.

Margin Stability: A Testament to Operational Discipline

Getinge's 2024–2025 financial performance underscores its ability to navigate external pressures without compromising profitability. In Q4 2024, the company reported a 19.4% adjusted EBITA margin, up from 13.3% in the prior year, even as tariffs and FX headwinds reduced EBITA by 0.9 percentage points. By Q1 2025, adjusted EBITA surged 19% to SEK 1.0 billion, driven by organic growth in Acute Care Therapies and Sterile Transfer. These results highlight Getinge's operational discipline, as it absorbs short-term costs while maintaining pricing power and cost efficiencies.

The company's gross margin of 50.6% in Q4 2024 (up from 46.4% in 2023) reflects its ability to scale high-margin products and services. This is particularly evident in its consumables and service offerings, which now account for over 50% of revenue. For example, DPTE®-BetaBags and ECLS consumables in Acute Care Therapies have delivered double-digit growth, supported by rising demand for respiratory care and critical care solutions.

Strategic Mitigation: Regionalization and Supply Chain Resilience

Getinge's proactive regionalization strategy has been critical to mitigating trade-related risks. The company has diversified its supply chain to reduce reliance on single geographic hubs, a move that has cushioned it from the worst impacts of Trump-era tariffs (2017–2021) and retaliatory measures. For instance, its EU-to-U.S. shipments, once heavily impacted by tariffs, now benefit from localized production in key markets, reducing logistics costs and delivery times.

In 2024, Getinge also expanded its digital health offerings, such as Torin OR Management and T-DOC Instrument Tracking, which are now being deployed in high-profile facilities like UT Health San Antonio. These solutions not only enhance operational efficiency for hospitals but also generate recurring revenue through software subscriptions and maintenance contracts. The company's acquisition of Paragonix Technologies in Q3 2024 further strengthened its position in Transplant Care, with the KidneyVault system receiving strong market feedback.

High-Margin Recurring Revenue: The Engine of Sustainable Growth

Getinge's shift toward high-margin recurring revenue streams is a cornerstone of its long-term value creation. In 2024, consumables and services grew by 12%, outpacing equipment sales. This trend is expected to accelerate as healthcare systems increasingly adopt value-based care models, which prioritize outcomes over one-time purchases.

The Acute Care Therapies segment, for example, is capitalizing on the global shortage of ventilators and ECLS systems. With 96% of U.S. manufacturing leaders expressing concerns over trade policy impacts, Getinge's niche leadership in critical care solutions positions it to capture market share. Similarly, the Surgical Workflows segment is leveraging digital integration to reduce hospital costs and improve patient outcomes. The company's DPTE®-FLEX Alpha port, launched in 2025, addresses contamination risks in biopharmaceutical production, opening new avenues for growth in the life sciences sector.

Balance Sheet Strength: A Foundation for Strategic Flexibility

Getinge's financial fortress is a key enabler of its strategic ambitions. In 2024, the company generated SEK 3.28 billion in free cash flow, with a leverage ratio of 1.7x adjusted EBITDA—well below its internal threshold of 2.5x. This financial flexibility has allowed it to pursue accretive acquisitions, such as Paragonix, while maintaining a robust dividend yield of ~2.5%.

The company's balance sheet also provides a buffer against short-term volatility. Despite a -270 million SEK hit from tariffs and FX in Q2 2025, Getinge's cash reserves and strong operating cash flow enabled it to maintain a healthy liquidity position. This resilience is critical as it prepares for potential trade policy shifts in 2025, with plans to further regionalize production and optimize sourcing.

Investment Thesis: Undervalued Growth in a Resilient Sector

For investors, Getinge represents an attractive opportunity in a sector that is both defensive and growth-oriented. While its current valuation trades at a discount to peers (P/E of ~18x vs. ~24x for Medtronic and Stryker), its high-margin recurring revenue streams and operational excellence suggest significant upside.

The company's strategic focus on Acute Care and Surgical Workflows aligns with secular trends in healthcare, including aging populations, rising chronic disease prevalence, and the shift toward outpatient care. With a long-term target of doubling lives saved and enabling more surgeries per operating room, Getinge is not only addressing clinical needs but also creating shareholder value.

Conclusion: A Buy for the Long-Term

Getinge AB's ability to maintain margin stability, innovate in high-growth niches, and adapt to macroeconomic challenges makes it a standout in the medtech sector. While short-term headwinds from tariffs and FX remain, the company's disciplined cost management, regionalization efforts, and strong balance sheet position it to outperform in 2025 and beyond. For investors with a 3–5 year horizon, Getinge offers a compelling combination of resilience and growth, particularly in its undervalued Acute Care and Surgical Workflows segments.

As the global healthcare landscape evolves, Getinge's focus on recurring revenue, digital integration, and supply chain resilience ensures it is well-equipped to deliver sustained value creation. In a world of uncertainty, this is the hallmark of a company worth betting on.