incentive annual report 1997 - bib.kuleuven.be bct introduced the trima collection system, with...

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Incentive Annual Report 1997

A complete annual report is to be fetched at Incentives' homepage.

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We have creatednew business patternswithin healthcareWe have come a long way since Incentive was formed in1991. We have consistently restructured and redistributedour resources to medical technology/dialysis care. Today,we hold strategically strong positions in areas, withfavorable growth. Combined with our financial strength,this provides a strong platform for the future.

Through Gambro, Incentive holds an internationallyleading position in medical technology/dialysis care.Patients throughout the world are being treated with ourproducts and in our own clinics are provided advancedcare of the highest quality. We have in-depth andfundamental knowledge in some of the most demandingsectors of healthcare – renal care, cardiopulmonary careand blood component technology. In renal care, we werepioneers in the advanced concept of integrating products/care. We hold a strong position as high quality provider ofhealthcare and are well-positioned in the managed-caresector. In all these areas we have successfully been able todevelop, redefine and create new business patterns andfields of operations to be able to better meet the patient’sand the healthcare sector’s needs.

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Our deepcommitmentwithin healthcare......the trust we have created, our employees’know-how, skills and enthusiasm, our invest-ments in research and development, the closerelations we have established with all players inthe healthcare sector – combined, this representsthe total value of our company.

ContentsHighlights 1997 ____________________ 4

Incentive – an overview _____________ 5

Message from the Chairman __________ 8

Message from the President __________ 9

Message from Gambro’s President ____ 11

Medical technology _________________ 13

Global healthcare ___________________ 15

Renal Care ________________________ 19

Dialysis Products ________________ 20

Dialysis Care ____________________ 22

Cardiopulmonary Care ______________ 25

Blood Component Technology________ 27

Other Operations ___________________ 29

Incentive Shares ____________________ 33

Board of Directors __________________ 36

Executive Management ______________ 38

Addresses__________________________ 40

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High Annual GeneralMeeting

The Annual General Meeting will be held onThursday, April 23, at 5:00 p.m., at the RoyalTennis Hall, Stockholm.

NotificationShareholders who wish to participate in the AnnualGeneral Meeting must be listed in the share registermaintained by the Swedish Securities RegisterCenter (VPC) not later than Thursday, April 9,1998. Shareholders whose shares are registered in thenames of trustees must, in ample time prior to April 9,temporarily reregister the shares in their own namesin VPC’s share register.

Shareholders who wish to participate in theAnnual General Meeting must notify the Companyby mail to Incentive AB, P.O. Box 7373, SE-103 91Stockholm, or by telephone +46 8-613 65 32 or613 65 78 or by fax to +46 8-611 57 31 not later than12:00 noon on Monday, April 20, 1998.

DividendThe Board of Directors has proposed Tuesday, April28, 1998 as the record date. If the Annual GeneralMeeting approves the proposal, dividends areexpected to be sent out from VPC on April 30, 1998.

Financial Reports1997 Year-end Report March 6Annual General Meeting April 23Interim Report, Jan-March April 29Interim Report, Jan-June August 5Interim Report, Jan-Sept October 27

Financial reports can beordered from Incentive AB,

P.O. Box 7373, SE-103 91 Stockholm, SwedenTel +46 8-613 65 00. Fax +46 8-611 57 31

[email protected], www.incentive.comwww.gambro.com

Shareholder contactsAnna Augustson . Tel +46 8-613 65 00

[email protected]

Investor RelationsInger Larsson . Tel +46 46-16 90 00

[email protected] Modéer . Tel +46 8-613 65 00

[email protected]

Incentive continues to streamline:• sale of Wabco holding concluded• large holdings of shares in ABB and Electrolux sold

– no longer associated companies• TA Hydronics, Hägglunds Vehicle and Hägglunds

Drives divested• Munters listed on Stockholm Stock Exchange

Structuraltransformation

Acquisition in KoreaKorea Green Cross Corporation’sassets and market rights for dialysisproducts on the South Korean mar-ket were acquired.

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200%increase inpatientsThe number of patients beingtreated in the Group’s dialysisclinics rose during the year fromapprox. 11,000 to slightly morethan 33,000, including Vivraclinics.

The American dialysis clinicchain Vivra, with 262 clinics and15,800 patients, was acquired.

Acquisitionof dialysisclinics inthe U.S.

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KEY RATIOS

SEK M 1997 1996 1995 1994 1993

Revenues 19,490 20,220 24,324 18,389 12,271

Earnings after financialitems 13,890 5,228 4,653 3,832 966

Return on shareholders’equity, % 1) 57.6 21.5 20.8 21.0 4.8

Return on total assets, % 35.3 19.1 18.1 18.7 7.5

Earnings per share 1), SEK 168.49 42.18 35.55 31.97 6.75

Incentive share,total return, % 46.9 73.8 24.7 – 5.2 50.0

Solidity (equity/assetsratio), % 52 44 52 43 61

Interest coverage ratio,multiple 14.7 4.6 4.0 3.9 2.2

1) After full tax

Revenues amounted to SEK 19,490 M (20,220). Sales for com-parable group structure rose 27.5 percent including acquisitions.

Earnings after financial items amounted to SEK 13,890M (5,228), including items affecting comparability resulting fromthe sale of shares and companies totaling SEK 12,949 M (2,570).

Earnings per share amounted to SEK 168.49 (42.18), ofwhich SEK 163.25 from items affecting comparability.

The Board proposes a dividend of SEK 10.00 per share(10.00).

44%

A joint-venture company was formed in Argentinafor the purpose of operating clinics. At year-end,slightly more than 1,200 patients were being treatedat these clinics.

Clinics in Argentina

Newproducts

Two dialysis concentrate productswere introduced: a sodium chloridecartridge and an ion bag. Withthese new products and BiCart, thebicarbonate cartridge, dialysis fluidscan now be fully prepared on-line.

A new-generation perfusion system,Century Perfusion, was launched byCOBE CV.

The Prisma acute dialysis machinewas introduced on the Americanmarket.

COBE BCT introduced the TRIMAcollection system, with which alltypes of blood components, includ-ing red blood cells, can be collected.

Incentive’s sharerose 44%

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lights 1997

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Other Operations includes the subsidiaries MacGREGOR andTAC with combined sales in 1997 of SEK 4,364 M, of which 90percent outside Sweden. The number of employees at year-end1997 was 1,787. MacGREGOR’s operations comprise cargo han-dling systems for ships, where the company is a world leader. TACis active in the field of building automation where the companyholds a leading position in open and integrated systems.

Other Operations

Blood Component TechnologyBlood components are used increasingly to alleviate theeffects of cancer therapy, among other applications. TheGambro Group produces the equipment that separatesthe blood into its different components and transfersthem to the patient. The world market for these so-called apheresis products is valued at approximatelySEK 4.5 billion.

Cardiopulmonary Care Each yearthroughout the world, nearly one million men andwomen undergo so-called bypass surgery. Annually, thistype of treatment is increasing by more than 4 percent.The Gambro Group is one of the world’s leadingmanufacturers of oxygenators used in cardiovascularsurgery and holds approximately 20 percent of the worldmarket for oxygenators.

Renal Care Some 850,000 persons through-out the world are receiving dialysis treatment. With itsshare of about 17 percent, the Gambro Group is todaya world leader in the market for dialysis products, whichis valued at approximately SEK 40 billion.

Gambro operates more than 400 dialysis clinics andtreats approximately 33,000 patients. The largest hold-ing of clinics is in the U.S. where Gambro owns theGambro Healthcare Patient Services chain of clinics.

Gambro is a global medical-technology company, with marketsoutside Sweden accounting for 98 percent of sales. The com-pany has more than 90 subsidiaries in 26 countries, with repre-sentation in a large number of other countries and 26 produc-tion units in 13 countries. Centers for research and develop-ment are located in Sweden, Germany, France, Italy, Japan andthe United States.

Gambro

Incentive is an international group which through Gambro focuses mainly on medicaltechnology. The Group’s total sales in 1997 were SEK 19,490 M, of which sales outsideSweden accounted for 96 percent. The number of employees at year-end 1997 was 18,176.The Group’s operations comprise Medical Technology, which accounted for 77 percentof sales, and Other Operations.

Incentive

6 OVERVIEW

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SEK M 1997 1996 1995

Revenues 4,364 4,251 3,736Average number of employees 1,872 1,904 1,879

OVERVIEW 7

SEK M 1997 1996 1994

Revenues 19,490 20,220 24,324Operating earnings before depreciation 16,011 5,434 4,379Earnings after depreciation 14,135 4,050 3,239Return on capital employed, % 57.6 21.5 20.8Solidity (equity/asset ratio), % 52 44 52Total return of Incentive share, % 46.9 73.8 24.7Average number of employees 16,108 17,145 18,573

Revenues by market

Revenues by market

Revenues by market

Revenues by market

Revenues by market

● Nordic countries 3%

● Rest of Europe 38%

● North America 50%

● Asia, Australia 8%

● Rest of world 1%





















SEK M 1997 1996 1994

Revenues 15,033 10,964 10,157Operating earnings before depreciation 2,944 2,149 2,037Operating earnings after depreciation 1,721 1,490 1,501Return on capital employed, % 8.3 18.0 20.6Investments 1,162 945 706Average number of employees 14,183 10,866 9,314

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During the slightly more than six years that it hasexisted, the Incentive Group has undergone a com-plete strategic transformation. The “new” Incentivethat was formed in 1991 included the “old” Incen-tive – a development company built on many indi-vidual companies in different fields, plus the por-tions of ASEA that did not become a part of ABB.Thus, at the start in 1991 Incentive comprised morethan fifty operations involving consumer products,trading, engineering and defense products, as wellas the power industry and some large shareholdings.In this fragmented environment, it was obvious thatthere were considerable hidden values that couldnot be developed properly within the frameworkof the Group. Few of the businesses met the Group’shigh requirements for future solid growth in value.

We investigated a number of interesting growthindustries and soon identified medical technologyas a new very attractive future area for Incentive.Through the acquisition and expansion of Gambro,we have focused our resources on a business withgood growth, leading market positions, and quali-fied know-how in the form of research and devel-opment, among other assets. In our comprehen-sive restructuring program we have transferred ourresources in a consistent manner to this business.From being a diversified conglomerate with a var-ied content and strength, Incentive has developedinto a leading global medical-technology enterprise.A solid base has thereby been created for goodgrowth in value.

1997 was another year of strong change in thisdirection. As a result of a number of large and im-portant transactions, decisive steps were taken inchanging the Group. And the tempo has beenrapid. We have found new and better “homes” for

Message from the Chairmanfour subsidiaries. Together with three large salesof shareholdings, this has significantly streamlinedIncentive’s financial position. At the same time,through its acquisition of Vivra, the Americandialysis clinic company, Gambro has strengthenedits leadership position.

Incentive will become a “pure” medical-tech-nology company. Expressed another way: Incentivewill become Gambro. It is time to say farewell toIncentive. It is now logical for the Group to changeits name to Gambro. This is a strong name with manypositive connotations, especially in the industry inwhich our future lies.

The Board of Directors has a major stake inIncentive’s success. It has been demanding work,involving decisive strategic decisions, many meet-ings and extra efforts to rapidly and efficiently beable to guide the transformation of the Group. Op-erations have now changed character completlyand become fully oriented on medical technology.Therefore, a changing of the guard is natural and Iextend thanks to those members who are now leav-ing the Board.

Incentive’s holding in ABB AB represents a sub-stantial value. It has contributed to financial strengthbut it does not belong in a streamlined medical-technology company. Accordingly, Incentive in-tends to review its holding in ABB AB and take afinal position when a clear tax status is obtained.

In conclusion, on behalf of the Board, I extenddeep gratitude to the Group’s management and em-ployees for another successful year. Fine work efforts,strong determination and a comprehensive processof change have yielded good results.

Anders Scharp

8 MESSAGE FROM THE CHAIRMAN

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Message from the PresidentFrom Incentive to Gambro

In 1991 Incentive was a hard-to-grasp conglomer-ate with profitability problems. The Group consistedof companies with operations in sixty different un-related product areas.

We adopted a strategy whereby we would con-centrate on a few selected core areas with a highknowledge and technology content and good growthpotentials. Step by step, we would reallocate ourcapital to high-growth areas. Profitability and mar-ket leadership would be the key words for futuredevelopment.

Today, we can note with pride that we have com-pleted the first leg in the strategic journey that be-gan in 1991. Incentive is streamlined, strong andprofitable, and it is operating in growth markets withhigh technology and knowledge contents. That iswhere we wanted to be. Now we are beginning thenext leg.

A change that is creating valueWe can look back on slightly more than six yearsof an intensive process of change. We have soldand bought nearly 70 companies – approximatelyone a month. Everything we were working with in1991 has been sold and everything we are engagedin today has been added during the past four years.The portion of our operations that are outside Swe-den has increased from 40 percent to 96 percent.When we have fully completed the transformationof Incentive we will have been involved in trans-actions totaling nearly SEK 100 billion.

We have created value for the shareholders bybringing out and enhancing hidden values. Themarket value of the Company has increased fromaround SEK 7 billion to SEK 49 billion. Since 1991Incentive’s shareholders have enjoyed a total re-turn, in the form of increased value plus dividend,that has averaged 34.6 percent per year. The aver-age for the Swedish stock market as a whole hasbeen 24.7 percent.

We have created a new, strong Incentive. As aresult of investments in our wholly owned subsid-iary, Gambro, Incentive has become a world leaderin the growth areas of medical technology andhealthcare services.

Intensive restructuring andhigh yieldDecisive steps in the restructuring of the Groupwere taken during 1997.

The Medical Technology Business Area grew

even stronger. With its acquisition of Vivra, Gambrobecame the second-largest dialysis clinic chain inthe United States and in the world. New productsfor dialysis, cardiovascular surgery and blood com-ponent technology were launched.

At the same time that the Medical Technologybusiness area expanded, holdings in other sectorswere divested. The sale of half of the shareholdingin ABB restored, with a single stroke, Incentive’sfinancial strength following the purchase of Vivra.Holdings in Electrolux and Wabco were sold. Fourcompanies acquired new owners: TA Hydronics,Hägglunds Vehicle and Hägglunds Drives throughsales, and Munters through a listing on the Stock-holm Stock Exchange.

At year-end 1997 only two companies outsideour chosen core area of medical technology re-mained within the Group. An agreement coveringthe sale of TAC, the “building automation” com-pany, was reached in February 1998. We expect tofind a new owner for MacGREGOR, the shipboardcargo care company, during the course of the presentyear.

Following the sale of the holdings in ABB andElectrolux, these companies are no longer associ-ated companies of Incentive. Over the long term,large shareholdings constitute a foreign element inan exclusively medical-technology Group. The con-tinued ownership of ABB shares will ultimately be

MESSAGE FROM THE PRESIDENT 9

10 SIDORUBIK1010 MESSAGE FROM THE PRESIDENT

considered when we have obtained clarification ofthe tax aspects.

From a shareholder’s perspective, 1997 was a verysatisfactory year. The total return on Incentive’sstock during the year amounted to 46.9 percent, com-pared with an average of 27.7 for publicly listed com-panies on the Stockholm Stock Exchange.

Incentive becomes GambroIncentive is determined to continue to build on theexpertise and opportunities for growth that exist inGambro. Accordingly, the Board of Directors isproposing that Incentive and Gambro merge underthe Gambro name. Incentive’s shareholders will be-come the direct owners of a streamlined, successfuland strong medical-technology company.

The consolidation to Gambro means, analogouswith a spin-off, that the goodwill in Incentive forGambro is charged against shareholders’ equity inan amount of about SEK 10 billion. The goodwill inGambro resulting from acquisitions of about SEK14 billion remains.

As a result of the very strong growth in the price ofIncentive’s shares, it has become by far one of the high-est-priced stocks on the Stockholm Stock Exchange.To facilitate trading, the Board of Directors proposesa split of the stock whereby one present share of In-centive AB will yield five shares in new Gambro AB.

We plan to list the new Gambro shares publicly inthe United States as well in the future. This is a natu-ral step, considering that the American market is ourlargest.

A new Gambro has emergedThe merger with Gambro completes the restructur-ing of Incentive. When the two companies becomeone, no major step is involved, however. This is thecontinuation of a process which has been under waysince Incentive became a majority owner in Gambroin 1994. The continuation of Incentive’s financialresources has made it possible for Gambro to realizeits growth potential. Combined, we have doubledGambro’s sales since 1994. And with the productionof dialysis products being integrated with healthcareservices in the form of dialysis care, a fivefold largermarket is opening up.

In 1995 Gambro acquired all the shares of thepartly owned REN chain of clinics in America. In1996 nearly SEK 700 M was invested to acquire andestablish dialysis clinics in the United States andEurope. The Dialysis Care business area expandedby approximately 80 percent.

As a result of the purchase of Vivra in 1997, as wellas other acquisitions and establishments of clinics inthe U.S., Europe, the Far East and Latin America,the number of patients treated in Gambro clinicsduring the year increased from 11,000 to 33,000.

The strategy has been setWe have established a strategy for long-term growthand profitability.

Gambro has growth potentials in each of the fieldsin which the company today is a world leader: dialy-sis products, dialysis care, cardiopulmonary care andblood component technology. In addition, there isa growing potential to further develop the dialysiscare in line with the managed-care concept wherebya healthcare company assumes responsibility for apatient’s total healthcare needs for a fixed fee.

With the acquisition of Vivra, we achieved thestrategic size and market position that we had beenseeking in the field of dialysis care. Now we will moveforward by establishing new clinics and makingsmaller, supplementary acquisitions. We will grow,in particular, in new markets in the Far East and LatinAmerica. By the year 2000, Gambro’s clinics willhave at least 50,000 patients in the U.S. and a totalof 60,000 throughout the world.

We will strengthen our positions in the field ofcardiopulmonary care. We will continue to invest inresearch and development to bring forth new prod-ucts. We must continue to be technological leadersin the sectors in which we are active. We will safe-guard our ability to compete. With undiminishedstrength, we will complete the restructuring-and-efficiency-improvement program now being carriedout and which is designed to yield continuing annualimprovements in productivity through rationaliza-tion measures and better logistics.

Farewell to IncentiveI want to express deep gratitude to all employees whosegreat work in past years contributed to our achievingthe position we occupy today. I also want to expresswarm thanks to members of the Board of Directorsof the Incentive that is now ceasing to exist.

For me personally, there awaits an exciting newtask following the eventful years in Incentive. But Ido not perceive the change from the presidency ofIncentive to the presidency of Gambro as anythingdramatic. The two companies have gradually growncloser together and, as Chairman of Gambro for fouryears, I have participated in developing the company’sstrategies for the future. The route is well defined.The journey now continues with the new Gambro.

Gambro develops equipment and treatment meth-ods that enable men and women who are afflictedby illnesses to obtain better care and live better lives.The company performs useful services for both pa-tients and society. And when we focus on service topatients we can at the same time create value for ourshareholders. This is a situation in which there areonly winners.

Mikael Lilius

SIDORUBIK 11 MESSAGE FROM GAMBRO’S PRESIDENT 11

BERTHOLD LINDQVIST:

“Gambro iswell-preparedto meet thechallenges ofthe future”

Gambro is againreporting a successfulyear in 1997.During the year, salesincreased by 37 percentto SEK 15 billion,and operating earningsimproved to SEK 1.7billion.

12 SIDORUBIK12 MESSAGE FROM GAMBRO’S PRESIDENT

Renal Care hasstrengthened its positionGambro has further strengthened its market posi-tion within the Renal Care area of operations.

What unquestionably was the major event in1997 was the acquisition of the U.S. Vivra dialysisclinic chain. This acquisition enabled us to achievethe long-sought strategic position in the U.S. Therapid development of U.S. healthcare in the di-rection of an enlarged “managed care” segmentsignals new and exciting possibilities for the Dialy-sis Products and Dialysis Care business areas.

Since 1990, Gambro has allocated major re-sources to establish broad-based operations in theU.S. The rapid increase in the number of dialysispatients in the country justified our acquisition ofthe dialysis products manufacturer COBE in 1990,the REN dialysis clinic chain in 1991-1995, Vivrain 1997 and a large number of other operations inthe intervening years. Today, the U.S. market domi-nates our dialysis operations, accounting for 50 per-cent of sales. Of our 17,000 employees, approximately11,000 are Americans.

However, the U.S. has not been the sole focus ofdialysis operations during the year. In Argentina, wesucceeded in establishing a leading position in di-alysis care through a joint-venture. More than 1,200patients are receiving care at our Argentine clinics.

Our concentration on forward integration, theowning of our own clinics, in other words, is pro-ceeding according to plan. We can safely state thatour goal of achieving a level of 60,000 patients inour own clinics by the year 2000 appears to be real-istic.

Success in other business areasBut our other business areas were also successfulduring 1997. The Blood Component Technology(BCT) business area’s excellent trend of the 1990scontinued during 1997. Sales increased by 12 per-cent to SEK 1,076 M. It can now be seen that theaverage sales increase since the acquisition of COBE– and thereby BCT’s – has amounted to about 10percent annually. The business area’s leading po-sition within its market segments has been furtherconsolidated. The latest addition to the productportfolio TRIMA – a simple-to-operate system forcollecting all types of blood cells – has been very wellreceived.

In the Cardiopulmonary Care business area, mar-ket growth, measured in number of heart operations,has been unchanged at 3 to 4 percent. However, thetrend in terms of volume has outpaced the market.

In my opinion, we have further strengthened ourmarket position during the year. The trend in Eu-rope has been particularly pleasing. However, thebusiness area carried out another important taskduring the year. As the result of a comprehensiveinternal review, cost reductions and productivityimprovements were achieved. The operations alsoposted not insignificantly higher earnings. However,the business area’s strategic position must be strength-ened through acquisitions, as I stressed earlier.

In conclusion, 1997 has therefore been a year inwhich we strengthened our position in the dialysismarket, and we can derive satisfaction from the suc-cesses enjoyed by the smaller business areas.

Leaving GambroAnd now to another subject. At mid-year, I will con-clude my last full fiscal year as president of Gambro,a period which began in 1984, when the Company’ssales amounted to slightly more than SEK 1 billion.

The weak profitability during my first workingyear, 1984, compelled us to take a series of differentmeasures to secure Gambro’s future. In our companytoo we were forced to “go back to basics,” that is,dialysis products. Ironically enough, we had to dis-continue operations within the cardiopulmonaryarea.

Gambro’s future was to be based on the develop-ment, manufacture and sale of dialysis productswhich, during the 1980s, was reporting steady growthof 8 to 10 percent annually. It was a matter of stra-tegic necessity that we grow stronger in our homemarket – Europe.

The acquisition of French/Italian Hospal was inmany respects a logical one. We acquired Hospal inthe summer of 1987 and, with that company, theGambro product line received a well-needed addi-tion. Hospal’s renowned AN-69 membrane con-tinued its triumphal progress in the market, in com-pany with Hospal’s other excellent products. Theimportance of Hospal’s contribution to the Groupfrom 1988 onward cannot be overstated – but de-spite this, the financial market was initially scep-tical about the valuation – the P/E ratio was 40!

Research contributed to successA pleasing aspect for me was the meritorious con-tributions from our own research and developmentoperations during the 1980s and 1990s whichstrengthened Gambro’s position. Most of the newinnovations and breakthroughs within hemodialy-sis during that period were introduced by theGambro Group: the AK dialysis machines, Integra

SIDORUBIK 13 MESSAGE FROM GAMBRO’S PRESIDENT 13

and C3, as well as the BiCart bicarbonate cartridge,to name a few.

And now to the U.S.Gambro’s profitability in the U.S. had been weakthroughout the 1980s. The U.S. government hadenacted new compensation regulations which radi-cally altered conditions. Gambro’s strategic positionwas also weak, owing mainly to an insufficientlybroad product portfolio and lack of “critical mass.”

By the mid-1980s, we had already identified theCOBE company as the ideal acquisition. By thesummer of 1990, the COBE acquisition was a fact,enabling us to solve a number of problems. Now atlast, we had reached critical mass on the NorthAmerican continent. And, moreover, we secureddiversifications in areas closely related to the dialy-sis operations: the cardiopulmonary and blood com-ponent technologies. The Company now devised aunifying formula – Gambro’s expertise was treat-ment of blood outside the body, or extra-corporealblood treatment.

Through the COBE acquisition, Gambro estab-lished a strong, effective organization in the U.S.

Increased stock market interestThe COBE acquisition was the signal to the stockexchanges in Sweden, Great Britain and U.S.which focused interest on the Gambro share. Untilthen, it had been difficult to attract the interest offinancial market players to Gambro as a publiclytraded company, despite the fact that in many re-spects our market areas were unique, since the or-ganic growth in the dialysis and blood-treatmentsegment was 8 to 10 percent annually. But now,Gambro had attained sufficient size, and there wasa growing awareness among analysts, brokers, finan-cial journalists and share investors of the dialysisindustry’s special conditions. It is a source of plea-sure to have contributed to a broader understand-ing of the Renal Care, Cardiopulmonary and BloodComponent technologies.

An entirely new operation– ownership of dialysis clinicsAt the close of the 1980s, we in Gambro’s manage-ment began discussing the possibilities of the Com-pany owning dialysis clinics. In 1991, we were in-vited to invest in the REN Corporation, a U.S. di-alysis chain, with its head office in Nashville, Ten-nessee. At the same time, the healthcare author-ity in our home city, Lund, invited us to provide carefor patients in need of dialysis at a clinic to be oper-

ated by Gambro. This marked the beginning of anentirely new operation. We increased our RENshareholding until the entire chain could be boughtout from the American stock exchange in Decem-ber 1995. The Swedish clinic was provided with twoaffiliated clinics in Sweden, while the Europeanclinic acquisitions became more numerous. And,finally, the largest acquisition of all: the buying ofthe Vivra clinic chain in May 1997.

Incentive acquires GambroHowever, prior to this, something important oc-curred: In April 1994, Incentive took over the blockof shares in Gambro owned by the Volvo associ-ated company, Cardo. At the beginning of 1996,Incentive took the next step by delisting Gambrofrom the stock exchange. Since then, we have beena wholly owned subsidiary of Incentive. I will notdeny that my first reaction was somewhat negative.However, I must admit that the cooperation withIncentive has proceeded smoothly, and our strate-gies and plans for Gambro have received verystrong support. I wish to particularly acknowledgeIncentive’s strong support for our acquisition ofVivra, support which cost them SEK 12 billion.

Thanks and good luck!As I approach the time to leave Gambro to retireon June 30, I view the past years with satisfaction.It has been, throughout, an exciting and stimulat-ing time, rich in experiences and challenges, some-times setbacks, but above all, characterized by apositive trend in an exciting company.

I wish particularly to thank the many capableemployees who contributed to our good results andsuccesses. And I can safely state that, for the com-pany, anonymity is a thing of the past – the nameis Gambro, and it will be publicly listed as before.

Concerning the future, it is my belief that thenew management can look ahead with confidence.It is true that they will be working in a market thatis subject to price competition, political interven-tion, pressure from constantly growing patientgroups, tough competitors and the momentouschanges in the wake of successes in medical research.But I know that Gambro is well-prepared to copesuccessfully with these tough conditions. Nothingstands still, and I anticipate that my successor willintroduce the changes he judges to be necessary andjustified. I extend my best wishes for success to mysuccessor.

Berthold Lindqvist

14 SIDORUBIK

Mi-Joo Yang and Jeong-Sodle Seol work together at the dialysis clinic in the Samsung MedicalCenter in Seoul, South Korea. The clinic has been in operation for some four years and pro-vides about 1,300 treatments monthly.

The global medical-technology industry continuedto maintain a strong growth rate in 1997.

In parallel with the growth of modern medicinesince the end of the 19th Century, the need forsupport technologies has also increased. Somemedical specialties emerged in symbiosis with tech-nological development. The treatment of kidneyfailure with hemodialysis is one example; otherareas include cardiovascular surgery and bloodtransfusions.

The medical-technology sector did not begin todevelop in Sweden until the latter half of the presentcentury. In recent years, a large number of smalldevelopment companies have been established inthe medical-technology sector, an area believed by

many to be assuming growing importance in Swed-ish industry. New medical-technology productshave been developed with particular success in so-called “science villages” which have sprung up nearSwedish colleges and universities.

It was only a few years ago that stock marketplayers began to notice the emergence of medicaltechnology. In the U.S., however, shares of medi-cal-technology companies have been the focus ofstrong interest for nearly a decade.

Gambro is Sweden’s leading medical-technologycompany. Gambro is also a world leader amongintegrated dialysis companies, one of the leadingmanufacturers of oxygenators and the world’s lead-ing manufacturer of blood separation equipment.

Medical technology– continued favorable growth

during 1997

14 MEDICAL TECHNOLOGY

SIDORUBIK 15

Global healthcareand mechanisms that

control it

■ The global healthcare industryis controlled partly by mechanismsdifferent from the traditionalforces behind industrial development.The industry is dependent to asignificant extent on healthcarepolicies, forms of healthcare financing,healthcare traditions and, naturally,economic growth in national marketsaround the world.

Nurse Park Tae Mi works in thedialysis department at the St. MaryKnoll Hospital in Seoul, SouthKorea.

In all developed societies, political organizationsadopt policies concerning their population’s needfor healthcare services and decide which forms offinancing should comprise the basic choice forhealthcare organizations. As a natural consequence,they also make decisions on the degree of govern-ment involvement in healthcare services, includ-ing financing. In addition, they decide the amountof healthcare costs that should be absorbed by pri-vate individuals. Official bodies also provide guide-lines for insurance liability assumed by employers,for example, or private or pub-licly owned insurance agencies.

Every society also has laws andregulations to control the targetlevel and quality of healthcareservices, and decide the extentto which government authori-ties or politically elected rep-resentatives should control theservices. Decisions are maderegarding required training andskill levels of healthcare per-sonnel and the curriculum fortraining programs. Gambro isa global player in the health-

MEDICAL TECHNOLOGY 15

care sector and, accordingly, is highly dependenton healthcare policy trends, decisions and legisla-tion governing medical and healthcare services inmore than 100 national markets where the com-pany conducts business operations. In view of thisgeneral background, the following is a brief pres-entation of healthcare policy trends in some ofGambro’s most important markets.

USAAmerican healthcare services have developed vari-ous financing concepts and organizational formatsfor different groups, with every individual respon-sible for his/her own health insurance as the domi-nant principle. Public contributions were limitedfor many years to regulated measures and specialcontributions to particularly exposed groups. Sincethe 1960s, however, new insurance solutions havebeen tested in an effort to increase the quality ofservices and meet the needs of all people for medi-cal and healthcare services.

Part of the background in the current process ofdynamic change, however, is growing dissatisfactionwith constantly increasing healthcare costs (about14 percent of GNP today), lack of accessibility to

medical and healthcare services(about 13 percent of the popu-lation has no health insurancecoverage) and the inconsistentquality of services rendered.

In 1965, the American Con-gress resolved to provide vul-nerable groups in society withbasic health insurance throughthe establishment of Medicare

16 MEDICAL TECHNOLOGY

of HMOs, and fees are paid ei-ther by individual policyhold-ers or employers. In the begin-ning of the 1990s, healthcarecosts in the U.S slowed in par-allel with the success of man-aged care. Now there are signsthat costs again are rising.

It should also be noted thattoday’s dynamic process ofchange in the American health-care sector is mainly takingplace outside the political sys-tem, driven by groups of pa-tients, grassroots movements,medical institutions, the health-care industry and employees ofmedical and healthcare estab-

lishments. Various political difficulties during the1990s have made it impossible for the federal govern-ment to exercise significant power over current de-velopments.

The transformation of American healthcare serv-ices has naturally also had certain effects on dialy-sis services. The system of compensation introducedin 1983 increased cost awareness in dialysis care.Multiple use of dialyzers was introduced and treat-ment times were reduced to cut costs.

The concept of HMOs has influenced dialysiscare. Disease Management, a variation of HMO, isan appropriate alternative for treating patients suf-fering from chronic diseases – kidney failure, forexample, or diabetes – and comprises more looselystructured networks that are activated as needed.Nationwide HMOs specializing exclusively in di-alysis care have also been discussed.

During the late 1980s, HMO chains were devel-oped very quickly and, in many cases, expandedinto nationwide organizations, often publicly listedon stock exchanges. A growing trend has also beennoted toward increased consolidation and the cre-ation of nationwide chains in specialist fields,exemplified by dialysis clinics.

EuropeHealthcare organizations in Europe have chosen avariety of different avenues.

During the period after World War II, Great Brit-ain and Sweden were the most steadfast of all West-ern European countries in their efforts to developcomplete-coverage public health and medical caresystems. Tax financing dominated the public healthservices of both countries, and medical services wereprovided by publicly owned institutions.

The situation remains unchanged in Sweden,where about 93 percent of institutional care is still

COBE introduced a new heart-lung machinein 1997, the Century Perfusion System.

and Medicaid programs. Thefederal government, accord-ingly, assumed primary respon-sibility for financing healthcareservices for elderly (Medicare)and impoverished (Medicaid)members of society. The pro-grams are based on a combina-tion of insurance coverage atvarious levels, patient fees andcontributions by the states inwhich patients live.

The professional element insociety also assumed responsi-bility for insurance protectionafter 1965 through individualhealth insurance coverage,which is subsidized indirectlyby the government through tax deductions for in-surance payments. Today, health insurance, or aproportion of it, included among salary benefits isincreasingly commonplace.

Private health insurance coverage has tradition-ally provided policyholders a freedom of choice inselecting their medical service providers, whichcharge patients on a fee-for-service principle. Even-tually, however, it became difficult to control costsand guarantee medical care quality under the sys-tem.

Rising costs became a major cause for concern and,in 1983, a new reimbursement system was introducedfor Medicare patients based on fixed compensationfor all medical services and diagnostics. A classifi-cation system was developed for most ailments anddiseases, which were divided into Diagnosis RelatedGroups (DRG). The new system was soon adoptedin other countries, including Sweden. It radicallychanged the driving forces in healthcare. Treat-ment times were reduced quickly.

Another new healthcare trend developed inparallel with the classification system. Increasingly,physicians started to look for contract-controlledservices, so-called Health Maintenance Organiza-tions (HMO) or “managed care”, where costs couldbe reduced through increased patient volumes andimproved negotiation positions. So called “PrimaryCare Physicians” in an HMO could determine thecare need and halt over-use. HMOs have existedsince 1929, but did not achieve widespread accept-ance until the 1970s. They are organized in a vari-ety of shapes and forms, but all HMOs have certainbasic common denominators. The foundation is nor-mally a network of doctors, hospitals, specialist clin-ics and other medical experts who share joint respon-sibility for the healthcare needs of HMO membersin return for annual fees. There are many variations

Irene Cornelius has received dialysis treatmentfor nearly two years. Care is provided atGambro’s Escondido Clinic in Los Angeles.Hats are a passion with Irene – an interestthat cheers her up.

provided by the local commu-nities. Of all European coun-tries, it is only in the Nordicand Benelux countries thatpublic health services play sucha dominant role. The publicsector’s involvement with in-stitutional care in most otherEuropean countries varies be-tween 50 and 70 percent.

During the 1990s, the Eu-ropean healthcare debate –driven perhaps by EMU discus-sions, unemployment and stag-nant economies – has focusedstrongly on reducing health-care costs. The percentage ofhealthcare costs in relation toGNP varies between 5.5 per-cent in Norway, 6.9 percent inGreat Britain, and 8.6 percent in Italy and Ger-many and 9.7 percent in France and Austria(OECD Health Data 1996). Efforts to reduce costshave resulted in lower prices for purchases of medi-cal technology and pharmaceuticals as well as com-prehensive medical and healthcare reforms in mostcountries.

The differences between the healthcare organi-zations in various countries are highly pronounced,a factor with far-reaching effects on Gambro’s busi-ness activities in Europe, which necessitates a sepa-rate local model for the cultivation of every nationalmarket. The section below comprises a brief pres-entation of conditions in some key countries.

M In Great Britain, public health care is still animportant social institution. The National HealthService (NHS) became one of the most prominentfeatures in Britain’s post-war welfare state, and theNHS functioned satisfactorily for nearly 40 yearsafter the original model was established during the1940s. After a period of prolonged deliberation,the Conservative government took the initiativein implementing significant changes in publichealthcare services in the late 1980s. The new orga-nization is characterized by continued strong politi-cal control on the national level, but regional in-fluence in healthcare policies has been strength-ened. The general practitioner’s role as a patient’srepresentative has also been strengthened. Privatehealthcare services have become an importantsupplement to NHS.

Dialysis care in Great Britain suffered negativeeffects from cutbacks in public health services in theearly 1980s. In order to provide care and treatmentfor patients adversely affected by inadequate re-

sources, relatively concerted ef-forts are now being made underthe auspices of both public andprivate institutions. The so-called Private Finance Initia-tive, now known as PPP (Pub-lic Private Partnership), was in-troduced by the British govern-ment in 1992. It was intendedto reduce the financial burdenon the public sector by usingprivate-sector expertise tofinance and manage projectspreviously conducted by thepublic sector. Gambro reachedone such agreement for health-care services in Belfast in De-cember 1997.

M An important principle inGermany’s constitution is the so-called subsidiarityprinciple, whereby nothing in society should bemanaged at a level of administration deemed higherthan necessary. As a result, the financing and pro-viding of public health services is decentralized toindependent organizations. The responsibility forfinancing is delegated to local health insuranceoffices, while actual care and treatment are trans-ferred to private doctors and privately managed hos-pitals. Direct political control is limited. Althoughfinancing is publicly funded, it is supported by aninsurance system – not taxes. General practitionersare reimbursed in accordance with the fee-for-serv-ice principle. Doctors in private practice have a cen-tral position, with exclusive rights to out-patienttreatment and all decision-making authority on re-ferrals to hospital. Medical and healthcare utiliza-tion is high, and there are no long waiting linesfor treatment.

Dialysis care in Germany is conducted to a largeextent by foundations and other non-profit compa-nies. The largest is Kuratorium, which treats morethan 50 percent of all dialysis patients in Germany.

M The organization of healthcare services in Italyhas been based on the British model since 1979. Serv-ices are divided into 21 regional healthcare author-ities that consist, in turn, of 227 “Unita sanitarielocali” with direct responsibility for health care.Approximately one-fifth of all hospitals in Italy areprivately owned or operated by foundations. Italy’spublic health sector is characterized by economicrestraint today as the country prepares to join EMUand continues to exercise caution in the wake ofthe political turmoil that marked the beginning ofthis decade. One of the country’s most important


18 SIDORUBIK18 RENAL CARE

objectives is to balance substantial differences be-tween regional resources. Important healthcare re-forms are also being implemented in parallel withattempts to privatize part of the country’s healthinsurance structure.

Dialysis care in Italy is characterized by many pri-vate clinics and high quality standards. Close co-operation with nephrology research institutions hasled to rapid acceptance of new treatment forms inItaly.

M France has relatively high costs for healthcareservices. Despite efforts to reduce healthcare costs,French authorities have not yet been able to influ-ence the continued growth in the medical mar-ket. Control from central authorities of both pub-lic and private health care is strongly dominant.One ambition of the present government is to trans-fer more healthcare activities outside hospitals.Several comprehensive hospital reform measuresare also being planned.

French healthcare services are financed throughpublic sector insurance, which accounts for 85 per-cent of costs incurred for public health services. Pa-tients are expected to pay about 25 percent of hos-pital costs and 30 percent of medical costs for non-acute conditions. Healthcare services are organizedin 21 healthcare regions and 90 healthcare districts.About 35 percent of all hospitals in France areoperated by private owners or foundations.

Dialysis care is organized in several different for-mats, including private and public sector ownershipand clinics owned by foundations, with a variety ofvery large units and many small satellite clinics. Am-bitious trials of new treatment procedures are alsobeing undertaken.

M The EU has created several organizations tocounteract difficulties created by large differencesbetween healthcare policies in European countries.Common regulations for the introduction of newproducts (CE marking, etc.) and a joint EU patentoffice now contribute to facilitating operations inthe European market.

JapanThe Japanese system for health and medical serv-ices is based on certain historically mandated con-ditions. Shintoism, the national religion of Japan,is a virtual animistic religion, strongly character-ized by a striving for purity. Chinese medicine wasintroduced in Japan during the 4th Century. Itsphilosophy of balance between the complemen-tary principles of Yin and Yang, as well as harmo-nization of the five elements in the human bodyand its organs, provides a holistic perspective that

tends to prioritize non-invasive forms of treatment.Herbal medicines comprise an important base fortherapy, and the medical profession has concen-trated on pharmaceuticals for a long time.

Hospitals in Japan are small and 80 percent areprivately owned. They have the world’s longestaverage treatment times and their geographic dis-tribution is unevenly divided between different partsof the country. About 90 percent of all Japaneseout-patient clinics are privately owned. Personneldensity is low, and patients are expected to providefor their own services while confined to hospitals,either through family members or others. The re-sponsibility of voluntary personnel in healthcareservices is generally quite substantial. Doctors com-mand a prominent status in Japanese society.

The health insurance system is similar to theAmerican structure, with one category insured asemployees of private companies and public-sectororganizations, while National Health Insuranceprovides coverage for people of uncertain financialmeans. A study is now being conducted to reviewJapanese healthcare costs, and central governmentauthorities are trying to strengthen their controlover costs in the country’s healthcare system.

Technically, hospitals in Japan are well equipped.Dialysis care has been firmly established since theintroduction of a financial support program for di-alysis patients in 1972. Kidney transplants are rare,since general public opinion remains sceptical oforgan transplants.

More than 70 percent of all Japanese dialysispatients are treated in private clinics owned andoperated by dialysis specialists. Private companiesare not allowed to own clinics.(Background: SNS series on healthcare,MDIS, Gambro data).

Managed Care

The collective term for healthcare

programs in the U.S., whereby

private individuals are affiliated

with a certain network of doctors

and hospitals and healthcare provid-

ers are paid in accordance with

fixed rates.

HMO (Health MaintenanceOrganization)

A network of healthcare providers

in the U.S. based on

managed care.

Capitation

Doctors receive a fixed fee for

every patient, regardless of the

extent of the treatment provided.

Fee-for-service

Payment principle whereby

patients are charged for each

individual component of a

treatment procedure.

WORD LIST

SIDORUBIK 19

Renal care has given rise to two Gambro businessareas, Dialysis Products and Dialysis Care. The com-bined market value in these two sectors amountsto approximately SEK 200 billion, of which prod-ucts for dialysis account for some SEK 40 billion.

There are two reasons for Renal Care being aresource-intensive medical specialty.M During recent decades, the number of patients

within this category has increased by about 10percent annually and is expected to continue togrow by 7-8 percent in future.M Treatment is provided every second day – in otherwords, the patient never receives enough treatment.One alternative is to provide the patient with a trans-plant of a donated kidney. But transplants are nota viable solution for all patients due to the limitedavailability of donated kidneys.

In 1996, 800,000 kidney patients throughout theworld were treated with some form of dialysis. NorthAmerica accounted for approximately 28 percent,Europe for 24 percent, Japan for 21 percent, with11 percent in Latin America, 10 percent in the AsiaPacific region and 6 percent in other countries.

Currently, Europe, Japan and the U.S. have thelargest number of patients but the greatest growthis shown within new markets, such as Asia Pacificand Latin America. The number of patients inChina is increasing by 20 percent each year. Basedon current estimates, there will be some 1.4 mil-lion patients worldwide by the year 2005.

There are two forms of dialysis treatment, he-modialysis and peritoneal dialysis (see page 25).The Gambro Group is the market leader in the he-modialysis area, with a world market share of 23percent. The U.S. company, Baxter, is the worldleader in the peritoneal dialysis area.

In addition to Gambro, Baxter and Fresenius areglobal players, while the other competitors limit theiroperations to one or a few regions.

■ The treatment of people sufferingfrom chronic kidney failure hasdeveloped into a global industry.During a relatively brief period of time– no more than 30 years – the lifeexpectancy and prognosis for peoplewith this condition have changedcompletely. Today, with the help ofdialysis treatment, or the transplan-tation of a new kidney, such patientscan look forward to a long life ofacceptable quality. However, thetreatment they need is so resource-intensive that it is creating the basefor an extensive medical business,which is the driving force behindtoday’s global dialysis industry.

Nurse Carmencita Gruta at theEscondido Clinic in Los Angeleschanges a BiCart cartridge on aCOBE dialysis machine.

Renal carehas developed intoa global industryR

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MarketThe market for dialysis products increased by about10 percent in volume annually during the past fewdecades. Currently, it is also undergoing a substan-tial process of change, which is naturally havingan effect on Gambro’s operations within this busi-ness area. The most important driving forces are acombination of increased pressure on prices andthe fact that customers are becoming increasinglylarger and fewer in number as the dialysis clinicchains are consolidated.

In today’s EU, with preparations in progress forEuropean Monetary Union, healthcare costs areunder great scrutiny. This is particularly the casein Gambro’s most important European markets,Italy, France and Germany. At the same time, theUK has grown to become a large and importantmarket, due to the country’s major investment indialysis during the 1990s to compensate for earliershortcomings in this area as a result of the cutsmade in healthcare funding during the 1980s.

Of the non-European markets, the UnitedStates has always been cost-sensitive, as have the

emerging markets of the third world. The Japanesemarket has made sufficient resources available fordialysis treatment for many years but is today un-der greater pressure and is more price-sensitive thanpreviously as a result of growing economic prob-lems. Despite currency crises, the remainder of theAsia-Pacific region shows favorable increases.

While the dialysis market is increasing by 7-8percent annually, the increase in sales value is 6-8percent. The trend toward consolidation in the cus-tomer area is contributing not only to pressure onprices but also to increased competition betweenthe producers of dialysis products. The way in whichsales are conducted is also becoming more impor-tant. Generally, sales are conducted in the form oflong-term contracts, with service and deliveries ofdisposable products over long periods being impor-tant components of such contracts. In addition,product purchasing routines vary from country tocountry.

Dialysis Products– breadth, innovation and quality

are key concepts

■ Gambro’s origins are rooted inthe Dialysis Products business area.The further development of NilsAlwall’s epoch-making inventionsfrom the mid-1960s has given thecompany a leading place among thepioneers in the dialysis medicinefield. The company gained an imageas an innovative force, with the focusfirmly on quality. Another earlycorporate ambition was to offer themarket the complete range of productsneeded by a dialysis clinic. Today,the business area’s core operatingphilosophy continues to be based onbreadth, innovation and quality.

Approximately 1,700 liters

of blood normally pass through the

kidneys every 24 hours. In the

kidneys, the blood is distributed

into about two million nephrons.

The nephron is the kidney’s

smallest functional unit; it can

independently clean the blood and

produce urine.

In the nephron, the blood flows

first to the glomerulus, a very small

global structure of minute blood

capillaries. There, a large part of

the liquid in the blood is squeezed

THE FUNCTION OF AHEALTHY KIDNEY

out through small holes in the

capillaries. The liquid contains

water, waste products, salts and

many nutritive substances. This

so-called primary urine is captured

in “Bowman’s capsule,” which

surrounds the entire glomerulus.

The primary urine is then con-

centrated. The greater part of the

liquid, as well as salts and nutritive

substances, are reabsorbed by the

blood. What remains is urine,

which is discharged to the bladder

via the renal pelvis and the ureter.

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Nurse Estella Alonso has been work-ing at the Chula Vista dialysis clinicin Los Angeles for eight years.

The leading companies in the global dialysis mar-ket are Sweden’s Gambro, America’s Baxter andthe German company, Fresenius. During 1997,their shares of the dialysis product market, as esti-mated by Gambro, were as follows:

Gambro Baxter FreseniusHemodialysis 23% 4% 20%Peritoneal dialysis 2% 74% 14%

Total 17% 22% 18%

ProductsThe most important products used in the treatmentof hemodialysis areM dialyzersM dialysis machines, with technical servicesM dialysis fluid, andM blood linesGambro has always been a pioneer among today’sdialysis product companies and continues to makeimportant contributions within its field (see alsoResearch on page 39).

The advanced dialysis machines – which circu-late the blood and control the dialysis process –are marketed under three brands:M the AK series, marketed under the Gambro brandM the CentrySystem series, marketed under the

COBE brand, andM Integra, which is marketed under the Hospal

brand.During the year, the Prisma acute dialysis machinewas launched in the U.S., following its successfulintroduction in Europe earlier.

During the past few years, the significance of di-alysis machines to Gambro’s sales revenues has in-creased. Today, the Gambro Group holds a 28-per-cent share of the world market for dialysis machinesand is the global market leader.

The dialyzers contain membranes that have vary-ing characteristics. They may be more or less hemo-compatible, and offer a higher or lower degree ofpermeability. The Group hasdeveloped four of its own syn-thetic membranes. Of these, itspolyamide and acrylonitrilemembranes were re-launchedduring the year, with signifi-cantly improved properties.New generations of dialyzerswere introduced in parallel withthese and other membranes.

During the past decade, thetrend has been towards theincreased use of synthetic mem-branes in capillary form, whilecellulose-based membranes

have declined. Accordingly, Gambro is now invest-ing to increase the production of capillary dialyzersand at the same time is concentrating its produc-tion of plate dialyzers to one plant.

Today, Gambro has a global market share fordialyzers of 22 percent and is thus the world leader.

The blood lines, which during dialysis treatmentconduct the blood to the dialyzer and then back tothe body via the machine, are manufactured in Italy,Germany, the Czech Republic, Slovenia, Mexicoand China. Today, the Gambro Group has a lead-ing share of the global market for blood lines of 30percent.

Traditionally, the production of dialysis fluid isbased on dialysis concentrate made in the U.S.,Germany, Australia, Turkey and Italy.

The powder concept for the production of dialy-sis fluid, which Gambro introduced with its BiCartbicarbonate cartridge in 1987, continues to be highlysuccessful. The patent protection for BiCart in theEU was removed by the EU patent office in March1997, however. BiCart patents for other marketscontinue to apply.

In May 1997, a further development of the pow-der concept was launched, consisting of a cartridgecontaining sodium chloride powder and a small ionbag containing the other substances included in thedialysis fluid. Combined with the bicarbonate car-tridge, BiCart, these products constitute the nextgeneration of dialysis concentrate.

With this system, Gambro has contributed to atotal transformation of the dialysis fluid system.The experience gained from powder technology isalso used in the CleanCart disinfection and cleans-ing cartridges introduced earlier, which contain dif-ferent powders that are mixed with hot water toefficiently clean the dialysis machines.

Gambro’s strength within hygiene care is beingfurther strengthened by the water-purificationequipment, which in recent years has become anincreasingly more important feature of the pack-

age offered to customers.Gambro holds a 16-percent

share of the global market fordialysis concentrate and solu-tions and is thus ranked secondbehind Japan’s FUSO.

StrategiesAgainst the background of rapidmarket growth, the increase inthe number of privately owned

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Dialysis Care– increasing number of ownclinics is prioritized strategy

■ 1997 was a memorable year forGambro in its capacity as an owner ofdialysis clinics. In May, Gambro’sU.S. subsidiary, COBE, acquired theVivra chain of dialysis clinics inAmerica for nearly SEK 12 billion.As a result, Gambro’s involvement indialysis care increased by approxi-mately 16,000 patients in the U.S.

chains of dialysis clinics, thepressure on prices and custom-ers’ increasing consolidation,Gambro has developed a num-ber of strategies designed to fur-ther strengthen its share of thedialysis products market:

Forward integration is an im-portant umbrella strategyadopted by Gambro since thebeginning of the 1990s to pro-vide the Dialysis Products busi-ness area with a guaranteedmarket. During a period of tran-sition, Gambro’s clinics will usea mixed product range. How-ever, the intention is that infuture they will use the Group’sproducts to the greatest extentpossible.

Support to customers has become a guiding prin-ciple in Gambro’s marketing efforts, as reflected bythe award-winning campaign theme: “Best use ofresources.” More cost-effective forms of dialysis –such as satellite dialysis and home dialysis – receivewide support from the products, IT support and ad-visory services.

Rationalization of operations is a fundamental strat-egy for meeting low-cost demands. The manufactur-ing units are being concentrated and rationalized.Within the framework for an extensive logistics proj-ect, the number of warehouses in Europe is beingreduced from 53 to 6. The first new, completely com-

puterized and robotized storagefacility was inaugurated inHechingen in southern Ger-many in October 1997.

Important strategic invest-ments are also being made with-in product development. The de-velopment and production ofnew synthetic membranes forsteam and radiation steriliza-tion are in progress to conformwith this important interna-tional trend.

The strong powder concept isto be given increased supportthrough the establishment ofa plant in the U.S. during 1998.

The focus on peritoneal di-alysis products – including a

new machine and the new system for PD fluids –will continue in Europe and Asia.

The focus on the development of new markets isincreasingly successful. The strong trend in Korea,China and other Asia Pacific markets and in LatinAmerica – especially Argentina and Brazil – willbecome increasingly significant for Gambro.

Highlights of 1997The business area’s sales increased by 5 percent, com-pared with 1996.The volume trend in Europe andthe U.S. paralleled market growth during the year,while many markets in the Far East and Latin Amer-ica presented higher growth

MarketIn many countries during the past decade, the organi-zation of dialysis care has changed and now focusesincreasingly on privately owned dialysis clinics.The number of patients treated by such clinics hasincreased continuously and today they account forabout one fourth of the world’s approximately850,000 dialysis patients.

Among the reasons for this trend are hopes thatthe privately owned clinics, which are expected tobe more cost-effective, will relieve the public healthsector of the heavy costs of dialysis care. The clinics

Carolina Martinez is born in Chiuava,Mexico and has been receiving dialysis treat-ment for five years. Care is provided at theChula Vista Clinic in Los Angeles.

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SIDORUBIK 23

During the first quarter, clinics were established inDenver, Colorado; Goldsboro, North Carolina; SanDiego, California; and Crossville, Tennessee.

Cooperation agreements were entered into dur-ing the same period with clinics in Niagara Falls,N.Y., Brooklyn, N.Y., and the Johns Hopkins Uni-versity Hospital in Baltimore, Maryland. A jointventure, with Gambro Healthcare as majority owner,was formed to operate five dialysis clinics in Cin-cinnati, Ohio.

In May, the U.S. Vivra Renal Care (VRC)clinic chain was acquired. VRC had some 15,800patients at 262 clinics located in 28 U.S. states andthe District of Columbia. During 1996, VRC hadoperating revenues amounting to USD 411 M andpre-tax earnings in excess of USD 100 M. The ac-quired operations were integrated in Gambro’sAmerican dialysis business as of June 1, 1997, andwere consolidated effective the same date.

In June, Gambro Healthcare Patient Servicesestablished a joint venture in Argentina which dur-ing the remainder of the year acquired 18 clinicsin Argentina with a total of 1,212 patients.

During the third quarter, a further five clinicswere acquired in the United States. Three clinicswere started in the U.S. during the same period.

In Europe, three clinics were acquired in Hun-gary. The Kungsdialysen clinic was also acquired inUppsala, Sweden during the year, as was the Gamapalclinic in Valencia, Spain, with 230 patients. In Ma-laga, a branch clinic with 40 patients was opened,and in Italy a clinic with 25 patients was acquired.

Major dialysis clinic chains – number of patients January 1998

Provider Global Share, % US Share, % Europe Share, % RoW Share

Fresenius Medical Care 67,800 7.9 56,000 24.0 6,100 3.0 5,700 1.4Gambro 33,400 3.9 29,600 12.7 2,000 1.0 1,800 0.4TRC/RTC proforma 29,600 3.4 27,800 11.9 200 0.1 1,600 0.4Kuratorium für Dialyse 15,000 1.7 15,000 7.3Dialysis Clinic Inc. 9,400 1.1 9,400 4.0Renal Care Group 9,000 1.0 9,000 3.9Everest 4,000 0.5 4,000 1.7Baxter 4,000 0.5 500 0.2 3,500 0.8Excelsior Group 1,800 0.2 1,800 0.4Braun Eurocare 1,100 0.1 1,100 0.5Générale de Santé 800 0.1 800 0.4Renex 850 0.1 850 0.4

Total 176,750 20.6 136,650 58.6 25,700 12.5 14,400 3.4

Other providers 683,250 79.4 96,350 41.4 179,300 87.5 407,600 96.6

Total number of patients 860,000 100 233,000 100 205,000 100 422,000 100

are specifically adapted to treat patients with thehelp of safe and efficient health care routines, with-out the need for additional specialist care.

The world’s largest dialysis clinics are in Germanyand the U.S. (see table above). In the UnitedStates, 58 percent of the country’s dialysis patientsare treated by the largest seven dialysis clinicchains. In Europe, the seven largest chains accountfor 12.5 percent of the continent’s dialysis patients.In other words, private clinics are not so commonin Europe as the U.S., primarily because there is aless positive attitude towards private clinics in somecountries in Europe. Privately owned dialysis clin-ics do not exist in Belgium and the Netherlands.

Outside Europe and the U.S., Argentina has par-ticularly supported the introduction of privatelyowned dialysis clinics and certain countries in theFar East are showing similar ambitions.

Trends in the American market are character-ized by the concentration of the dialysis chains. Neworganizational forms within health care (see page14) in themselves are also significant. The goal ofimproving the quality of the care provided is an-other trend, which is being driven by the high mor-tality rate among U.S. dialysis patients. In Europe,the clearest trend is the rapid growth in privatelyowned dialysis care.

Gambro-owned clinicsAt the beginning of 1997, Gambro owned 130 clin-ics, which treated a total of nearly 11,000 patients,of which 105 clinics were in the U.S.

RENAL CARE 23

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24 SIDORUBIK24 CARDIOPULMONARY CARE

In this form of treatment, the

blood is conducted, via blood lines

outside the body, through the dia-

lyzer, where the purification takes

place. In the dialyzer, the blood

and the dialysis fluid flow on oppo-

site surfaces of a thin membrane.

Waste products are transported

from the blood through the mem-

brane and carried away by the di-

alysis fluid. The body’s excess liquid

is removed through the membrane

by means of a pressure differential

created by the dialysis machine. The

entire process is monitored and

controlled by the dialysis machine.

HEMODIALYSIS

Peritoneal dialysis is a form of

dialysis that differs from the more

common hemodialysis in that the

blood is treated without being

removed from the body. Instead,

the cleansing fluid is brought into

the patient’s abdominal cavity,

where the body’s peritoneum acts

as a dialysis membrane.

Dialysis fluid in plastic bags,

sterile blood lines and special

connectors – and sometimes spe-

cial machines for fluid pumping –

are required in this form of treat-

ment. The most common form of

peritoneal dialysis is known as

CAPD (Continuous Ambulatory

Peritoneal Dialysis), whereby the

patient manually change the dialysis

fluid every four hours. With APD

(Automated Peritoneal Dialysis),

treatment can be performed by a

machine, and can thus take place

even when the patient is sleeping.

PERITONEAL DIALYSIS

The outstanding shares in the Résidence du Parcdialysis clinic in Marseilles, France, were also ac-quired during the year.

StrategiesGambro is continuing to play an active role in theglobal consolidation process in progress among theowners of the world’s dialysis clinics.

Gambro estimates that by the year 2000, approxi-mately 60,000 patients will be cared for by theGroup’s clinics.

There are several reasons why the acquisition ofclinics is a prioritized strategy for Gambro. One ofthe most important is full control of the value chain,from development to production, sales and dialysiscare.

Another is the Group’s conviction that only verylarge players will be able to successfully take partin the current re-creation of the American dialysismarket. Among other factors, it is expected thatnationwide networks of Health Maintenance Or-ganizations (HMOs) will be established exclusivelyto provide dialysis care.

Other Gambro strategies for the U.S. includeinvestment in the establishment of new clinics andin the development of existing laboratories and ITservices. Gambro also intends to develop disease-management programs, in the form of networks ofcare providers for patients suffering from chronicdiseases requiring dialysis.

The quality aspects of dialysis care are under-lined strongly in the work of the Group’s Americanoperations. Evaluations of the use of disposable dia-lyzers are in progress in a number of Gambro’s U.S.clinics.

In Argentina, conditions for the establishmentof new operations are favorable. The market is grow-ing at a rate of 9 percent annually and the trendtowards private dialysis clinics is being supportedby both political and economic measures.

In Europe, plans are under way to implementfurther acquisitions. The new British program des-ignated “Public Private Partnership (PPP)” was ableto announce the establishment of its first operation,in Belfast, Northern Ireland, at the end of 1997.

Within a few years, Gambro will operate its ownclinics in Asia. It is also likely that legislation willbe passed in Japan during the next few years thatwill enable industrial companies to operate dialysisclinics.

Highlights of 1997The Dialysis Care business area reported approxi-mately 120 percent growth in 1997. During theyear, more than SEK 14 billion was invested in ac-quisitions or the establishment of dialysis clinics.

The integration of Vivra’s clinics with GambroHealthcare Patient Services progressed accordingto plan during the autumn. Administrative andtechnical service operations were coordinated. Theclinics are now being integrated in the IT systemdeveloped by and used within Gambro’s U.S. clin-ics for many years. Work related to blood analyses,tests and other activities in the new clinics is beingtransferred to the Group’s analysis laboratory in FortLauderdale, Florida. It is estimated that the overallearnings effect during a five-year period will totalapproximately USD 250-300 M.

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Nearly one millionpatients had

bypass surgery in 1997

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MarketIn the cardiovascular-surgery product market,twelve producers are competing for sales worthUSD 1.2 billion. Gambro’s main competitors areBaxter and Medtronic in the U.S. and Sorin in Italy.

During 1997, almost one million people under-went what are known as “bypass” operations. Ap-proximately 50 percent of these patients had theiroperations in the U.S. The number of operations ofthis type is increasing by approximately 4 percentannually.

Bypass operations are performed to correct vas-cular stenosis, valvular disorders and congenitalheart defects. Heart conditions are often lifestyleillnesses, since vascular stenosis commonly occursas a consequence of an excessively fat-rich diet andinadequate exercise. The number of patients withheart disease increased rapidly in parallel with in-creasing prosperity during the second half of thepresent century.

Cardiovascular surgery is now a routine procedureat all major hospitals throughout the world. Accord-ingly, the cardiovascular segment of the medical-technology market is a mature market.

During the past ten years, non-surgical tech-niques for repairing the heart and associated ves-sels have attracted the interest of clinics specializ-ing in heart conditions.M Growth for the technique known as angioplasty,which involves dilating a blood vessel with a bal-loon inserted with the aid of fiber-optical technol-ogy and is used by many heart-disease clinics, hasdeclined, since this method provides only a tem-porary palliative effect rather than permanentlywidening the blood vessel.M On the other hand, increased utilization ofangioplasty in combination with tubes made fromfine metal gauze, known as “stents,” which are in-serted into a blood vessel to expand it, to someextent postpones the need for heart surgery.M Minimally invasive surgery, in which the surgeonuses “keyhole” surgery to perform heart operations,is growing to some degree, but has yet to bring aboutany significant reduction in the number of conven-tional operations.

As a result of the alternative techniques whichare often the first choice of treatment, the patientsoperated on today tend to be more elderly and moreseriously ill by the time surgery becomes unavoid-able, and consequently require a high degree of pro-fessional skill on the part of the surgeon, as well ashighly advanced technical equipment.

Thanks to a more health-conscious lifestyle, thenumber of patients requiring surgery could declineslightly in the future. At the same time, the needfor surgery is increasing among the inhabitants ofdeveloping countries.

The market is affected by the dynamic develop-

■ Following the reorganizationmeasures implemented, the Cardio-pulmonary Care business area reporteda substantial improvement in earningsin 1997. The market for cardio-pulmonary care products is growingby 4-5 percent in volume annually,while market price trends mean thatvalue growth is 2-3 percent. Newheart surgery techniques have notmade any substantial impact on thenumber of conventional operations.

RENAL CARE 25

26 SIDORUBIK26 BLOOD COMPONENT TECHNOLOGY

The oxygenator is based largely

on the same principle as the

dialyzer. The blood flows along

one side of a membrane, with

oxygen on the other side. Oxy-

gen passes through the membrane

into the blood, while carbon

dioxide formed in the body leaves

the blood via the membrane. The

perfusion machine performs the

heart’s pumping function by

transporting the oxygenated blood

from the oxygenator back to the

patient. The machine is also used

to collect blood from the opened

thorax, to deliver liquid medica-

tions to the patient and to report

essential data during the operation.

ABOUTCARDIOVASCULARSURGERY

William L. Daly is a perfusionist responsiblefor the heart-lung machine during surgery. Heworks in the heart clinic at Emory Universityin Atlanta, Georgia.

ment occurring in medical carein the U.S., the business area’slargest market. Managed Careand cost containment have in-creased the pressure on prices.

ProductsCOBE’s three key products areoxygenators, heart-lung ma-chines and specially designedblood lines.

During the third quarter of1997, a new heart-lung machine,the Century Perfusion System,was successfully introduced, re-sulting in a strong increase inthe level of order bookings.

One of the company’s newoxygenator models receivedFDA approval in December 1997 and will belaunched in the market during 1998.

The final months of 1997 have seen the small-scale introduction in Europe of perfusion circuitstreated with surface-modifying additives, which en-hance the biocompatibility of the surface.

The Blue Ribbon Pack, first introduced in 1996in the U.S., continues to be successful. A specialpack contains all the disposable products requiredduring a heart operation. They are arranged forrapid use, with pre-installed couplings between thelines and the oxygenator. The compact format ofthe package facilitates storage in hospitals.

An oxygenator for use in neonatal units caringfor premature babies was also introduced during theyear. The neonatal oxygenator became availableto COBE through an exclusive distribution contractwith Polystan, a Danish supplier.

COBE’s autotransfusion machine, known asBRAT 2, has continued to be successful during theyear. Autotransfusion is used during operationswhen the patient is expected to loose a largeamount of blood. Autotransfusion technology en-ables the patient’s own blood to be collected,purified and returned to the patient’s body.

StrategiesThe market for cardiopulmonary care products hasreached a mature stage. Gambro’s strategies in thismarket include:M COBE CV will increasingly focus on reducingcosts to become a low-cost supplier.M The company is developing a more extensiveproduct portfolio and continuing to follow up al-ready established products with new generations.M When the company lacks the know-how to de-velop products in certain areas, partnerships are

established with other compa-nies.M There will be an increase innew markets outside the U.S.and Europe.M The success achieved withthe BRAT 2 autotransfusionsystem motivates further de-velopment.M Attempts to identify a suit-able acquisition target con-tinue.

Highlights of 1997Adjusted for currency effects,the Cardiopulmonary Carebusiness area reported a 1 per-cent increase in sales in 1997.The volume increase for oxy-

genators alone was approximately 5 percent. Dur-ing the year, COBE CV increased its market sharesin several product areas and geographical regions.

The earnings increase compared with target lev-els was satisfactory, as a result of the ongoing re-structuring program and extensive production im-provements. New and improved products werelaunched during the year, which can be producedmore cost efficiently than previously.

The business area’s focus on environmental is-sues resulted in several important environmentalinitiatives, primarily at the European productionfacility in Gloucester, which produces substantialvolumes of disposable products. The Gloucesterplant has received the Queen’s Award, sponsoredby the British government in recognition of out-standing export achievements.

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MarketAbout 40 million units of blood are collected eachyear from donors all over the world. Two millionof these units are collected via apheresis.

The world market for apheresis products as awhole is valued at approximately SEK 4.5 billion.Transfusion medicine accounts for SEK 3.5 billion,the stem cell market for SEK 200 M, and thera-peutic apheresis for the re-mainder.

COBE BCT has two princi-pal competitors in this area: theNorth American companies,Baxter and Haemonetics. InCOBE BCT’s estimation, thecompany is today larger thaneither of these competitors andis the world leader in apheresisproducts within its selectedmarkets.

Currently, the BCT marketand the business area’s custom-ers, the blood banks, are in a

state of consolidation. The blood banks – includ-ing the American Red Cross, which operates a largenumber of blood banks in the US – are subject tothe same cost-efficiency requirements and rules asthe industry in general.

Up until the mid-1980s, the blood banks weresmall and regional in nature. Today, they work withsophisticated, standardized routines and thereforerequire technical equipment to control and moni-tor the processes.

ProductsCOBE BCT’s core product is the COBE SpectraApheresis Blood Separation System. Since its in-ception in 1988, upgraded versions of the systemhave been introduced on a regular basis. Followingthe successful launch in 1997 of version 6 – whichis capable of wholly automatic stem-cell collectionfrom the blood system – version 7 is in the pipelineand approaching launch stage. This version focuseson greater productivity, whereby blood platelets canbe collected faster and in greater volumes.

The TRIMA Automated Blood Collection Sys-tem was introduced in a number of European mar-kets in October 1997. TRIMA is a widely usable sys-tem for the collection of all types of blood compo-nents and is adapted to meet the blood banks’ needfor a versatile, user-friendly and cost-effective ma-chine. Using TRIMA, many different componentscan be collected simultaneously from a single do-

nor through one needle.The Leukocyte Reduction

System (LRS) is a disposableproduct that is used in conjunc-tion with the Spectra and Trimasystems. The LRS system re-moves the white blood cells ona continuous basis as the bloodplatelets are collected. Since

Blood Component Technologyin rapid development

■ The Blood ComponentTechnology business area continuedto develop strongly during 1997. Thebusiness area holds a leading positionin the field of apheresis products.During the 1990s, COBE BCT hassuccessfully established itself as themarket’s leading producer of bloodcell separators. With the introductionof TRIMA in October, COBE BCT’soperations moved into the largetransfusion medicine market, in whichall of the blood components neededfor transfusions are collected: redblood cells, blood platelets and plasma.

TRIMA is a fully automatedsystem for collection of bloodcomponents. After a final qualitycontrol, the blood componentsare ready for use.

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CARDIOPULMONARY CARE 27

28 SIDORUBIK28 OTHER OPERATIONS

Blood, the body’s most important

transport medium, consists of red

blood cells (erythrocytes), white

blood cells (leukocytes), blood

platelets (thrombocytes), plasma

and stem cells.

The red blood cells, which are

tiny, pliable discs, are transported

through our arteries and veins 3,000

times per day. They deliver oxygen

from the lungs to all cells in the

body and remove waste products.

White blood cells act as immune

defense controllers. They provide

rapid protection when the body is

exposed to disease.

Blood platelets are cells whose

main task is to check bleeding.

They bind with each other and

other tissues to provide temporary

natural protection for the wound

until the body can complete the

healing process.

Nutrients, salts, waste products

and other substances are transported

through the body in the plasma, the

fluid portion of the blood.

Stem cells are found in the bone

marrow or, to a lesser extent, in the

peripheral blood system. They are

the blood’s mother cells, which

eventually develop into red or white

blood platelets.

Using apheresis technology

whole blood is separated into the

above-named components.

Apheresis is used within three

areas of medicine:

• Transfusion medicine, which

works with the collection of red

blood cells, blood platelets and

plasma from healthy donors for

transfusion to patients in need.

• During therapeutic apheresis,

certain types of blood cells or plasma

are separated from the blood. They

are replaced by donated or

artificially produced blood cells.

• Stem cell therapy means that the

stem cells are collected from the

blood system and infused into the

patient, who is then capable of

producing new blood. Cancer pa-

tients may need an infusion of

different types of stem cells follow-

ing chemotherapy or radiotherapy.

THE BLOOD’SCOMPONENTS

its introduction in 1996, the LRS system has beenhighly successful in the market. The high qualityof the blood platelet doses produced with the helpof the LRS system accounts for the product’s widemarket acceptance.

APOLLOnet is the software program offered tousers of Spectra machines for documenting theplatelet collection process. The program providespowerful support to the blood banks for their ad-ministrative operations, while simultaneously in-creasing the safety and efficiency of the process.APOLLOnet recorded significant market successesduring the year.

COBE BCT has been working on a project since1993 in cooperation with Aastrom Biosciences, Inc.,a Michigan-based U.S. research company, aimedat developing the Aastrom Cell Production System(CPS), a system for the cultivation of cells. Thissystem enables small doses of stem cells to be ex-panded and transferred to patients suffering fromvarious diseases, including breast cancer. Favorableresults are being noted from phase II of the clini-cal trials.

In a new cooperation project, Aastrom Bio-sciences and COBE BCT are developing methodsto collect stem cells from umbilical cords.

Today, Gambro has a slightly more than 20-per-cent holding in Aastrom and holds the global dis-tribution rights for CPS when used on stemcells.

Increased penetration of the Excorim system forthe removal of antibodies from blood was noted inEurope during 1997. An application has been madeto the authorities for permission to sell the systemin the U.S.

COBE BCT has secured the rights to distributethe Japanese product, Kaneka Apheresis Liposorber,in the United States.

StrategiesCOBE BCT is active in a market with an annualorganic growth of 10 percent. Operations focus onachieving two core goals:M COBE BCT will achieve success through its in-novative ability. The business area allocates about12 percent of its revenues to research and devel-opment. New highly innovative products havebeen developed by the business area’s researchers,and existing products are enhanced on a regularbasis.M The second goal is to make the business area’scustomers successful. To achieve this objective,COBE BCT’s personnel remain in constant com-munication with customers, monitoring theirthoughts and reactions and responding to their in-dividual requirements. A major part of COBE BCT’sproduct development work is based on an intimate

knowledge of its customers’ work environments. Inthe initial stages of the work to develop TRIMA,extensive preparations were made in the form ofpanel discussions with customers and focus groups.

Highlights of 1997The Blood Component Technology business areadeveloped well during the year. Sales increased by12 percent, compared with 1996. The SpectraBlood Separation System and related disposableproducts accounted for most of the improvement.

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Revenues by marketRevenues and operating earningsafter depreciation, SEK M


Global leadershipin marine cargo handling

– platform for growth

■ The MacGREGOR Groupfocuses on marine cargo handling.The aim is to offer shipownerscomplete systems that increaseprofitability of their ships. In 1997,MacGREGOR reported revenues ofSEK 3,591 M, with 1,034 employeesat year-end.

MacGREGOR concentrates on cargo handling andcargo care systems for different types of ships: con-tainer ships, bulk carriers, general cargo ships, RoRoships, passenger ships and reefer ships. The rangeof cargo handling systems includes hatch covers,cranes, RoRo equipment, container securing equip-ment, air conditioning chillers, passenger elevators,provisions stores, refrigerated holds and refrigera-tion plants.

Of the Group’s main products, hatch covers rep-resent almost 16 percent of revenue, cranes con-tribute 24 percent of revenue and RoRo equipment14 percent.

79 percent of revenue comes from new equip-ment sales and 21 percent from after sales, whichcovers maintenance, spare parts, modernization andconversions. The after sales revenue contributionis expected to rise within the next few years.

Strategic competenceMacGREGOR offers the shipowner strategic com-petence by providing a total system for cargo han-dling, by modernizing ships to maximize their com-petitive strength, by guaranteeing equipment per-

formance, and by providing through-life supportand maintenance worldwide.

MacGREGOR offers the shipyard strategic com-petence by its development of shipboard cargohandling systems, and by being an integrated partof a ship’s construction process.

Global leadershipMacGREGOR’s platform for profitable growth isbased on global market leadership, a broad base ofinstallations on 13,000 ships, over 50 offices in 25countries, and market growth – primarily in Asiaand eastern Europe. MacGREGOR will grow bothorganically and also through acquisitions and part-nerships.

For 60 years MacGREGOR has been the worldleader in hatch covers, and today supplies 45 per-cent of the world market. The Group’s cranes havea 35 percent market share, and its RoRo equipment45 percent.

MacGREGOR’s main hatch cover competitorsare Nakata Mac Corp in Japan, Macor in Germanyand Kvaerner Ships Equipment in Singapore. Com-petitors in the crane market are Liebherr in Austria,Neuenfelder Maschinenfabrik in Germany andIshikawajima-Harima Heavy Industries in Japan.In RoRo systems, Kvaerner Ships Equipment inSingapore, Macor in Germany and Naval Impiantein Italy are the main competitors. For after sales –service and maintenance –␣ there is no other com-pany with an equivalent worldwide infrastructure.

New equipment marketThe demand for ocean-going transport is determinedprimarily by the level of world trade. In the past 25years world trade has grown by 6 percent annually.






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BLOOD COMPONENT TECHNOLOGY 29

30 SIDORUBIK30 OTHER OPERATIONS

Volume is three times greatertoday than in the mid-1960s.

Demand for new ships willincrease in the future as theworld’s ageing fleet has to berenewed. This increase in de-mand coincides with the sub-stantial restructuring of ship-yards around the world. Atpresent Japan has a newbuild-ing market share of around 30percent. Following consider-able investment in its ship-building industry during recentyears, South Korea now has asimilar share. China showssigns of becoming an impor-tant presence in the shipbuild-ing industry and its share now represents about 5percent of orders for new ships.

Orders for new vessels in target ship-types forMacGREGOR peaked in 1995-96 and are expectedto be at a lower level in the next three years.

From Europe to AsiaThe largest part of MacGREGOR’s market, 48 per-cent, is still in Europe. Asia and Australia repre-sent some 38 percent and North America 13 per-cent. The bulk of shipbuilding activities has shiftedfrom Europe to Asia, which today has 60 percentof the world’s shipbuilding. Asia’s contribution toMacGREGOR’s revenue is expected to increase.

The company has a strong base in the Asian re-gion. In Japan a 50 percent owned company,MacGREGOR-Kayaba, is the market leader inhatch covers and RoRo equipment, providing aplatform for growth. In Korea MacGREGOR hasa market leadership in cranes, hatch covers andcontainer securing systems.

MacGREGOR has had licensed manufacturersof cranes and hatch covers in China for 20 years,where it also holds a market leadership. A whollyowned company will be established in Shanghaiin 1998.

MacGREGOR has signed a production coop-eration agreement with the Chinese company

Nantong OISCO, which iswholly-owned by COSCOGroup. Nantong OISCO willbuild a new, modern hatchcover factory with the help ofMacGREGOR’s know-how.Production from this new fac-tory is scheduled to start at theend of 1998.

Modernizing andconverting shipsThe maximum age of a ship to-day, depending on its type, is20-25 years. This figure showssigns of rising. With a longership’s lifetime and changedtransport needs during that pe-

riod, there is more upgrading of ships: up to twomajor refits during a ship’s lifetime. Modernization,conversion or upgrading of ships is increasingly be-coming an alternative to investment in new ton-nage, and a growing part of MacGREGOR’s after-sales operations.

Shipowners as global playersThere is a trend towards concentration. More andmore, major shipowners are forming global alliances,motivated by benefits of scale and cost-effective-ness. These global players appreciate a partner whocan deal with their total cargo handling needs –covering investments in new construction, mod-ernization and conversion projects, and also main-tenance of their fleets. This provides opportunitiesfor agreements covering planned maintenancethroughout a ship’s lifetime.

Highlights of 1997Royal Caribbean International placed an order in1997 for two of the world’s largest cruise liners,which will be built by Kvaerner Masa-Yards in Fin-land. For these Project Eagle ships MacGREGORis supplying complete elevator shipsets and variousrefrigeration plant packages in a contract wortharound SEK 150 M. A contract for a third-of-classvessel is presently held by the yard.

SEK M 1997 1996 1995Revenues 3,591 3,537 2,903Operating earnings before depreciation 103 160 207Operating earnings after depreciation 60 121 173Return on capital employed, % 13.3 18.2 29.9Investments 80 64 42Average number of employees 1,070 1,043 918

Deep sea RoRo-container vessel Taiko,owned by W. Wilhelmsen, benefiting fromMacGREGOR’s cargo access/transfersystems.

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Revenues by marketRevenues and operating earningsafter depreciation, SEK M


TAC’s traditionally strongest markets are the Nor-dic region and Great Britain. The goal is contin-ued expansion through a focused strategy on sys-tem operations and on the aftermarket within well-defined geographical areas and a successive, inter-national expansion mainly in the rapidly growingnear markets in the Eastern European countries.There are subsidiaries in Sweden, Denmark, Fin-land, Norway, Great Britain, Germany, Poland andSingapore.

Industry structuringThe building automation industry in recent yearsis characterized by restructuring. In the beginningof 1997, Siemens acquired the recently merged Swisscompanies Landis & Gyr and Staefa. In addition,the control company Satchwell was acquired by theBritish industrial conglomerate Siebe.

The world market is dominated by three globalplayers: U.S.-based Honeywell and Johnson Con-trols and the new European Siemens/Landis & Gyr/Staefa.

On the world market, TAC is ranked fifth afterthe aforementioned companies. However, TACholds a regionally very strong position in the Nor-dic area.

Eventful yearThe year 1997 was eventful for TAC. The single, mostimportant event was the launch of the first opensystem, through which TAC can offer totally newpossibilities within building automation. The systemis based on the new industrial standard LonWorks,which facilitates easy integration of the various

The last options for the U.S. Navy Strategic SealiftProgram were declared in 1997, bringing the totalvalue of the whole program to SEK 1,783 M. Thiscontract, comprising crane and RoRo equipmentdeliveries, has been one of the biggest ever heldby MacGREGOR and will be completed in 1999.

MacGREGOR’s earnings were seriously affectedby several restructuring activities during 1997. Inthe Tanker Division a winding down of the opera-tion started, and continues until the end of 1998.The Securing Division’s operations were stream-lined and manufacturing was outsourced, resultingin redundancies in Germany. In the Global Ser-vices Division a restructuring plan was executed in

Europe to better position the Group for changed mar-ket conditions and to improve productivity, andhence profitability. In total, measures implementedamounted to SEK 150 M, of which a considerableportion will yield positive earnings effect during1998.

The company’s revenue will be affected by theflattened shipbuilding market. Economic crisis andcurrency fluctuations in Asia, and particularly de-velopments in the South Korean market, createdconcerns towards the year end. These developmentswill be closely monitored for their impact in theshipbuilding market in the future. MacGREGORis focusing on strengthening its position in Asia.

First open systemfor building automation

■ TAC operates in the field ofbuilding automation. This includescontrol and management systems forheating and air-conditioning inbuildings, as well as computerizedsystems for monitoring buildings andenergy management. In 1997, TACposted revenues of SEK 773 M, with753 employees at year-end.





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32 SIDORUBIK

User demands for a favorable indoor climateare met in the World Trade Center inStockholm, Sweden, with TAC’s advancedcontrol and automation systems.

building functions, such asheat, ventilation, lighting andsecurity. For the propertyowner, this results in a betterutilization of the building,with increased comfort andlower operating expenses andreduced energy consumption.

The system was very favor-ably received on the market.Several orders were receivedand a number of integrationsolutions were delivered.

During the year, the com-pany’s new profile and namechange to TAC was launched.Introduction of the first opensystem on the world market,combined with the profiling and marketing efforts,resulted in TAC strengthening its position on mainmarkets.

New organization and market focusIn January 1997, TAC adopted a new organizationdivided into three business units: System, AfterSales and Partners. The aim was to create a cus-tomer-oriented organization with short decisionpaths and possibilities to rapidly adjust to changedmarket situations.

The System business unit develops and marketscomplete control and information systems, special-izing in integrated solutions in which different sys-tems in a building are linked in a network. Systemoperations developed well during the year in theNordic countries, due to the new system concept aswell as the strong business climates, in particularin Finland and Denmark.

The After Sales business unit offers building own-ers service and maintenance. This business area isdeveloping towards greater responsibility for all thetechnical systems in a building. After Sales devel-oped very strongly during 1997. The service sectoris expanding sharply and is undergoing major changesince companies as well as state and municipal ad-ministrations are increasingly outsourcing mainte-nance and service to external suppliers. Continued

strong expansion is expected inthe years immediately ahead.

The Partners business unit isresponsible for ensuring rapidinternational expansion. Thefocus is on developing close co-operation with strong localpartners. Efforts in the formerbloc countries in Eastern Eu-rope, particularly Poland andRussia, are proceeding largelyas planned. Major investmentprojects are under way in East-ern Europe, in particular withindistrict heating, where TACtraditionally holds a very strongposition. During the year, TACreceived a number of large dis-

trict heating orders. Strong growth is expected inthis area in the years immediately ahead. The majorobstacle to rapid growth is access to capital.

The weakened economies in Southeast Asiahave impacted adversely on order bookings andsales to TAC’s partners in the region. The end-customers are mainly large office complexes, pub-lic administration building as well as the hotel andbanking sectors. A weak trend is expected in thisarea in the immediate future within the region.

After a relatively weak start, the operations inGermany show a strong improvement during thelatter half of the year.

Investments in productionFurther investments were made during the year inthe surface assembly line for electronic productionat the Stockholm production unit in Västerhaninge.This increases capacity to handle expansion of thenew product range.

In addition, comprehensive changes were madein the logistics functions of the production units,which resulted in costs savings, lower tied-up capi-tal and shorter delivery times.

New ownerIn February, 1998, TAC was sold to ScandinavianEquity Partners.

32 OTHER OPERATIONS

SEK M 1997 1996 1995Revenues 773 714 834Operating earnings before depreciation 51 53 34Operating earnings after depreciation 31 34 9Return on capital employed, % 26.2 17.7 8.5Investments 15 18 17Average number of employees 802 861 961

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1993 1994 1995 1996 1997

B share General Index

(c) SIX Findata

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B share

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Total number of shares traded(thousand, incl. off-floor)

(c) SIX Findata

Share prices,December 31 1993 1994 1995 1996 1997

Series A 261 239.50 290 495 715Series B 261 239 290 495 717

PRICE TREND 1993-97

PRICE TREND AND TRADING VOLUME 1997

The Incentive share +44%

Incentive shares are listed on the Stockholm StockExchange and are also traded on SEAQ Interna-tional in London.

Price trend +44%Incentive’s series A shares rose by 44.4% in 1997,from SEK 495 to SEK 715. The B share was up44.8%, from SEK 495 to SEK 717. Affärsvärlden’sGeneral Index increased during the same periodby 24.8%. The year’s highest and lowest paid pricesfor the A share were SEK 765 and SEK 485 re-spectively, and for the B share SEK 765 and SEK487.50.

Higher capitalizationAt year-end 1997 Incentive’s total market capi-talization amounted to SEK 48.79 billion (33.85),making the company the 12th largest on theStockholm Stock Exchange.

TurnoverMore than 26.3 million Incentive shares weretraded in 1997, at a value of SEK 16.9 billion. His-torically, the B share is the most heavily traded interms of volume. However, since autumn 1997,the A shares is the most heavily traded.

The turnover rate for Incentive’s shares in 1997was 38.5% – 32% of the A shares and 56% of theB shares were traded. The Stockholm Stock Ex-change’s turnover rate was 66% in 1996.

Beta value 0.6The beta value is a risk measurement that showsthe volatility of stock prices in relation to marketfluctuations, compared with the entire market overa given period of time. A beta value of more than1.0 means that the share price is more volatile thanthe market index. If the beta value is lower than1.0, it is less sensitive than the market as a whole.

According to SIX Findata, the beta value ofIncentive’s series A and B shares is 0.6, measuredagainst Affärsvärlden’s General Index over thepast 48 months. This means the series A and Bshares have varied 40% less.

THE INCENTIVE SHARE 33

100

150

200

250

300

350

400

450

500

1993 1994 1995 1996 1997

B-aktien Findatas avkastningsindex

(c) SIX Findata

Number Proportion, %Share Shares Votes Shares Votes

Series A 50,114,818 50,114,818 73.3 96.5Series B 18,259,049 1,825,905 26.7 3.5Total 68,373,867 51,940,723 100 100

TOTAL SHAREHOLDERS’ RETURN

PER-SHARE DATA 1)

1997 1996 1995 1994 1993

Dividend, SEK 10.00 2) 10.00 9.00 8.00 7.00Dividend as %of market value(direct yield) 1.4 2.0 3.1 3.3 2.7Earnings, SEK 168.49 42.18 35.55 31.97 6.75Total shareholders’return, % 46.9 73.8 24.7 – 5.2 50.0Shareholders’equity, SEK 371 213 179 161 145Market value/Net profit (P/E ratio) 4.2 11.7 8.2 7.5 38.7Market value/Shareholders’ equity, % 193 232 162 148 1791) After full tax2) Proposed

Proposed dividend SEK 10Incentive’s policy is that dividends should corre-spond to Group profitability, with due consider-ation for future development and financial posi-tion.

The Board of Directors proposes a dividend ofSEK 10.00 (10.00) per share for 1997.

Total shareholders’ return (TSR)46.9%The TSR includes share price development anddividend as well as reinvested dividend. Incentive’sTSR in 1997 was 46.9%. The average for the Stock-holm Stock Exchange was 27.7%.

Since year-end 1992 SEK 100 invested in Incen-tive have grown to SEK 452 at year-end 1997, com-pared with SEK 367 average for the StockholmStock Exchange.

Share capital unchangedIncentive’s share capital amounted to SEK 684M at year-end, distributed among 68.4 millionshares with a par value of SEK 10. The shares aredivided among 50.1 million A shares (1 share 1 vote)and 18.3 million B shares (1 share 1/10 vote).

ShareholdersAt year-end 1997, Incentive had 68,692 share-holders, down 2% since the preceding year-end.Share ownership in Incentive is concentrated, 25owners held 62% of the share capital.

Incentive’s largest shareholder is Investor, with19.7% of the capital and 25.9% of the votes.Incentive’s ten largest owners hold shares corre-sponding to 54.6% of the capital and 60.1% ofthe votes.

Institutional investors hold 68% of the shares ofwhich 13% is mutual funds. 16% is held by privateindividuals.

The proportion of shares owned by individualsor legal entities outside Sweden amounts to 16%.

34 THE INCENTIVE SHARE

OWNERSHIP DISTRIBUTION, DEC 31, 1997

Number of % of % ofNumber of shares shareholders shareholders share capital

1 - 1,000 66,603 96.96 12.61,001 - 10,000 1,820 2.65 6.4

10,001 - 100,000 196 0.29 9.1100,001 - 73 0.11 71.9

Total 68,692 100 100Source: DN Ägarservice

TEN LARGEST SHAREHOLDERS

Shareholding Number of % of % ofDecember 31, 1997 shares share capital votes

Investor 13,467,665 19.7 25.9FöreningsSparbanken’s Funds 4,388,770 6.4 5.24th National Swedish PensionInsurance Fund 3,880,840 5.7 7.1Wallenberg Foundations 3,862,671 5.6 7.3AMF Pension Insurance 2,990,600 4.4 3.3SPP (Mutual Insurance) 2,245,564 3.3 3.0Nordbanken Funds 2,162,100 3.2 1.6Trygg-Hansa Insurance 1,659,267 2.4 2.3Ratos 1,500,000 2.2 2.9State Street Bank and Trust 1,155,403 1.7 1.4

Total 37,312,880 54.6 60.1Source: DN Ägarservice

● Swedish mutual funds 13%

● Swedish institutions 55%

● Swedish individuals 16%

● Owners outside Sweden 16%

DISTRIBUTION OF SHAREHOLDERS

Source: DN Ägarservice

Incentive is monitored continuouslyby the following analystsABG SecuritiesMats Eriksson +46 8-566 286 00

Alfred Berg FondkommissionPaula Treutiger +46 8-723 58 00

Aros SecuritiesCaroline Baekkevold +46 8-458 56 00

Banque ParibasChristian Diebitsch +44 171-595 20 00

BZW (Barclays de Zoete Wedd)Taina Uljas Slendebroek +44 171-623 23 23

CarnegieRein Piir +46 8-676 88 00

CazenoveCharles Evans Lombe +44 171-588 28 28

Den Danske BankTatiana Brask +45-33 44 00 00

Deutsche Morgan GrenfellJohan Strandberg +46 8-463 55 00

Dresdner Kleinwort BensonKarl Johan Bonnevier +44 171-475 23 91

Enskilda SecuritiesAnnika Espander Jansson +46 8-522 295 00

Fischer Partners FondkommissionAndrea Croner +46 8-463 85 00

Goldman SachsStefan Sanne +44 171-774 10 00

Hagströmer & QvibergAnna Boman, Carl Harald Janson +46 8-696 17 00

HandelsbankenStefan Wikholm +46 8-701 10 00

HSBC James Capel & CoFredrik Myrén +46 8-454 55 00

Merrill LynchAndreas Tholstrup, Peter Bradshaw+44 171-628 10 00

Morgan StanleyJames Mc Kean +44 171-513 80 00

Myrberg & Wiklund FondkommissionMikael Johansson +46 8-440 50 00

Nordbanken Trading AktierErik Magnusson +46 8-614 70 00

SBC WarburgHåkan Blomdahl +46 8-453 73 00

Swedbank FondkommissionSten Westerberg +46 8-790 10 00

Öhman FondkommissionGustav Rhenman +46 8-402 50 00

THE INCENTIVE SHARE 35

Board of Directors

MEMBERS

Anders Scharp, chairman. Born 1934. Elected 1992.Chairman of the Boards of the Swedish Employers’Confederation, Atlas Copco, Electrolux, Saab, Scaniaand SKF. Vice Chairman of Investor. Member of theBoard of Email Ltd (Australia), and the Federation ofSwedish Industries.Shareholding in Incentive: 4,000 shares and1,100 shares through companies.

Casimir Ehrnrooth. Born 1931. Elected 1991.Chairman of the Board of Nokia.Shareholding in Incentive: 200 shares.

Mikael Lilius. Born 1949. Elected 1991.President and CEO of Incentive.Member of the Boards of Huhtamäki Oy and Perlos Oy,Finland, Ratos, The Federation of Swedish Industriesand The Association of Swedish Engineering Industries.Shareholding in Incentive: 0 shares, 20,000 optionsand 11.683 call options.

Håkan Mogren. Born 1944. Elected 1996.President and CEO of Astra. Chairman of the Boardsof the Industrial Institute for Economic and SocialResearch. Vice chairman of the Social and EconomicCouncil. Member of the Boards of Astra, Investor,STORA and the Federation of Swedish Industries.Shareholding in Incentive: 0.

Nicolaus Malmgren, Lars-Åke Johansson andKarl-Olof Tell.

Mikael Lilius and Anders Scharp. Marcus Wallenberg, Karl-Erik Sahlberg andBjörn Svedberg.

36 BOARD OF DIRECTORS

Karl-Erik Sahlberg. Born 1928. Elected 1995.Chairman of the Boards of Cardo and Lund Institute ofTechnology. Member of the Boards of Tetra Laval Group andthe Federation of Swedish Industries.Shareholding in Incentive: 0.

Björn Svedberg. Born 1937. Elected 1997.Chairman of the Board of Ericsson. Board member of ABBLtd, STORA and Volvo. Chairman of the Royal SwedishAcademy of Engineering Sciences and Chalmers Universityof Technology.Shareholding in Incentive: 0.

Sven Söderberg. Born 1928. Elected 1991.Chairman of the Boards of Skandia and Ratos. Member of theBoard of STORA. Consul General of Norway in Stockholm.Shareholding in Incentive: 2,298 shares.

Marcus Wallenberg. Born 1956. Elected 1994.Executive Vice President of Investor. Vice Chairman of theBoards of Astra and Saab. Member of the Boards of Investor,Knut & Alice Wallenberg Foundation, Scania, S-E-Bankenand Ericsson. Deputy Member of the Board of SAS Sweden.Shareholding in Incentive: 0.

Lars-Åke Johansson. Born 1943. Elected 1997.Employee representative, Federation of Salaried Employeesin Industry and Services.Shareholding in Incentive: 0.

Nicolaus Malmgren. Born 1957. Elected 1996.Employee representative, Swedish Confederation ofTrade Unions.Shareholding in Incentive: 0.

Karl-Olof Tell. Born 1943. Elected 1997.Employee representative, Swedish Confederation ofTrade Unions.Shareholding in Incentive: 0.

DEPUTY MEMBERSAnn-Christine Adamsson. Born 1957. Elected 1996.Employee representative, Swedish Confederation of TradeUnions.Shareholding in Incentive: 0.

Sture Hobro. Born 1961. Elected 1997.Employee representative, Federation of Salaried Employeesin Industry and Services.Shareholding in Incentive: 0.

Yngve Jonsson. Born 1942. Elected 1997.Employee representative, Federation of Salaried Employeesin Industry and Services.Shareholding in Incentive: 225.

SECRETARYBengt Modéer. Senior Vice President, Incentive.

AUDITORSCarl Gustaf Gutberg.␣ Authorized Public Accountant.Gunnar Widhagen. Authorized Public Accountant.

DEPUTY AUDITORSBjörn Fernström. Authorized Public Accountant.Berit Hernström. Authorized Public Accountant.

Yngve Jonsson, Ann-Christine Adamsson andSture Hobro.

Sven Söderberg, Håkan Mogren andCasimir Ehrnrooth.

BOARD OF DIRECTORS 37

Executive ManagementIncentive

Mikael Lilius. President andChief Executive Officer.Born 1949. Employed 1991.Board member of Huhtamäki Oyand Perlos Oy, Finland, Ratos,Sweden, the Federation of SwedishIndustries and the Association ofSwedish Engineering Industries.Shareholding in Incentive:0 shares, 20,000 options and11,683 call options.

Anders Jagraeus. Executive VicePresident. President and ChiefExecutive Officer MacGREGORGroup.Born 1945. Employed 1995.Shareholding in Incentive:105 shares, 6,000 options and4,064 call options.

Sören Mellstig. Executive VicePresident, Corporate Control.Born 1951. Employed 1994.Shareholding in Incentive:1,000 shares, 12,000 options and3,395 call options.

Lars Fahlén. Senior VicePresident, Corporate HumanResources.Born 1943. Employed 1992.Shareholding in Incentive:1,200 shares, 10,800 options and2,773 call options.

Sverker Lundkvist. Senior VicePresident, Corporate Finance.Born 1943. Employed 1993.Shareholding in Incentive:0 shares, 13.000 options and2,990 call options.

Bengt Modéer. Senior VicePresident, CorporateCommunications.Born 1943. Employed 1991.Shareholding in Incentive:357 shares, 10,000 options and1,462 call options.

38 EXECUTIVE MANAGEMENT

Executive ManagementGambro

Berthold Lindqvist. President andChief Executive Officer.Born 1938. Employed 1984.

Leif Smeby. Research Director.Born 1944. Employed 1986.

Jan Gustavsson.Vice President and ChiefFinancial Officer.Born 1946. Employed 1993.

Alain Granger. President ofHospal AG, Hogamed S.A. andHospal International Marketing.Born 1942. Employed 1978.

Edward J. Giachetti. President ofCOBE Cardiovascular, Inc.and COBE International, Ltd.Born 1939. Employed 1971.

Lawrence J. Centella.Executive Vice President ofGambro Healthcare, Inc.Born 1941. Employed 1989.

Edward C. Wood.President of COBE BCT, Inc.Born 1944. Employed 1972.

Mats Wahlström. Executive VicePresident. President of COBELaboratories Inc and GambroHealthcare Inc.Born 1954. Employed 1983.

Ugo Grondelli. Senior ExecutiveVice President, Deputy ManagingDirector and Head of Renal CareBusiness Segment.Born 1945. Employed 1972.

EXECUTIVE MANAGEMENT 39

Addresses

40 ADDRESSES

SWEDENIncentive ABBox 7373SE-103 91 STOCKHOLMHamngatan 2Tel +46 8-613 65 00Fax +46 8-611 28 30

Gambro ABandGambro Lundia ABBox 10101SE-220 10 LUNDMagistratsvägen 16Tel +46 46-16 90 00Fax +46 46-16 96 96

Gambro Sales ABBox 10101SE-220 10 LUNDMagistratsvägen 10Tel +46 46-16 98 00Fax +46 46-16 96 19

Gambro SvenskaFörsäljnings ABBox 10101SE-220 10 LUNDScheelevägen 30Tel +46 46-16 96 00Fax +46 46-16 96 20

Excorim AB (Gambro)Box 10101SE-220 10 LUNDEmdalavägenTel +46 46-16 97 00Fax +46 46-16 96 90

MacGREGOR Group ABBox 7604SE-103 94 STOCKHOLMHamngatan 2Tel +46 8-613 65 10Fax +46 8-611 85 16

MacGREGOR Cranes ABBjörnavägen 14SE-891 85 ÖRNSKÖLDSVIKTel +46 660-29 40 00Fax +46 660-29 42 87

MacGREGOR (SWE) ABBox 4113SE-400 40 GÖTEBORGFiskhamnsgatan 2Tel +46 31-85 07 00Fax +46 31-24 44 41

TAC ABJägershillg 18SE-213 75 MALMÖTel +46 40-38 68 50Fax +46 40-21 82 87Production:Fabriksvägen 1SE-137 37 VÄSTERHANINGETel +46 8-685 11 00Fax +46 8-500 276 13

ARGENTINAGambro Healthcare SAParaguay 1178 - Piso 3AR-1057 CAPITALTel +54 1 812 4541Fax +54 1 815 7941

AUSTRALIACOBE Laboratories PtyLtdSydney (Primary office):3/17 Rodborough RoadFRENCHS FOREST, NSW 2086Tel +61 2-9452 6077Fax +61 2-9452 6023Melbourne (Secondary office):17 King StreetBLACKBURN, VIC 3130Tel +61 3 9894 4477Fax +61 3 9894 1657Manufacturing:E.V Lovell & Co43 Titan DriveCARRUM DOWNS, VIC 3201Tel +61 3-9775 1720Fax +61 3-9775 1410

Gambro Pty LtdPrimary Office/Sales and maufacturing:PO Box 6604 BHBCBAULKHAM HILLS,NSW 21533,3, Hudson AvenueTel +61 2-9680 2711Fax +61 2-9634 1375Manufacturing:27, Healey RoadDANDENONG, VIC 3175Tel +61 3-9706 4913Fax +61 3-9706 4914

Gambro Pty LtdUnit 3, 7 Gilby RoadMT WAVERLEY, VIC 3149Tel +61 3-9562 6577Fax +61 3 9562 7469

Gambro Pty LtdPO Box 109KENMORE, QLD 4069Tel +61 7-3201 1482Fax +61 7-3201 1485

MacGREGOR (AUS) Pty LtdPO Box 76BALMAIN, NSW 2041Unit 13/5-13 Parsons StreetTel +61 2-9810 0557Fax +61 2-9818 1817

AUSTRIAGambro Vertriebs GmbHWarneckestraße 7AT-1110 WIENTel +43 1-768 1651-55Fax +43 1-769 3077

Hospal-COBEMedizintechnischeProdukte GmbHNussdorferstraße 38AT-1090 WIENTel +43 1-31 04 01 743Fax +43 1-31 04 01 744

BELGIUMCOBE International LtdEuropean Corp HQ30, MercuriusstraatBE-1930 ZAVENTEMTel +32 2-715 05 90Fax +32 2-721 0770

Gambro NV/SA11, GroenveldstraatBE-3001 LEUVENTel +32 16-29 8750Fax +32 16-22 6521

Hospal-COBE RenalN.V. S.A.30, MercuriusstraatBE-1930 ZAVENTEMTel +32 2-715 3100Fax +32 2-715 3149

MacGREGOR (NLD) BVLuithagen Haven 2EBE-2030 ANTWERPENTel +32 3-542 5112Fax +32 3-542 4772

CANADACOBE Canada Ltd5736 Finch Avenue EastUnits 6&7SCARBOROUGH,ONT M1B 5R1Tel +1 416-291 9655Fax +1 416-291 7670

Hospal-Gambro Inc8220 Pascal GagnonST LEONARD,QUE H1P 1Y4Tel +1 514-327 1635Fax +1 514-327 0822

CHINAGambro China Ltd,andGambro Asia PacificP O Box 1577Shatin Central Post OfficeN.T. HONG KONGSuite 701, Tower 1Grand Central Plaza, ShatinTel +852 2687 0911Fax +852 2687 1255Branch Offices:Beijing, Chengdu, Canton,Hangzhou, Kunming, Shanghai,Wuhan

Gambro JR China LtdBlock 4, Ming He LaneWang Zhuang Zi StreetHe Dong DistrictTIANJIN 300011Tel +86 22-2432 0515Fax +86 22-2432 8371

Gambro Medical Products(Shanghai) Co Ltd170, Yuan Yang RoadMinhang Economic & TechnDev ZoneSHANGHAI 200245Tel +86 21-64 62 0700Fax +86 21-64 62 0138

MacGREGOR (CHN) LtdUnit B, 9A Floor,Yi Dian BuildingNo746 Zhao Jia Bang roadSHANGHAI 200030Tel +86 21-6467 7163Fax +86 21-6467 7166

MacGREGOR (HKG) Ltd7th Floor, May May Bldg683-685 Nathan RoadMongkok, KowloonHONG KONGTel +852-2394 1008Fax +852-2787 7652

CROATIAMacGREGOR(HRV) d o oNikole Cara 6HR-51000 RIJEKATel/Fax +385 51-214 082

ADDRESSES 41

CZECH

REPUBLICGambro-Meopta s.r.o.Manufacturing:Kabelikova 1CZ-750 58 PREROVTel +420 641 202 513Fax +420 641 204 725

Eurocon (Gambro)Budejovicka 59CZ-25242 JESENICE UPRAHYTel +420 2 643 8232Fax +420 2 643 8225

DENMARKGambro Medicoteknik A/SJydekrogen 8DK-2625 VALLENSBAEKTel +45-4362 0500Fax +45-4362 0749

MacGREGOR (DNK) A/SSmedeholm 11DK-2730 HERLEVTel +45-4453 8484Fax +45-4453 8410

TA Control A/SVaerkstedsgaarden 18DK-2620 ALBERTSLUNDTel +45-4366 6060Fax +45-4366 6099

FINLANDMacGREGOR (FIN) OyHallimestarinkatu 6FI-20780 KAARINATel +358 2-412 11Fax +358 2-4121 409

Oy Gambro ABPO Box 30FI-00811 HELSINKISahaajankatu 24Tel +358 9-759 4120Fax +358 9-78 1146

Tac-Com OyPO Box 250FI-01301 VANTAAKellokukantie 2Tel +358 9-584 2500Fax +358 9-584 25 299

FRANCECOBE S.AandCOBE Cardiovascular EAME1-3 Bvd Charles de GaulleFR-92707 COLOMBES CEDEXTel +33-1 4786 9760Fax +33-1 4786 9761

Gambro Sales ABMaghreb Sales:Les Vignes VieillesFR-84120 MIRABEAUTel +33-4 9077 0640Fax +33-4 9077 0646

Gambro S.AandGambro HealthcareService Europe1-3 Bd Charles de GaulleFR-92707 COLOMBES CEDEXTel +33-1 4119 3100Fax +33-1 4781 5185

Hogamed S.A.P O Box 7315FR-69357 LYON CEDEX 0761, Avenue Tony GarnierTel +33-4 3728 1050Fax +33-4 3728 1051

Hospal R&D InternationalP O Box 7315FR-69357 LYON CEDEX61, Avenue Tony GarnierTel +33-4 3728 1000Fax +33-4 3728 1001

Hospal S.A.188, Avenue Jean JaurésPR-69007 LYONTel +33-4 7276 1818Fax +33-4 7276 1800

Hospal Int MarketingP O Box 7315FR-69357 LYON CEDEX61, Avenue Tony GarnierTel +33-4 3728 1100Fax +33-4 3728 1101

MacGREGOR (FRA) S.A.P O Box 437FR-44474 CARQUEFOUCEDEX4, Impasse des AlizésTel +33 2 4030 5000Fax +33 2 4030 3442

GERMANYCOBE Laboratories GmbHPostfach 1616DE-82145 PLANEGG-MARTINSRIEDLochhamer Straße 15Tel +49 89-8993 3200Fax +49 89-8993 3250

Gambro DialysatorenGmbH & Co KGManufacturing:PO Box 1323DE-72373 HECHINGENHolger-Crafoord-Straße 26Tel +49 7471-170Fax +49 7471-171 57Research:Ermelesstraße 76Tel +49 7471 170Fax +49 7471 171 52

GambroMedizintechnik GmbHPostbox 1464DE-82143 PLANEGG-MARTINSRIEDLochhamer Straße 15Tel +49 89-899 33 0Fax +49 89-899 33 194

HospalMedizintechnik GmbHPO Box 910220DE-90260 NÜRNBERGBrettergartenstraße 16Tel +49 911-32 44 70Fax +49 911-31 51 68

MTN MedizintechnikNeubrandenburg GmbHManufacturing:Gustav-Kirchhoff-Straße 2DE-17033 NEUBRANDENBURGTel +49 395-58 10 00Fax +49 395-58 10 099

MacGREGOR (DEU) GmbHPO Box 261631Normannenweg 24DE-20506 HAMBURGTel +49 40-25 44 40Fax +49 40-25 44 44 44

MacGREGOR-Conver GmbHPO Box 610307Fritz-Thiele Straße 4DE-28263 BREMENTel +49 421-83 91 83Fax +49 421-83 91 899

SECON GmbH(Gambro)Manufacturing:In der Dehne 10DE-37127 DRANSFELD-GÖTTINGENTel +49 5502-915 70Fax +49 5502-915 733

TAC Control Systems GmbHEssener Straße 5DE-46047 OBERHAUSENTel +49 208-8 24 86-0Fax +49 208-8 24 86-10

GREAT BRITAINCOBE Laboratories LtdSales and distribution:Athena 2, Olympus Business ParkQUEDGELEYGloucester GL2 4NFTel +44 1452-72 7300Fax +44 1452-72 0172

Gambro LtdLundia House124 Station RoadSIDCUP, Kent DA15 7ASTel +44 1813-09 7800Fax +44 1813-00 1705

Hospal LtdUnit G, Forum DriveLeicester RoadRUGBY Warwickshire CV21 1NTTel +44 1788-54 0543Fax +44 1788-54 0170

MacGREGOR (GBR) Ltd86/90 Front Street,WHITLEY BAY,T&W NE25 8DNTel +44 191-253 4611Fax +44 191-252 4167

TAC (UK) Ltd42 Coldharbour LaneHARPENDEN, Herts AL5 4UNTel +44 1582-767 991Fax +44 1582-769 230

GREECEMacGREGOR (GRC) EPE4-6 Efplias StreetGR-185 37 PIRAEUSTel +30 1-42 83 838Fax +30 1-42 83 839

42 ADDRESSES

Gambro-ShimizuPharmaceutical Co LtdIzumi Hoshiichi Bldg7-22-12 Nishi-Shinjuku,Shinjuku-kuJP-TOKYO 160Tel +81 3 3227 2611Fax +81 3 3227 2615

Gambro-TeijinMedical Co LtdShinjuku Sumitomo Bldg 14 F2-6-1 Nishi-Shinjuku,Shinjuku-kuJP-TOKYO 163-02Tel + 81 3-3349 1735Fax + 81 3-3349 1741

Hospal LtdIzumi Hoshiichi Bldg7-22-12 Nishi-Shinjuku,Shinjuku-kuJP-TOKYOTel +81 3-3371 2188Fax +81 3-3371 2199Sales:7th Takahashi Mansion RC14-1 Asahi-cho, Haneda, Ota-kuJP-TOKYO 144Tel +81 3-3745 0631Fax +81 3-3745 3784

MacGREGOR-Kayaba Ltd9th floor, Suzue Baydium Bldg1-15-1, Kaigan, Minato-kuJP-TOKYO 105-0022Tel +81 3-5403 1951Fax +81 3-5403 1953

KOREAGambro Korea Ltd.3rd Floor, Daeyang Building198-7, Jamshil Bon-Dong,Songpa-KuSEOULTel +82 2 424 3123Fax +82 2 424 3125

MacGREGOR (KOR) LtdRoom No 601, Dong Ju Bldg13-5 Ka, Jungang-Dong, Jung-KuPUSANTel +82 51-441 0805Fax +82 51-462 7498

MEXICOCOBE de Mexico SA de CVC P 14050MX-MEXICO DFMoctezuma No 26Col José Toriello GuerraTel +52 5-528 2595Fax +52 5-528 2959

COBE Renal Care deMexico S A de CV101 40 Marconi Suite ”C”OTAY MESA,CA 92173-3251, USATel/Fax +1 619-661 1630Visiting address:Blvd Pacifico No 10014Parque Industrial Pacifico2a seccionMX-TIJUANA BCMEXICO 22680Tel +52 66-26 6700Fax +52 66-26 6711

THE NETHERLANDSCOBE LaboratoriesEurope NV/SAPO Box 106NL-5400 AC UDENLoopkantstraaat 23Tel +31 413 26 4330Fax +31 413 33 0908

Hospal-COBE Renal NLPO Box 106NL-5400 AC UDENLoopkantstraaat 23Tel +31 413 26 4330Fax +31 413 33 0910

Gambro BVPO Box 2169NL-4800 CD BREDAFranse Akker 1Tel +31 76-541 1600Fax +31 76-541 1968

MacGREGOR (NLD) BVPO Box 55344Rietdijk 12NL-3008 EH ROTTERDAMTel +31 10-429 2422Fax +31 10-429 3219

NEW ZEALANDGambro PTY Ltd5B Target CourtGLENFIELD, AucklandTel +64 9-444 4779Fax +64 9-443 2222

NORWAYGambro A/SPostboks 827NO-3196 HORTENBlixjordetTel +47 3307 3788Fax +47 3307 4259

MacGREGOR (NOR) A/SPO Box 337 SentrumNO-0101 OSLOPalékaienTel +47 2310 3400Fax +47 2310 3401

TA Control System ASHans Nielsen Haugesgt 50BNO-0481 OSLOTel +47 2279 7070Fax +47 2222 2015

HUNGARYGambro KftDiósárok út 5HU-1125 BUDAPESTTel +36 1-202 6411Fax +36 1-155 2989

INDIAGambro IndiaCrown Court Complex34, Cathedral RoadIN-CHENNAI 600086Tel +91 44-827 0453Fax +91 44-828 2360

ITALYBiosol S.p.A.Manufacturing:P O Box 62SS dello Stelvio km 86.370IT-23035 SONDALO (SO)Tel +39 342-80 1515Fax +39 342-80 1915

Biosol S.p.A.Manufacturing:Via delle Valli 50IT-66010 CANOSASANNITA (CH)Tel +39 871-93 7071Fax +39 871-93 7101

COBE Lab Italia s.r.l.Via G Galilei 4CIT-430 35 FELINO (PR)Tel +39 521-83 6023Fax +39 521-83 6694

Gambro S.p.A.Via Aldo Moro 1/AIT-43035 FELINO (PR)Tel +39 521-83 5411Fax +39 521-83 5451Manufacturing:Via Appia Km 65.934IT-43013 LATINA SCALO (LT)Tel +39 773-408 11Fax +39 773-63 1117

Gambro Sales ABSouth-East Europe Sales:Via Diaz 19/1IT-34124 TRIESTETel +39 4030 6764Fax +39 4030 1853

Hospal S.p.A.Via Ferrarese 219/9IT-40128 BOLOGNATel +39 51-63 82 411Fax +39 51-32 74 77

Hospal Dasco S.p.A.Manufacturing:PO Box 97IT-410 37 MIRANDOLAVia Modenese 30Tel +39 535-50 111Fax +39 535-50 325

MacGREGOR (ITA) S.p.A.Via Al Molo GianoIT-161 26 GENOA/PORTOTel +39 10-277 0412Fax +39 10-246 1194

JAPANCOBE Laboratories K.K.Nissei Otsuka 3,Chome Bldg 6F3116 Otsuka, Bunkyo-kuJP-TOKYO 112Tel +81 3-3944 5252Fax +81 3-3944 5353

Gambro K.K.Izumi Hoshiichi Bldg7-22-12 Nishi-Shinjuku,Shinjuku-kuJP-TOKYO 160Tel +81 3-5330 6880Fax +81 3-5330 6988Manufacturing:Koga, P O Box 9Koga-gunSHIBA 520-34Tel +81 7-4888 5821Fax +81 7-4888 5572

ADDRESSES 43

POLANDGambro Poland Sp z o oUl Floriana 5PL-04664 WARSAWTel +48 226 13 0012Fax +48 39 12 0468

MacGREGOR (POL) Sp z o oUl Polska 1DPL-81-339 GDYNIATel +48 58-621 5460Fax +48 58-621 5420

TAC Polska Sp z o oul, Wolnosci 18PL-81-327 GDYNIATel +48 58-21 0106Fax +48 58-21 0436

PORTUGALGambro LdaParque Industral Cotai,Estrada de MatoCheirinhos, AbóbodaPT-2775 PAREDETel +351 1-445 02 80Fax +351 1-444 42 16

Gambro II Productosde Hemodialise LtaManufacturing:Address as aboveTel +351 1 444 4191Fax +351 1 444 4216

RUSSIAN

FEDERATIONGambro CISB. Serpukhovskaya 27RU-113811 MOSCOWTel +7 095 236 6359Fax +7 095 236 2112

MacGREGOR (RUS) A/OUlitsa Zvenigorodskaja 3191126 ST PETERSBURGTel +7 812-112 42 02Fax +7 812-112 41 72

SINGAPORECOBE Laboratories IncAsia Pacific Regional OfficeBlk 1003, #02-1521Lorong 8, Toa Payoh IndustrialParkSG-SINGAPORE 319075Tel +65 356 9670Fax +65 356 9671

MacGREGOR (SGP) Pte LtdNo 1. Lok Yang Way#01-6ASG-SINGAPORE 628623Tel +65-265 2322Fax +65-264 1261

TAC Control Pte Ltd#04-10 Sindo Bldg66 Tannery LaneSG-SINGAPORE 347 805Tel +65-748 2393Fax +65-743 1446

SLOVENIABioprod d.d(Gambro)SL-61117 LJUBLJANATel +386-61 159 8172Fax +386-61 159 7377

SPAINCOBE Iberica S.A.Josep Pla, 82-84ES-08019 BARCELONATel +34 3-266 3667Fax +34 3-303 3535

Gambro S.A.Principe de Vergara 43-2-AES-28001 MADRIDTel +34 1-431 6271Fax +34 1-435 7324

Hospal S.A.Napoles, 249 1st floorES-08013 BARCELONATel +34 3-457 0074Fax +34 3-457 7672

MacGREGOR (ESP) S.A.Edificio MetroC/Ibaigane no 15, 5°, Dpto 4ES-48930 LAS ARENAS,VizcayaTel +34 4-463 4877Fax +34 4-463 4259

SWITZERLANDGambro AGPO Box 241CH-6331 HÜNENBERGBösch 23Tel +41 41-785 5300Fax +41 41-780 6922

Hospal LtdPostfachCH-4008 BASELDornacherstraße 8Tel +41 61-278 9191Fax +41 61-278 9188

TAIWANGambro Taiwan Ltd4th Floor, No 8 Alley 83, Sec 1Kuang-Fu Road, San ChungTW-TAIPEITel +886 2999 0668Fax +886 2999 0667

UKRAINEMacGREGOR (UKR)St. Bolshaya ArnautskayaHouse 15, Room 78270012 ODESSATel +380 482-287 333Fax +380 482-210 612

USACOBE Laboratories Inc,andGambro Healthcare IncManufacturing, marketingand salesandGambro HealthcarePatient Services1185 Oak StreetLAKEWOOD, CO 80215-4498Tel +1 303-232 6800Fax +1 303-231 4915

COBE International1185 Oak StreetLAKEWOOD, CO 80215-4498Tel +1 303-232 6800Fax +1 303-231 4949

COBE BCT, IncManufacturing, marketingand sales:1201 Oak StreetLAKEWOOD, CO 80215-4498Tel +1 303-232 6800Fax +1 303-231 4160

COBE Cardiovascular IncManufacturing, marketingand sales:14401 West 65th WayARVADA, CO 80004-3599Tel +1 303-232 6800Fax +1 303-467 6525

Gambro HealthcarePatient Services5950 Live Oak Pkwy., Suite 200Norcross, GA 30093Tel +1-714 831 0900Fax +1-714 831 6538

Gambro HealthcarePatient Services115 ColumbiaALISO VIEJO, CA 92656Tel +1 714-831 0900Fax +1 714-831 6538

Gambro HealthcarePatient ServicesPO Box 948NASHVILLE,TN 372031919 CharlotteTel +1 615-320 4200Fax +1 615-320 4231

Gambro Healthcare IncManufacturing:PO Box 44500OKLAHOMA CITY,OK 73144-15003631 SW 54th StreetTel +1 405-682 1993Fax +1 405-682 2108

Gambro Healthcare, IncManufacturing:5000 Chestnut AvenueNEWPORT NEWS,VA 23605-2108Tel +1 757-247 0105Fax +1 757-380 1476Manufacturing:1990 Industrial DriveDELAND FL 32724Tel +1 904-738 2778Fax +1 904-736 6437

Gambro HealthcareLaboratory ServicesPalm Crossing Ind Center,South Wing5361 North West 33rd AveFORT LAUDERDALE,FL 33309Tel +1 954 777 1100Fax +1 954 777 1181

Incentive Group Inc50 Chestnut Ridge RoadMONTVALE, NJ 07645Tel +1 201-476 0488Fax +1 201-476 9044

MacGREGOR (USA) IncPO Box 708PINE BROOK, NJ 0705820, Chapin Road, Unit 1012Tel +1 973-244 4100Fax +1 973-244 4101

Production: Incentive and Gambro, Sweden.Graphic design: Annonsbyrån Pennan, Sweden.Photos: Lars Strandberg and Ola Lager, Sweden.

The report is printed on environmentally friendly Gothic Silk byChrister Persson Tryckeri AB in Köping, Sweden 1998.

Hamngatan 2 . P O Box 7373 . SE-103 91 Stockholm . SwedenTel +46 8-613 65 00 . Fax +46 8-611 28 [email protected] www. incentive.com

incentive annual report 1997 - bib.kuleuven.be bct introduced the trima collection system, with...

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