· Gross order intake amounted to SEK 4,656 M (4,366), an increase of 10 percent based on constant exchange rates and 7 percent in SEK.
· Net sales was SEK 3,614 M (3,715), unchanged based on constant exchange rates and a decrease of 3 percent in SEK.
· Adjusted EBITA* amounted to SEK 918 M (779). Items affecting comparability was SEK 0 M (-253). Bad debt losses amounted to SEK -15 M (-16).
· Adjusted EBITA* margin was 25 percent (21).
· Operating result was SEK 769 M (347).
· Net income amounted to SEK 544 M (93). Earnings per share was SEK 1.42 (0.24) before/after dilution.
· Cash flow after continuous investments was SEK 979 M (1,016).
· Eight Elekta Unity orders were booked in the quarter.
May – April 2017/18
· Gross order intake amounted to SEK 14,493 M (14,064), an increase of 5 percent based on constant exchange rates and 3 percent in SEK.
· Net sales was SEK 11,333 M (10,704), an increase of 8 percent based on constant exchange rates and 6 percent in SEK.
· Adjusted EBITA* amounted to SEK 2,116 M (1,661). Items affecting comparability was SEK 0 M (-518). Bad debt losses amounted to SEK -53 M (-46).
· Adjusted EBITA* margin was 19 percent (16).
· Operating result was SEK 1,538 M (598).
· Net income amounted to SEK 1,099 M (126). Earnings per share was SEK 2.88 (0.33) before/after dilution.
· Cash flow after continuous investments improved to SEK 1,589 M (1,045).
· The Board of Directors proposes a dividend of SEK 1.40 (1.00) per share for the fiscal year 2017/18.
Outlook for fiscal year 2018/19
· Based on IFRS15 restatement (see pages 9-12).
· Net sales growth of around 7 percent, based on constant exchange rates.
· EBITA margin of around 20 percent (Changed from >20 percent).
*Adjusted for items affecting comparability and bad debt losses, for a reconciliation to operating result, see page 13. The split between restructuring costs and costs for legal processes is presented on page 21.
President and CEO comments
Last year was a strong year. We have established sustainable business processes and built a solid platform for future profitable growth. Order intake increased, our EBITA* margin improved to 19 percent, while maintaining a low level of working capital and strengthening our cash flow significantly. Elekta Unity continued its positive trend with eight new orders booked in the fourth quarter and we are on track for CE mark in June.
We delivered a strong final quarter and strengthened our positions for the year. A number of competitive wins, Elekta Unity orders and a growing market were key reasons for order intake growth of 10 percent in the fourth quarter and 5 percent for the fiscal year. Our ongoing improvement activities in North America ensured our momentum and order intake grew by 10 percent in the fourth quarter. Also, Europe saw strong development with 28 percent growth. In Asia, we achieved growth of 2 percent for the full year, while the fourth quarter was slower, particularly in Japan. We estimate the global market growth for the past year to be 4 percent and we continue to have a positive view of the market moving forward in all regions.
We have secured a more even revenue distribution throughout the year, as reflected in the fourth quarter which was unchanged from last year. Looking at the full year, net sales showed a solid 8 percent growth driven by favorable delivery volumes for linear accelerators, good growth in treatment planning software and a strong year for Leksell Gamma Knife®. Our total installed base of treatment systems grew 6 percent compared with the preceding year. This is an important driver for the service business, which forms the foundation for stable and recurring revenues over time.
EBITA* margin in Q4 increased by 4 percentage points to 25 percent. For the full year the margin improved 3 percentage points to 19 percent and taking into account the items affecting comparability in FY16/17 the EBITA* margin increased by 8 percentage points. Our reported EBIT grew by 157 percent for the year. We achieved the highest operating cash flow to date in Elekta’s history with a 30 percent increase compared with last year.
At the ESTRO event in April, the growing interest in Elekta Unity and new solutions from our Elekta Digital program confirmed our innovation and thought leadership in the sector. Our partnership with IBM Watson Oncology is a great example of this. The partnership will help clinicians to largely automate the preparation of treatment plans using artificial intelligence to convert big data into customized cancer therapy. We are excited about the opportunity this offers and are looking forward to being a pioneer in this field.
During the quarter, we booked orders for eight Unity systems. This brings the total to 28 sold. I’m happy to see the momentum growing while feedback from installed sites confirms the potential of enabling precision radiation medicine to offer each patient further personalized therapy. We are on schedule for CE mark in June, which in practice means that we are currently finalizing the system development with the customer validation phase.
From this current fiscal year (2018/19), we are changing our accounting principles in line with IFRS15. For transparency, we have provided restated historic numbers on pages 9-12 in this report. The restatement, where net sales is SEK 240 M higher for the year, provide the basis for our outlook.
For the coming fiscal year, we foresee continued rising demand for advanced cancer care and, together with higher deliveries of Elekta Unity, our assessment is that net sales will grow around 7 percent based on constant exchange rates. With this growth, and our focus on process improvements and cost control, we target to achieve an EBITA margin of around 20 percent. The response in China regarding Unity has been very positive and we will install the first five systems during this current fiscal year. However, revenue for these systems will be recognized after CFDA approval, meaning not in this fiscal year.
I would like to thank my 3,700 colleagues around the world for the great results and achievements during the year and even more so our customers for their trust and support to help us developing the best tools for fighting cancer. We will continue to invest in our organization and its development, and together create profitable growth and help even more patients this year.
Richard Hausmann, President and CEO
Note: Growth figures in CEO statement are based on unchanged exchange rates. *Adj. EBITA margin
Elekta will host a telephone conference at 10:00-11:00 CET on June 1, 2018, with President and CEO Richard Hausmann, and CFO Gustaf Salford.
To take part in the conference call, please dial in about five minutes in advance.
Swedish dial-in number: +46 (0) 8 566 426 91
UK dial-in number: +44 (0) 203 008 9808
US dial-in number: +1 855 753 2237
The webcast will be through the following link: