· Order bookings amounted to SEK 8,352 M (8,080), equivalent to an increase of 8* percent.
In the third quarter order bookings increased 15* percent.
· Net sales increased 7* percent to SEK 6,740 M (6,608).
· EBITA amounted to SEK 895 M (1,053) before non-recurring items of SEK -61 M (-24). The decline is mainly related to lower than expected delivery volumes of Leksell Gamma Knife® and currency effects amounting to SEK -140 M. In the third quarter EBITA amounted to SEK 340 M (454) before non-recurring items.
· Net income amounted to SEK 333 M (504). Earnings per share amounted to SEK 0.87 (1.31) before dilution and SEK 0.87 (1.30) after dilution.
· Cash flow after continuous investments amounted to SEK -550 M (335). In the third quarter cash flow after continuous investments was SEK -27 M (112). A strong cash flow is expected in the fourth quarter.
· Due to lower-than-expected delivery volumes of Leksell Gamma Knife® and delays in expected deliveries to emerging markets, the outlook for the full-year has been revised.
- In fiscal year 2013/14, net sales is expected to grow by approximately 7 percent in local currency compared to last year.
- EBITA is expected to grow by approximately 3 percent in local currency compared with last year. Exchange rate movements are expected to have a negative impact of about approximately 5 percentage points on EBITA growth.
The prior outlook, published in the Q2 report, expected net sales to grow by more than 10 percent in local currency. EBITA was expected to grow by approximately 10 percent in local currency. Exchange rate movements were expected to have a negative impact of approximately 5 percentage points on EBITA growth.
* Compared to last fiscal year based on constant exchange rates.
President and CEO comments
Strong order bookings
Overall market development continues to be good and we are very pleased with our order booking trend. Order bookings rose 15* percent in the third quarter, and 8* percent during the first nine months. In North and South America, order bookings rose 40* percent in the quarter. In the US, we see a consolidation of private cancer care with a market that is moving toward more long-term strategic partnerships and larger orders. The strong growth in Europe, Middle East and Africa continued, with order bookings rising 15* percent in the quarter. Our growth in China continued, with order bookings growth during the quarter exceeding the market average. In Asia Pacific, as a whole, quarterly order bookings declined 9* percent in relation to high order bookings last year. Weak currencies in some emerging markets have also affected order growth due to delayed investments.
Weak deliveries in the third quarter affected EBITA
Net sales rose 1* percent during the third quarter and 7* percent during the first nine months. Our third quarter was significantly impacted by lower-than-expected delivery volumes of Leksell Gamma Knife®, primarily in North and South America and Asia Pacific. In addition, weaker currencies, particularly in some emerging markets, have affected volumes. EBITA before non-recurring items for the third quarter amounted to 340 (454) and to SEK 895 M (1,053) for the first nine months. Currency effects in the period amounted to SEK -140 M.
We are not satisfied with our third quarter results and particular not with our Leksell Gamma Knife® business. We have analyzed the prospects for the full year and initiated a number of corrective actions to ensure improved performance. Our long term prospects remains and we are confident that Leksell Gamma Knife® will be back on track with volumes starting to recover in the fourth quarter. At the same time we continue to invest in product development to further enhance our offering.
Cash flow from operating activities was SEK 153 M (258); cash flow after continuous investments was SEK -27 M in the third quarter. Compared with the second quarter, we have increased inventory by some SEK 250 M ahead of planned deliveries in the fourth quarter. We expect a strong cash flow in the fourth quarter.
Favorable trend for Versa HD
Our most advanced linear accelerator, Versa HD™, was launched one year ago. Sales has exceeded our expectations and Versa HD™ now accounts for over 60 percent of our system sales in applicable markets in the US and Europe.
Strategic partnerships for better cancer care
During the quarter, we secured a long-term partnership agreement with a US health network, McLaren Health Care. This type of comprehensive partnership will become increasingly important in our business. In addition to our leading hardware and software solutions, we will support and facilitate the development of more efficient and higher quality cancer care throughout McLaren’s network.
Adjusted outlook for the year
Lower-than-expected volumes of Leksell Gamma Knife® and delays in expected deliveries to emerging markets have led to a revised outlook for the full-year. Net sales growth has been adjusted from more than 10 percent to approximately 7 percent in local currency, and EBITA is expected to grow by approximately 3 percent in local currency, adjusted from 10 percent.
Our long-term strategy and objectives remain unchanged, as does the continued growing need and demand for Elekta’s superior clinical solutions. Based on the company’s unique market position, we will continue to pursue our commitment to the development of modern cancer care.
President and CEO
* Compared with last fiscal year, based on constant exchange rates.
Elekta will host a telephone conference at 10:00 – 11:00 CET on February 27, with President and CEO Tomas Puusepp and CFO Håkan Bergström.
To take part in the conference call, please dial in about 5-10 minutes in advance and use the access code 941615.
Swedish dial-in number: +46 (0)8 5052 0110, UK dial-in number: +44 (0)20 7162 0077, US dial-in number: + 1 877 491 0064.
The telephone conference will also be broadcasted over the internet (listen only). Please use the link: http://webeventservices.reg.meeting-stream.com/84836_elekta/
Year-end report May – April 2013/14 May 28, 2014
Interim report May – July 2014/15 August 28, 2014
Annual General Meeting 2014 August 28, 2014
Interim report May – October 2014/15 November 27, 2014