· Gross order intake amounted to SEK 3,174 M (2,738), an increase of 16 percent in SEK and 12 percent based on constant exchange rates.
· Net sales was SEK 2,819 M (2,504), an increase of 13 percent in SEK and 10 percent based on constant exchange rates.
· EBITA amounted to SEK 386 M (420), including a positive effect of SEK 76 M related to a divestment during the period.
· EBITA margin was 13.7 percent (16.7).
· Operating result was SEK 238 M (281).
· Net income amounted to SEK 166 M (199). Earnings per share was SEK 0.43 (0.52) before/after dilution.
· Cash flow after continuous investments was SEK -542 M (-95).
· Net debt amounted to SEK 1,307 M (1,912).
· Four Elekta Unity orders were added to the order backlog.
Outlook for fiscal year 2018/19 reiterated:
· Net sales growth of around 7 percent, based on constant exchange rates.
· EBITA margin of around 20 percent.
President and CEO comments
I am pleased to report that we in many aspects delivered a good first quarter of the year. It was characterized by solid market development, Elekta Unity orders and a number of competitive wins, resulting in order intake growth of 12 percent compared with last year and based on unchanged exchange rates. In regions North and South America and Europe, Middle East and Africa, order intake rose by 23 and 15 percent, respectively. Asia Pacific returned to growth during the quarter, with an increase of 8 percent in China and twice that in Japan. We estimate global market growth for the past 12 months to be 7 percent and we maintain a positive view for all regions.
Our net sales grew by 10 percent in the first quarter. Linear accelerator sales were strong, particularly in emerging markets, as well as growth in all software segments and our service revenue grew by 8 percent. We continue to invest in long-term profitable growth. This includes an expansion of our commercial organization and marketing as well as activities to strengthen our role as the leader in precision radiation medicine.
We reported an EBITA margin of approximately 20 percent for the rolling 12-month period. However, gross margin in the quarter was 39.1 percent, a decline compared with the preceding year, primarily a result of higher volumes to emerging markets and an unfavorable project mix. We are confident that the gross margin will increase during the remainder of the year, primarily related to improved geographic and project mix and Elekta Unity revenues.
The cash conversion rate for the rolling 12-month period was 78 percent. In the first quarter cash flow was affected by a decrease in customer advances as well as higher inventory levels. This is a temporary effect related to the high revenue growth in the quarter as well as lower shipments and associated invoicing following that we now are focusing our operations on project installation starts and further shortening of lead times. We have also built our inventory for upcoming Unity installations.
Elekta Unity has recently reached three milestones: CE mark in Europe, the first patients treated using the clinically approved system and submission to the FDA for approval and market clearance in the U.S. I remain convinced that Elekta Unity is the future of radiation therapy and an unrivaled device for delivering precision radiation medicine. This is confirmed by the very high interest that customers show. One clear example is the recent seminar on MR radiation therapy, held by UMC Utrecht, which attracted more than 300 participants from universities and hospitals all around the world.
During the quarter, we booked four new Unity orders, which means that we have sold a total of 32 systems. Feedback from our customers confirms that Unity has the potential to offer each patient the possibility of more personalized radiation therapy with the highest level of precision and reduced risk for complications.
To strengthen our portfolio, we recently acquired two companies: Acumyn, with its integrated quality management system, AQUA; and PalabraApps, which helps to improve the clinical workflow using Elekta’s MOSAIQ® oncology information system. During the quarter we also divested our MEG business.
We see a continually increasing demand for advanced cancer care and our outlook for the full year is positive and unchanged: we estimate that net sales will grow around 7 percent and that we will achieve an EBITA margin of around 20 percent for our current fiscal year.
President and CEO
Elekta will host a telephone conference at 10:00-11:00 CET on August 30, 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)8 506 395 49
UK dial-in number: +44 (0) 203 008 98 06
US dial-in number: +1 855 831 59 45
The webcast will be through the following link: