Elekta's annual general meeting 2003
ELEKTA'S ANNUAL GENERAL MEETING 2003
Today, September 22, Elekta AB (publ) held its Annual General Meeting.
83 shareholders, representing 47.8 percent of the votes in the company
attended the Meeting, which was held at the Finlandshuset Conference
Center in Stockholm.
President and CEO Laurent Leksell reported on the development of the
company during the 2002/03 fiscal year and first quarter of 2003/04
fiscal year
· Laurent Leksell stated that 2002/03 was another successful year for
Elekta. Despite the generally weak business climate, the company
continued to develop favorably. The global market for Elekta's products
and treatment methods for cancer and brain disorders continues to
develop positively. Elekta is well positioned to benefit from and
contribute to future growth in these markets.
· Today, Elekta is the global market leader in equipment for
radiosurgery treatment of brain disorders and the second largest
supplier in the world for equipment for radiotherapy of cancer.
· Despite the weak business climate and unfavorable currency
movements, operating profit rose by 56 percent during the year to SEK 323 M.
· Order bookings were up 9 percent denominated in SEK and by 20
percent in local currencies. The order backlog at April 30, 2003 was SEK
411 M - the highest level ever.
· During the fiscal year, all four market regions increased their
business volumes by between 6 and 68 percent.
Elekta reached or exceeded all financial goals during the year.
· Operating margin was 12 percent, compared with the corporate
objective of 8-10 percent.
· Sales growth in local currencies amounted to 12 percent, compared
with the objective of 10-15 percent.
· Return on capital employed was 22 percent, as against the objective
of at least 15 percent.
· The equity ratio amounted to 49 percent, compared with the
objective of at least 40 percent
Elekta has an exposure to currency movements through its international
organization and structure. Elekta shelter however the effect through by
managing its currency mix and currency hedging in line with it's
currency exposure management policies.
· During the year this had a major impact on net sales, which grew 2
percent in SEK, compared with 12 percent denominated in local
currencies.
· Elekta's sales are mainly in USD and EUR. The costs for oncology
products are largely in GBP and for neurosurgery products in SEK.
· Elekta hedges contracts as well as part of estimated net flows over
a rolling 18-month period. Combined with the currency mix, this
safeguarded earnings in 2002/03.
The President reported on developments within Elekta's four market
regions.
· In Europe, including the Middle East and Africa, order bookings in
local currencies rose 22 percent. Many countries continue to invest in
improved cancer care and Elekta's market share is about 40 percent. The
market for radiosurgery developed slowly, but a breakthrough was noted
during the year with an additional Gamma Knife to a leading hospital in
France.
· In North and South America, order bookings rose in local currencies
by 6 percent. The underlying market growth is favorable and Elekta's
market position remains strong. The market for radiotherapy is largely
driven by upgrades to IGRT. There is a large market in the region for
the Leksell Gamma Knife® and the clinical interest for the Elekta
Neuromag® is substantial.
· In Japan, order bookings in local currency rose 68 percent. The
country's economy remains weak, but Japan is still an important market
for Elekta. The need for investment in cancer care is considerable.
Elekta's large installed base of Leksell Gamma Knife® and Elekta
Neuromag(TM) units creates major potential for profitable aftermarket
sales.
· In Asia excluding Japan, order bookings in local currencies
increases by 31 percent. The need for investment in cancer care is
substantial and Elekta's market position is strong across the region.
Cancer is a growing problem worldwide and an ever-increasing lifetimes
combined with improved diagnostics is resulting in an increase in the
number of cancer cases.
· Annually, more than 6 million people die of cancer and more than 10
million cases are diagnosed. In the industrialized part of the world,
cancer is the cause of every fourth death.
· In many parts of the world, the healthcare system is facing
financial pressures. At the same time, an increasingly older population
is resulting in a greater need for sophisticated care.
· Elekta develops and markets innovative solutions and advanced
equipment for applications in oncology and neurosurgery. There are large
similarities between these medical disciplines in terms of technology,
product development, knowledge development and customer support.
· Traditionally, radiotherapy of cancer and radiosurgery of brain
disorders have developed separately but in parallel. Today, however,
there is a rapid development of methods for cancer treatment and a large
exchange of experience and technology. This development is driven
primarily by such new technologies as conformal, intensity-modulated,
image-guided and stereotactic radiotherapy.
· Elekta conducts an extensive research and development operation
with more than 200 qualified employees involved in research and product
development at the company's research centers in Sweden, the UK, the US
and Finland.
· The overall goal is to achieve higher precision in radiotherapy
with the aim of improving clinical effectiveness and efficiency.
Laurent Leksell continued with a presentation of Elekta's three-month
interim report for the May-July period.
· Order bookings rose by 20 percent to SEK 835 M (697) and at fixed
exchange rates by 35 percent. Order backlog was at an all time high and
amounted to SEK 2,625 M (2,411),
· Net sales declined by 7 percent to SEK 615 M (662). At fixed
exchange rates, net sales rose 4 percent. The decline in SEK was
explained by currency changes and low shipment volumes due to customer
requirements.
· Order bookings for a rolling 12-month period increased by 14
percent in SEK, well in line with corporate targets.
· Currency effects impacted the operating margin, which was 9 percent
(10). Compared with the year-earlier period, currency movements affected
operating profit negatively by about SEK 14 M.
· Gross margin improved substantially as a result of favorable
geographical and product mix.
· Profit after taxes amounted to SEK 41 M (43).
· Elekta's financial position is strong, with liquid assets of SEK
1,068 M (1,087), shareholders' equity of SEK 1,496 M (1,445) and an
equity ratio of 51 percent (49).
In June, the Board of Directors decided to adopt a new dividend policy
for Elekta.
· The goal is to distribute 20 percent or more of net profit in the
form of dividends, share buyback or comparable measures. The
distribution decision is based on Elekta's financial position,
profitability trend, growth potential and investment needs.
The Elekta share has performed well on Stockholmsbörsen (Stockholm
Exchange).
· During fiscal year 2002/03, the price of the Elekta share developed
considerably better than the index on Stockholmsbörsen. The share's
upward trend continued in the first quarter of 2003/04.
Future prospects for full-year 2003/04
· Demand remains favorable for Elekta's products and services. Order
backlog is the highest ever. While order volumes remain healthy,
delivery volumes, and thus net sales, are expected to be lower in the
first half than in the second half of 2003/04 due to customer
requirements.
· As a result of mainly the weakening of the USD against the SEK,
Elekta's earnings growth will be adversely affected. The financial
objectives for fiscal years 2001/02 to 2003/04 remain un-changed, with a
sales growth of 10-15 percent in local currencies and an operating
margin of 8-10 percent on a rolling 12-month basis. The operating margin
for individual quarters can deviate from this objective. The return on
capital employed is to exceed 15 percent and the equity/assets ratio is
to exceed 40 percent.
Elekta has established three Groupwide priorities for fiscal year
2003/04.
1. World-class service operations. Providing world-class service and
support is increasingly important. Elekta has therefore initiated a
highly ambitious investment and skills enhancement program so that
Elekta within a few years will be a world leader with respect to quality
and efficiency in its customer service and support operations.
2. Rapid product development. To be able to maintain sustainable and
profitable growth, Elekta will continue to develop and launch innovative
new products in radiotherapy and radiosurgery at a rapid pace.
3. Strengthen business processes To retain and strengthen Elekta's
strong position, Elekta will continue to improve its business processes
and increase the efficiency of its operations.
In conclusion, the President stated that Elekta has a strong position
for continued profitable growth.
· The product portfolio is strong and Elekta has a global presence
through a streamlined organization.
· Cancer is increasing and half of all cancer patients need radiotherapy.
· IMRT and IGRT are driving growth in oncology.
· An increasing number of application areas are opening for the Leksell Gamma Knife®
· The market potential for the Elekta Neuromag® is substantial.
· Healthcare is increasingly in need of procedures for outpatient care.
· More knowledgeable patients place higher demands on high quality of life during the treatment period.
After the President's comments, the Meeting adopted the financial
statements and discharged the members of the Board of Directors and the
President from personal liability for the fiscal year.
Election of the Board
The Meeting re-elected Akbar Seddigh, Magnus Schmidt, Carl G.
Palmstierna, Tommy Karlsson and Laurent Leksell as Board members.
Hans Barella, born 1943 and a citizen of the Netherlands, was elected
new member. Hans Barella has extensive experience in the medical
technology industry, including serving as CEO of Philips Medical
Systems.
Board proposal on redemption of shares and reduction of share capital
The Meeting voted to approve the Board's proposal of redemption of each
17th share for a cash payment of SEK 165 per share. At full acceptance,
1,938,468 shares will be redeemed and about SEK 319.8 M will be
transferred to the shareholders.
Nomination procedure prior to the Annual General Meeting
The Meeting decide that the nominating process shall be that the Board
Chairman at the close of the fiscal year contacts representatives of at
least five of the largest shareholders who together and under the
leadership of the Board Chairman shall develop a proposal for members of
the Board to be submitted to the Annual General Meeting for decision and
that the names of the owner representatives who participate in the
committee shall be announced publicly.
Proposal that the Annual General Meeting mandate that the Board appoint
an audit committee.
With reference to the Board Chairman's and auditors' report on the
auditing work in Elekta, in which the entire Board participates, the
Meeting voted refer the question to the Board of Directors.
********
Documentation provided at the Meeting can be requested from Corporate
Relations, telephone +46 8 587 254 00.
For additional information, contact:
Peter Ejemyr, Group Vice President Corporate Communications, Elekta AB
(publ)
+46 587 254 00. E-mail: peter.ejemyr@elekta.com
Elekta is a world-leading supplier of advanced and innovative clinical
solutions and services for and precise treatment of cancer and minimal-
invasive neurosurgery for treatment of brain disorders. Elekta's
solutions are clinically effective, cost efficient and gentle on the
patient.
Additional information on Elekta is available on the Internet:
www.elekta.com
------------------------------------------------------------
This information was brought to you by Waymaker http://www.waymaker.net
The following files are available for download:
http://www.waymaker.net/bitonline/2003/09/22/20030922BIT01740/wkr0001.doc
http://www.waymaker.net/bitonline/2003/09/22/20030922BIT01740/wkr0002.pdf
