· Gross order intake amounted to SEK 2,738 M (2,662), an increase of 3 percent in SEK and unchanged based on constant exchange rates.
· Net sales was SEK 2,169 M (1,882), an increase of 15 percent in SEK and 12 percent based on constant exchange rates.
· Adjusted EBITA* amounted to SEK 187 M (166). No items affecting comparability were reported (SEK -89 M). Bad debt losses amounted to SEK -10 M (-6).
· The effect from changes in exchange rates compared with last year was approximately SEK 5 M including hedges.
· Adjusted EBITA* margin was 9 percent (9).
· Operating result was SEK 38 M (-34).
· Net income amounted to SEK -1 M (-64). Earnings per share was SEK 0.00 (-0.17) before/after dilution.
· Cash flow after continuous investments improved by SEK 213 M to SEK -95 M (-308).
· Two Elekta Unity orders from leading hospitals in Hong Kong were added to the backlog.
*Adjusted for items affecting comparability and bad debt losses, for a reconciliation to operating result, see page 10.The split between restructuring costs and costs for legal processes, is presented on pages 18.
President and CEO comments
Our continuous improvements and transformation are generating results. Delivery volumes are approaching satisfactory levels following the major adjustment we implemented in the first half of last year. Gross margin has improved, cash flow has strengthened and net working capital continues at a low level. At the same time the commercialization of Elekta Unity is progressing well and we continue to invest in it, as well as our activities relating to Elekta Digital.
Net sales in the quarter increased by 15 percent as reported or by 12 percent based on constant exchange rates, driven by strong growth in China, Western Europe and emerging markets. Delivery volumes are approaching satisfactory levels following the implementation of our produce-to-order process during the first half of last year. Gross margin strengthened by 1.8 percentage points and EBITA rose 13 percent to SEK 187 M.
We continue to invest in cancer care for the future and during the quarter, further resources were allocated to the commercialization of Elekta Unity and our commitment in the software development program Elekta Digital. This has affected the EBITA-margin, but at the same time, we are prioritizing day-to-day work to continuously improve our processes and further reduce our cost base to reach our targets. In addition, the finalized transformation program also adds direct cost savings of SEK 150 M which will be realized during the year. As the transformation program is completed and major legal disputes were closed last year, we had no one-off costs in the quarter.
Our order intake grew by 3 percent in SEK and was flat based on constant exchange rates. Overall, I am convinced that we can do better, especially with Elekta Unity coming to the market this year. Order intake in Asia Pacific rose 10 as reported or 7 percent based on local currencies, driven by strong develop-ment in Southeast Asia and good growth in China. In Europe, we had strong performance in Germany, Italy and Spain, but the overall comparison was challenging from last year. In North America, we begin to see the results of our improvement program and order bookings increased 8 percent as reported or 5 percent in local currencies. However, development in Latin America was slow.
Much of the interest at ASTRO in September this year will center around our groundbreaking system, Elekta Unity, which combines radiation therapy and visualization with high-field MRI in real time. We have also added two Unity orders from leading hospitals in Hong Kong to our order backlog during the quarter. The first patient study has now been concluded and demonstrated precision beyond expectations. The system generates excellent imaging synchronized with precision beam delivery. We are convinced that the new technology will revolutionize radiation therapy and create completely new opportunities for physicians and their patients. We are advancing towards CE-mark and 510k filing that are planned before end of this calendar year and we reiterate our ambition to generate 75 orders until year end 2019.
I have my management team in place and organization aligned. I am looking forward to the rest of this fiscal year and our targets are clear. We will return to profitable growth and with continuous process improvements and cost savings we reiterate our target of an EBITA margin exceeding 20 percent.
President and CEO
Elekta will host a telephone conference at 12:00-13:00 CET on August 23, 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 42 690
UK dial-in number: +44 (0) 203 008 98 01
US dial-in number: +1 855 753 22 36
The webcast will be through the following link: