· Gross order intake amounted to SEK 3,383 M (3,398). Growth was flat in SEK and decreased by 2 percent based on constant exchange rates.
· Net sales was SEK 2,434 M (2,828), a decrease of 16 percent based on constant exchange rates. The decline is mainly related to one-off effects from implementing the produce-to-order process.
· EBITA* amounted to SEK 391 M (451) before items affecting comparability of SEK -117 M (-18) and bad debt losses of SEK -23 M (-7). The effect from changes in exchange rates compared with last year was SEK 95 M (50) including hedges.
· EBITA* margin was 16 percent (16).
· Operating result was SEK 140 M (304).
· Net income amounted to SEK 55 M (189). Earnings per share was SEK 0.14 (0.49) before and after dilution.
· Cash flow after continuous investments amounted to SEK 114 M (147). Cash outflow related to the transformation program and legal processes was SEK -150 M.
· Two orders for MR-linac were signed after the end of the second quarter, in line with local regulatory requirements.
· Gross order intake increased 1 percent to SEK 6,044 M (5,967) and was flat based on constant exchange rates. This is in line with general market development.
· Net sales was SEK 4,316 M (5,067), a decrease of 15 percent based on constant exchange rates. The decline is mainly related to one-off effects from implementing the produce-to-order process.
· EBITA* amounted to SEK 558 M (519) before items affecting comparability of SEK -206 M (‑48) and bad debt losses of SEK -29 M (-34). The effect from changes in exchange rates compared with last year was SEK 210 M (30) including hedges.
· EBITA* margin increased to 13 percent (10).
· Operating result was SEK 106 M (211).
· Net income amounted to SEK -9 M (60). Earnings per share was SEK -0.03 (0.15) before and after dilution.
· Cash flow after continuous investments improved by SEK 223 M to SEK -194 M (-417). Cash outflow related to the transformation program and legal processes was SEK -320 M.
· Richard Hausmann assumed the role as President and CEO effective June 10, 2016.
*Adjusted for items affecting comparability (restructuring costs and costs for legal processes, see details on pages 19-20) and bad debt losses.
President and CEO comments
We continue our transformation program to reduce costs, strengthen margins and cash flow, and drive operational excellence. We see strong interest in our innovations and have started to receive orders for our coming MR-linac system.
The global market for radiation therapy is in essence stable, although we continue to see quarterly fluctuations. Our gross orders for the first half year are flat compared with last year. We strengthened our market leadership in emerging markets with strong order intake in China, India, Southeast Asia, Latin America and the Middle East.
The measures for improvement in region North and South America are slowly yielding results and we continue to strengthen our organization. Gross orders returned to growth in the second quarter mainly driven by strong performance in our Latin American operations.
In region Europe, Middle East and Africa, the underlying market remained stable, but we had a challenging comparison to the second quarter last year.
My confidence in the potential of our MR-linac is reinforced and prior to CE mark we signed two orders just after the closing of the second quarter, in line with local regulatory requirements. Our activities towards launch and CE-mark in the second half of the 2017 calendar year are advancing as planned. I really look forward to bringing this groundbreaking technology to our customers and their patients. It’s less than a year away!
As part of our transformation program, we are increasing efficiency and reducing our cost base. At the end of the second quarter, we had reached an annual savings run rate of SEK 500 M out of the SEK 700 M target. The cost savings in combination with favorable currency movements and product mix, strengthened our EBITA margin to 13 percent (10) for the first half of the fiscal year.
Our change of the supply chain process to produce-to-order is now completed and had a negative one-off effect on net sales of SEK 650 M for the first half year. We have increased the efficiency in our supply chain, shortened lead times and reduced working capital. Accordingly, our underlying cash flow has improved by about SEK 530* M adjusted for cash outflow for legal processes and the transformation program.
In the quarter, we launched our new strategy and brand platform. Further, the organization has been aligned with our three core processes, Product Lifecycle Management, Supply Chain Management and Customer Relationship Management. Accompanied by the support and management processes, this change will lead to clearer and more effective processes and workflows. These measures are an essential part of our transformation towards sustainable profitable growth and operational efficiency.
President and CEO
*Cash flow after continuous investments. Adjusted for items affecting comparability of SEK 303 M (refer to page 4), related to cash outflow attributable to legal processes and the transformation program.
Elekta will host a telephone conference at 10:00-11:00 CET on December 1, with president and CEO Richard Hausmann and CFO Håkan Bergström.
To take part in the conference call, please dial in about five minutes in advance.
Swedish dial-in number: +46 (0) 2 00 88 38 17
UK dial-in number: +44 (0) 203 008 98 01
US dial-in number: +1 646 502 51 18
The telephone conference will also be broadcasted live online (listen only). Please use the link: