Elekta's annual general meeting 2003

ELEKTA'S ANNUAL GENERAL MEETING 2003Today, September 22, Elekta AB (publ) held its Annual General Meeting.83 shareholders, representing 47.8 percent of the votes in the companyattended the Meeting, which was held at the Finlandshuset ConferenceCenter in Stockholm.President and CEO Laurent Leksell reported on the development of thecompany during the 2002/03 fiscal year and first quarter of 2003/04fiscal year· Laurent Leksell stated that 2002/03 was another successful year forElekta. Despite the generally weak business climate, the companycontinued to develop favorably. The global market for Elekta's productsand treatment methods for cancer and brain disorders continues todevelop positively. Elekta is well positioned to benefit from andcontribute to future growth in these markets.· Today, Elekta is the global market leader in equipment forradiosurgery treatment of brain disorders and the second largestsupplier in the world for equipment for radiotherapy of cancer.· Despite the weak business climate and unfavorable currencymovements, operating profit rose by 56 percent during the year to SEK 323 M.· Order bookings were up 9 percent denominated in SEK and by 20percent in local currencies. The order backlog at April 30, 2003 was SEK411 M - the highest level ever.· During the fiscal year, all four market regions increased theirbusiness 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 corporateobjective of 8-10 percent.· Sales growth in local currencies amounted to 12 percent, comparedwith the objective of 10-15 percent.· Return on capital employed was 22 percent, as against the objectiveof at least 15 percent.· The equity ratio amounted to 49 percent, compared with theobjective of at least 40 percentElekta has an exposure to currency movements through its internationalorganization and structure. Elekta shelter however the effect through bymanaging its currency mix and currency hedging in line with it'scurrency exposure management policies.· During the year this had a major impact on net sales, which grew 2percent in SEK, compared with 12 percent denominated in localcurrencies.· Elekta's sales are mainly in USD and EUR. The costs for oncologyproducts are largely in GBP and for neurosurgery products in SEK.· Elekta hedges contracts as well as part of estimated net flows overa rolling 18-month period. Combined with the currency mix, thissafeguarded earnings in 2002/03.The President reported on developments within Elekta's four marketregions.· In Europe, including the Middle East and Africa, order bookings inlocal currencies rose 22 percent. Many countries continue to invest inimproved cancer care and Elekta's market share is about 40 percent. Themarket for radiosurgery developed slowly, but a breakthrough was notedduring the year with an additional Gamma Knife to a leading hospital inFrance.· In North and South America, order bookings rose in local currenciesby 6 percent. The underlying market growth is favorable and Elekta'smarket position remains strong. The market for radiotherapy is largelydriven by upgrades to IGRT. There is a large market in the region forthe Leksell Gamma Knife® and the clinical interest for the ElektaNeuromag® is substantial.· In Japan, order bookings in local currency rose 68 percent. Thecountry's economy remains weak, but Japan is still an important marketfor Elekta. The need for investment in cancer care is considerable.Elekta's large installed base of Leksell Gamma Knife® and ElektaNeuromag(TM) units creates major potential for profitable aftermarketsales.· In Asia excluding Japan, order bookings in local currenciesincreases by 31 percent. The need for investment in cancer care issubstantial and Elekta's market position is strong across the region.Cancer is a growing problem worldwide and an ever-increasing lifetimescombined with improved diagnostics is resulting in an increase in thenumber of cancer cases.· Annually, more than 6 million people die of cancer and more than 10million 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 facingfinancial pressures. At the same time, an increasingly older populationis resulting in a greater need for sophisticated care.· Elekta develops and markets innovative solutions and advancedequipment for applications in oncology and neurosurgery. There are largesimilarities between these medical disciplines in terms of technology,product development, knowledge development and customer support.· Traditionally, radiotherapy of cancer and radiosurgery of braindisorders have developed separately but in parallel. Today, however,there is a rapid development of methods for cancer treatment and a largeexchange of experience and technology. This development is drivenprimarily by such new technologies as conformal, intensity-modulated,image-guided and stereotactic radiotherapy.· Elekta conducts an extensive research and development operationwith more than 200 qualified employees involved in research and productdevelopment at the company's research centers in Sweden, the UK, the USand Finland.· The overall goal is to achieve higher precision in radiotherapywith the aim of improving clinical effectiveness and efficiency.Laurent Leksell continued with a presentation of Elekta's three-monthinterim report for the May-July period.· Order bookings rose by 20 percent to SEK 835 M (697) and at fixedexchange rates by 35 percent. Order backlog was at an all time high andamounted to SEK 2,625 M (2,411),· Net sales declined by 7 percent to SEK 615 M (662). At fixedexchange rates, net sales rose 4 percent. The decline in SEK wasexplained by currency changes and low shipment volumes due to customerrequirements.· Order bookings for a rolling 12-month period increased by 14percent 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 affectedoperating profit negatively by about SEK 14 M.· Gross margin improved substantially as a result of favorablegeographical and product mix.· Profit after taxes amounted to SEK 41 M (43).· Elekta's financial position is strong, with liquid assets of SEK1,068 M (1,087), shareholders' equity of SEK 1,496 M (1,445) and anequity ratio of 51 percent (49).In June, the Board of Directors decided to adopt a new dividend policyfor Elekta.· The goal is to distribute 20 percent or more of net profit in theform of dividends, share buyback or comparable measures. Thedistribution decision is based on Elekta's financial position,profitability trend, growth potential and investment needs.The Elekta share has performed well on Stockholmsbörsen (StockholmExchange).· During fiscal year 2002/03, the price of the Elekta share developedconsiderably better than the index on Stockholmsbörsen. The share'supward 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. Orderbacklog is the highest ever. While order volumes remain healthy,delivery volumes, and thus net sales, are expected to be lower in thefirst half than in the second half of 2003/04 due to customerrequirements.· As a result of mainly the weakening of the USD against the SEK,Elekta's earnings growth will be adversely affected. The financialobjectives for fiscal years 2001/02 to 2003/04 remain un-changed, with asales growth of 10-15 percent in local currencies and an operatingmargin of 8-10 percent on a rolling 12-month basis. The operating marginfor individual quarters can deviate from this objective. The return oncapital employed is to exceed 15 percent and the equity/assets ratio isto exceed 40 percent.Elekta has established three Groupwide priorities for fiscal year2003/04.1. World-class service operations. Providing world-class service andsupport is increasingly important. Elekta has therefore initiated ahighly ambitious investment and skills enhancement program so thatElekta within a few years will be a world leader with respect to qualityand efficiency in its customer service and support operations.2. Rapid product development. To be able to maintain sustainable andprofitable growth, Elekta will continue to develop and launch innovativenew products in radiotherapy and radiosurgery at a rapid pace.3. Strengthen business processes To retain and strengthen Elekta'sstrong position, Elekta will continue to improve its business processesand increase the efficiency of its operations.In conclusion, the President stated that Elekta has a strong positionfor continued profitable growth.· The product portfolio is strong and Elekta has a global presencethrough 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 financialstatements and discharged the members of the Board of Directors and thePresident from personal liability for the fiscal year.Election of the BoardThe 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 electednew member. Hans Barella has extensive experience in the medicaltechnology industry, including serving as CEO of Philips MedicalSystems.Board proposal on redemption of shares and reduction of share capitalThe Meeting voted to approve the Board's proposal of redemption of each17th 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 betransferred to the shareholders.Nomination procedure prior to the Annual General MeetingThe Meeting decide that the nominating process shall be that the BoardChairman at the close of the fiscal year contacts representatives of atleast five of the largest shareholders who together and under theleadership of the Board Chairman shall develop a proposal for members ofthe Board to be submitted to the Annual General Meeting for decision andthat the names of the owner representatives who participate in thecommittee shall be announced publicly.Proposal that the Annual General Meeting mandate that the Board appointan audit committee.With reference to the Board Chairman's and auditors' report on theauditing work in Elekta, in which the entire Board participates, theMeeting voted refer the question to the Board of Directors. ********Documentation provided at the Meeting can be requested from CorporateRelations, 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.comElekta is a world-leading supplier of advanced and innovative clinicalsolutions and services for and precise treatment of cancer and minimal-invasive neurosurgery for treatment of brain disorders. Elekta'ssolutions are clinically effective, cost efficient and gentle on thepatient.Additional information on Elekta is available on the Internet:www.elekta.com------------------------------------------------------------This information was brought to you by Waymaker http://www.waymaker.netThe 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