ELEKTA ANNUAL GENERAL MEETING 2005
Stockholm, September 21, 2005
The Annual General Meeting of Elekta AB (publ) was held today, September 21. At the Meeting, which was held at the Finlandshuset Conference Center, 207 shareholders entitled to vote participated, representing 49.06 percent of the votes in the company.
President and CEO Tomas Puusepp reported on the development of the company during the 2004/05 fiscal year and for the three-month period May-July 2005.The acquisition of IMPAC was the single, largest event during the operating year stated Tomas Puusepp. Also in other respects, it was a successful year for Elekta, which continues to deliver sustained profitable growth, reported Tomas Puusepp. Elekta’s successes are based largely on many years of successful investments in research and the development of new products. Currently, Elekta has a very strong portfolio, with unique, competitive and often world-leading products and services. Elekta’s system for image-guided and stereotactic radiotherapy, Elekta Synergy® and Elekta Synergy® S, have been well received by customers during the year and have actually set a new standard for advanced radiotherapy.Within neurosurgery, Elekta has now delivered more than 225 Gamma Knife® units and a new generation, Leksell Gamma Knife® 4C, was launched during the 2004/05 fiscal year. With improvements particularly in software features, the 4C facilitates a more efficient work process and new possibilities for even more advanced treatment.Despite the weakening effect of currency fluctuations on earnings performance, Elekta reported an increase in operating profit in the 2004/05 fiscal year. Order bookings during the year rose by 12 percent in local currencies to SEK 3,558 M. The order backlog at fiscal year-end was SEK 3,493 M, which is a record high level, a record also excluding IMPAC, which accounts for SEK 432 M.Net sales during the year rose by 13 percent in local currencies and operating profit by 14 percent. Return on capital employed amounted to 20 percent for the fiscal year and the equity/assets ratio at fiscal year-end was 37 percent. Accordingly, Elekta achieved its financial goals, with the exception of the equity/assets ratio, which was slightly below the goal, due to the IMPAC acquisition occurring just prior to the end of the year.The financial report for the first quarter was also presented to the participants at the Meeting. Order bookings rose by 38 percent to SEK 952 M. Order bookings also rose excluding IMPAC’s contribution, corresponding to 12 percent. Order bookings in oncology grew sharply during the quarter. Net sales increased by 21 percent to SEK 869 M (717). As expected, the low delivery volumes during the first quarter resulted in a decline in operating profit to SEK 31 M (81) and operating margin to 4 percent (11). On a rolling 12-month basis, operating margin amounted to 10 percent.Today, there are more than 50,000 patients receiving treatment for cancer or brain disorders daily in which Elekta’s clinical solutions or IT systems play an important role reported Tomas Puusepp. Thereafter, he presented the main elements in Elekta’s future plans.Currently, the healthcare system in the western world is under heavy pressure and in many respects is in the midst of a transformation process. Healthcare expenditures are rising faster than economic growth and the pressure to slow this increase is very high. The number of hospital beds is declining at a rapid pace and in many countries has been halved in just a few decades.Concurrently, the number of cancer cases is rising rapidly, primarily as a result of higher longevity and improved diagnostics. This increases the pressure on the healthcare system to work more efficiently and to create a simple and cost-effective patient flow through the entire process, from diagnosis to post-treatment follow-up. To be able to focus on its core operations, the healthcare system will in the future need to outsource other operations to partners and suppliers. It is here that Tomas Puusepp considers that Elekta in the long term has its main task – to unburden healthcare providers through assuming responsibility for large segments of the healthcare process, while the care provider, of course, retains responsibility for the actual treatment.“For Elekta, the future can involve both new products and new IT systems as well as developing services that enhance the efficiency of the care process,” stated Tomas Puusepp.At the close of his presentation, Tomas Puusepp took the opportunity to thank Laurent Leksell, who left his position as Elekta’s President on May 1, 2005 to assume a new role to focus full-time on Elekta’s strategic development, customer relations and expansion on new markets.“Laurent Leksell has had a completely decisive impact for Elekta and for the company’s strong position today and I extend my and the rest of the company’s warm appreciation for his excellent efforts as President of Elekta,” concluded Tomas Puusepp. Disposition of the Company’s earningsElekta’s dividend policy is to distribute 20 percent or more of net profit in the form of dividends, share buy-backs or comparable measures.In addressing the agenda item regarding disposition of the company’s earnings as shown in the balance sheet adopted by the Meeting, the Meeting resolved in accordance with the Board’s proposal that of the company’s disposable earnings of SEK 871,351,023 a dividend be paid to the shareholders in an amount corresponding to SEK 6.60 per share and that the balance be carried forward. The record date for the dividend was set at September 26, 2005.Election of the BoardMembers of the Nomination Committee during the year were:Laurent Leksell ChairmanMarianne Nilsson Robur FundsCharles Evans-Lombe Egerton CapitalTorsten Johansson SHP/SPP FundsCaroline af Ugglas Skandia LivBjörn Lind SEB FundsThe Chairman of the Nomination Committee presented its work during the year and reported on the Board’s internal evaluation. The Meeting re-elected Akbar Seddigh, Magnus Schmidt, Hans Barella, Carl G. Palmstierna, Tommy H Karlsson and Laurent Leksell as Board members.The Meeting elected Birgitta Stymne Göransson, born 1957 and educated at Harvard Business School (MBA) and the Royal Institute of Technology (BSc Chemical and Biotechnical Engineering). Most recently, she served as Vice President of Telefos AB, a corporate group in the IT/Telecom field owned by Industri Kapital and TeliaSonera AB. Her business career has included positions as President of Cyngor AB, consulting operations in own company, Vice President of K-World AB, Vice President Finance/CFO of Åhléns AB as well as management consultant and senior project leader at McKinsey & Company. Birgitta also has experience within the medical-technology industry from positions held within the marketing department of Gambro AB and the Technical Attaché Office in Washington D.C. Birgitta Stymne Göransson is a member of the Boards of Net Insight AB and Sveriges Radio AB as well the Norwegian exchange-listed companies Nera AS and Orkla AS. She has no prior assignments within Elekta and can be considered independent in relation to the company and management as well as to the major shareholders in the company. The Meeting resolved to re-elect Akbar Seddigh as Chairman of the Board.With regard to Board fees, the Meeting decided in accordance with the proposal by the nomination committee that the total remuneration to the Board shall be SEK 1,700,000, of which 460,000 to the Chairman, SEK 230,000 each to the external Board members and SEK 60,000 to the Chairman of the Executive Compensation Committee and SEK 30,000 to other members of the Executive Compensation Committee. No remuneration is paid to Board members employed by the company.Share splitThe Meeting resolved to implement a share split, in which each old A or B share is replaced by three new shares.The record date for the split was set at October 19, 2005, which means that the last day for trading in the share prior to the split is October 14, 2005. The formal procedure for this share split is presented in the Meeting documentation.Reduction of share capitalDuring the fiscal year, Elekta repurchased 224,900 of its own B shares. After the 3:1 split, this represents a holding of 674,700 of its own B shares. Accordingly, the Meeting resolved to reduce the company’s share capital by SEK 1,349,000 through cancellation of these 674,700 B shares without payment. The reduction amount will be allocated to the company’s unrestricted reserves.Authorization of the Board to purchase and transfer own sharesThe Meeting authorized the Board of Directors during the period until the next Annual General Meeting, on one or more occasions, to decide on acquisition of a maximum number of own shares to the extent that after purchase the company holds not more than 10 percent of the total number of shares in the company.Incentive programUnder the agenda item covering establishment of an incentive program – Board Chairman Akbar Seddigh reported on Elekta’s strategy for compensation to managers, in which the aim is to strengthen management by objectives and profit development in the short and long term, to drive operating profit and growth in the short term and create long-term value growth and a shareholder perspective.The Chairman also reported further on the work of Elekta’s Executive Compensation Committee.Elekta’s model for a share-related incentive program – Share Unit Plan – was introduced in 2004. This can be summarized as a model for allotment based on performance in relation to the Group’s goals, in which participation and allotment require assumption of personal risk through the acquisition of shares, in which participation in the allotment of shares requires continued employment and in which profit is maximized at a reasonable level. Thereafter, the Meeting decided in accordance with the proposal on the issue of employee stock options in accordance with the Elekta AB 2004 Share Unit Plan and to approve the assumption of a debenture loan through the issue of debentures with detachable warrants for subscription of shares and approval of the transfer of the warrants.On achievement of the performance goals, a total of 1,900,000 shares (after the split) can be acquired, representing a dilution of about 2 percent. If the performance goals are exceeded, an additional maximum total of 285,000 shares can be acquired, corresponding to a total dilution effect of 2.3 percent of the total number of shares.Composition of Nomination CommitteeThe Meeting decides that the nominating process shall be that the Board Chairman prior to the close of the fiscal year’s second quarter contacts representatives of at least three and at most five of the largest A and B shareholders at that time. Combined and under the leadership of the Board Chairman, these representative shall comprise the Nomination Committee and fulfill the tasks as specified in the Code of Corporate Governance. The names of the owner representatives who participate in the Committee shall be announced publicly as soon as they are appointed, however, not later than six months prior to the next Annual General Meeting. The Nomination Committee shall appoint a Chairman from among its members. The assignment for the Nomination Committee applies until a new Nomination Committee is appointed.********Documentation provided at the Meeting is available at www.elekta.com, or can be requested from Elekta Corporate Communications, telephone +46 8 587 254 00.For further information, please contact:Peter Ejemyr, Group VP Corporate CommunicationsTel: +46 733 611 000, e-mail: email@example.com