Interim report May - January 2008/09
• Order bookings rose 17* percent. Order backlog at an all time high level of SEK 6,755 M.
• Net sales amounted to SEK 4,156 M, an increase by 20* percent.
• Operating profit rose 16 percent to SEK 309 M (267).
• Profit after taxes amounted to SEK 184 M (174).
• Earnings per share after dilution were SEK 2.03 (1.91).
• Cash flow from operating activities was negative SEK 93 M (pos.89).
• For the full year 2008/09, Elekta reiterates the outlook of a net sales growth of more than 15 percent in local currency and operating profit growth of 20-25 percent.
* Compared to the same period last fiscal year at unchanged exchange rates.
President and CEO Tomas Puusepp comments
Elekta continues to strengthen its market position. Demand for our technology and clinical solutions remains strong and the interest in our recent product launches, Leksell Gamma Knife® Perfexion™, Elekta Axesse™ and Elekta VMAT continues to be high.
I am pleased with the global presence we have reached and the fact that our systems and solutions are used in over 5,000 hospitals. A broad and large customer base makes Elekta less vulnerable to certain market shifts and provides an excellent platform for our after sales business.
Order bookings on a rolling twelve-months basis increased by 27 percent. From the beginning of this fiscal year, the order backlog increased by 33 percent, reflecting solid business growth as well as favorable currency movements.
During the third quarter we experienced lower order intake in the US market as the sales cycle has increased. The reimbursement rules that took effect in January support further investments in advanced cancer care, especially in IMRT where Elekta has an excellent market position. Furthermore, I am proud that the oncology department at the well-respected University of Texas M. D. Anderson Cancer Center has acquired Leksell Gamma Knife® Per-fexion™, which shows the importance of this technology also in radiation therapy.
We are expanding geographically into new markets. Starting our own office in Latin America has already shown to be a successful investment. An important factor for growth in emerging markets is our highly competitive linear accelerator Elekta Compact™. As anticipated we received approval in January from the Chinese State Food and Drug Administration (SFDA) to sell Elekta Compact in China.
Operating profit for the first nine months increased by 16 percent compared with the previous year. The strong improvement of operating profit in the third quarter was an effect of increased sales and positive currency development. Cash flow is still weak, mainly as an effect of a relatively high level of working capital. We remain focused on working capital management and expect our net debt to equity ratio to be reduced from 0.8 to the targeted level 0.5 at the end of the fiscal year.
Currency markets continue to be highly volatile. In line with our hedging policy, we have increased our hedge levels for next fiscal year and are currently hedged at approximately 60 percent. The substantial positive impact of currency movements will mainly be recognized during next fiscal year.
The economic slowdown has so far had a limited effect on investments in cancer care. We do expect lower growth in the US market. However, substantial capacity shortage prevails in large parts of the world. In some countries public health care investments are considered to be a fruitful way to stimulate the economy. Also, as the largest supplier of oncology soft-ware we provide treatment tools for efficiency gains in all our markets.
For the full fiscal year 2008/09 we reiterate our earlier outlook of a net sales growth of more than 15 percent in local currency and a growth in operating profit of 20-25 percent.
President and CEO