Third quarter, November–January 2025/26

• In constant exchange rates, net sales increased by 2 percent mainly driven by Europe and China. Reported sales in SEK decreased by 10 percent amounting to SEK 4,239 M (4,695).

• The book-to-bill ratio was 1.17 (1.15), supported by strong order intake in China, U.S. and Europe.

• Third quarter was impacted by a SEK 417 M restructuring charge related to change of the operating model, which is expected to reduce the cost base by more than SEK 500 M annually.

• Higher adjusted gross margin of 38.3 percent (37.1) driven by product launches and improved pricing.

• Tariff costs and changes in FX had a negative impact of 100 and 130 basis points respectively on the gross margin.

• Adjusted EBIT amounted to SEK 504 M (548), resulting in a margin of 11.9 percent (11.7). The positive effect from the gross margin was partly offset by higher amortization and a lower capitalization level.

• Net income was SEK 12 M (336) and basic earnings per share was SEK 0.03 (0.89).

• Cash flow after continuous investments declined to SEK 255 M (730) in Q3 partly due to severance payments and lower contribution from working capital, while YTD amounted to SEK 251 M (-192).

¹Compared to last fiscal year based on constant exchange rates.
²Adjusted gross margin = Gross margin excluding items affecting comparability, see page 28.
³Adjusted EBITDA = EBITDA excluding items affecting comparability, see page 28.
⁴Adjusted EBIT = Operating income (EBIT) excluding items affecting comparability, see page 29.
⁵Adjusted earnings per share = Net income excluding items affecting comparability, attributable to Parent Company shareholders, in relation to the weighted average number of shares (excluding treasury shares), see page 30.

A solid quarter with significant impact from currency and restructuring

Third quarter summary
Net sales in Q3, at constant exchange rates, increased by 2 percent year-over-year, driven by continued positive momentum in Europe, as well as China’s return to growth for the first time since Q3 2023/24. The book-to-bill ratio reached 1.17, supported by strong order intake in China and the U.S., as well as service orders in Europe.
 
The adjusted gross margin in Q3 improved year-over-year to 38.3 percent (37.1). The increase was mainly supported by product launches and improved pricing. The strengthening of the Swedish krona against major currencies and the depreciation of the U.S. dollar had an increasingly negative impact during the quarter, reducing gross margin by 130 basis points year-over-year. Adjusted EBIT margin for the third quarter ended at 11.9 percent (11.7) . The improvement was primarily driven by a higher gross margin and lower R&D spend while increased amortization and lower capitalization of R&D weighed negatively by 150 basis points in total year-over-year on the EBIT margin.
 
Year-to-date operating cash flow after continuous investments amounted to SEK 251 M, representing an improvement of SEK 443 M compared with last year despite severance payments related to the change of operating model.
 
Value creation through speed and continuous improvement
As previously communicated, Elekta has defined four priority areas, our Must-Win Battles, that will drive value creation through increased speed and continuous improvement. Through Must- Win Battle 1, we are implementing a new operating model aimed at simplifying and decentralizing the organization. As a result, we expect to achieve more than SEK 500 M in annualized cost savings, with the full effect realized in Q1 2026/27. The implementation of the new operating model is progressing well, with more than 80 percent of the planned workforce reductions already completed.
 
With Must-Win Battle 2, Focused Innovation, we aim to improve returns on R&D investment by sharpening our focus on projects that address commercial demand and shape the future of radiation therapy through our focus on adaptive treatments.
                 
Winning in the U.S. and expanding in China are the priority areas included in Must-Win Battle 3. In the U.S., the launch of Evo and Elekta ONE have strengthened our product offering across hardware, software, and service with continued strong interest from customers. Expanding our presence in China represents the second pillar of this Must-Win Battle. To strengthen our competitiveness, we are further deepening the localization of Elekta’s portfolio and supply chain. We have maintained our market-leading position through a period of declining demand, and as the market begins to recover, we expect to see operating leverage from the Chinese business.
 
Must-Win Battle 4 focuses on reducing cost of goods sold and reinforcing our ambition to expand the gross margin, thereby freeing up resources for continued innovation. Key initiatives include introducing dual sourcing and cost efficient suppliers, deploying AI-tools to support field service engineers, improving order fulfillment efficiency, and simplifying installation and serviceability.
 
Outlook
We reiterate our full-year 2025/26 outlook, where we expect net sales in constant currency to grow year-over-year. Furthermore, we expect continuous negative impact on earnings from FX at current exchange rates and tariffs. On June 17, we will host a Capital Markets Day in Stockholm.

Jakob Just-Bomholt
President and CEO