Slide 1: A solid quarter with inspiring events and significant further improvement potential
“A solid quarter with inspiring events and significant further improvement potential” Q2 report November 29, 2018 Focus where it matters.
Slide 2: Agenda
Agenda. 1. Q2 in short 2. Financials Richard Hausmann Gustaf Salford 3. Key take-aways President and CEO CFO 4. Q & A Focus where it matters.
Slide 3: Important information
Important information. This presentation includes forward-looking statements including, but not limited to, statements relating to operational and financial performance, market conditions, and other similar matters. These forward-looking statements are based on current expectations about future even
Slide 4: 1. Q2 in short
Richard Hausmann President and CEO 1. Q2 in short. Agenda
Slide 5: Launched strategy focused on thought leadership in Precision Radiation Medicine
Launched strategy focused on thought leadership in Precision Radiation Medicine at Capital Markets Day. Mid-term scenario 2022/2023 8-10% Net sales CAGR over the period (based on constant exchange rates) EBITA with expansion of up to 200 BPS by the end of the period >20% Focus where it matters.
Slide 6: Strong sales growth in Q2
Strong sales growth in Q2. • Order intake +12 percent (+2 percent in constant currency) - Double digit order growth for treatment and software solutions - Service orders declined in some regions - Interest in Elekta Unity is strong. Sales funnel continues to grow, but no orders booked in Q2 • Net sa
Slide 7: Strong market and order intake first half year
Strong market and order intake first half year. • Order intake +14 percent (+6 percent in constant currency) - Four Elekta Unity orders added to the backlog in H1 - 2+2 Elekta Unity agreements in November • Net sales +14 percent in the first six months, (+7 percent in constant currency) • EBITA marg
Slide 8: Solid order growth in 2 out of 3 regions. U.S. disappointing in service orders
Solid order growth in 2 out of 3 regions. U.S. disappointing in service orders North & Europe, Middle Asia Pacific South America East & Africa - 41% in Q2 +43% in Q2 +18% in Q2 • Weak service orders in the US. • In Europe especially strong • In China the MOH published growth at the moment, a plan to
Slide 9: ASTRO 2018 manifested great interest in Elekta's solutions
ASTRO 2018 manifested great interest in Elekta’s solutions. More traffic and sales leads than ever before Elekta Unity drew a lot of attention Focus where it matters.
Slide 10: China and CIIE
China and CIIE Exciting opportunities • Chinese Ministry Of Health published plan on radiotherapy investment in 2018-2020 - ~1,400 linacs • China International Import Expo (CIIE) - Elekta the only radiation therapy company invited - Large interest in Elekta’s solutions by both government and healthc
Slide 11: Strengthening our GenesisCare partnership
Strengthening our GenesisCare partnership • Linac MoU signed in November valued at approximately USD 60 million • Agreement includes provisions for Elekta’s MOSAIQ® oncology information system (OIS) and Monaco® treatment planning system • Separate research agreement also signed • Builds on previous
Slide 12: 3 new Elekta Unity handed over in the quarter
3 new Elekta Unity handed over in the quarter. Great feedback from customers on the performance of the system Focus where it matters.
Slide 13: Elekta Unity – 36 systems in total as of November
Elekta Unity – 36 systems in total as of November 8 17 11 GOP
Slide 14: 2. Financials
Gustaf Salford CFO 2. Financials. Agenda
Slide 15: Q2 – sales growth YTD and improved margins vs. Q1
Q2 – sales growth YTD and improved margins vs. Q1 Q2 Q1 Q2 (SEK M) 2018/19 2018/19 2017/18 Net sales 3,330 2,819 2,903 • Net sales up 6% in Q2 COGS -1,953 -1,716 -1,644 7% YTD - growth in all regions Gross margin (%) 41.4% 39.1% 43.4% Unity installations contribute to growth Expenses -760 -806 -680
Slide 16: Continued focus on cost control in the quarter
Continued focus on cost control in the quarter Q2 Q1 Growth* Q2 Growth* Expenses (SEK M) 2018/19 2018/19 Q/Q 2017/18 Y/Y Selling -320 -324 -5% -300 0% • Expenses% decrease vs. Q1 – good cost control Administrative -237 -265 -14% -224 -2% • Net R&D expense increase from higher amortization and less R
Slide 17: Unity commercialization, less capitalization and price pressure impacting EBITA% vs. last year
Unity commercialization, less capitalization and price pressure impacting EBITA% vs. last year Q2 YTD - EBITA bridge (SEK M) 272 332 217 30 91 34 70 Currency effect Q2 (SEK M, Y/Y) YTD 2018/19 • Effect on net sales: +380 987 987 • Effect on expenses -341 • Exchange rate +30 differences: Effect on EB
Slide 18: EBITA expected to improve in second half of FY18/19
EBITA expected to improve in second half of FY18/19 – primarily from volume and positive market mix Margin drivers H2 2018/19 (indicative) EBITA FY Investments in Revenue growth Market mix R&D innovation & ~20% (mature Currency leverage Capitalization geographic markets) expansion FX EBITA effect +
Slide 19: EBITDA growth improved cash flow in the quarter
EBITDA growth improved cash flow in the quarter Cash Conversion bridge Net working capital as % of net sales Q1 Q2 iso. 2018/19 18/19 20% 14% 15% EBITDA 427 639 10% 8% Working capital -699 -81 2% 5% Financial net -25 -29 0% 13/14 14/15 15/16 16/17 17/18 17/18 Q1 Q2 Paid tax -21 -47 -5% -6% IFRS15 -1
Slide 20: Cash Conversion at 81% and maintained Net Debt/EBITDA at 0.5x
Cash Conversion at 81% and maintained Net Debt/EBITDA at 0.5x Operational cash conversion and EBITDA Net debt / EBITDA and equity SEK M 150% 1,6 81% 1,4 4.000 1,2 100% 1,0 0,8 2.000 0,6 50% 0,4 0.5x 0,2 0.2x 0% 0 0,0 12/13 13/14 14/15 15/16 16/17 17/18 Q2 R12 Q4 Q1 Q2 Q3 Q4 Q1 Q2 = Cash Conversion =
Slide 21: 3. Key take-aways
Richard Hausmann President and CEO 3. Key take-aways. Agenda
Slide 22: Our strategic focus: Thought leadership in Precision Radiation Medicine
Our strategic focus: Thought leadership in Precision Radiation Medicine It resonates well with our customers
Slide 23: We reiterate our guidance for 2018/19
We reiterate our guidance for 2018/19 Net sales ~7% growth EBITA ~20% margin
Slide 24: Q&A. We now welcome any of your questions
Q&A. We now welcome any of your questions Richard Hausmann Gustaf Salford President and CEO CFO Focus where it matters.
Slide 25: Thank you
Thank you Next report Q3, 22 February 2019 Gunilla Öhman, Head of IR (interim) gunilla.oehman@elekta.com +46707638125