Elekta Ab Class B · OMXSTO:EKTA_B
Elekta Ab Class B — Q3 2021/22 Earnings Presentation
25 slides from Elekta Ab Class B's earnings presentation, Feb 24, 2022
Slide 1: Strong demand, and supply chain challenges
Strong demand, and supply chain challenges Q3 report 2021/22 Gustaf Salford, President and CEO Tobias Hägglöv, CFO February 24, 2022 Restricted Information and Basic Personal Data
Slide 2: Agenda
Agenda • Towards improved access to the best cancer care, Q3 • Q3 financials • Outlook • Q&A 22 2 Restricted Information and Basic Personal Data
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 event
Slide 4: Towards improved access to the best cancer care, Q3
Towards improved access to the best cancer care, Q3 4 Restricted Information and Basic Personal Data
Slide 5: Our strategy – ACCESS 2025
Our strategy – ACCESS 2025 Drive Accelerate innovation partner integration with customer across the cancer utilization in mind A world where care eco-system everyone has access to the best cancer care Be the customer Drive adoption lifetime companion across the globe People Resilience & Process Exce
Slide 6: The recovery continues towards pre-pandemic growth levels
The recovery continues towards pre-pandemic growth levels Order and revenue growth, RTM 15% Fifth quarter with underlying order growth, 10% 9% resulting in strongest order backlog ever 5% * 38 bn 3% SEK 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Revenue impacted by -5% lower installation volumes compared t
Slide 7: Strong order growth in Europe and emerging markets
Strong order growth in Europe and emerging markets Americas EMEA APAC -3% 23% -3% 9M: 0% 9M: 10% 9M: 4% Latin America returned to Europe strong growth. Middle Strong growth in India and East Asia. growth. Tough US comps East & Africa returned to growth Soft in China US, Oklahoma UK Egypt + Ghana Ind
Slide 8: Good order growth in Solutions but continued pressure on margins
Good order growth in Solutions but continued pressure on margins Order development Revenue development Margin development Gross margin 8 -3 41% 36.7% % % 59% Solutions Q3 21/22 Q3 21/22 Service EBIT margin 5 4 42% 1 10.4 % % % 58% Solutions 9M 21/22 9M 21/22 Service Order and revenue development bas
Slide 9: Gross margins negatively impacted by logistics costs and higher component prices
Gross margins negatively impacted by logistics costs and higher component prices Gross Margin development Cost impact vs. LY 40% Higher logistics costs and Longer supply chain lead -250 bps 30% times + 20% 38.7% 36.7% Higher component prices -50 due to shortages bps 10% + Solution/Service mix +100 0
Slide 10: We are accelerating our resilience and excellence activities
Resilience & Excellence We are accelerating our resilience and excellence activities FY 20/21 FY 21/22- Adjusting to the new normal Acceleration of resilience and excellence activities ✓ Redefine ways of working to allow for less travel needs going forward ▪ Drive faster order backlog conversion to
Slide 11: Establish clinical evidence
Accelerate innovation Establish clinical evidence Publications to drive reimbursement Reimbursement Increasing levels of clinical evidence Establish differential Superiority schemes Clinical safety 26 Growing number of Unity publications and effectiveness peer-reviewed Utilize articles reporting cli
Slide 12: Q3 financials
Q3 financials 12 Restricted Information and Basic Personal Data
Slide 13: Strong service growth but total revenue decline
Strong service growth but total revenue decline Rolling 12 month (RTM) development 9M Q3 SEK M % 16 000 20 Total net sales Total net sales 4% -3% 12 000 15 Solutions Service Solutions Service 8 000 10 3% 5% -8% 7% 4 000 5 EBIT margin EBIT margin 10.8%1 10.41 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Solutio
Slide 14: Continued pressure on margins
Continued pressure on margins (SEK M) Q3 21/22 Q3 20/21 Q2 21/22 Net sales declined by 3% in constant currencies Net sales 3,602 3,581 3,697 • Americas: -2% Solutions 2,109 2,234 2,254 • EMEA: -4% Service 1,494 1,347 1,443 • APAC: -2% COGS -2,279 -2,194 -2,270 Gross margin (%) 36.7% 38.7% 38.6% Gros
Slide 15: Increased expenses as selling activities normalize and digitalization focus continues
Increased expenses as selling activities normalize and digitalization focus continues Quarterly expenses Expenses Q3 Q3 Growth1 Q2 Growth1 Selling expenses (SEK M) 2021/22 2020/21 Y/Y 2021/22 Q/Q • Increased customer facing activities Selling -342 -279 19% -317 2% Administrative expenses Administrat
Slide 16: Accelerated R&D investments forming future growth
Accelerated R&D investments forming future growth Rolling 12 months (RTM) R&D expenses as % of sales (RTM) SEK M Gross R&D Gross R&D as % of net sales 1 800 Gross R&D as % of net sales 15% 15% Net R&D as % of net sales 1 600 10% 10% 1 400 5% 5% 1 200 1 000 0% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q
Slide 17: NWC in line with seasonal pattern
NWC in line with seasonal pattern Net working capital changes (SEK M) Net working capital as % of net sales 9,611 20/21 21/22 52 314 438 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 8,451 460 Assets -2% -3% -2% -4% -3% -3% -4% OB 21/22 Inventory Accounts Accrued Other Jan 21/22 -6% receivable income -7% 265 9,998 508
Slide 18: Cash conversion continued on good levels
Cash conversion continued on good levels 9M Cash flow (SEK M) Operational cash conversion, RTM 100% 3 000 82% 82% 77% -503 80% 71% 71% 1,849 61% 61% 2 000 -528 60% 45% 40% 35% -991 1 000 818 20% -173 0% 0 EBITDA Other1) Change in Cash flow Continuous Cash flow Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 NWC from inv
Slide 19: Outlook – Q4 and midterm
Outlook – Q4 and midterm 19 Restricted Information and Basic Personal Data
Slide 20: Outlook in Q4
Outlook in Q4 • Higher installation volumes than last year, but component shortages continue to be challenging • Continued high logistics and supply chain costs impacting margins • Long-term market trends to support growth and investment in high-end radiotherapy equipment and margin expansion 20 20
Slide 21: Midterm outlook until 24/25
Midterm outlook until 24/25 Growth Margin Capital allocation >7% EBIT % >50% net sales expansion of annual net profit CAGR over period in dividend Elekta’s outlook is based on an average 6-8% market growth during the mid-term period 21 Restricted Information and Basic Personal Data
Slide 22: Summary Q3
Summary Q3 • Supply chain challenges continued to impact revenue and margins • Strong order growth mainly driven by Europe and recovery in emerging markets. Highest order backlog ever • Additional local presence in the Philippines when delivering on ACCESS 2025 • Strong platform for profitable growt
Slide 23: We build hope
We don’t just build technology We build hope 23 Restricted Information and Basic Personal Data
Slide 24: Q&A
Q&A 24 Restricted Information and Basic Personal Data
Slide 25: Restricted Information and Basic Personal Data
Restricted Information and Basic Personal Data