Elekta Ab Class B · OMXSTO:EKTA_B
Elekta Ab Class B — Q1 2022/23 Earnings Presentation
22 slides from Elekta Ab Class B's earnings presentation, Aug 25, 2022
Slide 1: Accelerating initiatives to expand margins
Accelerating initiatives to expand margins Q1 report 2022/23 Gustaf Salford, President and CEO Tobias Hägglöv, CFO Aug 25, 2022
Slide 2: Agenda
Agenda • Towards improved access to the best cancer care • Q1 financials • Outlook • Q&A 2
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
Towards improved access to the best cancer care 4
Slide 5: Delivering on our strategy ACCESS 2025
Delivering on 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 &
Slide 6: Global macroeconomic turmoil impact market conditions
Global macroeconomic turmoil impact market conditions Americas EMEA APAC -43% 11% 9% Tough comps and cautiousness in Strong growth - Spanish tender Growth despite contracting the U.S. but growth in Latin America driving Europe Chinese market US, New Jersey Panama Spain Nigeria Japan RWJBarnabas Cent
Slide 7: Revenue continued to grow despite continued market turmoil but margins under pressure
Revenue continued to grow despite continued market turmoil but margins under pressure Growth figures and margin, rolling 12 months (RTM)1 Q1 key figures 15% Order Revenue Order -11% 10% Revenue 3% 5% 4% Adj. gross margin 38.9% 3% 0% Adj. EBIT margin 4.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 -5% FY
Slide 8: Accelerating Elekta by introducing an additional cost reduction Initiative to expand margins
Accelerating Elekta by introducing an additional cost reduction Initiative to expand margins FY 22/23 Additional Cost-reduction Initiative FY 21/22 - ongoing ▪ Increase productivity in operations and service ▪ Optimize innovation pipeline and leverage global product organization ▪ Drive efficiencies
Slide 9: Q1 financials
Q1 financials G@Elekta
Slide 10: Stable revenue growth and improved adjusted gross margin
Stable revenue growth and improved adjusted gross margin (SEK M) Q1 22/23 Q1 21/22 Q4 21/22 Increased net sales by 3% y-o-y1 • Growth in Americas 7% and EMEA 2%, APAC flat Net sales 3,327 3,009 4,239 • Solution -1%, Service 6% Solutions 1,706 1,631 2,658 Service 1,621 1,378 1,581 Improved adj. gross
Slide 11: Improvements in adjusted gross margin despite higher logistics and supply chain costs
Improvements in adjusted gross margin despite higher logistics and supply chain costs Adjusted gross margin development Impact vs. LY 40% Net sales growth +120 bps 30% Product mix and +250 37.1% 38.9% Solution-Service mix bps 20% +180 bps FX impact +110 10% bps 0% Higher supply chain costs -300 -110
Slide 12: Increased activities at higher costs
Increased activities at higher costs Quarterly expenses Higher selling costs Expenses Q11 Q1 Growth2 Q4 Growth1 • More in-person customer events and meetings (SEK M) 22/23 21/22 Y/Y 21/22 Q/Q including travel and exhibitions Selling -390 -316 14% -380 0% Higher administrative expenses y-o-y but Admi
Slide 13: Optimization of innovation pipeline
Optimization of innovation pipeline Rolling 12 months (RTM) SEK M R&D expenses as % of sales (RTM) Gross R&D 2 400 Gross R&D as % of net sales 15% 15% 2 200 2 000 10% 10% 1 800 1 600 5% 5% Gross R&D as % of net sales 1 400 Net R&D as % of net sales 1 200 1 000 0% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2
Slide 14: Net working capital ratio in line with seasonal pattern despite some inventory build up
Net working capital (NWC) ratio in line with seasonal pattern despite some inventory build up NWC changes (SEK M) NWC as % of net sales 372 9,634 457 60 9,435 54 Assets 20/21 21/22 22/23 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 OB Inventory Accounts Accrued Other CB Q1 22/23 receivable income Q1 22/23 -2% -3% -3%
Slide 15: Cash conversion close to target of 70 percent
Cash conversion close to target of 70 percent Q1 Cash flow (SEK M) Operational cash conversion, RTM 100% 3 000 82% 82% 77% -28 80% 71% 71% 69% 379 67% 61% 61% -549 2 000 60% -198 40% -594 1 000 20% -396 0% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 20/21 21/22 22/23 EBITDA Taxes, Change in Cash flow Continuous Ca
Slide 16: Introducing Cost-reduction Initiative to secure profitable growth
Introducing Cost-reduction Initiative to secure profitable growth Estimated reduction spend, SEK M 2022/23 Yearly run-rate Increase productivity in operations and service (COGS) ~50 ~150 Optimize innovation pipeline and leverage global product organization (Gross R&D) ~110 ~200 Drive efficiencies in
Slide 17: Outlook – Q2 FY 22/23 and midterm
Outlook – Q2 FY 22/23 and midterm 17
Slide 18: Outlook Q2 FY 22/23
Outlook Q2 FY 22/23 • Uncertain macroeconomic environment and supply chain challenges to continue to impact installations, costs and margins • Installation volumes expected to be in line with LY • Long-term market trends to support growth and investment in high-end radiotherapy equipment and margin
Slide 19: Midterm outlook until 2024/25 unchanged
Midterm outlook until 2024/25 unchanged Net sales EBIT margin Dividend policy >7% ≥50% CAGR expansion of annual over period over period net income Elekta’s outlook is based on an average 6-8% market growth during the mid-term period 19
Slide 20: Summary Q1
Summary Q1 • Continued revenue growth and strong order intake in EMEA and APAC • Increased market activities and continued higher supply chain costs and inflation impacting margins • Cost-reduction Initiative launched to expand margins and support profitable growth • Reiterate outlook to 2024/25 and
Slide 21: We build hope
We don’t just build technology We build hope 21
Slide 22: Q&A
Q&A 22