Elekta Ab Class B · OMXSTO:EKTA_B
Elekta Ab Class B — Q3 2022/23 Earnings Presentation
27 slides from Elekta Ab Class B's earnings presentation, Feb 24, 2023
Slide 1: Growth and improved margins
Growth and improved margins Q3 report 2022/23 Gustaf Salford, President and CEO Tobias Hägglöv, CFO Feb 24, 2023 Restricted Information and Basic Personal Data
Slide 2: Agenda
Agenda • Delivering on our strategy • Q3 financials • Outlook • Q&A 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: Delivering on our strategy
Delivering on our strategy Restricted Information and Basic Personal Data
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: Returning to healthy order growth
Returning to healthy order growth 9% in Q3 22/23 Americas EMEA APAC 3% 0% 27% Growth in both North and Good growth in Europe with strong order Strong growth in China, Latin America win in Italy and Spain. Weaker development East Asia and Australia in the Middle East and Africa Strong order backlog o
Slide 7: Strong order backlog conversion driving revenue growth
Strong order backlog conversion driving revenue growth Installed base 12% 8% in Q3 22/23 Solutions 5% • Revenue growth in all business lines • Regional growth • Americas +15% • EMEA • APAC +16% -3% 3% • China impacted by Covid wave in Nov/Dec Service Q3 21/22 Q3 22/23 Revenue development figures bas
Slide 8: Strengthening market position in Thailand
Strengthening market position in Thailand Market characteristics Elekta in Thailand • Population of ~70 million • Acquiring business assets • Underserved market: from current distributor some 100 linacs serving • Strong footprint of the population ~50 employees • Governmental initiative to • Current
Slide 9: Revolutionizing cancer care with Elekta Unity
Revolutionizing cancer care with Elekta Unity The MRL Consortium paves the way in prostate SBRT treatment • Largest prostate 5 fraction SBRT cohort study (425 patients) reporting very low toxicity Published results from • Excellent outcomes motivates study MOMENTUM1 of 2 fraction SBRT • Workflow fro
Slide 10: Sustainability: Science-based targets validated
Sustainability: Science-based targets validated SCOPE 1 + 2 SCOPE 3 Cut emissions from the use of Cut emissions by 46.2% from SBT 1 Elekta’s products2 by 55% per SBT 3 scope 1 and 2 over 10 years1 (from base year 2021/22) RT course over 10 years (from base year 2021/22) Move to using 100% renew- Eng
Slide 11: Q3 financials
Q3 financials Restricted Information and Basic Personal Data
Slide 12: Strong revenue growth and adj. gross margin improvement
Strong revenue growth and adj. gross margin improvement (SEK M) Q3 22/23 Q3 21/22 Q2 22/23 Net sales increased by 8% y-o-y1 with 12% growth in Solutions Net sales 4,337 3,602 4,081 Solutions 2,628 2,109 2,322 Adj. gross margin and adj. EBIT margin improved Service 1,709 1,494 1,759 both sequentially
Slide 13: Improved adjusted gross margin primarily driven by net sales growth
Improved adjusted gross margin primarily driven by net sales growth Adj. gross margin development Impact vs. Q3 LY 40% Net sales growth +320 bps 30% Solution-Service mix -100 20% 36.7% 38.4% bps +170 bps FX impact +150 10% bps 0% Higher supply chain costs -200 -110 Q3 LY Q3 FY and inflation bps Net
Slide 14: Decreased expenses both y-o-y and sequentially
Decreased expenses both y-o-y and sequentially Quarterly expenses Somewhat higher selling expenses2 y-o-y due Expenses Q31 Q3 Growth2 Q21 Growth2 to more in-person activities, but sequentially (SEK M) 22/23 21/22 Y/Y 22/23 Q/Q declining Selling 374 342 1% 397 -6% Administrative expenses2 decreased y
Slide 15: Continued strong investments in innovation
Continued strong investments in innovation SEK M Quarterly development of gross R&D R&D expenses as % of net sales (RTM) 800 20% Gross R&D as % of net sales 600 15% Net R&D as % of net sales 400 10% 200 5% 0 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 20/21 21/22 22/23 20/21 21/22 22
Slide 16: Cost-reduction Initiative savings well on track with increased impact in Q3
Cost-reduction Initiative savings well on track with increased impact in Q3 Yearly run-rate reduction end Estimated spend reduction, SEK M YTD 2022/23E of 2022/23E Increase productivity in operations and service (COGS) 30 ~50 ~150 Optimize innovation pipeline and leverage global product organization
Slide 17: Net working capital impacted by more installations
Net working capital impacted by more installations Q3 NWC changes (SEK M) NWC as % of net sales (RTM) 11,624 240 65 573 10,625 121 21/22 22/23 Assets Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1% Q2 22/23 Inventory Accounts Accrued Other Q3 22/23 -2% -3% -2% -3% -4% -4% receivable income -6% -7% 11,428 Receivable a
Slide 18: Cash flow impacted by working capital build up and investments
Cash flow impacted by working capital build up and investments Q3 Cash flow (SEK M) -14 Working capital driven by more installations and higher 684 inventory -445 Continuous investments 225 increased due to investments -389 in innovation pipeline and strengthening of product offering -163 EBITDA Tax
Slide 19: Strong balance sheet and refinancing
Strong balance sheet and refinancing Maturity profile SEK M Net debt1)/EBITDA ratio 1.46 In SEK In GBP Maturity March Refinancing 3 000 Low refinancing risk 2 000 After Q3 closing refinanced SEK 500 M (maturity March 22/23) with SEK 990 M in 7 years tenor 1 000 0 Average duration of 3.3 years before
Slide 20: Outlook
Outlook Restricted Information and Basic Personal Data
Slide 21: Outlook
Outlook • Uncertain macroeconomic environment continue to impact coming quarters • Improved order backlog conversion supporting revenue growth • Component shortages and inflation will remain, putting pressure on margins, whereas the Cost- reduction Initiative contributing positively • Long-term mark
Slide 22: 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 Restricted Information and Basic Personal Data
Slide 23: Summary Q3
Summary Q3 • Demand for radiotherapy continued to improve in the quarter and supported our order growth. • Managed the supply chain challenges well and strong order backlog conversion driving installation volumes and revenue • The Cost-reduction Initiative is progressing according to plan, supportin
Slide 24: We don't just build technology, We build hope.
We don’t just build technology, We build hope. Restricted Information and Basic Personal Data
Slide 25: Save the date: CMD June, in Crawley, UK
Save the date: CMD June, 20 in Crawley, UK Restricted Information and Basic Personal Data
Slide 26: Q&A
Q&A Restricted Information and Basic Personal Data
Slide 27: Restricted Information and Basic Personal Data
Restricted Information and Basic Personal Data