Elekta Ab Class B · OMXSTO:EKTA_B
Elekta Ab Class B — Investor Day (June 2014)
36 slides from Elekta Ab Class B's investor day presentation, Jun 17, 2014
Slide 1: Capital Markets Day 2014
Capital Markets Day 2014 June 17, Stockholm Photo: Jeppe Wikström/mediabank/visitstockholm.com
Slide 2: Agenda and Important information
Capital Markets Day June 17, 2014 13:00 Elekta - strategic agenda Niklas Savander, President and CEO 13.30 Financials Håkan Bergström, Chief Financial Officer MRI-guided radiation Kevin Brown, Head of Scientific and 13.50 therapy Medical Affairs 14:10 Q&A 14:30 Coffee 14.50 Elekta North America Jay
Slide 3: Elekta Capital Markets Day 2014
Elekta Capital Markets Day 2014 Niklas Savander President and CEO 3 Elekta Growth since 2013/14 2003/04 Employees 3,775 323% Net sales (SEK M) 10,694 368% 4 2
Slide 4: Leksell Gamma Knife at MD Anderson; Eyes to the Oncologist
Leksell Gamma Knife® at MD Anderson 5 Eyes to the Oncologist MRI-guided radiation therapy 6 3
Slide 5: Our product areas; Comment on last fiscal year
Our product areas Brachytherapy Neuroscience Oncology Software 7 Comment on last fiscal year Achievements Challenges • Double-digit order growth in • Weak results in Russia, US, China, EMEA Latin America and India • Esteya® and Monaco® 5 • Leksell Gamma Knife® launched • Working capital • MRI-guided
Slide 6: Financial targets; 33 million cancer patients
Financial targets Guidance 2014/15 Financial objective Net sales growth 7-9%* >10%* Exceed sales growth EBITA growth 10% or more* in SEK 9 *Based on constant exchange rates 33 million cancer patients in the world 10 Source: Globocan 2012. Within 5-year of diagnosis 5
Slide 7: Significant linac undercapacity; Cancer care growth factors
Significant linac undercapacity Linac gap Established markets 2,000 Emerging markets 7,000 - 8,000 10,000 11 Source: CCOR study, Elekta market model Cancer care - growth factors 1 2 Cancer incidence Re-treatments are increasing: million cases • Improved treatments 23 21 − Increased survival rates 19
Slide 8: Increased usage of radiation therapy; Continuous portfolio expansion
3 Increased usage of radiation therapy Estimated share of cancer patients treated with RT Linacs per million inhabitants (incl. re-treatment) United States of America Netherlands 14 USA Switzerland Australia 12 Denmark Canada Singapore 10 Sweden Japan Denmark United Kingdom Norway France 8 Netherlan
Slide 9: Underlying market growth; The Elekta strategic agenda
Underlying market growth • Cancer incidence growth and re-treatments Market growth rate of • Increasing utilization of radiotherapy • Closing the gap in emerging 4-5% markets • Higher technology content, more 6-7% aftermarket revenues + • Elekta target - to grow faster than Elekta growth target comp
Slide 10: Innovation leadership; Commercial transformation
Innovation leadership • Collaborative • Software key enabler and differentiator • Seamless and personalized solutions • Informatics drive clinical outcome / efficiency Versa HD™ MRI-guided Integrated radiation therapy software solutions 17 Commercial transformation • Improved speed / efficient deliv
Slide 11: Lifecycle management – drive aftermarket revenues; Grow the Pie
Lifecycle management – drive aftermarket revenues Software & Efficiency in service hardware upgrades organization Software and service share of Elekta’s revenue today Connectivity: today Advisory services ~60% of installed Own presence / vs. base Education and 45% distributors training 19 Grow the P
Slide 12: Financial targets
Financial targets Guidance 2014/15 Financial objective Net sales growth 7-9%* >10%* Exceed sales growth EBITA growth 10% or more* in SEK 21 *Based on constant exchange rates 22 11
Slide 13: Financials: long-term targets
Financials Håkan Bergström Chief Financial Officer 23 Sustainable profitable growth – long-term targets SEK M Net Sales 12 000 CAGR 10 000 10% • Net sales growth: >10% 8 000 6 000 • EBITA growth to exceed sales 4 000 growth in SEK 2 000 0 08/09 09/10 10/11 11/12 12/13 13/14 • Cash flow ambition: >70
Slide 14: EBITA-margin and contribution margin development
EBITA-margin development Currency adj. EBITA (%) 25% 20% 21.3% 15% 10% Fiscal year 2013/14: 5% • Leverage on SG&A costs; from 19,6% to 0% 09/10 10/11 11/12 12/13 13/14 18.5% of net sales Currency adjusted EBITA-margin • Lower Leksell Gamma Knife® volumes • Negative currency effect; SEK 175 M 25 Cont
Slide 15: Emerging markets instrumental in growth; R&D investments
Emerging markets instrumental in growth Elekta emerging markets, • Emerging markets: 35% of net (SEK bn) sales in 2013/14 • No.1 position 3,7 CAGR 23% 3,3 − Established network with the leading clinics 2,6 − Education and training 2,2 1,9 − Adaptation to local customer needs 1,3 • Temporarily slower
Slide 16: Cash flow after investments; Net working capital target
Cash flow after investments Average 6-year cash conversion: 70% SEK M 86% 91% 59% 57% 76% 32% Cash conversion 2 000 70% cash conversion 1 500 expected for FY 2014/15: 1 000 Operating • Higher operating cash flow cash flow Continuous • Investments on a relative high level 500 investments Change in −
Slide 17: Project lead times and order backlog; Strong financial position
Project lead times and order backlog Linac sales cycle: Delivery & Order Shipment installation Acceptance • Improved efficiency and precision for shorter lead times Backlog versus revenue: SEK M Total Elekta SEK M Technical service • Elekta report net orders − Historic cancellations 2-3% annually 12
Slide 18: Extra dividends proposed; FY 2014/15 outlook
Extra dividends proposed for second year running SEK M 800 • Dividend: 66% of net profit in FY 2013/14 CAGR 33% • Ordinary dividend of 600 SEK 1.50 per share 400 • Extraordinary dividend of SEK 0.50 per share 200 • Proposal for share 0 repurchase program (max 5%) 08/09 09/10 10/11 11/12 12/13 13/14
Slide 19: MRI-guided radiation therapy
MRI-guided radiation therapy Kevin Brown Global Vice President Scientific Research 35 Current challenges in radiation therapy Current technology (CBCT IGRT) has been exceptionally successful in transforming RT practice and perception. It also has a lot of potential that has yet to be fully exploited
Slide 20: Region North America
Region North America Jay Hoey Executive Vice President North America 45 North America – socio economic factors impact on RT Number of new cancer cases Estimated usage of radiation therapy Thousands (incl. re-treatment) 3 500 3 000 2 500 USA 63% 2 000 1 500 Canada 33% 1 000 500 Mexico 15% 0 2012 2015
Slide 21: North America market dynamics; USA drivers
North America market dynamics USA Canada Mexico • Hospital consolidation • Canadian Partnership • Government initiatives for drives larger deal sizes and Against Cancer commits to expanding in radiation comprehensive solutions increasing access to medicine • Demonstrative cost Radiation Therapy ~ 70
Slide 22: North America order bookings up 9%; Versa HD
North America - order bookings up 9%* FY 2013/14 Market share – installed base Market share – new orders FY 2013/14 FY 2013/14 Accuray Accuray 3% Elekta 0% 2% Siemens 9% 15% 9% Elekta 28% Varian 69% Varian 67% Sources: IMV, MD Buyline, Internal Win / Loss reports, Management analysis * Local currenc
Slide 23: Leksell Gamma Knife Perfexion; MOSAIQ
Leksell Gamma Knife™ Perfexion® • 17th International Leksell Gamma Knife Society Meeting in NYC − Record attendance: 600 physicians/physicists, > 40 countries − New, compelling long term, large series studies • System of choice at large volume brain centers − New state penetration: Alaska, Montana −
Slide 24: Elekta LINC; Service customer support
Elekta LINC - Learning and Innovation Center • Ideal environment for learning • Innovative collaboration with users and industry Service customer support Driving quality and productivity • Revenue - service agreement revenue up by 17% year over year • Expanding installed base shifting to Versa HD™ -
Slide 25: Customer support awards; North America continued growth
Elekta customer support - Awards & Industry Rankings • 2013 MD Buyline – Elekta #1 vendor in linacs, SRS, OIS, and brachy • 2013 Best in KLAS for Radiation Therapy − #1 Elekta Leksell Gamma Knife® Perfexion™ (2013/2012/2011) − #2 Elekta Infinity™ • 2013 Top ranked OIS - Elekta MOSAIQ® − 4 years in a
Slide 26: Region Asia Pacific
Region Asia Pacific Gilbert Wai Executive Vice President Asia Pacific 57 A growing unmet need for cancer care Low penetration of Linear accelerators • Age group +60 years expected to double by 2030 • Currently only ~1 linacs per million inhabitants • Capacity gap of 4,000-5,000 linacs • GDP growth e
Slide 27: Strong underlying growth factors; long-term growth in Asia Pacific
Strong underlying growth factors Number of new Differences in usage of Thousands cancer cases radiation therapy (estimate) • High potential in 12 000 underserved market Australia 10 000 South Korea • Emerging market Japan − Education and training 8 000 China − Accessibility 6 000 India 4 000 Philipp
Slide 28: Elekta is the market leader in Asia Pacific; China
Elekta is the market leader in Asia Pacific Installed base growth Market share – new orders Elekta FY 2013/14 CAGR Other 9% 13% Accuray 5% 46% Elekta Varian 40% 1004AC 1104AC 1204AC 1304AC 1404AC 61 China – second largest market for Elekta • Elekta achieved double-digit growth last year − In a slowi
Slide 29: Full offering of solutions in China
Elekta provide a full offering of solutions in China • Education and training • Technology focused on local needs Opening of • Software Elekta LINC in Beijing • Service • Manufacturing • Sourcing 63 Elekta in China - great success Net sales 1 200 1 000 8 of 10 CAGR 26% 800 600 400 Top cancer centers
Slide 30: Japan; Rest of Asia
Japan – growing need for cancer care • Aging population – underlying growth • Steady growth in oncology segment • Agreement with Toshiba to provide better service, support and training to gain share • Opportunity of Siemens, Mitsubishi and Toshiba installed base replacement • Executing on a growth p
Slide 31: Priorities for Asia Pacific
Priorities for Asia Pacific • Capture market potential and execute on growth strategy • Further strengthen infrastructure to support the entire region including training and education • Adapted range of solutions to suit all market needs • Expand software and service business • Capture full Siemens
Slide 32: Region Europe & AFLAME; Strong growth in Europe
Region Europe & AFLAME Ian Alexander Executive Vice President Europe & AFLAME 69 Strong growth in region Europe EMEA Elekta order growth CAGR • Net sales of SEK 4.2 bn (~40% of 13% Elekta) Emerging markets 37% • Sales in over 100 countries • Strong order bookings, up 19%* in FY and 13%* in Q4 06/07
Slide 33: Cancer need is increasing; Undercapacity in Europe
Cancer need is increasing Estimated usage of radiation Number of new cancer cases therapy Europe Netherlands 10 000 Switzerland 9 000 8 000 Norway Thousands 7 000 Sweden 6 000 5 000 UK 4 000 Germany 3 000 2 000 Russia 1 000 Colombia 0 2012 2015E 2020E 2025E 2030E 2035E Peru % of patients Algeria rec
Slide 34: Elekta is gaining share; Versa HD exceeding expectations
Elekta is gaining share in the region Market share – new orders (entire region) Emerging markets share – new orders FY 2013/14 FY 2013/14 Accuray and Accuray 1% other 4% Elekta Elekta 40% 36% 56% Varian Varian 63% 73 Sources: Elekta Versa HD™ – exceeding expectations Faster Higher Larger MLC leaf do
Slide 35: Roll out of Elekta Care; Growing potential in emerging markets
Roll out of Elekta Care Elekta Care™ Support – Single link and complete site support Europe.support@elekta.com 008800 4000 5000 elekta.com/elektacaresupport Benefits for customers Benefits for Elekta • One number • Cost and scalability • Remote support • Performance management • Quick response • Fas
Slide 36: Own Elekta presence; Priorities for Europe, Middle East, Africa
Establishment of own Elekta presence • Continuously evaluating own presence − Secure aftermarket and leverage education and training capabilities − Direct relation with health care authorities • Dynamic markets with several interesting prospects 77 Priorities for Europe, Middle East, Africa • Captur