Elekta Ab Class B · OMXSTO:EKTA_B
Elekta Ab Class B — Q2 2022/23 Earnings Presentation
26 slides from Elekta Ab Class B's earnings presentation, Nov 24, 2022
Slide 1: Product launches and Cost-reduction Initiative on track
Product launches and Cost- reduction Initiative on track Q2 report 2022/23 Gustaf Salford, President and CEO Tobias Hägglöv, CFO Nov 24, 2022
Slide 2: Agenda
Agenda • Delivering on our strategy • Q2 financials • Outlook • Q&A
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 CjElekta
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: Orders impacted by global macroeconomic challenges
Orders impacted by global macroeconomic challenges -6% in Q2 22/23 Americas EMEA APAC -13% -9% 2% Decline in Canada and South Slow development in Europe and Africa, Good growth in East Asia and America with stable demand in continued strong momentum in Spain expanding Chinese market, weaker the U.S.
Slide 7: Solution revenue declined, service growing faster than installed base
Solution revenue declined, service growing faster than installed base -5% Installed base -13% Solutions in Q2 22/23 5% • Revenue negatively impacted by: • Supply chain disturbances • China lockdowns • Customer readiness 7% • Growth in the U.S. and Europe Service • Service revenue growing faster than
Slide 8: Customer lifetime companion: Launch of Elekta Care 360
Customer lifetime companion: Launch of Elekta Care 360 Enhancing customers’ clinical operations by faster, consistent and more efficient processes Opportunities Services for full line of solutions includes e.g. Service revenue Equipment as a service Commissioning Financial services Pay-per-use Physi
Slide 9: Release of Unity Comprehensive Motion Management (CMM)
Release of Unity Comprehensive Motion Management (CMM) • Freedom to choose the right motion management strategy for every patient • More than simply automatic gating for CMM with True Tracking and automatic gating precision treatments • Seamlessly integrated workflow CE mark: FDA: submitted
Slide 10: U.S. launch of Esprit at ASTRO
U.S. launch of Esprit at ASTRO Well received in the U.S. market • Ease of use and better patient comfort • Fast treatment plan with Lightning • Superior visualization with Vantage CE mark: FDA clearance:
Slide 11: Q2 financials
Q2 financials CjElekta
Slide 12: Low revenue and supply chain challenges impacting margins
Low revenue and supply chain challenges impacting margins (SEK M) Q2 22/23 Q2 21/22 Q1 22/23 Net sales decreased by 5% y-o-y1 with growth in the U.S. and Europe Net sales 4,081 3,697 3,327 • Solutions -13% Solutions 2,322 2,254 1,706 • Service +7% Service 1,759 1,443 1,621 COGS2 -2,557 -2,270 -2,032
Slide 13: Adjusted gross margin still heavily impacted by the supply chain and inflation
Adjusted gross margin still heavily impacted by the supply chain and inflation Adj. gross margin development Impact vs. Q2 LY 40% Net sales growth -160 bps 30% Solution-Service mix +140 20% 38.6% 37.3% bps -130 bps FX impact +140 10% bps 0% Higher supply chain costs -250 -110 Q2 LY Q2 FY and inflati
Slide 14: Sequentially decreasing opex despite inflation pressure
Sequentially decreasing opex despite inflation pressure Quarterly expenses Higher selling expenses y-o-y due to more Expenses Q21 Q2 Growth2 Q11 Growth2 in-person customer events, but sequentially (SEK M) 22/23 21/22 Y/Y 22/23 Q/Q declining Selling -397 -317 13% -390 -2% Administrative expenses flat
Slide 15: Cost-reduction Initiative targeting SEK 450 M annual savings
Cost-reduction Initiative targeting SEK 450 M annual savings well on track with increasing impact in H2 Yearly run-rate reduction end Estimated spend reduction, SEK M Q2 2022/23E of 2022/23E Increase productivity in operations and service (COGS) 10 ~50 ~150 Optimize innovation pipeline and leverage
Slide 16: Decreasing gross R&D in relation to net sales
Decreasing gross R&D in relation to net sales Quarterly development R&D expenses as % of net sales SEK M 800 20% (RTM) Gross R&D as % of net sales Gross R&D Net R&D as % of net sales 600 15% 400 10% 200 0 5% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 20/21 21/22 22/23 20/21 21/22 22/23 De
Slide 17: Seasonable stable net working capital (NWC) ratio
Seasonable stable net working capital (NWC) ratio Q2 NWC changes (SEK M) NWC as % of net sales (RTM) 10,625 169 197 391 Assets 21/22 22/23 9,634 234 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 OB Q2 Inventory Accounts Accrued Other CB Q2 -2% -3% -2% 22/23 receivable income 22/23 -3% -3% -4% -4% -6% -7% 10,914 Liabil
Slide 18: Softer cash flow due to lower earnings
Softer cash flow due to lower earnings Q2 Cash flow (SEK M) Lower earnings than last 465 year -319 Continuous investments -202 increased due to -55 investments in innovation -362 -417 pipeline and strengthening of product offering EBITDA Taxes, Change in Cash flow Continuous Cash flow interest net W
Slide 19: Continuous strong balance sheet and low refinancing risk
Continuous strong balance sheet and low refinancing risk Maturity profile SEK M Net debt1)/EBITDA ratio 1.38 SEK GBP 5 000 4 000 Available funds2) of more than SEK 3.5 bn 3 000 2 000 Low refinancing risk with SEK 500 M in 1 000 maturities until March 2025 0 22/23 23/24 24/25 25/26 26/27 27/28 28/29
Slide 20: Outlook
Outlook CjElekta
Slide 21: Outlook
Outlook • Uncertain macroeconomic environment and supply chain challenges to continue to impact installations, costs and margins in Q3 • However, situation expected to gradually improve during Q4 • Long-term market trends to support growth and investment in high-end radiotherapy equipment and margin
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
Slide 23: Summary Q2
Summary Q2 • Continued macroeconomic challenges impacted order, revenue and margins • New launches and price improvements will contribute to revenue and margin growth • Cost-reduction Initiative on track to expand margins
Slide 24: We don't just build technology, We build hope.
We don’t just build technology, We build hope.
Slide 25: Q&A
Q&A
Slide 26: CjElekta
CjElekta