Slide 1: Year-end report
Year-end report June 1, 2017
Slide 2: 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 3: Richard Hausmann, President and CEO
Richard Hausmann President and CEO 3 | Focus where it matters
Slide 4: My first year
My first year Fun and rewarding • Clear direction outlined We do what we say • Building a foundation for profitable growth Tremendous need for cancer care • Customer experience in focus • New systems and software – we think forward 4 | Focus where it matters.
Slide 5: Q4 was a very special quarter
Q4 was a very special quarter – compared to last year Net sales flat in constant currency • Strong deliveries in Americas and Europe • New shipment policy affecting Leksell Gamma Knife® and Asia Pacific Strong cash flow of SEK 1 bn Order intake -20% • Weak performance in USA and Japan • Challenging
Slide 6: Full-year 2016/17
Full-year 2016/17
Slide 7: A year of laying the foundation
A year of laying the foundation Achievements Necessary fix Actions required • Cost savings achieved • Produce to order change • Fix weak performance in first half 650 MSEK USA • Produce to order realized revenue effect • Strengthen structural set up • Very good cash flow • 3 month ship to installati
Slide 8: Strong order performance in Europe and Asia
Strong order performance in Europe and Asia Europe, Middle East, and Africa Asia Pacific North and South America +4%* -11%* +5%* 4 954 5 078 4 470 4 516 4 824 4 043 FY 15/16 FY 16/17 FY 15/16 FY 16/17 FY 15/16 FY 16/17 • Western Europe +13%, • Strong performance in China • US – underperformance & Ea
Slide 9: USA – accelerated actions
USA – accelerated actions • Priority No. 1 • In our hands – market is robust • Change of US leadership • Peter Gaccione new head of North America. (people manager, sales veteran, domain expert) • Commercial excellence program ongoing, examples: • Investing in accelerated improvements in USA turnarou
Slide 10: Significant effect from produce to order in 2016/17, will reverse in 2017/18
Significant effect from produce to order in 2016/17, will reverse in 2017/18 EBITA bridge (SEK M) Fiscal year 2016/17 • Net sales flat when adjusted for produce to order +315 -103 1 639 1 661 -440 +250 • EBITA margin of 16% (15) • Significant negative EBITA effect from produce to order • Will revers
Slide 11: The future in radiation therapy
The future in radiation therapy
Slide 12: Information and data driven future
Information and data driven future Info and analytics key to the future Interoperability needs are increasing Global connectivity for networks data sharing Expect a merging of medical disciplines
Slide 13: New era in healthcare and cancer management
New era in healthcare and cancer management Information and data driven future Continuous increase of radiation therapy system use and utilization Up to 75% of cancer drugs fail Productivity and outcomes Personalization 4x growth in the use of SRS and SBRT over the next 10 years Reimbursement drives
Slide 14: Innovation trends we believe in and drive
Innovation trends we believe in and drive Outcome driven with focus where it matters • High field MR as the ultimate soft tissue imaging tool Image • Adaptive workflows to save healthy tissue by reducing guidance margins • Integrated and automated workflows on treatment units Workflow • Seamless int
Slide 15: Elekta Unity – will revolutionize radiation therapy
Elekta Unity – will revolutionize radiation therapy • Setting a new standard • Addresses unmet need in cancer therapy • Intelligent software with new interface 15 | Focus where it matters.
Slide 16: Our next priority is to accelerate software platform convergence
Our next priority is to accelerate software platform convergence in the era of digitization of healthcare 16 | Focus where it matters.
Slide 17: Elekta Digital
“Elekta Digital” • New services oriented platform new new new … UNITY MOSAIQ MONACO VERSA • Enable use of artificial intelligence for automated Elekta User Experience (GUI) workflows in radiation therapy Generic Application Layer • Focus on big data applications ■ segmentation ■ contouring ■ morphin
Slide 18: End of last year was a tipping point for Elekta
End of last year was a tipping point for Elekta
Slide 19: Homework done - foundation in place
Homework done - foundation in place Values Organization Strategic priorities We work as one team We do what we say We keep thinking forward Company organized Updated brand in line with three key Growth processes Cost 19 | Focus where it matters.
Slide 20: Robust market
Robust market Western Europe Current growth estimated at 3-5% • Pent-up demand • Replacements • Private initiatives Eastern Europe • Large unmet need North America • Starting to grow • Technology driven • Replacements • Consolidation Japan • Slow market China South America • Long-term build out of c
Slide 21: Leading portfolio
Leading portfolio Elekta Unity Superior Unique position linac with Leksell platform Gamma Knife® Global no.1 in Competitive brachytherapy software portfolio 21 | Focus where it matters.
Slide 22: New management team
New management team Executive Management Richard Hausmann, CEO Gustaf Salford, CFO Karin Svenske Nyberg, EVP Human Resources Maurits Wolleswinkel, Chief Strategy Officer Ioannis Panagiotelis, Chief Marketing Officer Ian Alexander, Chief Commercial Officer Elekta Conference, Brighton, May 2017 Johan
Slide 23: Return to growth and >20% EBITA margin
2017/18: Return to growth and >20% EBITA margin
Slide 24: Our way forward has started
Our way forward has started 2018/19 2016/17 2017/18 2018/19 • Year of change and building • Transformation delivers • Elekta Unity – growth driver the foundation for profitable full effect growth • Significant efficiency • Organization and improvements • Produce to order and ship management in place
Slide 25: Margin drivers for 2017/18
Margin drivers for 2017/18 Margin drivers 2017/18 (indicative) EBITA bridge from last year (SEK M) COGS Investments Currency savings Volume growth Service growth Reach >20% EBITA EBITA Produce Cost Currencies EBITA margin Working 15/16 to order savings capital 16/17 effects / mix clean- up and less
Slide 26: Record strong backlog
Record strong backlog Last year This year (SEK bn) (SEK bn) 22.5 18.2 +16% 7.9 6.7 Opening order Expected revenue Opening order Expected revenue backlog FY 16/17 backlog FY 17/18 26 | Focus where it matters.
Slide 27: Targets 2017/18
Targets 2017/18 Reach Net working capital Growth >20% EBITA <5% margin to net sales 27 | Focus where it matters.
Slide 28: Focus where it matters.
Focus where it matters. be) CyElekta
Slide 29: Financial update
Financial update Håkan Bergström, CFO
Slide 30: Net sales by quarter versus last year
Net sales by quarter versus last year SEK M 4 000 40% 3 715 3 607 3 500 35% +0% 3 000 2 828 2 547 2 673 30% • Produce to order effect in 2 434 2 500 2 239 +1% 25% first half -16% • Less 3rd party products 2 000 1 882 20% 1 500 -15% 15% • Fewer acceptances 1 000 10% 500 5% • Lower level of book-and 0
Slide 31: Income statement – Q4 2016/17
Income statement – Q4 2016/17 Q4 Q4 (SEK M) 2016/17 2015/16 EBITA bridge vs. Q4 last year x Net sales 3,715 3,607 EBITA 15/16 Q4 785 COGS -2,139 -2,067 Leksell Gamma Knife -65 - shipment policy Gross margin (%) 42.4% 42.7% Increased spend, -35 OPEX -774 -754 Unity etc. Capitalized R&D 163 132 Capita
Slide 32: Positive currency effect expected for FY 2017/18
Positive currency effect expected for FY 2017/18 Weakening of GBP has a positive effect on bottom line Effect YTD Y/Y (SEK M) Effect 2017/18 Y/Y (SEK M) • Effect on net sales: +2% Estimated effect on EBITA (Y/Y) ~200 • Effect on EBITA: 351 • Exchange rate differences: -201 Main currency rates vs. la
Slide 33: Transformation program implemented
Transformation program implemented Cost reductions of Net working capital Produce-to- Significantly fewer to sales below Leksell Gamma Knife® units SEK 700 M order and ship with full effect 5% to installation shipped, despite increased order intake. Good backlog 2017/18 by 2016/17 process position f
Slide 34: Opex savings target reached
Opex savings target reached Rolling 12 months gross spend development SEK M 5 200 5 100 • Achieved operating savings 5 000 target reached 4 900 • Additional investments in growth - Elekta Unity 4 800 - New markets 4 700 Reached 4 600 500 SEK M target 4 500 Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec
Slide 35: Net working capital at -6% of sales
Net working capital at -6% of sales Key working capital assets Net working capital Accounts receivables as % of sales Accrued 12% income Inventories 8% 4% Q3 Q4 Q1 Q2 Q3 Q4 15/16 15/16 16/17 16/17 16/17 16/17 0% Q3 Q4 Q1 Q2 Q3 Q4 Key working capital liabilities -4% -8% -6% Customer advances Prepaid
Slide 36: Strong cash flow generation
Strong cash flow generation Cash conversion Cash Flow FY14/15 FY15/16 FY16/17 160% 145% Operating cash flow 1 299 709 767 140% 126% Working Capital +524 +461 + 1 051 120% 111% 100% Cash Flow from operating 1 823 1 170 1 819 activities 79% 80% Investments tangibles & other -271 -178 -141 60% 60% Capi
Slide 37: Implementation of IFRS 15 from fiscal year 2018/19
Implementation of IFRS 15 from fiscal year 2018/19 • Elekta will implement IFRS 15 revenue recognition standard as of 1 May 2018 • An analysis is performed of the expected effects from implementing the new standard • Based on the analysis, a significant effect from the timing of recognition of reven
Slide 38: Focus where it matters.
Focus where it matters. be) CyElekta
Slide 39: 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 40: Elekta Unity
Elekta Unity Dr. Ioannis Panagiotelis, Chief Marketing Officer
Slide 41: Pioneer in Radiotherapy
1972 First Monte Carlo 2003 based Treatment Planning System Pioneered Radiosurgery with Gamma Knife 2008 (CMS) First to integrate CBCT and introduce Image-guided radiotherapy Introduction of Agility, the highest 2015 2012 performing MLC in market Pioneer in First online adaptive Radiotherapy radiosu
Slide 42: Elekta Unity – will revolutionize radiation therapy
Elekta Unity* – will revolutionize radiation therapy • Setting a new standard • Addresses unmet need in cancer therapy • Intelligent software with new interface 42 | Focus where it matters. *Elekta Unity is a Technology in Development.
Slide 43: Film
FILM clip Film 43 | Focus where it matters.
Slide 44: Elekta Unity
Elekta Unity Personalized Therapy New, paradigm of surgical precision radiotherapy & cancer treatment Ground Breaking Patient-centric platform allows response to live images of the tumour whilst patient is on the table New, unique next-generation linac Tailored on-demand treatment plan with potentia
Slide 45: Personalized radiotherapy
Personalized radiotherapy MR/RT RT Conventional Reduction The expansionin PTV of duePTV the to increased ensures confidence that the dose in position cloud and still covers shape of the the target, target and online accounting for plan adaptation uncertainties Dose PTV expansion No change in the PTV
Slide 46: Potential for significant reduction of dose to healthy tissue
Potential for significant reduction of dose to healthy tissue Current IGRT Delivering CTV to PTV conformal expansion treatments by common for static, RT moving indications targets, and deforming targets with the smallest margin. PTV with imaging S M L XL 3-5 mm 5-7 mm 7-12 12-20 mm PTV CTV PTV CTV P
Slide 47: Unique potential for 'hard to treat' cancers
Unique potential for ‘hard to treat’ cancers Nodal Diseases Pancreatic Cancer Preoperative Breast Renal Cell Carcinoma Liver Metastases Adrenal metastasis (Oligo-metastasic disease) Biliary Cancers 47 | Focus where it matters.
Slide 48: Successful presentation at ESTRO
Successful presentation at ESTRO • 1118 leads vs. 705 in 2016 [↑58%] • 329 Unity new customer leads • Evening event 450 professionals representing 250 institutions • >180 planning guides sent • 15 systems sold to date
Slide 49: First patient treated at UMC
First patient treated at UMC – part of the clinical study
Slide 50: First-in-man treatments on Elekta Unity
First-in-man treatments on Elekta Unity* Results “Better than Expected” Images courtesy of Utrecht MC. Uncompromised diagnostic imaging quality Image anywhere, anytime High Speed (>15 images/s) High Resolution (<1mm3) Full breadth of Diagnostic MR sequences Demonstrated technical accuracy and safety
Slide 51: Commercialization on track
Commercialization on track ASTRO Target: 510k ESTRO September submission presentation 2017 2017 RSNA First patient Target: CE-mark November treated 2017 2017 51 | Focus where it matters.
Slide 52: Long-term addressable market ~25% of current installed linacs
Long-term addressable market ~25% of current installed linacs Target: Phase 1: Reputation driven phase 75 orders • High-profile clinics until 2019; • ~ 300-400 units addressable market 15 to date Phase 2: Clinical adoption driven phase • Larger mainstream profile, guidelines driven • ~ 3 000 units a
Slide 53: Focus where it matters.
Focus where it matters. be) CyElekta
Slide 54: Gustaf Salford
Gustaf Salford Chief Financial Officer • MSc from Stockholm School of Economics • Consultancy background (Boston Consulting Group, Booz Allen Hamilton) • At Elekta since 2009 • Finance Director Europe • Head of Business Control
Slide 55: What I believe in
What I believe in Continue Transparency Balanced to transform and business through process accountability model excellence 55 | Focus where it matters.
Slide 56: Q&A
Q&A
Slide 57: Focus where it matters.
Focus where it matters. be) CyElekta