Slide 1: Elekta – Q3 report and Transformation update
Elekta – Q3 report and Transformation update 2015/16 Tomas Puusepp President and CEO Håkan Bergström Chief Financial Officer
Slide 2: Q3 year to date - summary
Q3 year to date - summary Emerging markets affected by weak economic development Order bookings below plan and decreased 6*% Emerging markets decreased 9*% Net sales decreased 2*% EBITA increased by 17% to SEK 855** M Cash flow from operating activities improved 97% to SEK 311 M Net working capital
Slide 3: Order bookings – growth momentum in two regions
Order bookings – growth momentum in two regions Europe, Middle East and Africa North and South America Asia Pacific Significant decline in Russia, USA: modest growth in line with Continued good development in Eastern Europe and in parts of market Australia and China the Middle East Strong performanc
Slide 4: Leksell Gamma Knife new systems - order bookings -56% YTD
Leksell Gamma Knife® new systems - order bookings -56*% YTD Leksell Gamma Knife® new systems › Good pipeline of new systems - but taking longer time − Emerging markets: weak economic environment for high end specialized equipment − Icon awaiting regulatory approval (China, Japan, Canada) − Awaiting
Slide 5: Strong growth in our core linear accelerator business
Strong growth in our core linear accelerator business Elekta Linear Accelerators – order bookings +10*% YTD › Gaining market share globally › Continued success of Versa HDTM − Rapid leaf speeds and high dose delivery − Potential to deliver SBRT/SRS in a standard time slot 4 *Based on constant exchan
Slide 6: Transformation program
Transformation program › June 2015 Elekta announced a transformation program to create a leaner company with improved financial efficiency, higher margins and strong cash flow › YTD we have realized cost reductions of SEK 80 M › During our efforts we have identified further areas for improvement ‐ N
Slide 7: Financial update
Financial update Håkan Bergström CFO
Slide 8: Financial performance – Q3 FY 15/16
Financial performance – Q3 FY 15/16 Net sales: SEK 7,614 M (6,984), decreased 2%* − Low volumes of Leksell Gamma Knife − Temporarily low deliveries in Europe − Continued good growth in Services EBITA: SEK 855** M (733) − One-off costs: SEK -139 M (-2) related to transformation and legal costs − Bad
Slide 9: Improvement in cash flow generation
Improvement in cash flow generation MSEK 2 500 2 000 1 500 1 000 500 0 -500 -1 000 Q4 2013/14 Q1 2014/15 Q2 2014/15 Q3 2014/15 Q4 2014/15 Q1 2015/16 Q2 2015/16 Q3 2015/16 Cash flow from operating activities Cash flow from operating activities - rolling 12 months 8
Slide 10: Cash conversion above target of >70%
Cash conversion above target of >70% Cash conversion (%) 140% 126% 130% 120% 111% 100% 81% 76% 80% 60% 55% 40% 32% 20% 0% 12/13 13/14 14/15 Rolling 12-months Free cash flow / adjusted net profit Cash flow from operating activities / EBITDA (before non-recurring items) Target 9
Slide 11: Net working capital to be further improved
Net working capital to be further improved DSO* Days DSO* improved to 56 (83) days 6 000 120 5 000 100 • North and South America -42 (-32) 4 000 80 • Improvement mainly related to a favorable product 3 000 60 mix with a relative high level of software sales 56 2 000 40 • Europe, Middle East & Africa
Slide 12: Transformation program: net working capital ratio to sales below 5%
Transformation program: net working capital ratio to sales below 5% • Net working capital will be reduced to below 5% of net sales by end of next FY (2016/17) with a more efficient produce to order process − Historically we have accepted to take orders late in the quarter and ship in the same quarte
Slide 13: Transformation: savings target increased to SEK 700 M
Transformation: savings target increased to SEK 700* M Transformation program expanded, leading to additional savings: ‒ Increased financial management and control ‒ Shared Service Centre to reduce G&A cost ‒ Efficiency improvement in “produce to order process” ‒ Consolidation of sales offices ‒ Opt
Slide 14: Order backlog
Order backlog Visibility of future revenue Order backlog maturity by year (bnSEK) 18 50% Q3 Order backlog 35% SEK ~2.7 bn from backlog expected as 15% revenue in Q4 Opening FY15/16 FY16/17 FY17/18 and Backlog Q4 later FY15/16 13 xx% = Forecasted share of current order backlog to be revenue recognize
Slide 15: Tomas Puusepp
Tomas Puusepp CEO
Slide 16: Need for cancer care unchanged
Need for cancer care unchanged Cancer Care Spending Cancer growth USD 188 bn People, million Chemotherapy 30 24 25 Cancer incidence 20 14 15 15 Mortality Radiation therapy 10 8 5 Surgery 0 Stem Cell 2012A 2015E 2020E 2025E 2030E 2035E Immunotherapy transplant 15 WHO forecast of new cancer, excluding
Slide 17: Growth perspective
Growth perspective Mid-term › Mature markets offer stable low single digit growth 4-5% › Continued growth in China › Service and software growth from the installed base 3-5% Long-term › Cancer incidence growth and retreatments › Increased utilization of radiotherapy > › Closing the gap in emerging m
Slide 18: Atlantic investment on track for launch in 2017
Atlantic investment on track for launch in 2017 Planning Ambition Delivery of all consortium systems During 2016 Regulatory approvals - CE Mark, During 2017 510(k) Launch and taking commercial orders 2017 Total orders during ramp up 75 700 MUSD (until 2019) order Expected market price USD 8-10 M opp
Slide 19: Updated fiscal year 2015/16 outlook
Updated fiscal year 2015/16 outlook 2015/16 2016/17 Updated Slightly negative growth in Improved EBITA margin net sales for fiscal year ─ Growth in service 2015/16* ─ Cost reductions Improved EBITA** margin ─ Positive Y/Y EBITA effect of ca 250 MSEK expected ─ Cost reductions on FX for FY 2016/17 ─
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