Slide 1: Q3 report
Q3 report March 2, 2018 Richard Hausmann President and CEO Gustaf Salford CFO
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: We execute on our path towards long-term profitable growth
We execute on our path towards long-term profitable growth Order growth Operational Installed base Elekta Unity Advancing and higher improvements and service on track with margin growth Elekta Digital 4 | Focus where it matters.
Slide 5: EBITA margin to net sales
Net working Reach capital Growth EBITA margin to net sales This fiscal year an EBITA margin of around 19 percent is expected • Less favorable currency effects (SEK 40 M) • Impact from the previously communicated delay of the Unity launch 5 | Focus where it matters.
Slide 6: Q3 financial highlights
Q3 financial highlights Order intake +9% in Q3 and +3% YTD Net sales grew +7% in Q3 and +13% YTD • Strong delivery volumes for linacs and Leksell Gamma Knife® EBITA margin improved 6 ppts to 18.3% in Q3 • Higher volumes and lower costs Strong cash flow • Cash flow more than doubled to SEK 479 M in Q
Slide 7: Good momentum in China, Asia Pacific and North America
Good momentum in China, Asia Pacific and North America North and Europe, Middle East Asia Pacific South America and Africa • Continued improvement • Large order from NHS • Strong growth in China in North America in UK – strengthened market leadership • Major order from Ottawa • Good momentum in Hosp
Slide 8: New focus on our services business
New focus on our services business • Services accounted for 40% of revenues; growing at +6% (YTD). Installed base +6% Y/Y • Trend of increased demand from emerging markets Services • We are driving a global service share of excellence initiative for growth total net and efficiency sales 40% • Improv
Slide 9: 3 new Elekta Unity customers since last report
3 new Elekta Unity customers since last report (Two was booked in Q3 and one will be booked in Q4) 21 customers, 7 installed systems and 3 under installation to date New customers since last report 9 | Focus where it matters. Founding member of Elekta MR-linac Consortium
Slide 10: Elekta Unity commercialization on track
Elekta Unity commercialization on track • CE-mark on track for H1 2018 • Consortium is currently performing imaging on volunteers – comparable with diagnostic 1.5T MR • Functional imaging at CE mark • Odense and Uppsala installation started 10 | Focus where it matters.
Slide 11: Professional services and software and treatment solutions portfolio
PROFESSIONAL SOFTWARE MOSAIQ MOSAIQ METRIQ/LGK Oncology Oncology SERVICES SOLUTIONS Information System Analytics Cancer Registries Oncology Informatics Monaco Image & Plan Plan of care Adaptive planning Review Incl PT Treatment pathway Management New version TREATMENT SOLUTIONS SERVICE & SUPPORT Ver
Slide 12: Welcome to ESTRO
Welcome to ESTRO Barcelona, Spain, April 20-24, 2018 • Lunch symposium, 21 April • Evening event, 21 April • Management meetings • Exhibition area
Slide 13: Financial update
Financial update Gustaf Salford, CFO
Slide 14: Good volume growth and margin leverage
Good volume growth and margin leverage Q3 Q3 (SEK M) 2017/18 2016/17 Net sales 2,747 2,673 COGS -1,595 -1,611 • Net sales +7% in Q3 and 13% YTD – growth in all regions Gross margin (%) 42.0% 39.7% • Gross margin improved by 2.3 Selling expenses -277 -279 percentage points. Driven by Administrative e
Slide 15: Operating costs are decreasing
Operating costs are decreasing 2017/18 2016/17 SEK M Q3 Q2 May-Jan Q3 May-Jan Selling expenses -277 -300 -882 -279 -869 Administrative expenses -244 -232 -724 -234 -680 R&D expenses -264 -282 -862 -261 -733 TOTAL -785 -814 -2,467 -774 -2,282 15 | Focus where it matters.
Slide 16: EBITA bridge compared with last year
EBITA* bridge compared with last year (MSEK) +107 +35 +61 -142 -44 +298 1197 882 EBITA 9M Volume Efficiency & Unity Admin Exchange rate Amortization EBITA 16/17 COGS Selling/R&D Expenses differences and bad debt 9M 17/18 *Before items affecting comparability and bad debt losses 16 | Focus where it m
Slide 17: Q3 tax rates and US tax reform
Q3 tax rates and US tax reform Elekta Q3 effects • Lower US tax rate from January 1, 2018 • One-time positive effect due to US tax reform of SEK 50 M, mainly related to revaluation of deferred tax of capitalized R&D • This resulted in a tax rate of 7.5% in Q3 and 16% YTD Elekta estimated tax rate fo
Slide 18: Good working capital management and cash conversion
Good working capital management and cash conversion Net working capital as % of net sales Operational cash conversion 12% 200% 8% 132% 150% 4% 100% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 50% -4% -8% 0% -6% 12/13 13/14 14/15 15/16 16/17 Rolling 12-months Note: *Cash flow from operating activities / EBITDA 18
Slide 19: SEK ~110 M in currency effect expected for FY 2017/18
SEK ~110 M in currency effect expected for FY 2017/18 Currency effect first 9 months (SEK M, Y/Y) Estimated effect 2017/2018 (SEK M) • Effect on net sales: -155 • Estimated effect on EBITA (Y/Y) ~110 • Effect on expenses 130 Main currency rates vs. last year • Exchange rate differences: -18 Jan 2017
Slide 20: Backlog position going into Q4
Backlog position going into Q4 Order backlog (SEK bn) 22,5 22,2 21,7 21,9 21,7 22,0 20,1 ~15% or SEK 3.3 bn expected to be delivered from backlog in Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016/17 2016/17 2016/17 2016/17 2017/18 2017/18 2017/18 20 | Focus where it matters.
Slide 21: Reach ~19% EBITA margin for FY 2017/18
Reach ~19% EBITA margin for FY 2017/18 Margin drivers Q4 2017/18 (indicative) Investments Currency 9M EBITA bridge (SEK M) COGS savings and efficiency initiatives EBITA margin: EBITA margin: Volume growth Service growth (compared with Q3) EBITA 9M Volume Efficiency & Unity Admin Exchange Amortizatio
Slide 22: Richard Hausmann, President and CEO
Richard Hausmann President and CEO 22 | Focus where it matters
Slide 23: We deliver on our strategy for long-term profitable growth
We deliver on our strategy for long-term profitable growth Order growth Operational Installed base Elekta Unity Advancing and higher improvements and service on track with margin growth Elekta Digital 23 | Focus where it matters.
Slide 24: Focus where it matters.
Focus where it matters. be) CyElekta