Elekta Ab Class B · OMXSTO:EKTA_B
Elekta Ab Class B — Investor Day (June 2021)
75 slides from Elekta Ab Class B's investor day presentation, Jun 7, 2021
Slide 1: Capital Markets Day 2021
Capital Markets Day 2021 Restricted Information and Basic Personal Data
Slide 2: Capital Markets Day agenda, June 7, 2021
Cecilia Ketels 14:00 OPENING Head of Investor Relations INTRODUCTION Gustaf Salford MARKET DYNAMICS President & CEO 14:30 STRATEGY Maurits Wolleswinkel INNOVATION Chief Product Officer & President Linac Solutions Capital Markets Day Lionel Hadjadjeba June 7, 2021 President MR-Linac Solutions UNITY T
Slide 3: Introduction
Capital Markets Day 2021 Introduction Gustaf Salford, President & CEO Restricted Information and Basic Personal Data
Slide 4: A global organization for a global business
A global organization… Headquarter 4,500 40 in Stockholm …across 40 main Employees globally… sites and expanding …for a global business… +2M +7,000 +120 Patients treated every year Hospitals with Countries with sales with an Elekta solution Elekta equipment …that keeps growing 14,000 4,750 MSEK in a
Slide 5: Our Business Lines, Regions, and Global Service are key components
Our Business Lines, Regions, and Global Service are the key components of our organization Business Lines Americas 28% Oncology EMEA Linac MR-Linac Brachy Neuro Global Informatics solutions solutions solutions solutions service 37% solutions Global Service Asia Pacific 34% Emerging vs. Mature Softwa
Slide 6: Cancer impacts all of us, the cancer burden will continue to grow
Cancer impacts all of us It’s personal – the cancer burden will continue to grow One in five people will develop cancer People live longer with cancer 5-year survival rate from 49% to 70% since the 1970’s It’s growing Cancer is growing twice as fast as other diseases and is likely to become the lead
Slide 7: Our vision, mission and purpose
Our vision: A world where everyone has access to the best cancer care Our mission: We improve patient lives by working together with our customers and partners Our purpose: Hope for everyone Delivered in a dealing with cancer sustainable way Restricted Information and Basic Personal Data
Slide 8: Market dynamics
Capital Markets Day 2021 Market dynamics Gustaf Salford, President & CEO Restricted Information and Basic Personal Data
Slide 9: Improvements in cancer care have increased survival rates
Improvements in cancer care over the past 40 years have increased survival rates All cancers Thyroid Improve Prostate operational efficiency Breast (female) Skin Corpus Uteri Bladder Kidney Non-Hodgkin lymphoma Cervix Uteri Mouth/throat Leukemia Colorectum Myeloma Ovary Brain Stomach Improve Esophag
Slide 10: Different geographical markets require different focus to close Linac shortage
Different geographical markets require different focus to close the current shortage of >15,000 Linacs globally IB units per capita (million population) in 2021 14 Improve clinical 12 efficiency and local proximity 10 8 6 15% of world population 4 Develop 85% of world population infrastructure 2 and
Slide 11: Underlying fundamentals support future RT market growth
Underlying fundamentals support future RT market growth 1 2 3 4 Improved cancer Continued infrastructure Growing adoption of Breakthrough and RT access cancer cost-efficient technology in emerging burden and value- advancements markets based care Market collaboration across the cancer care eco-syste
Slide 12: Main future growth drivers are Emerging Markets & Software
Main future growth drivers are Emerging Markets & Software Market size Market growth and drivers – outlook 6-8% CAGR globally* >7 8-10% Emerging Markets 7-9% Software BUSD 2-4% 5-7% Mature Markets Solutions *Underlying growth, Covid-19 recovery might impact short-term outlook 12 Source: Market repor
Slide 13: Elekta's Strategy
Capital Markets Day 2021 Elekta’s Strategy Gustaf Salford, President & CEO Restricted Information and Basic Personal Data
Slide 14: Our strategy: ACCESS 2025
Our strategy ACCESS TOWARDS A WORLD WHERE 2025 EVERYONE HAS ACCESS TO THE BEST CANCER CARE 14 Restricted Information and Basic Personal Data
Slide 15: What does access to the best cancer care mean to Elekta?
What does access to the best cancer care mean to Elekta? 2025 MILESTONE AVAILABILITY +300m people 1 OF CARE to gain access to RT via 800 to 1000 additional Elekta Linacs in underserved markets ELEVATION 2x to 4x 2 OF CARE double the clinical usage of short course treatment (hypofractionation) and qu
Slide 16: Our strategy
Our strategy 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 & Process Excellence across
Slide 17: Our sustainability agenda
Our strategy Our sustainability agenda – two sides of the same coin • Cut Co2 emissions in half until 2030 – science-based targets implemented • Support green procurement and circular Towards a world E business models where everyone has access to the best cancer care Towards a world where everyone h
Slide 18: Strategy operationalization well under way
Strategy operationalization well under way LONG TERM Driver of market paradigm shift FY 21/22 to FY 24/25 Sustainable Next generation treatment, profitable growth workflows and customer FY 20/21 engagement models to improved ACHIEVED MILESTONES ü New software platform patient access to the best canc
Slide 19: Precision in Oncology
A COMPREHENSIVE PARTNERSHIP FROM INNOVATION TO DISTRIBUTION Precision in Oncology Two Companies One Vision 19 Restricted Information and Basic Personal Data
Slide 20: Elekta–Philips partnership value
ELEKTA–PHILIPS PARTNERSHIP VALUE Breadth and Depth Personalized Therapy Integrated Informatics End-to-End Cancer Care Streamlined Workflows for Open-architecture and Continuum coverage with Adaptive Therapy Delivery vendor-agnostic solutions best-in-class solutions 20 Restricted Information and Basi
Slide 21: Capital Markets Day
Capital Markets Day 2021 Restricted Information and Basic Personal Data
Slide 22: Innovation
Capital Markets Day 2021 Innovation Maurits Wolleswinkel, Chief Product Officer & President Linac Solutions Restricted Information and Basic Personal Data
Slide 23: Two distinct segments | Five product lines
Two distinct segments | Five product lines Comprehensive Oncology Care Solutions Oncology Informatics Software Services RT Treatment Solutions Devices Software Services Linacs MR/RT Neuro Brachy 23 Restricted Information and Basic Personal Data
Slide 24: Amazing progress in past year
Amazing progress in past year LGK Lightning Monaco® 6.0 Elekta Studio Harmony Linac MOSAIQ® 3.0 24 Restricted Information and Basic Personal Data
Slide 25: ACCESS 2025 drives priorities, three focus areas
‟ACCESS 2025” drives priorities │ Three focus areas 1 Personalized Precision 2 Elevated Productivity Comprehensive Clinical decision support Oncology Care Resource optimization Solutions Patient’s role in Mobility of care care pathway 3 Integrated Informatics RT Treatment Integration and expansion W
Slide 26: Harmony
Treatment productivity and efficiency Harmony MR-Linac Unity segment 25% productivity improvement CE approved, 510k pending Versa Premium 11 countries HD segment First patient treated Better profitability Harmony Performance Pro segment Value Harmony segment 26 Restricted Information and Basic Perso
Slide 27: Evolving Treatment Management Software
Workflow efficiency and clinical excellence Evolving Treatment Management Software + ProKnow Proton Solution Artificial intelligence* 27 *WIP Restricted Information and Basic Personal Data
Slide 28: MOSAIQ Plaza
Integrated informatics MOSAIQ® Plaza Focus on ease of use and efficiency for the clinical staff… MOSAIQ SmartClinic … and adding AI-based PRO tools through Kaiku Health 28 Restricted Information and Basic Personal Data
Slide 29: The next part of the journey...
The next part of the journey... 29 Restricted Information and Basic Personal Data
Slide 30: Elekta is accelerating innovation investments
Elekta is accelerating innovation investments Innovation investment Personalized 1 Precision • Embark on a comprehensive Digital Software Transformation program to future-proof our solutions and enable new capabilities and services Elevated Form strategic partnerships while staying 2 Productivity •
Slide 31: Next-gen software will see traditional OIS role expanded
Digital software transformation Next-gen software More multi- Clinic disciplinary decisions productivity will see traditional OIS role expanded Patients more Interact anywhere actively participate and any time 31 Restricted Information and Basic Personal Data
Slide 32: Closer integration of treatment management software with the device
Digital software transformation ...and closer integration of treatment management software with the treatment device Reference plan 1 mm treatment resolution Adapted plan Image guidance Real-time motion Act on anatomical Device-specific treatment as standard management* changes day-by-day management
Slide 33: Digital transformation program
Digital software transformation Digital transformation program 1 FASTER What we are doing INNOVATION Central software platform team established, and centrally driven SW transformation program 2 SMOOTHER Software transformation UNIFIED UX journey, started over a year Elekta is expanding its ago, curr
Slide 34: Share a vision of Precision in Oncology
Strategic partnership Share a vision of Kaiku SmartClinic Patient Engagement Precision in Oncology End to End Integration Tumor Board Orchestrator MOSAIQ ® MOSAIQ® Assist Plaza Medical Oncology Oncology Genetic Tumor Pathways Board Oncology Analytics 34 Restricted Information and Basic Personal Data
Slide 35: Jointly advancing comprehensive and personalized Oncology care
Elekta–Philips strategic partnership Jointly advancing comprehensive and personalized Oncology care Magnetic Resonance Radiation Therapy Integrated Simulation–Planning–Treatment workflow for adaptive and personalized therapy Expansion of integrated imaging and image-guided solutions for oncology tre
Slide 36: AI efforts
AI efforts Vision Partners Clinical & Operational Insights Automate non- Enable ART critical tasks Free oncologist to focus Infrastructure Resource Industrial partners Management 50k RT-specific end-to-end data sets 36 Restricted Information and Basic Personal Data
Slide 37: Accelerating innovation | Single software foundation
Accelerating innovation | Single software foundation Linacs MR/RT Neuro Brachy Informatics New linac systems include Further expand real-time Drive efficiency and Expand image Patient, workflow and adaptive workflows capabilities (AI) automation guidance clinical decision support Kaiku SmartClinic P
Slide 38: Capital Markets Day
Capital Markets Day 2021 Restricted Information and Basic Personal Data
Slide 39: MR-Linac
Capital Markets Day 2021 MR-Linac Lionel Hadjadjeba, President MR-Linac Solutions Thijs van Bommel, VP and Head of Marketing & Sales MR-Linac Solutions Restricted Information and Basic Personal Data
Slide 40: +100 Unity systems ordered and installed across the globe
+100 Unity systems ordered and 44 installs across the globe EMEA Americas APAC 37 orders 32 orders 32 orders 20 installs 11 installs 13 installs 40 Restricted Information and Basic Personal Data
Slide 41: Unity MR-Linac – the journey onwards
Unity MR-Linac – the journey onwards Motion Management Response Adaptive Elekta More personalized Unity Elekta Unity More efficient Standard in Radiotherapy Workflow Optimization Treatment time reduction Auto segmentation 41 Restricted Information and Basic Personal Data
Slide 42: Margins set to increase following operational improvements
Margins set to increase following operational improvements and business maturity Operational improvements Business maturity will enhance driving cost down margin profile % service revenue Installation time Sustainable margin improvement Elekta group Unity Business Installation times: From 37 weeks t
Slide 43: MRL treatment beneficial to 25-30% of all RT patients
Based on clinical analysis, MRL treatment would be beneficial to 25-30% of all RT patients in the future Clinical need for MRL 12-15% 25-30% All Cancer cases All RT cases 43 Restricted Information and Basic Personal Data
Slide 44: The Unity evidence development journey
The Unity evidence development journey First-in-man CE-mark Start MOMENTUM Today 2017 2018 2019 HERMES Study Prostate MR-Adaptor Study Oropharynx Superiority studies Clinical evidence UNITED Glioblastoma MOMENTUM Study Observational studies Data generation FREEDOM RT DWI for Oropharynx Technical stu
Slide 45: Good progress in clinical evidence journey
Good progress in clinical evidence journey: New on-going clinical studies of interest Cancer type: Head and Neck Cancer1 Intervention Radiation + immunotherapy What is the highest radiation dose 1 Study question: that can be given with Unity in patients receiving immunoTx? Cancer type: Kidney Cancer
Slide 46: Capital Markets Day
Capital Markets Day 2021 Restricted Information and Basic Personal Data
Slide 47: Service
Capital Markets Day 2021 Service Paul Bergström, EVP Global Services Restricted Information and Basic Personal Data
Slide 48: Recurrent service business is a substantial and growing share of revenues
Recurrent service business is a substantial and growing share of Elekta revenues Net sales per product type (% of total Elekta sales) EMEA Americas APAC 63% 59% Solutions 39% 75% 61% 26% 40% 60% 74% 37% 41% Service 25% Regional variation between ~25-60% 10/11 15/16 20/21 48 Restricted Information an
Slide 49: Service revenue is stable and recurring
Service revenue is stable and recurring with majority of service revenue stemming from long term contracts Lifecycle revenue, illustrative warranty Year 0 +1 +2 +3 +4 +5 +6 +7 +8 +9 +10 +11 +12 +13 Solution revenue including Annual Total software, installation, service service service and training r
Slide 50: Service revenue has outpaced installed base growth
Service revenue has outpaced installed base growth Installed base and service revenue (quarterly rolling 12 months) Devices Service revenue MSEK 6,000 6,000 5,000 5,000 4,000 4,000 3,000 3,000 2,000 2,000 1,000 1,000 0 0 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 50 Restricted Infor
Slide 51: Strategic focus areas for Services
Strategic focus areas for Services A proactive service model Process Digitalization Growth People & Platforms innovating and expanding with developing centralizing, implementing innovations and competence and standardizing, to be a forerunner business models effectiveness and automating • Increase a
Slide 52: Digitalization met pandemic challenges with minimal customer impact
Digitalization Thanks to our digitalization efforts, we’ve been able to meet the challenges of the pandemic with minimal customer impact Site down cases, FY18/19 – FY20/21 Remote assist rate 55% 66% FY18/19 Q4 FY20/21 increased with maintained overall NSAT score of 80+ FY18/19 FY19/20 FY20/21 52 Res
Slide 53: Expanding services offering and new business models
Innovation for growth We plan to drive growth by expanding our services offering and moving towards new business models Service Revenue Equipment as a service Opportunities Financial services Pay-per-use Value Added Services Maintenance service contracts Cost of service Current offerings Repair Supp
Slide 54: In summary
Capital Markets Day In summary 2021 • Stable recurring revenue business • Growing faster than the installed base • Industry leading remote technology • Driving growth through innovation and digitalization • Service strategy results in higher service quality, lower costs and increased customer satisf
Slide 55: Capital Markets Day
Capital Markets Day 2021 Restricted Information and Basic Personal Data
Slide 56: Emerging Markets
Capital Markets Day 2021 Emerging Markets Habib Nehme, EVP Middle East, Africa and India, APAC & Japan Restricted Information and Basic Personal Data
Slide 57: Emerging markets are underserved
Emerging markets are underserved 155countries 40% of global GDP 40% of total RT 85% of global installed base population 57 Source: UN World Population Prospects, 2019; International Atomic Energy Agency: DIRAC (Directory of Radiotherapy Centres), 2021; World bank, 2019 Restricted Information and Bas
Slide 58: Strong position and growing Emerging Market share
We have a strong position in these countries and keep growing the Emerging Market share of our total business Net sales per market type (% of total Elekta sales) Elekta market share in Emerging Markets (% of total market) Mature ~50% 71% 70% of new orders 81% Markets Emerging ~35% 29% 30% of install
Slide 59: Emerging Markets margins are increasing
Emerging Markets margins are also increasing as our service and software offerings keep gaining attractiveness Gross margin (%) Operational drivers Increased sales push on full Elekta offering, increasing Software and Service sales Increased customer demand for full Elekta offering to meet productiv
Slide 60: We work structurally to address the needs of emerging markets
We work structurally to address the needs of emerging markets Partnering with Ministries of Health Develop Partnering with human capital private actors and investors PATIENT ACCESS Smart market Right products coverage and for the market local presence 60 Restricted Information and Basic Personal Dat
Slide 61: Capital Markets Day
Capital Markets Day 2021 Restricted Information and Basic Personal Data
Slide 62: Financials
Capital Markets Day 2021 Financials Johan Adebäck, Chief Financial Officer Restricted Information and Basic Personal Data
Slide 63: Mid-term outlook until 24/25
Mid-term outlook until 24/25 Growth Margin Capital allocation >7% EBIT % >50% net sales expansion of annual net profit CAGR over period in dividend 63 Restricted Information and Basic Personal Data
Slide 64: Innovation, partnerships and PRM adoption will drive top line growth
Innovation, partnerships and PRM adoption will drive strong top line growth in the next four years Net sales in MSEK Delivering profitable growth Key drivers in a sustainable way Unity >7% 4-year CAGR 6% Emerging Markets 4-year CAGR Software Service 8% 10% 3% 1% As-a-Service New products 16/17 17/18
Slide 65: Continued EBIT margin improvement
Continued EBIT margin improvement FY 20/21 (MSEK) Key components until 2024/25 Net sales 13,763 Gross margin COGS -59% • Stable Gross margin levels historically Gross margin (%) 41% SG&A SG&A expenses -16% • Continued improvement of SGA leverage from efficiencies Net R&D expenses -11% R&D Other (FX,
Slide 66: Stable Gross margin levels historically
Stable Gross margin levels historically Gross income in MSEK and Gross margin as % of sales Key drivers Unity 41% 41% New products Service & Software COGS initiatives Price pressure on existing platforms 16/17 17/18 18/19 19/20 20/21 Emerging Markets 66 Restricted Information and Basic Personal Data
Slide 67: Improved SG&A leverage by driving efficiencies
We will continue our journey of improved SG&A leverage by driving efficiencies SG&A expenses in MSEK and as % of sales Key drivers 20% Reduced T&E % 16% Digital Sales & Marketing Process efficiencies Digitalization Centralization 16/17 17/18 18/19 19/20 20/21 67 Restricted Information and Basic Pers
Slide 68: Accelerated investments in innovation to support growth
Accelerated investments in innovation in the coming years to support growth Gross R&D expenses in MSEK and as % of sales Key drivers Indicative Personalized precision 11% 11% Elevated productivity Integrated informatics 16/17 17/18 18/19 19/20 20/21 21/22 68 Restricted Information and Basic Personal
Slide 69: Moving from EBITA to EBIT
We are moving from EBITA to EBIT as Net R&D % will be more stable going forward Gross and Net R&D expenses as % of sales 14% Indicative 12% Gross R&D as % of sales 10% Product 8% Unity Harmony launches, Net R&D illustrative as % of sales 6% Net to Gross R&D bridge in FY 20/21 4% Net R&D 11% Amortiza
Slide 70: Stability in Working Capital and Cash flow over time
Stability in Working Capital and Cash flow over time Net working capital as % of net sales Operational cash conversion % MSEK 10% 200% 6.000 5-year 10-year average average 5% 150% 77% 78% 0% 100% 82% 4.000 -5% 50% -10% -7% 0% 2.000 -15% -50% -20% -100% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 16/17 17/18 18/19 19/
Slide 71: Strong balance sheet with low net debt
Strong balance sheet with low net debt supports our growth and innovation agenda Net debt to EBITDA – Leverage Profile Maturity Profile MSEK 1.6 2.000 1.4 1,700 1,600 1.2 1.500 1.0 1,000 0.8 1.000 GBP 0.6 0.4 0.25x 500 500 0.2 SEK 0.0 0 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/
Slide 72: Capital allocation going forward
Capital allocation going forward Selective Geographic Dividends acquisitions/ expansion investments New policy: at least Expanding our portfolio Increased footprint in 50% of net income and offering emerging markets 72 Restricted Information and Basic Personal Data
Slide 73: Attractive value creation model supporting profitable growth
To summarize, we have an attractive value creation model supporting our plan for profitable growth in a sustainable way High growth Limited fixed assets Innovation & negative leader working capital Strong Strong market balance position sheet Margin expansion 73 Restricted Information and Basic Perso
Slide 74: Capital Markets Day
Capital Markets Day 2021 Restricted Information and Basic Personal Data
Slide 75: We build hope
We don’t just build technology We build hope Restricted Information and Basic Personal Data