Slide 1: Q4 report
Q4 report June 1, 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: 2017/18 – a successful year
2017/18 – a successful year Good growth in Strengthened Higher Elekta Unity on orders organization EBITA- track – 16 and and improved margin new orders net sales processes (for the year) Net sales EBITA-margin Cash flow rolling 12 months % rolling 12 months from operating activities rolling 12 month
Slide 5: Communicated targets for 2017/18 reached
Communicated targets for 2017/18 reached Net working Reach capital Growth EBITA margin to net sales 5 | Focus where it matters.
Slide 6: Strong performance in Q4
Strong performance in Q4 • Order intake +10% in Q4 (+5% YTD) • Net sales flat in Q4 (+8% YTD) − Good growth in Linacs, Monaco® TPS and Leksell Gamma Knife® − Unchanged revenues in Q4 - in line with efforts to have more even quarters throughout the year • EBITA margin improved 4 ppts to 25% in Q4 and
Slide 7: Good growth in order intake
Good growth in order intake NORTH AND EUROPE, MIDDLE ASIA SOUTH AMERICA EAST AND AFRICA PA C I F I C +10% in Q4 +28% in Q4 -9% in Q4 (YTD +9%) (YTD +4%) (YTD +2%) • Turnaround in US on a • Strong ending of the year • Challenging market good track. conditions in Japan - strengthened market • 5 Elekta
Slide 8: Growing our installed base of treatment solutions
Growing our installed base of treatment solutions • Total installed base grew by +6% Y/Y. • Services grew by +6% and accounted for 41% of revenues • Solid demand and growth in linac business • Successful year for Leksell Gamma Knife® • Growing share for treatment planning software Monaco® • ESTRO -
Slide 9: Elekta Unity – 8 new systems booked in Q4
Elekta Unity – 8 new systems booked in Q4 Sichuan X5 * Tumor Hospital China • 28 systems sold and 10 installed to date • CE-mark process on track for June 2018 • Target installation pace of 1 per month for FY 2018/19 • China: 5 systems to be installed in FY 2018/19 28 systems sold – revenue recogniz
Slide 10: Financial update
Financial update Gustaf Salford, CFO
Slide 11: Q4 2017/18 – EBITA improvement
Q4 2017/18 – EBITA improvement Q4 Q4 (SEK M) 2017/18 2016/17 Net sales 3,614 3,715 • Net sales flat in Q4 COGS -2,120 -2,139 Gross margin (%) 41.3% 42.4% • Gross margin; higher 3rd party revenues with low margin. Lower Expenses -636 -650 than expected COGS savings Exchange rate diff. 60 -147 EBITA*
Slide 12: Continued cost control
Continued cost control 2017/18 2016/17 SEK M Q4 Q3 FY Q4 FY • ESTRO trade show in Q4 Selling expenses -326 -277 -1,208 -296 -1,165 • Elekta Unity towards finalization, lower expenses, Administrative expenses -224 -244 -948 -248 -928 but higher capitalization of R&D costs R&D expenses -234 -264 -1,09
Slide 13: 2017/18 - growth and operating leverage
2017/18 - growth and operating leverage Full year Full year (SEK M) 2017/18 2016/17 Net sales 11,333 10,704 • Net sales +8% for the year in COGS -6,584 -6,277 constant currency Gross margin (%) 41.9% 41.4% • Gross margin improved 0.5 ppts; Expenses -2,675 -2,565 volumes and cost control Exchange rat
Slide 14: EBITA bridge compared with last year
EBITA* bridge compared with last year (MSEK) +32 +61 +242 Currency effect 2017/18 (SEK M, Y/Y) -120 -20 +260 • Effect on net sales: -230 • Effect on expenses +148 • Exchange rate +242 2116 differences: Effect on EBITA +160 1661 Estimated currency (SEK M, Y/Y)) effect 2018/19 Effect on EBITA +150 EBI
Slide 15: Continued strong working capital management freeing up capital
Continued strong working capital management freeing up capital Net working capital as % of net sales Operational cash conversion 12% 150% 109% 8% 4% 100% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -4% 50% -8% -10% -12% 0% 12/13 13/14 14/15 15/16 16/17 17/18 Note: *Cash flow from operating activities / EBITDA
Slide 16: Increased cash flow driven by operating result and working capital improvements
Increased cash flow driven by operating result and working capital improvements Cash flow 2017/18 2016/17 2015/16 EBITDA 2 213 1 253 1,058 • Improved supply-chain and order Working capital 351 1 051 461 fulfillment processes Financial net -164 -258 -228 • DSO at 12 days (33) Paid tax -250 -268 -268
Slide 17: Decreasing net debt / EBITDA and higher dividend proposed
Decreasing net debt / EBITDA and higher dividend proposed Proposed dividend Net debt / EBITDA and equity SEK/share 1,6 1,60 1,4 1,40 1.40 In two payments 1,2 1,20 1,0 1,00 0,8 0,80 0,6 0,60 0,4 0,40 0.4x 0,2 0,20 0,0 0.1x 0,00 Q4 Q1 Q2 Q3 Q4 14/15 15/16 16/17 17/18 2017/18 Net debt EBITDA Net debt t
Slide 18: IFRS15 restatement
IFRS15 restatement 18 | Focus where it matters
Slide 19: New accounting principles from current year (2018/19)
New accounting principles from current year (2018/19) 150 Main IFRS15 impact on Elekta Device project volumes FY17/18 130 • Revenue recognition on start of installation 110 instead of at shipment (devices) 90 • Installations more evenly spread across 70 50 quarters 30 • Resulting in more stable reve
Slide 20: Balance sheet effects
Balance sheet effects IFRS15 Main balance sheet effects, SEK bn Accrued Income Equity Comments • Accrued income: decrease as revenue is better matched with invoicing plans -0.4 -1.0 • Inventory: increased with projects between shipment and start of installation • Customer advances: Increase (consist
Slide 21: IFRS15 restatement in the Q4 report
IFRS15 restatement in the Q4 report 21 | Focus where it matters.
Slide 22: Richard Hausmann, President and CEO
Richard Hausmann President and CEO 22 | Focus where it matters
Slide 23: Priorities for 2018/19
Priorities for 2018/19 • Establish Elekta Unity as next generation treatment solution and capture growth • Grow our installed base of treatment solutions and expand our services business • Further develop our position as thought leader in precision radiation medicine • Continue to invest in innovati
Slide 24: Targets for 2018/19 – based on IFRS15 restatement
Targets for 2018/19 – based on IFRS15 restatement Net sales EBITA margin growth ~7% ~20% 24 | Focus where it matters.
Slide 25: Welcome to Elekta Capital Markets Day
Welcome to Elekta Capital Markets Day 2018 27 September in Stockholm