Elekta Ab Class B · OMXSTO:EKTA_B
Elekta Ab Class B — J.P. Morgan Healthcare Conference 2016
21 slides from Elekta Ab Class B's conference presentation, January 2016
Slide 1: J.P. Morgan - January 2016
J.P. Morgan - January 2016 Håkan Bergström CFO 1
Slide 2: Growing need for cost efficient cancer care
Growing need for cost efficient cancer care Growth of cancer Cancer care - medical cost People, million USD 188 bn 30 24 25 Cancer incidence 20 14 15 15 Mortality 8 USD 13 bn 10 (7%) 5 Radiation 0 therapy 2012A 2015E 2020E 2025E 2030E 2035E 2 WHO forecast of new cancer, excluding melanoma
Slide 3: Financial ambitions
Financial ambitions Short-term Mid-term Long-term (2015/16) (2016/17 – 2017/18) • Growth in net sales to • 3-5%* net sales growth • >10%* net sales growth continue to be modest per year per year for FY 2015/16* • Improve EBITA margin with • Growth in EBITA to exceed • Improve EBITA margin more than
Slide 4: Mid to long term growth drivers
Mid to long term growth drivers Macro • Improving world economy and political stability 4-5% • Cancer incidence growth and retreatments • Increased utilization of radiotherapy • Closing the gap in emerging markets Elekta • Driving aftermarket revenues > • Higher technology content 10% • Launch of At
Slide 5: Elekta – Market leader in 2 of 3 regions
Elekta – Market leader in 2 of 3 regions Market share- Linac units North America EMEA Asia Pacific Accuray and Accuray and Accuray and others 7% others 5% others 10% Elekta 23% Varian Varian 45% 50% Elekta Varian 44% 46% Elekta 70% 5 Sources: Elekta. FY 2014/15, new sales of linear accelerators.
Slide 6: Growth in China will continue
Growth in China will continue Net sales SEKM 1 500 • Health care reform sets clear direction 1 250 • Target of 2-3 linac per million from 1.4 CAGR 1 000 >10% • Expansion of private sector − 20% target 750 − Acquisition of hospitals 500 250 0 08/09 09/10 10/11 11/12 12/13 13/14 14/15 6
Slide 7: Capture upside in installed base
Capture upside in installed base Elekta installed base No. of systems • Capitalize on customer base − Service contract penetration 4 000 CAGR 8% − Upsell software 3 500 − Upgrade hardware 3 000 2 500 • Opportunity from recent products 2 000 − AgilityTM/FFF, Monaco® 5, MOSAIQ® 2.6 1 500 − Leksell Gam
Slide 8: Innovation Leadership
Innovation Leadership • Ground breaking innovations – higher clinical value that drives growth and profitability • Setting new standards – from palliative to curative cancer care • Atlantic provides the future in radiation therapy 2006 Integrated 2015 oncology 2013 First image 1985 guided adaptive s
Slide 9: Atlantic – a game changer
Atlantic – a game changer • MD Andersson system installed • 1.5 T MRI imaging quality for both 3D and 2D Cine demonstrated • Linac fully operational simultaneous with MRI • We expect to deliver and commission the remaining consortium systems by end 2016 9
Slide 10: The future of cancer care: Atlantic
The future of cancer care Atlantic Better knowledge of the Tomorrow: Today: patient and disease • Better outcomes IGRT with VMAT is Increased accuracy • Lower costs standard of care and precision • Potential for new Real-time adaption indications (motion, shape, biology) 10
Slide 11: Demonstrate clinical value
Demonstrate clinical value • Planning and imaging studies − Validate clinical hypotheses • Feasibility studies − Optimize work flow and confirm dosimetric benefit • Single arm studies − Estimate clinical outcome effect sizes • Comparative studies − Compare Atlantic-based treatment with most relevant
Slide 12: Tumor site groups established
Tumor site groups established • Each tumor site group is formed from clinical experts from each of the 7 consortium members • Planning and imaging studies defined; many have begun • Detailed timelines for pre-clinical and clinical studies being developed • Data management approach and infrastructure
Slide 13: Atlantic – on track for launch
1. Atlantic – on track for launch 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 (until 2019) 75 >700 MUSD Expected market price USD 8-10 M order opportunity unti
Slide 14: Transformation program on track
Transformation program on track › Continue to invest in strategic R&D › Strengthen customer service network including customer training and education › Reduce costs – primarily in administration, Mid-term supply chain and procurement (2016/17 – 2017/18) › Drive aftermarket growth and profitability •
Slide 15: Transformation program to drive margin improvement
Transformation program to drive margin improvement Margin development Margin improvement Effect on 60% ambition* margin Gross Margin Mid-term (3-year perspective) 47% 46% EBITA margin 50% 44% 40% Higher share of service revenues ~1.0% 40% Mix improvement in high margin Indicative ~1.0% 30% products
Slide 16: Transformation program drivers
Transformation program drivers Consolidate functions Consolidate functions and shared services Prioritize roadmap Process improvements Focus on growth drivers and high Improved time to customer – flexibility margin products and mobility Working capital efficiency Centers of excellence Reduced projec
Slide 17: R&D commitment for future growth
R&D commitment for future growth R&D expenses SEK M % of net sales 3 000 13,1% 14% 12,6% 11,2% 12% 2 500 ~11% Indicative 8,6% 8,6% 8,8% 8,9% 10% 2 000 8,1% ~10% ~8% 6,7% 6,9% 8% 1 500 6% 1 000 4% • Investments and 500 2% capitalization of 0 0% development costs is 11/12 12/13 13/14 14/15 Rolling 12
Slide 18: Actions for improved DSO
Actions for improved DSO New organization Strengthened focus on order fulfillment Improved cash management Payment terms and collections DSO target Incentives in place 70 days Deliver cash flow performance Centralized functions for Contract administration - Credit assessments - Customer Financing
Slide 19: Cash conversion ambition > 70%
Cash conversion ambition > 70% 140% 126% 117% 120% • Cash conversion 100% Investments target in relation to 77% 81% 83% Indicative EBITDA 80% 60% 76% • Lower levels of 60% investment 40% 20% 32% • Working Capital <10% of sales 0% 12/13 13/14 14/15 Rolling 12 15/16 16/17 17/18 months Free cash flow /
Slide 20: In summary - Strategic agenda & Priorities
In summary - Strategic agenda & Priorities › Innovation leadership Growth › Commercial transformation Profitability › Lifecycle management Cash flow › Expand addressable markets 20
Slide 21: Elekta
(°°) ELEKTA