Elos Medtech - Interim report, 1 January – 30 September 2016

Continued improved earnings and strong cash flow

Net sales increased to SEK 418.7 M (367.7) which, adjusted for exchange-rate fluctuations, corresponds to a rise of 14.7%, of which organic growth was 2.1%.

Operating profit improved to SEK 39.7 M (25.5, adjusted for non-recurring items of 34.0).

• Profit after net financial items totalled SEK 32.1 M (20.0). Net financial items were positively affected by exchange-rate differences of SEK 1.1 M (0.1). 

Profit after tax amounted to SEK 23.5 M (12.9), corresponding to SEK 3.88 (2.13) per share.

Cash flow from operating activities improved to SEK 73.3 M (41.7). Cash flow after investments amounted to SEK 53.7 M (neg: 148.9).


CEO, Jan Wahlström, comments

”The market scenario for Elos Medtech remained strong during the third quarter of the year and sales rose by 14.7% (2.1% in organic growth) in the period January–September 2016, in comparison with the corresponding period of 2015. The operating margin was 9.5% (6.9).
It is gratifying that all segments are showing positive figures. Geographically, we note a distinct increase in demand in Asia and the Nordic region. This, in combination with internally implemented structural measures and investments, has generated favourable results during the current year, with operating profit rising by 55.7% to SEK 39.7 M (adjusted for non-recurring items in the year-earlier period, the rise was 14.7%). Cash flow from operating activities strengthened further to SEK 73.3 M (41.7).

In the Dental Implant Systems market segment, Elos Medtech additionally strengthened its market-leading position in Europe. Growth of 9.8% was noted during the first nine months of 2016. Activity in contract services remained strong in the third quarter. In the field of own products, the favourable trend continued through the launch of new products (Hybrid Base in Digital Dentistry) and new distribution agreements, thus enabling more sales channels. 

The trend in the Trauma & Spine market segment slackened somewhat during the third quarter of 2016. Sales amounted to SEK 142.3 M (107.9) on a nine-month basis and sales for the third quarter was SEK 42.3 M (50.5). A contract customer of Onyx in the US has moved a product to its own manufacturing, which leads to decreased delivery volumes. The capacity freed up in production is now being filled gradually with new assignments and the current plan is that production will return to full capacity a bit into 2017. The underlying market trend in the Trauma & Spine area remains strong.          

During the third quarter, a reversal of trend was noted in the Medical Devices market segment, where a slightly more than 3% sales decline in the first half of the year turned into a total increase of 3.4% for the first nine months of the year.  Sales from the operation in Tianjin, China, made a strong contribution to this rise.

The favourable trend in the Diagnostics market segment continued during the third quarter and a total sales increase of 17.2% was reported for the first nine months of the year. Sales to the existing customer base were good, at the same time as we are continuing to attract new customers.

Investments during the third quarter totalled SEK 2.8 M, compared with total investments of SEK 21.4 M in the first half of the year. The outcome of these investments, which mainly related to extension, rebuilding and new building of capacity at Microplast and new capacity in Gørløse in Denmark, was satisfactory, resulting in increased delivery volumes.

Overall, it can be said that Elos Medtech has entered a healthy phase of development, very much due to previously approved and implemented investments. Meanwhile, we see a stable market, which is expected to be sustained in the immediate future. With generally strong profitability throughout the Group and reduced borrowing, it can be concluded that Elos Medtech is on the right track.”

Jan Wahlström
President and CEO

For further information, contact:
Jan Wahlström, President and CEO, +46 70-212 18 89, e-mail: jan.wahlstrom@elosmedtech.com
Ulrica Ehn, CFO, +46 510-48 43 67, +46 702-72 11 61, e-mail: ulrica.ehn@elosmedtech.com

This is information that is such information that Elos Medtech AB (publ) is obliged to published in accordansce with the EU Market Abuse Regulation and the Securities Market Act. The information was issued for publication by the contact person stated above, on 26 October 2016, at 08:00 (CET).

For additional information about the Elos Medtech Group, visit www.elosmedtech.com

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About Us

Elos Medtech is one of Europe's leading development and production partners for medical technology products and components, such as dental and orthopaedic implants and instruments. The operations are conducted at facilities in Sweden, Denmark, China and USA. Customers are mainly internationally active medical technology companies in the market segments Dental Implant Systems, Diagnostics, Medical Devices and Trauma & Spine. Elos Medtech employs more than 500 people worldwide and generates revenue that exceeds MSEK 550. Elos Medtech has been traded on NASDAQ Stockholm AB since 1989. The Elos Medtech B share is classified as a Health Care company on the Small Cap list.