Elos Medtech - Interim report 1 January - 30 September, 2017
Growt in several market segments in Q3
• Net sales for the first nine months of the financial year increased and amounted to SEK 429.0 M (418.7), corresponding to growth of 2.5%.
• Operating profit totalled SEK 36.1 M (39.7).
• Profit after net financial items was SEK 20.7 M (32.1). Net financial items were negatively affected by exchange rate differences of SEK -8.4 M (1.1).
• Profit after tax was SEK 15.1 M (23.5), corresponding to SEK 2.50 (3.88) per share.
• Cash flow from operations was SEK 42.9 M (73.3), and after investments SEK 25.2 M (53.7).
CEO, Jan Wahlström, comments
The positive growth that began in Q2 continued. Our strategic focus on sales and growth is beginning to yield results. Dental Implant Systems was a particular growth driver during the quarter. Other segments that were previously weak are now developing better. Sales during the quarter were SEK
132.5 M (126.7). This represents growth of 4.5% over the quarter. Value-adjusted growth was 3.0%.
Sales of SEK 562.2 M over a rolling period of twelve months are the highest ever at Elos Medtech.
Operating profit totalled SEK 36.1 M (39.7) for the first nine months of the year. This slightly lower figure is due primarily to the costs involved in increased market efforts designed to generate new business in the long term. Another reason is that production has been less effective during the quarter due to longer downtimes and a higher proportion of scrapped products. We are continuing our internal improvement initiative, EMOPEX (Elos Medtech Operational Excellence), in a targeted manner to strengthen synergies and efficiency. Initially, this will generate higher costs, but we believe such efforts are necessary and we are convinced they will yield positive effects both in terms of profit and capacity in the long term.
Development within Dental Implant Systems continued positively during the third quarter. Sales totalled SEK 42.2 M (38.7). Growth for the first nine months of the year was 18%. This means we are growing more than the market. This can be explained partly by the fact that we are gaining more business and taking market shares, and partly by the fact that we sell a large number of products and have broadened our range for several large key customers. Our long-term work and effort in the market segment has contributed towards us now being regarded as a leading development partner and contract manufacturer within the dental implants sector.
In the previous quarter, we noted that sales in Orthopedics had recovered and were at almost the same level as in 2016. The integration of Onyx has strengthened our offering on the global orthopedics market and our market efforts have yielded results here too. The number of customer enquiries has increased significantly. The surge of new business and customer projects means that we have not only been able to replace a previously lost order, but we are now in a position to speed up the pace.
We have experienced growth again in Diagnostics during the last two quarters and we continue with our investments to build up capacity at the plastic production facility in Skara.
Sales have started to pick up following a long period of turbulence for several key customers in Hearing Device & Vibrations. Sales are at a high level and we are expecting to see growth in this segment in the long term.
In Other Medical Areas, our new customers continued to generate sales. However, the rate of growth has been slightly slower than we had hoped. We are now working with our customers to speed up the pace in order to boost growth going forward. Our large key customers are developing according to plan.
Q3 shows a clear trend towards increased sales in several areas of our operations. Profit for the quarter was affected by a number of investments which we believe are necessary in order to further develop what we have to offer. Our ability to offer short lead times in combination with high quality has become one of the most important factors for our continued development and success on the global medical technology markets.
Jan Wahlström
CEO and President
For further information, contact:
Jan Wahlström, President and CEO, +46 70-212 18 89, e-mail: jan.wahlstrom@elosmedtech.com
Christian Bergaust, CFO, +46 70-293 50 40, e-mail: christian.bergaust@elosmedtech.com
This is the type of information that Elos Medtech AB (publ) is obliged to publish in accordance with the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was issued for publication by the contact persons stated above on 25 October 2017, at 9:00 am (CET).
For additional information about the Elos Medtech Group, visit www.elosmedtech.com
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