Sectra’s operating areas continued to develop and the trend for the Group’s financial results was positive. Our Imaging IT Solutions business area got off to a much better start than in the comparative quarter, but we cannot draw any definitive conclusions based on the outcome for a single quarter. Sales in Secure Communications also improved, mainly as a result of development assignments and products for secure communications. Although the business area’s new venture in the area of cybersecurity for critical infrastructure has not yet generated any substantial sales, we have signed a number of strategic orders and are growing in the Nordic energy sector.
Order bookings did not quite reach the desired level and we are continuing to focus on growth. In many of the markets where Sectra operates, we command such a large market share that our growth opportunities are limited. However, this is not the case in the US, where, in addition to a high level of customer loyalty, we also have a relatively small market share. We have been commissioned by several prominent healthcare providers in the US over the past year, and I expect that we will continue to benefit from favorable business opportunities in the US market going forward. To achieve long-term growth, we must also enter new markets and channels. Over the past year, we have established ourselves in two new countries, namely France and Canada.
Customer demand for the solutions we provide remains favorable, and we witnessed no changes to the underlying trends in our markets. We have a stable foundation, with a substantial share of long-term customer contracts, and more than half our sales comprise recurring revenue.
TUHS’s focus on advanced medical treatments, cancer care and medical education align very closely with our core values at Sectra. We are looking forward to implementing our enterprise-wide imaging solution at this prestigious healthcare system.
Sectra’s focus on cancer care, including our cutting-edge software for teaching files and multidisciplinary team meetings, aligns closely with UC San Diego Health’s treatment philosophy and academic needs.
To interact with the 3D renderings on the Sectra Table enables our students to learn and explore in a realistic environment. The portal itself is yet another way for enhancing medical training since students can access cases from their own workstations
I am most pleased with the positive feedback we continue to receive from users around the world. After all, operating a business is all about keeping your customers and users happy—and being paid to do so.
Digitizing our pathology department enables us to handle many of the efficiency and collaboration challenges that healthcare is facing. One example is increasing efficiency before and during multi-disciplinary team meetings. Sectra’s solution meets our high requirements in terms of both capacity and performance, as well as in system availability.
As I look back on the 2016/2017 fiscal year, I am most pleased with the positive feedback we continue to receive from users around the world. After all, operating a business is all about keeping your customers and users happy – and being paid to do so. The market’s view of Sectra reflects the high quality of our deliveries, regardless of where in the world our customers are located or the solutions they use. This high customer satisfaction is the result of our targeted efforts to understand our customers’ environments and of our culture, with outstanding employees who truly care about and assume responsibility for our customers.
Our profit increased, despite earnings being charged with several long-term investments in future growth. As the markets mature, our hope is that a number of these activities will contribute significantly to our growth. In the short term, however, Sectra’s growth will mainly be dependent on our sales in our largest business area, Imaging IT Solutions, where our order bookings over the past year did not quite meet our expectations. This was partly due to the trend in the UK, where we faced a falling GBP rate and a shrinking market in local currency, as well as the fact that in certain countries we now have such a large market share in our main area of medical IT systems (PACS) for radiology that it is difficult to continue growing at the same rate as we have in the past. However, in the US, for example, where Sectra so far has a relatively small market share and thus significant potential, order bookings are growing sharply. To create the scope for further growth in Imaging IT Solutions, we are also focusing on establishing a presence in two new countries: France and Canada. However, we do not expect to see the results of this work until a few years from now, since we operate in a slow industry.
In light of recent global cyberattacks, our corporate culture, where the needs of the customer are always our top priority, and our combination of niche areas are clear strengths. Healthcare and cybersecurity are growing and rapidly changing markets, where numerous opportunities are being created for companies such as Sectra. We are well positioned in these markets and we operate in segments where a strong brand, such as the Sectra brand, is an important and decisive factor. I therefore have high hopes when it comes to our ability to continue this positive trend over the years ahead.
To expand in the Canadian market is part of our long-term growth plan. Canada has some unique healthcare challenges that we are prepared to address with our flexible and intuitive software. Sectra has highly-satisfied customers in Canada, but we still have a relatively small market share. This is something we believe we can improve through increased local presence.
I am proud to say that the close partnership we have with all our customers in combination with clear crisis management processes has made this an efficient, although tough journey. We have worked around the clock, also over the weekend, to get systems back up at record times. As a medical IT company with its roots in cybersecurity, we have a big advantage in situations like these.
With Sectra as our vendor, we will be able to smoothly expand the solution as we grow, to include additional hospitals and medical disciplines. That advantage, as well as the possibility to geographically work from anywhere, were especially important to us in our choice of vendor. From our earlier experience with Sectra, we know that the solution has very high system availability and that Sectra’s support team will be there for us when we need assistance.
Our focus on cancer care through integrated diagnostics allows for great synergies with City of Hope. We are honored to be working with such a prominent cancer research organization.
We are elated to partner with a highly-esteemed institution like UPHS. We look forward to joining forces to accomplish our mutual goals of enhanced patient care and improved diagnostic outcomes.
Sectra’s proven track record of high availability and stable integrations with other systems were important aspects in our choice of vendor. Another key factor is that the solution is delivered through the cloud, which increases efficiency and reliability.
The US is one of the markets where our largest business area, Imaging IT Solutions, is growing and capturing market shares with its medical IT systems. Over the past three years, the US operations have reported average sales growth in excess of 20% per year. I recently returned from the US, where we once again received the prestigious award of “Best in KLAS” for our top ranking in customer satisfaction. This is the fourth consecutive year that Sectra’s system for managing medical images has received this award in the US, and the third year globally. In my opinion, the fact that we have won this award for so many years in a row is directly attributable to our close cooperation with customers, our strong corporate culture and our outstanding employees.
Our basic view is that it is better to be big in a few countries than to be small in many. Our goal is to be the largest or second largest supplier in the countries where we have subsidiaries. Just as we began operating in France last year, we plan to open offices in one or two additional countries during the coming year.
Within the Secure Communications business area, we have turned a loss into a profit. With new security approvals from NATO and the Netherlands, the business area has begun delivering the latest generation of Sectra’s Tiger products – products that protect phone calls and data communications from eavesdropping. While the business area’s focus on the growth of the new critical infrastructure product area will hamper its earnings trend in the short term, it will ultimately contribute to continued expansion.
With this joint solution from Sectra, information will follow the patient instead of the other way around. Sectra’s proven track record of extremely high system availability was another important aspect for us in the choice of vendor and is also key in delivering efficient healthcare.
Sectra is a pioneer in mobile voice encryption, with over 20 years’ experience of mastering mobile secure communication systems. With this partnership, now with the formal approval from NATO, we are making smartphone technology available to a large group of users who were not previously able to use it due to security concerns.
We are seeing a growing trend of increased patient engagement. Patients are becoming more keen to have access to their own medical records, for example to be able to have a deeper dialog with their physician or to bring along their medical images for treatment at another hospital. The extended capabilities of our solution will make it easier for healthcare providers to meet that demand, and thus help healthcare to become more inclusive and patient-centered.
A major factor for choosing Sectra was their high system uptime rates and strong physician satisfaction rankings in KLAS. Our radiologists enjoyed the enterprise wide system to distribute images quickly and efficiently across a very large geographic area. This will result in increased efficiencies for our business and referring physicians while providing swifter results for our patients.
To receive these accolades from users all over the globe, demonstrates the quality of our people and our software, regardless of where in the world or where in the hospital these customers work. It also shows our dedication to making our customers successful in every discipline we choose to enter—in radiology as well as in the broader field of enterprise imaging or cybersecurity
To maintain Sectra PACS as ‘Best in KLAS’ for four straight years demonstrates the consistency of what we do and the strength of our products and people. Our recent success is most definitely attributable to this prestigious distinction.
I’m pleased to be working with Sectra on expanding our image storage in a secure environment. The ability to archive both radiology and cardiology images in the cloud allows our providers to retrieve and share images to better collaborate on and coordinate care for our patients.
Implementing a pathology solution on this scale requires integration between several different IT solutions throughout the 50 labs. Sectra’s philosophy and proven track record of implementing standard-based integration is a core strength for us, which makes me extra proud to be part of this unique project.
Poland is a large market where healthcare reforms have been made in order to modernize hospitals. These conditions make Poland an interesting market for us. Opta-Tech’s experience and stable market position makes it an important business partner.
We want to offer an efficient workflow for radiologists and other diagnosticians, and have been looking for a fast PACS with integrated reporting. Sectra's toolbox allows us to work efficiently from a single work spot.
Västerbotten County Council is a good example of the type of healthcare providers that are among the first to adopt digital pathology in the market. They are a geographically distributed region and as such can see an interesting business case for going fully digital in pathology by being able to share digital images rather than sending physical glass slides.
Our group prides itself in being a radiological practice that combines best of breed innovation with a human-centered approach to healthcare. Sectra’s solution, with its track record of extremely high system availability and continuous development, suits us very well. In addition, with Sectra’s solution we will be able to efficiently expand the system to other departments if we want to do so in the future.
Russian healthcare providers are starting to digitize pathology making this an interesting market for us. BioVitrum’s previous experience and network in pathology makes them an important business partner for us. Also, through this addition to our distribution network we can now deliver a solution for integrated diagnostics to this market.
With a vision of contributing to a healthier and safer society, Sectra delivers stable solutions with a high level of availability for some of society’s most critical functions. Both internal and external customer satisfaction surveys confirm that our customers appreciate our efforts. In a recent survey of decision-makers in the North American healthcare market, Sectra once again outranked its competitors. This high level of customer satisfaction and long-term future focus is helping to strengthen our position in Sectra’s niche areas.
Quality is profitable. We delivered a strong financial performance in the second quarter, with continued positive trends with respect to the Group’s sales, operating profit and cash flow—despite the fact that our results were adversely impacted by currency effects, particularly in the UK, and that earnings for the second quarter were charged with long-term investments in future growth areas such as digital pathology and IT security for critical infrastructure. Our investments in these areas are growing as the markets mature, which will have a dampening effect on our earnings trend for the current fiscal year.
Although order bookings for the quarter showed an adequate improvement, we will not be entirely satisfied until our annual growth rate increases further. We are seeing light at the end of the tunnel for the Secure Communications business area, both in terms of the existing crypto business and in the new area of critical infrastructure, where we are experiencing strong market interest.
Healthcare in Africa is entering a phase of modernization. This partnership with Tecmed Africa enables Sectra to be part of that transformation and, based on our extensive experience from markets where similar modernization has taken place, help African hospitals to tackle their challenges.
Sectra’s enterprise image management platform enables healthcare providers that already have a stable archive for radiology images to conveniently expand that existing infrastructure to also capture, store and share other types of medical images. Having medical images in the same system increases efficiency for the IT department and facilitates collaboration across disciplines.
ProMedica and Sectra have a long history of collaboration. The ability to easily access images from both radiology and cardiology will allow us to continue delivering excellent patient care and improve communication between disciplines.
With Sectra, we have found the most efficient enterprise imaging solution for us. The solution will enable our radiologists and physicians to work within the same system regardless of their location, sharing both information and workload. This will create significant progress towards our constant goal of improving patient care.
Sectra has impressed once again with a very high Net Promoter Score among its PACS customers. No one else seems to be engendering this much loyalty. The fact that Sectra can maintain high scores with both IT approaches is unique.
The Sectra IEP deployed throughout Wales has significantly improved the transfer of radiology images. It has facilitated the work of users of all staff grades, many of whom work outside radiology, to request and transfer images in a fast and secure way
A major factor influencing our choice of Sectra PACS is its enhanced efficiency for viewing the entire spectrum of breast imaging studies.
This approval for RESTRICTED is confirmation that the Sectra/Samsung solution meets the highest demands and user needs for security in an environment where new serious threats against smartphones are appearing more and more frequently.
High operational reliability and usability were important criteria in our choice of radiology solution – criteria that Sectra was able to meet. It was also crucial that the solution could be integrated with our existing VNA in order to facilitate joint regional work processes and efficient, region-wide collaboration and information exchange. Our hope is that this will contribute to improved quality and higher productivity in healthcare by providing better access to updated clinical information
Thanks to our cooperation with Sectra, we now have the opportunity to offer a complete treatment chain for this serious disease, from initial risk assessment to follow-up and possibly further examinations and treatment.
We reported a stable first quarter and the key figures for our financial goals remain above our target levels. Order bookings exceeded net sales on an annual basis, but were below the level recorded in the comparative quarter. Order volumes vary considerably between quarters, since individual multiyear customer contracts can be significant in size. Nevertheless, we must keep an eye on this trend. The Group’s sales, operating profit and cash flow increased during the quarter, despite unfavorable currency fluctuations.
We operate in niche markets where there is a growing need for the products and solutions offered by Sectra. Our order bookings are significantly higher than our net sales, and we have a growing number of customers with multiyear managed-services agreements, which provide long-term stability. The Group’s financial position is favorable, and we have several exciting initiatives in the pipeline that we hope will contribute to future growth.
This contract with Premier reflects the success we have had with Sectra DoseTrack over the last three years. Our software flexibility and customizations confirm our ongoing dedication to customer satisfaction.
On course to realizing our vision - with satisfied customers, innovative offerings and achieved financial goals