Sectra’s nine-month interim report 2016/2017: Top ranking in customer satisfaction and performance shows that quality is profitable

Linköping, Sweden, March 7, 2017 – International medical imaging IT and cybersecurity company Sectra (STO: SECT B) reported positive trends for the Group’s sales, operating profit and cash flow for the third quarter of 2016/2017. While the Group’s future focus on the growth of new product areas and additional geographic markets will hamper its earnings trend in the short term, these activities have the potential to contribute to the Group’s long-term expansion. The company’s financial focus is to increase its operating profit per share while maintaining its operating margin and the company’s key figures for its financial goals remained above its target level. 

Nine-month period in figures  

  • Order bookings amounted to SEK 828.1 million (874.2). Order bookings for the rolling 12-month period were 14.4% higher than net sales for the same period.
  • Net sales totaled SEK 800.1 million (758.4), up 5.5%. Adjusted for currency fluctuations, sales increased 6.2%.
  • Operating profit rose 16.8% to SEK 125.6 million (107.5), corresponding to an operating margin of 15.7% (14.2). Adjusted for currency fluctuations, operating profit increased 15.0%.
  • Nonrecurring items during the third quarter had a positive impact of SEK 12.4 million attributable to the reversal of a contingent consideration and a negative impact of SEK 12.3 million attributable to depreciation, amortization and impairment. These items had a net effect of SEK 0.04 million on operating profit.
  • Cash flow after changes in working capital increased to SEK 174.9 million (123.8).

Third quarter in figures  

  • Order bookings amounted to SEK 302.9 million (369.0).
  • Net sales totaled SEK 294.2 million (268.9), up 9.4%. Adjusted for currency fluctuations, sales increased 8.3%.
  • Operating profit rose 7.0% to SEK 47.1 million (44.0), corresponding to an operating margin of 16.0% (16.4). Currency fluctuations contributed to a positive earnings trend, partly due to large purchases in GBP during the period. Adjusted for currency fluctuations, operating profit increased 11.8%.
  • Cash flow after changes in working capital increased to SEK 104.7 million (65.3).

Torbjörn Kronander, President and CEO of Sectra AB, comments  

Sectra is well positioned in a number of niches, with strong global potential and favorable underlying market growth.

“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.”  

For further CEO comments and information, see the attached interim report.

Presentation of the interim report on March 7 

Sectra will present its interim report during a teleconference with Torbjörn Kronander, President and CEO, and Mats Franzén, CFO. The presentation will be held in English.

Time: March 7, 2017 at 10:00 a.m. (CET)

To participate, call one of the following numbers five to ten minutes before the conference begins:

  • SE: +46 856642691
  • UK: +44 2030089810
  • US: +1 8557532235

or follow the report presentation online via: www.sectra.com/irwebcast . A recorded version after the conference will also be available via this link after the conference.

This information constitutes information that Sectra AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and/or the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 8:00 a.m. (CET) on March 7, 2017.

For further information, please contact:
Dr. Torbjörn Kronander, CEO and President Sectra AB, 46 (0) 705 23 52 27
Press photos: flickr.com/photos/sectramedicalsystems

About Sectra 
The world needs more efficient healthcare and increased security in society’s communication and IT systems. Sectra plays a key role in meeting these needs. Sectra assists hospitals throughout the world to enhance the efficiency of care, and authorities and defense forces in Europe to protect society’s most sensitive information. The company was founded in 1978, has its head office in Linköping, Sweden, with subsidiaries in 14 countries, and operates through partners worldwide. Sales in the 2015/2016 fiscal year totaled SEK 1,073 million. The Sectra share (STO: SECT B) is quoted on the Nasdaq Stockholm exchange. For more information, visit www.sectra.com .

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About Us

The world needs more efficient healthcare and increased security in society’s communication and IT systems. Sectra plays a key role in meeting these needs. Sectra assists hospitals throughout the world to enhance the efficiency of care, and authorities and defense forces in Europe to protect society’s most sensitive information. The company was founded in 1978, has its head office in Linköping, Sweden, with subsidiaries in 14 countries, and operates through partners worldwide. Sales in the 2015/2016 fiscal year totaled SEK 1,073 million. The Sectra share is quoted on the Nasdaq Stockholm exchange. For more information, visit www.sectra.com.

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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.
Torbjörn Kronander, President and CEO of Sectra AB
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.
Torbjörn Kronander, President and CEO of Sectra AB
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.
Torbjörn Kronander, President and CEO of Sectra AB