Sectra’s nine-month interim report 2017/2018: Sectra tops customer satisfaction for fifth consecutive year

Linköping, March 12, 2018 – International medical imaging IT and cybersecurity company Sectra (STO: SECT B) reported increased order bookings and net sales compared with the year-earlier period. The earnings trend for the Group as a whole was stable. Sectra’s financial focus is to increase its operating profit per share while maintaining its operating margin, and Sectra’s financial performance measures continue to exceed the Group’s target levels.

Nine-month period in figures 

  • Order bookings increased 19.8% to SEK 992.3 million (828.1).
  • Net sales rose 9.8% to SEK 878.6 million (800.1). Adjusted for currency fluctuations, sales increased 11.9%.
  • Operating profit rose 23.7% to SEK 155.4 million (125.6), corresponding to an operating margin of 17.7% (15.7). Adjusted for currency fluctuations, operating profit increased 27.3%.
  • Cash flow after changes in working capital amounted to SEK 120.8 million (174.9).

Third quarter in figures 

  • Order bookings increased 11.6% to SEK 337.9 million (302.9).
  • Net sales rose 2.0% to SEK 300.1 million (294.2). Adjusted for currency fluctuations, sales increased 4.7%.
  • Operating profit rose 8.9% to SEK 51.3 million (47.1), corresponding to an operating margin of 17.1% (16.0). Adjusted for currency fluctuations, operating profit increased 13.5%.
  • Cash flow after changes in working capital amounted to SEK 46.1 million (104.7).

Torbjörn Kronander, President and CEO of Sectra AB, comments 

“For a company such as Sectra, which competes with some of the largest companies in the world, it is extremely important to have satisfied, long-standing customers. Our success in this area is confirmed by the recognition of Sectra’s medical IT system (PACS) for having the highest customer satisfaction in the US for the fifth consecutive year, and globally for the fourth year straight. This is mainly the result of our corporate culture, where the needs and problems of our customers always come first. I am proud of the positive feedback we continue to receive from users across the globe and of our employees, who truly care about and assume responsibility for our customers.

“Sectra continued to deliver positive trends in terms of sales, order bookings, and profitability. The most significant sales growth during the period was reported in Sweden, primarily as a result of increased sales in the Secure Communications operating area. Within Imaging IT Solutions, we are growing in the Netherlands, the UK and the US.

“The increase in order bookings is attributable to several comprehensive, long-term customer contracts in both Secure Communications and Imaging IT Solutions. A significant portion of our expenditures arise in the early stages of the multiyear projects, while revenue and profit recognition are distributed over the entire duration of the customer contract. Accordingly, several of the new orders will tie up considerable capital during the installation phase, which will place a greater burden on cash flow.

“With all of our financial goals achieved, we aim to continue growing in the long term. Our focus will be on growth initiatives that can contribute to a long-term and stable earnings trend, including cybersecurity for critical infrastructure and solutions for integrated cancer diagnostics. We are also investing in new geographic marketsincluding Canada and France, where we opened offices over the past yearand in increasing our market shares in countries where we are already established but are not yet the market leader.”

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

Presentation of the interim report  

A teleconference will be held by Torbjörn Kronander, President and CEO of Sectra AB, and Mats Franzén, CFO of Sectra AB. The presentation will be held in English.

Time: March 12, 2018 at 10:00 a.m. (CET)

To participate, call:

SE: +46 856642665

UK: +44 2030089807

US: +1 8558315944

The report presentation can also be followed live online: www.sectra.com/irwebcast. A recorded version 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 below, at 8:00 a.m. (CET) on March 12, 2018.

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

About Sectra 
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. Thereby, Sectra contributes to a healthier and safer society. The company was founded in 1978, has its head office in Linköping, Sweden, with subsidiaries in 16 countries, and operates through partners worldwide. Sales in the 2016/2017 fiscal year totaled SEK 1,141 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

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. Thereby, Sectra contributes to a healthier and safer society. The company was founded in 1978, has its head office in Linköping, Sweden, with direct sales in 19 countries, and operates through partners worldwide. Sales in the 2017/2018 fiscal year totaled SEK 1,267 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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Quotes

For a company such as Sectra, which competes with some of the largest companies in the world, it is extremely important to have satisfied, long-standing customers. Our success in this area is confirmed by the recognition of Sectra’s medical IT system (PACS) for having the highest customer satisfaction in the US for the fifth consecutive year, and globally for the fourth year straight. This is mainly the result of our corporate culture, where the needs and problems of our customers always come first. I am proud of the positive feedback we continue to receive from users across the globe and of our employees, who truly care about and assume responsibility for our customers.
Torbjörn Kronander, President and CEO of Sectra AB
The increase in order bookings is attributable to several comprehensive, long-term customer contracts in both Secure Communications and Imaging IT Solutions. A significant portion of our expenditures arise in the early stages of the multiyear projects, while revenue and profit recognition are distributed over the entire duration of the customer contract. Accordingly, several of the new orders will tie up considerable capital during the installation phase, which will place a greater burden on cash flow.
Torbjörn Kronander, President and CEO of Sectra AB
With all of our financial goals achieved, we aim to continue growing in the long term. Our focus will be on growth initiatives that can contribute to a long-term and stable earnings trend, including cybersecurity for critical infrastructure and solutions for integrated cancer diagnostics. We are also investing in new geographic markets—including Canada and France, where we opened offices over the past year—and in increasing our market shares in countries where we are already established but are not yet the market leader.
Torbjörn Kronander, President and CEO of Sectra AB