Sectra’s six-month interim report 2016/2017: Increased earnings, strong cash flow and expanded future focus

Linköping, Sweden, December 12, 2016: IT and medical technology company Sectra (STO: SECT B) reported increased net sales, operating profit and cash flow for the first six months of 2016/2017 compared with the year-earlier period. This result was achieved despite negative currency effects due to changes in the GBP and increased investments in future growth areas such as digital pathology and IT security for critical infrastructure. 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.

Six-month period in figures 

• Order bookings increased 3.9% to SEK 525.1 million (505.2).
• Net sales totaled SEK 505.9 million (489.5), up 3.4%. Adjusted for currency fluctuations, sales increased 5.1%.
• Operating profit rose 23.6% to SEK 78.5 million (63.5), corresponding to an operating margin of 15.5% (13.0). Adjusted for currency fluctuations, operating profit increased 33.4%.
• Cash flow after changes in working capital increased to SEK 70.2 million (58.6).

Second quarter in figures 

• Order bookings increased 45.9% to SEK 299.6 million (205.3). The renegotiation of a multiyear customer contract had a nonrecurring negative effect of SEK 78.9 million on the Group’s order stock and resulted in a retroactive adjustment to the order bookings for 2014/2015. The renegotiation will have only a marginal impact on future operating profit.
• Net sales totaled SEK 275.4 million (264.7), up 4.0%. Adjusted for currency fluctuations, sales increased 4.6%.
• Operating profit rose 44.5% to SEK 46.4 million (32.1), corresponding to an operating margin of 16.8% (12.1). Adjusted for currency fluctuations, operating profit increased 60.4%.
• Cash flow after changes in working capital increased to SEK 52.6 million (52.0).

Torbjörn Kronander, President and CEO of Sectra AB, comments 

“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.” 

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

Presentation of the interim report on December 12 

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

Time:      December 12, 2016 at 10:00 a.m. (CET)

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

• SE +46 8 56642690
• 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 below, at 8:00 a.m. (CET) on December 12, 2016.

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 is quoted on the Nasdaq Stockholm exchange. For more information, visit www.sectra.com.

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