Sectra’s year-end report 2015/2016: Financial goals fulfilled and increased order bookings during the quarter

Linköping, Sweden, May 31, 2016 – IT and medical technology company Sectra (STO: SECT B) reported increased operating profit and cash flow for the 2015/2016 fiscal year. Net sales increased 11.7%, surpassing SEK 1 billion for the first time ever. Sectra’s financial focus is to increase its operating profit per share, while maintaining its operating margin, and the company has achieved all of its financial goals. Taking into consideration this favorable performance and the company’s strong financial position, the Board has decided to propose to the Annual General Meeting (AGM) that SEK 4.50 per share be distributed to the shareholders through a share redemption program.

Fiscal year in figures 

  •  The Sectra Group’s order bookings amounted to SEK 1,322.0 million (1,550.4). Order bookings continue to exceed net sales.
  •  Net sales totaled SEK 1,073.6 million (961.4), up 11.7%. Excluding the nonrecurring items in the comparative period, net sales rose 13.6%.
  •  Operating profit increased 10.1% to SEK 165.5 million (150.3), corresponding to an operating margin of 15.4% (15.6). Excluding the nonrecurring items in the comparative period, operating profit rose 18.2%.
  •  Cash flow after changes in working capital increased to SEK 185.9 million (85.0), corresponding to SEK 4.96 (2.28) per share. Several customers that have ordered Sectra’s medical IT systems have entered the operational phase. This means that the company has now started invoicing for these systems, and increased revenue from end customers has had a positive impact on the Group’s sales, earnings and cash flow.

Fourth quarter in figures 

  •  Order bookings amounted to SEK 447.8 million (368.6), up 21.5%.
  •  Net sales totaled SEK 315.1 million (268.3), up 17.4%.
  •  Operating profit increased 36.8% to SEK 58.0 million (42.4), corresponding to an operating margin of 18.4% (15.8). Excluding the nonrecurring item in the comparative quarter, operating profit rose 19.8%.
  •  Cash flow after changes in working capital amounted to SEK 62.1 million (52.9).

Torbjörn Kronander, President and CEO of Sectra AB, comments 

“Our Group-financed managed-services agreements for medical IT systems had the greatest impact on the Group’s positive performance in terms of sales, operating profit and cash flow. Several customers with extensive agreements deployed Sectra’s systems in late 2014/2015 and early 2015/2016. This had a positive effect on the performance of the Imaging IT Solutions business area. Managed-services agreements are handled by our financing unit, which has grown more than 60% and is now the Group’s second-largest operation.” 

“I am delighted to announce that we have fulfilled all of the Group’s financial goals, despite the fact that not all areas performed as expected. Please note that a more precise definition has been established for Sectra’s growth goal, since the previous target could be interpreted in different ways. However, both definitions of the growth goal – which is based on operating profit per share – were fulfilled.”

“Sectra has a strong brand – not only in medical IT, but also in the highly advanced IT security segment. While Imaging IT Solutions performed well, the Secure Communications business area has failed to meet our expectations for several years. We are now refocusing our efforts in this area through the launch of analysis and monitoring services for customers in the energy sector, the largest subsegment within critical infrastructure. Players in this area have significant value that must be protected. Unauthorized data access could result in the loss of human lives, serious injuries, major financial losses or jeopardize the safety of the entire country. Helping customers in the energy sector to protect their control systems is fully in line with our vision of contributing to a healthier and safer society. This new venture is an important part of our ongoing efforts to restore profitable growth in the Secure Communications business area.” 

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

Presentation of the year-end report and the Secure Communications business area’s new focus on IT security for critical infrastructure 

The presentations will be held by Torbjörn Kronander, President and CEO of Sectra AB, and Simo Pykälistö, President of Secure Communications and CFO and Executive Vice President of Sectra AB. The presentations will be held in English. 

Time:              May 31, 2016, at 12:00-2:00 p.m. (CET). The presentation of the year-end report will begin at 12:00 noon (CET). Following a short break, the presentation of the company’s new focus on IT security for critical infrastructure will begin at 1:00 p.m. (CET).

Location:        Operaterrassen in Stockholm, Sweden

Register to participate here: www.financialhearings.com or follow the report presentation online via: www.sectra.com/irwebcast 

A recorded version of the presentation will be available on Sectra’s website: www.sectra.se/irwebcast

The information in this report is such that Sectra AB (publ) is obligated to disclose in compliance with the Securities Market Act and/or the Financial Instruments Trading Act. The information was issued to the media for publication on May 31, 2016, at 8:00 a.m. (CET).

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

About Sectra 

The world needs more efficient healthcare and more secure communication. 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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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 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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Quotes

“Our Group-financed managed-services agreements for medical IT systems had the greatest impact on the Group’s positive performance in terms of sales, operating profit and cash flow. Several customers with extensive agreements deployed Sectra’s systems in late 2014/2015 and early 2015/2016. This had a positive effect on the performance of the Imaging IT Solutions business area. Managed-services agreements are handled by our financing unit, which has grown more than 60% and is now the Group’s second-largest operation.
Torbjörn Kronander, President and CEO of Sectra AB
I am delighted to announce that we have fulfilled all of the Group’s financial goals, despite the fact that not all areas performed as expected. Please note that a more precise definition has been established for Sectra’s growth goal, since the previous target could be interpreted in different ways. However, both definitions of the growth goal – which is based on operating profit per share – were fulfilled.
Torbjörn Kronander, President and CEO of Sectra AB
Sectra has a strong brand – not only in medical IT, but also in the highly advanced IT security segment. While Imaging IT Solutions performed well, the Secure Communications business area has failed to meet our expectations for several years. We are now refocusing our efforts in this area through the launch of analysis and monitoring services for customers in the energy sector, the largest subsegment within critical infrastructure. Players in this area have significant value that must be protected. Unauthorized data access could result in the loss of human lives, serious injuries, major financial losses or jeopardize the safety of the entire country. Helping customers in the energy sector to protect their control systems is fully in line with our vision of contributing to a healthier and safer society. This new venture is an important part of our ongoing efforts to restore profitable growth in the Secure Communications business area.
Torbjörn Kronander, President and CEO of Sectra AB