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Positive operating income in challenging times

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SECOND QUARTER 2020

  • Order intake decreased 3% to 62.3 (64.1) MSEK (-4% in constant currencies)
  • Order backlog amounted to 282.1 (214.5) MSEK
  • Revenue decreased 17% to 42.9 (51.5) MSEK (-18% in constant currencies)
  • Operating profit amounted to 0.9 (-0.6) MSEK, corresponding to a margin of 2.1 (-1.2) %
  • Net results after tax amounted -2.4 (-0.9) MSEK
  • Result per share amounted to -0.07 (-0.03) SEK

JANUARY – JUNE 2020     

  • Order intake decreased 2% to 110.0 (111.9) MSEK (-3% in constant currencies)
  • Revenue decreased 4% to 94.7 (98.8) MSEK (-6% in constant currencies)
  • Operating profit amounted to 1.9 (0.7) MSEK, corresponding to a margin of 2.0 (0.7) %
  • Net results after tax amounted -2.0 (0.0) MSEK
  • Result per share amounted to -0.06 (0.00) SEK

Comments from Tim Thurn, CEO

The ongoing Covid-19 pandemic has continued to play a role in the second quarter, but we managed well. Order intake in the second quarter is stable compared to previous year, revenue went somewhat down but we still succeeded to finish the quarter with a positive operating result.

Our business in Asia was strong throughout the second quarter, where order intake grew with 67 % year over year, driven by very good results from the Japanese market. In Europe countries opened sequentially and business started to resume towards the end of the quarter, where customers got reengaged in purchasing projects and product installations. In all order intake for Europe was slightly down with 5% compared to previous year. Due to an extensive lockdown in the health care sector, North America showed very limited business activity throughout the quarter – both in terms of new sales projects and deliveries. As a direct consequence order intake for the region decreased by 72 % compared to last year.

I want to highlight that order intake for the positioning products – our largest product category - grew with 10% over last year, which again is a very positive signal.

Revenue in the second quarter went down by 17% compared to the same period last year, whereas APAC grew by 19%, EIMEA and Americas showed a decline of -10 % and -73% respectively. Due to Covid-19 infection control measures many customers asked for a delay in deliveries or even stopped ongoing installations, which affected us primarily in the beginning of the quarter. Towards the end of the quarter the situation eased up in various markets and C-RAD was able to ship products to customers and to recognize corresponding revenue.

Gross margin in the quarter increased due to a favourable product mix, from last year’s 57 to 63 percent. The release of a new version of C-RAD’s main product - Catalyst+ - in March, and subsequent deliveries in the second quarter has contributed to the improved gross margin, mainly due to increased efficiency in the production and supply chain. C-RAD has delivered Catalyst+ to European, American, and Australian customers. For other markets, the mandatory approval process is ongoing, and customers will be supplied with Catalyst+ after regulatory clearance is issued.

To mitigate the anticipated decrease in revenue the company initiated a series of cost reduction activities during March, which has materialized during the second quarter with a significantly decreased cost base. With an improved gross margin and a positive impact from the cost reduction measures implemented, I am proud to present a positive operating income of 0.9 MSEK, versus a loss of -0.6 MSEK in the previous year. In addition, we are closing the quarter with a solid cash position of 83 MSEK allowing us to have a long-term focus on our business.

C-RAD has a strong position, both in proton and photon treatments. Proton therapy is the spearhead of precision radiation therapy, therefore accurate patient positioning and motion management are crucial for the success of the treatment. I am delighted, that Shenzhen Tumor Hospital, China has signed a letter of intent with C-RAD as their partner to supply the surface tracking solution for their new treatment facility. With an expected net order volume of 12 MSEK, this is the largest project in proton therapy that C-RAD has ever realized. It shows again the confidence that customers have in C-RAD as a partner.

I am looking forward to the second half of the year. I am convinced that C-RAD is in a good position to capitalize on the market opportunity, provided we see no major pandemic setbacks from the positive trend of relaxing Covid-19 related restrictions. We have an excellent product, great interest from the market in our technology and partnerships that will help us to provide our technology to an increasing number of customers worldwide and make our technology a true standard of care in advanced radiation therapy.

About C-RAD

C-RAD develops innovative solutions for use in advanced radiation therapy. The C-RAD group offers products and solutions for patient positioning, tumor localization and radiation treatment systems. All product development is conducted in three fully owned subsidiaries: C-RAD Positioning AB, C-RAD Imaging AB and C-RAD Innovation AB, all of which are located in Uppsala, Sweden. C-RAD has established three companies for direct sales: C-RAD Inc. in the US, C-RAD GmbH in Germany and C-RAD (Shanghai) Medical Devices Co Ltd. In China. Cyrpa International SPRL, a Franco-Belgian laser company, is a wholly owned subsidiary whose operations are integrated. C-RAD AB is listed on NASDAQ Stockholm.  

For more information on C-RAD, please visit http://www.c-rad.com.

For further information:

Tim Thurn, CEO C-RAD AB, Phone +46-18-666930, Email investors@c-rad.com

This information is information that C-RAD AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication at 08:30 CET on July 31, 2020.

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