Elekta presents priorities for continued revenue growth and profitability
Press Release
Stockholm, Sweden, June 9, 2011
Elekta will focus on areas that will continue to drive growth and profitability. This was the main message from Tomas Puusepp, President and CEO and Håkan Bergström, CFO at today’s Capital Markets Day.
Following the release of Elekta’s year-end report for 2010/11, Tomas Puusepp described how Elekta is well positioned to drive growth in several areas. “Our first priority is to accelerate growth from delivering systems to solutions.” He says Elekta can increase market share in established markets through extended solutions while investing in emerging markets using prudent financial solutions. Puusepp also said that strategic acquisitions could support the growth of the company.
“Our second priority is to increase margins and establish industry-leading efficiency. This includes improving G&A efficiency and driving higher margins by continuing to increase our sales in services and software,” he said.
Puusepp revealed Elekta’s strategy for sustainable profitable growth for the coming years, in line with Elekta’s long term financial guidance. This includes that Elekta in year 2015 will reach an accelerated growth of 13-15% and improved EBIT growth. Earnings per share is expected to have improved by more than 60%.
He compared established markets with emerging markets, saying: “We estimate about 600 projects per year in established markets, characterized by replacements and life cycle sales. These should result in growth of 5-8%. Emerging markets are often untapped and offer potential for high volume business. Here we expect about 300 projects per year and growth of 10-20%.”
Håkan Bergström described the market outlook for most regions as either stable or strong; the only exception being some uncertainty of government healthcare spending in Portugal, Ireland, Greece, Spain (PIGS) and in the UK.
“We see strong growth prospects for South America and strong demand in emerging markets. To help support expansion in emerging markets Elekta is considering a wide range of financial solutions including loans support, unsecured deferred payments, leasing, pay-per-use and risk sharing.”
Elekta’s backlog increased 14% in fixed currencies in 2010-2011, and Bergström reported continued good visibility of sales and earnings. He said there is a healthy backlog development for Leksell Gamma Knife® and linear accelerators (linacs).
“Net sales are expected to grow by more than 10% in local currency,” Bergström said. “And our operating profit in SEK is expected to increase by more than 10%.”
Elekta’s regional heads also spoke at the Capital Markets Day. Jay Hoey, Executive Vice President, Region North America, said the region would continue to improve its service excellence and software leadership. “As for challenges, we see healthcare reforms and regulatory involvement as well as pressures on reimbursements. On the other hand, new product launches, aging equipment and an aging population are all stimulating the medical device industry.”
Ian Alexander, Executive Vice President, Region Asia Pacific, said that China and India would lead the orders and sales in his region with expected growth of 15-20% and 20-25% respectively. He said that although the full impact of the earthquake and tsunami in Japan is not yet known, there is a strong underlying market demand in other parts of the region. “The market will continue to develop rapidly as it is characterized by an aging population, increased cancer incidence, improving diagnostics and a low installed base in developing countries.”
Region Europe, Africa, Latin America, Middle East (AFLAME) sees the strongest growth potential in Russia, Turkey and Brazil. Olof Sandén, the Executive Vice President for the region, said these countries are characterized by low linac penetration, GDP growth and population growth. He also mentioned financing as an enabling factor for growth. Even established markets show potential, he said: “The region on a whole has shown consecutive double digit growth over the last five years. And Elekta has the highest market share in replacements and new centers over the competition.”
The Capital Markets Day was held on June 9 from 09.00 CET to 12.00 CET, at the Museum of Modern Art in Stockholm. A webcast from the event will be available on Elekta’s website (www.elekta.com).
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For further information, please contact:
Stina Thorman, Vice President Corporate Communications, Elekta AB
Tel: +46 8 587 254 37, e-mail: stina.thorman@elekta.com
Time zone: CET, Central European
The above information is such that Elekta AB (publ) shall make public in accordance with the Securities Market Act and/or the Financial Instruments Trading Act. The information was published at 12.00 CET on June 9, 2011.
About Elekta
Elekta is a human care company pioneering significant innovations and clinical solutions for treating cancer and brain disorders. The company develops sophisticated, state-of-the-art tools and treatment planning systems for radiation therapy and radiosurgery, as well as workflow-enhancing software systems across the spectrum of cancer care. Stretching the boundaries of science and technology, providing intelligent and resource-efficient solutions that give confidence to both healthcare providers and patients, Elekta aims to improve, prolong and even save patient lives, making the future possible today.
Today, Elekta solutions in oncology and neurosurgery are used in more than 5,000 hospitals globally, and every day more than 100,000 patients receive diagnosis, treatment or follow-up with the help of a solution from the Elekta Group.
Elekta employs about 2,800 employees globally. The corporate headquarters is located in Stockholm, Sweden, and the company is listed on the Nordic Exchange under the ticker EKTAb