Interim report May – October 2008/09
• Order bookings rose 16* percent. Order backlog at an all time high level of SEK 6,392 M.
• Net sales amounted to SEK 2,492 M, an increase by 16* percent.
• Operating profit amounted to SEK 118 M (195).
• Profit after taxes amounted to SEK 59 M (126).
• Earnings per share after dilution was SEK 0.67 (1.38).
• Cash flow from operating activities was negative SEK 95 M (pos. 140). In the second quarter cash flow was positive SEK 68 M.
• New guidance: For the full year 2008/09, Elekta’s net sales are expected to grow by more than 15 percent in local currency. The operating profit is expected to grow by 20-25 percent. The previous outlook on operating profit was a growth of more than 15 percent.
* Compared to the same period last fiscal year at unchanged exchange rates.
President Tomas Puusepp comments
Demand for Elekta’s clinical solutions, products and services remains strong. Elekta continues to strengthen its market share and the product portfolio is more competitive than ever before. In the US the newly decided reimbursement rules for 2009 support further investments in advanced cancer care, especially in IMRT where Elekta has excellent solutions.
Order bookings on a rolling twelve-month basis increased by 18 percent. From the beginning of this fiscal year, the order backlog has increased by 26 percent, reflecting solid busi-ness growth as well as favorable currency movements.
The introduction of Elekta VMAT has been successful and this technology is quite rapidly becoming the new standard of care in radiation oncology. This is a growth area, particularly with our large installed base. We are also expanding geographically into new markets. A growth driver for emerging markets is our highly competitive linear accelerator platform Elekta Compact™.
The demand for Leksell Gamma Knife® Perfexion™ remains high and we see an increased interest from oncology centers, besides the traditional neurosurgeons. The order intake from Japan, where we received regulatory approval in May, is proceeding according to plan.
Elekta had a strong presence at this year’s large scientific meetings, ESTRO, ASTRO and CNS, and for the first time we showed our entire product portfolio under one common brand. It was clear to all attendants that Elekta today is a technology leader and comprehensive pro-vider of treatment solutions for cancer and brain disorders, and that our latest acquisition, CMS, is now integrated in our offering.
The currency movements during the past months will be positive for Elekta’s financial performance. We have secured the present fiscal year with hedging on favorable currency rates and in accordance with our policy we have also hedged into next fiscal year.
The financial crisis has so far had a limited effect on investments in cancer care. Looking beyond the present fiscal year, we can however not exclude that a worldwide recession might also affect cancer care. However, substantial capacity shortage prevails in large parts of the world and treatment of life threatening diseases such as cancer is among the last health care investments to be cut down on.
The six months result was negatively affected by product mix, higher costs originated from geographical expansion and strengthened marketing activities and to some extent by postponed shipments. I am confident that we will deliver according to our new outlook for 2008/09 since approximately SEK 50 M of the cost increase was related to one-off cost in the first half of the year and a substantial part of the order backlog will be delivered during this fiscal year.
We expect 2008/09 operating profit to grow by 20-25 percent. The earlier outlook on operating profit was a growth of more than 15 percent. Our outlook on Elekta’s net sales for 2008/09 remains.
Tomas Puusepp
President and CEO