Elos Medtech - Year-end report, January 1 – December 31, 2018
Double digit growth and improved profitability
• Net sales for the year increased and amounted to SEK 644.7 million (577.9), corresponding to organic growth of 11.6%. After currency adjustments, growth was 8.0%.
• Operating profit before non-recurring items amounted to SEK 47.6 million (42.7). Operating margin before non-recurring items for 2018 was 7.4%, compared to 7.4% the previous year.
• Operating profit after non-recurring items amounted to SEK 38.9 million (42.7). Operating margin after non-recurring items for 2018 was 6.0%, compared to 7.4% the previous year.
• Profit after financial items amounted to SEK 28.5 million (26.4). Net financial items were positively affected by foreign exchange effects in the amount of SEK 0.5 million (-7.2).
• Profit after tax amounted to SEK 20.9 million (22.6), which corresponds to SEK 2.59 (3.74) per share.
• Cash flow from operating activities was SEK 66.1 million (62.1), and amounted to SEK -13.8 million (24.5) after investments.
Dividend
• The Board of Directors proposes a dividend of SEK 1.00 per share for the financial year 2018.
Comments on Q4 from the CEO, Jan Wahlström
We saw a strong close to 2018. The last quarter of the year was the eighth consecutive quarter of growth and, at 13 per cent, we met our strategic target of double-figure growth this quarter too. I am pleased to say that all our business areas continue to develop positively and that the company has performed in an unprecedented manner.
In order to focus on our core business, we have reviewed our product and development projects and decided to impair them in the amount of SEK 7 million, reported as non-recurring costs. This is in line with our strategy for future growth linked to our Orthopedics and Dental Implant Systems business areas, which drive our business forward.
We saw a great deal of activity within Orthopedics during the last quarter as well. Growth has now reached an annual level of 20 per cent and is expected to increase even more thanks to our ability to meet increased demand following the decision to expand the factory in Memphis. Within Dental Implant Systems, we have fallen behind a little compared to the beginning of the year. This is related to general developments in the dental implant market, although our growth remains positive at 2 per cent for the year. In line with our focus on specialisation, we have reached an agreement with a customer within vibration to transfer some of our production to them, which will free up production capacity. This provides further opportunities to grow within Dental.
We are experiencing growth in all our segments. We have resolved many of the problems seen in one of our units, resulting in a positive earnings trend. For the year, we reported an EBITDA before non-recurring costs of SEK 99.7 million, and even reported improved profit after these non-recurring costs.
The medical devices market continues to perform strongly with a clear trend towards increased consolidation. We are also seeing greater interest among our customers in increased outsourcing to focus on their core business, which is a favourable development for a contract manufacturer such as ourselves. The most important long-term factors when choosing a partner are delivery reliability and quality. This benefits Elos Medtech, as we represent quality, expertise and innovation. Moreover, since the end of the period we have been awarded DKK 10 million to research white titanium surfaces, an act of recognition of our high-quality research and also an opportunity to develop more proprietary products in the future.
I am proud of the journey we have made during the year, in particular the introduction of our new Code of Conduct. With care as our watchword, we are taking clear responsibility for developing a sustainable business with concrete sustainability goals. With our transformative high-tech medical devices, we improve quality of life for people throughout the world. Trust is fundamental in our industry, and as such should characterise our entire business – we are what we do.
For further information, contact:
Jan Wahlström, President and CEO, +46 70-212 18 89, e-mail: jan.wahlstrom@elosmedtech.com
Christian Bergaust, CFO, +46 70-293 50 40, e-mail: christian.bergaust@elosmedtech.com
This is the type of information that Elos Medtech AB (publ) is obliged to publish in accordance with the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was issued for publication by the contact persons stated above on February 18, 2019, at 14:00 p.m. (CET).
For additional information about the Elos Medtech Group, visit www.elosmedtech.com
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