Elos Medtech Interim report, 1 January – 30 June 2016
Sales growth and improved operating profit
• Net sales for the first half of the year increased to SEK 292.0 M (244.6), which adjusted for exchange-rate fluctuations corresponds to an increase of 20.2%, of which organic growth was 1.1%.
• Operating profit totalled SEK 28.0 M (19.4, adjusted for non-recurring items of 26.4).
• Profit after net financial items totalled SEK 21.3 M (16.7). Net financial items were negatively impacted by exchange-rate differences of SEK 0.2 M (pos: 0.3).
• Profit after tax amounted to SEK 15.1 M (11.3), corresponding to SEK 2.49 (1.87) per share.
• Cash flow from operating activities was SEK 44.6 M (33.1) and, after investments, amounted to SEK 23.2 M (-169.1).
• A new President and CEO of Elos Medtech was recruited during the period - Jan Wahlström assumed operational responsibility on 1 July 2016.
CEO, Jan Wahlström, comments
“Following a slightly cautious start to the beginning of 2016, Elos Medtech's sales and result strengthened in the second quarter. Net sales increased with 10,1% (4,0% organic growth) and profit margin in the quarter was 10,6% (9,8). Growth in the second quarter was healthy with slight variations between different geographic markets and segments. China, Denmark and North America reported the best performances, while other core markets also noted growth. A positive trend was that weak demand in Asia from the second half of 2015 transitioned to positive growth.
Overall, it can be said that three of the Group’s market segments reported satisfactory growth in the first six months of the year – Dental Implant Systems, Trauma & Spine and Diagnostics – whereas Medical Devices reported a marginal decline.
Activity in the Dental Implant Systems market segment strengthened markedly in the second quarter of the year and sales increased by slightly more than 23% year-on-year. For the first six months of 2016, the sales increase was slightly more than 9% compared with the first half of 2015. This favourable trend was due to the increase in activities in contract services, the continued strong performance of the Group’s own products in the segment and the previous investments in sales and marketing activities generating positive results. New distribution agreements were signed within Europe during the period.
The Trauma & Spine market segment reported a marginal yet stable sales increase of almost 6% for the second quarter compared with the year-earlier period. Work in the quarter mainly focused on retaining the high pace of integration between Onyx Medical that was acquired in April 2015 and other parts of the Group.
The Medical Devices market segment was stable, but sales for the first half of the year fell by slightly more than 3% year-on-year, primarily due to the previously announced declines in the first quarter. Sales rose slightly during the second quarter.
Sales in the Diagnostics market segment rose by slightly more than 20% in the first six months of the year compared with the year-earlier period due to the positive performance in Microplast’s products.
The favourable trend from the start of 2016 for the operations in Tianjin, China continued with a recovery to more satisfactory levels.
During the period, Microplast completed the extension of the production facility in Skara, Sweden, and a significant portion of the Group’s investments in the first half of the year, SEK 21.4 M, pertained to construction and machinery. The extension followed a set plan and it is gratifying that we noted a high inflow of new customers during the same period. Other investments by the Group included mainly major machinery investments in Gørløse in Denmark in the first quarter.
In summary, the Group’s total sales for the first six-month period amounted to SEK 292.0 M and growth was 20.2%, most of which was due to the fact that Onyx was not included for all of 2015. The operating margin followed the upward trend reaching 9.6% for the first half of the year, up from 5.4% in the first quarter. The operating margin for the second quarter was 10.6% (9.8). Cash flow from operating activities also strengthened to SEK 44.6 M (33.1).
Elos Medtech’s future ambitions remain firm. Our competitiveness will continue to increase based on active product development, additional streamlining of production and high intensity in sales and marketing activities.
Jan Wahlström
President and CEO
For further information, contact:
Jan Wahlström, President and CEO, +46 70 212 18 89, e-mail: jan.wahlstrom@elosmedtech.com
Ulrica Ehn, CFO, 46 (0)510-48 43 67, +46 702 72 11 61, e-mail: ulrica.ehn@elosmedtech.com
This information is information that Elos Medtech AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication, through the agency of the contact person set out above, at 08.00 CET on 24 August 2016.
For additional information about the Elos Medtech Group, visit www.elosmedtech.com
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