Elos Medtech Interim Report January 1 - June 30, 2021

A STRONG QUARTER WITH CONTINUED GROWTH

April - June 2021

• Net sales for the second quarter amounted to SEK 181.0 (118.3) million, an increase of 53 percent compared with the same period last year. Net sales in local currencies increased by 63 percent.
• Operating profit amounted to SEK 26.5 (14.9) million, corresponding to an operating margin of 14.7 (12.6) percent. In the second quarter of last year government grant and subsidies due to Covid-19 had a positive impact of SEK 38.9 million on operating profit.
• Earnings after net financial items amounted to SEK 22.8 (9.1) million. Exchange rate differences and revaluation of interest rate swaps had a negative impact on net financial items of SEK -0.9 (-2.6) million and SEK -0.4 (-0.1) million, respectively, resulting in a net financial loss of SEK -3.7 (-5.8) million.
• Earnings after tax amounted to SEK 18.4 (6.9) million.
• Cash flow from operating activities was SEK 34.3 (50.2) million, amounting to SEK 24.0 (34.2) million after investments.
• Earnings per share amounted to SEK 2.28 (0.87).

CEO JAN WAHLSTRÖM COMMENTS ON Q2

Elos Medtech has maintained the positive trend from the beginning of the year, reporting growth of 6 percent compared with the first quarter and 53 percent compared with the coronavirus-hit second quarter of 2020. The gross margin also remained stable during the quarter.

Dental grew by 12 percent compared with the previous quarter. We have a good position, with an established product range. During the quarter we also launched additional products in the Elos Accurate® family that were well received by the market. This gives dental implant professionals a wider range of options and thus expands the area of use for our hybrid base.

Orthopedics had a strong second quarter. Thanks to our product mix as well as efficiencies and low staffing levels we have increased our margins in the business area. All machines at our Memphis site were validated in the spring and we are now well equipped to further expand production. However, due to the strong demand we are seeing for robotic-assisted surgery products our organization is currently undersized. We are therefore working hard to recruit staff to the site with the current challenge that workers with this skills profile are in strong demand in the US. This situation has resulted in strong short-term results but we expect recruitment to be a long-term challenge. 

In Life Science our profitability has remained stable and we proceed to make continuous improvements in production. In June our new production hall in Skara was classified as a cleanroom. The move has gone very well with no disruptions for our customers and we are now ready to start production in the third quarter.

Our focused efforts in Operational Excellence with margin improvement measures have produced clear results. A higher degree of automation has streamlined flows and improved quality, contributing to increased profitability. Growth has gone more or less hand in hand with profitability, although earnings were down slightly on the first quarter. In all business areas we have experienced certain problems with the delivery of raw materials as well as an increase in the prices of steel and plastics. This is something that we are actively monitoring and addressing, as it could have an impact on our earnings in the long run.

Our medical technology business gives us a stable foundation on which to stand, as we have a direct positive impact on people’s lives. We are also aware that the ongoing pandemic could spring a surprise on the world market and therefore maintain preparedness for handling any setbacks.

On July 7 TA Associates announced that it controls 73.1 percent of the shares of Elos Medtech. I welcome TA Associates as the company’s new majority owner and would like to take this opportunity to thank all our shareholders, many of whom have held their shares since the company’s IPO in 1989. Over the past three decades, we have worked together as a listed company to streamline, acquire and build a strong global corporate group. The key to our success has been a strong local foothold with motivated, skilled and not least loyal employees. We have consistently had a clear strategy to develop our offering and grow more than the market, which we continue to work with.

For further information, contact:

Jan Wahlström, President and CEO, +46 70-212 18 89, e-mail: jan.wahlstrom@elosmedtech.com
Ewa Linsäter, Group CFO, +46 76-633 32 33, e-mail: ewa.linsater@elosmedtech.com

This information is information that Elos Medtech AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above on July 16, 2021, at 08:00 (CET).

For additional information about the Elos Medtech Group, visit www.elosmedtech.com

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