Interim report January 1 – September 30, 2018

RaySearch Laboratories AB (publ)

“In the third quarter of 2018, order intake rose 31 percent to SEK 176 M (134), the highest-ever order intake for the third quarter. Net sales rose 35 percent to SEK 150 M (112) and the operating margin to 8 percent (1), despite changes in accounting policies that are deferring our revenue recognition. Without application of the new accounting policies, net sales would have risen 47 percent to SEK 164 M and the operating margin would have been 15 percent. We have confidence in our long-term strategy, and our expansion will continue,” says Johan Löf, CEO of RaySearch. 

THIRD QUARTER (JULY-SEPTEMBER 2018)

• Net sales SEK 150.4 M (111.7), of which revenues from RayStation®/RayCare® SEK 137.9 M (99.1) 
• Profit after tax SEK 13.5 M (-1.0) and earnings per share SEK 0.39 (-0.03)
• Operating profit SEK 12.4 M (0.7)
• Cash flow SEK -17.0 M (1.2)
• Order intake SEK 175.7 M (133.8), of which RayStation/RayCare SEK 165.0 M (123.6)

NINE MONTHS (JANUARY-SEPTEMBER 2018)

• Net sales SEK 407.8 M (380.1), of which RayStation/RayCare SEK 371.3 M (339.1) 
• Profit after tax SEK 45.9 M (45.3) and earnings per share before/after dilution SEK 1.34 (1.32)
• Operating profit SEK 52.8 M (61.0)
• Cash flow SEK -54.9 M (-15.5)
• Order intake SEK 510.3 M (435.4), of which RayStation/RayCare SEK 479.3 M (401.2)
• Order backlog SEK 740.4 M (571.3) at the end of the period, of which RayStation/RayCare SEK 688.3 M (511.7)

CHANGES IN ACCOUNTING POLICIES

• IFRS 15 Revenue from Contracts with Customers came into effect on January 1, 2018, and reduced the company’s license revenue from RayStation and RayCare by 18 percent in the third quarter and 17 percent during the first nine months of 2018 compared with the previously applied accounting policy (IAS 18), see Notes 1-2. The accounting policy changes also had a negative impact on net sales and earnings over the past 12 months. 

SIGNIFICANT EVENTS DURING THE THIRD QUARTER 

• RayStation was selected by several leading cancer centers, including Leeds Cancer Centre in the UK, the Swedish Cancer Institute in Seattle in the US, and Centre intégré de cancérologie de Laval in Québec in Canada. In addition, the University of California, San Francisco in the US has expanded its existing RayStation installation. 
• A long-term collaborative agreement for the development of RayCare was concluded with the Princess Margaret Cancer Center in Toronto, Canada. 
• RayCare was selected by Advanced Oncotherapy (AVO) in the UK. 
• RayCare 2A* and 2B* were released with a range of new features, including activity and rule-based scheduling for all clinical resources, clinical document management, support for full treatment delivery, workflow management and offline activity-based image analysis, and additional features for care administration and the management of external contacts. 

SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD

• Since October 8, 2018, RayCare and RayStation have been used to plan and manage the treatment of patients at Provision CARES Proton Therapy Center in Nashville in the US, which thereby became the first center to connect RayCare directly to a therapy system (ProNova SC360) to register and verify the treatments. 
• RaySearch and Canon Medical Systems Corporation entered into a collaborative agreement to integrate RayStation and RayCare with Canon Medical’s imaging systems and advanced visualization solutions with the aim of creating a more efficient workflow for virtual simulation.
    

The information contained in the interim report is such that RaySearch Laboratories AB (publ) is obliged to disclose under the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication on November 15, 2018 at 7:45 a.m. CET.
  

FOR FURTHER INFORMATION, PLEASE CONTACT: 

  
ABOUT RAYSEARCH 
RaySearch Laboratories AB (publ) is a medical technology company that develops innovative software solutions for improved cancer treatment. The company develops and markets the RayStation treatment planning system and RayCare oncology information system to cancer centers all over the world and distributes the products through licensing agreements with leading medical technology companies. RaySearch’s software is currently used by over 2,600 centers in more than 65 countries. The company was founded in 2000 as a spin-off from the Karolinska Institute in Stockholm and the share has been listed on Nasdaq Stockholm since 2003. More information about RaySearch is available at www.raysearchlabs.com.

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