Year-end Report January 1 - December 31, 2018

RaySearch Laboratories AB (publ)

“We summarize 2018 and conclude: RaySearch stands strong. Order intake rose by 19 percent and RayCare has been introduced into clinical use” 
Johan Löf, CEO of RaySearch. Comments page 3. 

YEAR IN BRIEF

For full-year 2018, order intake increased 19 percent to SEK 805 M (675) and net sales rose 7 percent to SEK 627 M (585). However, the operating margin declined to 15 percent (27), primarily due to changes in accounting policies that are deferring our revenue recognition. Without application of the new accounting policies, net sales would have risen 18 percent to SEK 687 M and the operating margin would have been 22 percent. The operating margin declined due to a scheduled increase in depreciation as well as a global market offensive, which involved a 24 percent increase in the average number of employees during 2018. Cash flow was significantly strengthened in the fourth quarter.  

FOURTH QUARTER (OCTOBER-DECEMBER 2018) 

• Net sales SEK 219.4 M (205.0), of which revenues from RayStation®/RayCare® SEK 206.2 M (192.6)  
• Profit after tax SEK 32.8 M (72.3) and earnings per share before/after dilution SEK 0.96 (2.11) 
• Operating profit SEK 41.7 M (98.7) 
• Cash flow SEK 56.8 M (34.6) 
• Order intake SEK 294.9 M (239.1), of which RayStation/RayCare/RayCommand® SEK 283.2 M (228.8) 
• Order backlog SEK 828.0 M (581.2) at the end of the period, of which RayStation/RayCare/RayCommand® SEK 777.5 M (523.6)

TWELVE MONTHS (JANUARY-DECEMBER 2018)

• Net sales SEK 627.2 M (585.1), of which RayStation/RayCare SEK 577.5 M (531.6)  
• Profit after tax SEK 78.5 M (117.6) and earnings per share before/after dilution SEK 2.29 (3.43) 
• Operating profit SEK 94.5 M (159.7) 
• Cash flow SEK 1.8 M (19.1) 
• Order intake SEK 805.2 M (674.6), of which RayStation/RayCare/RayCommand® SEK 762.5 M (630.0) 
• The Board of Directors proposes that no dividend be paid for 2018

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 17 percent in the fourth quarter and 19 percent for full-year 2018 compared with the previously applied accounting standard (IAS 18), see Notes 1-2. The accounting policy changes also had a negative impact on net sales and earnings in 2018. 

SIGNIFICANT EVENTS DURING THE FOURTH QUARTER 

• RayStation was selected by several leading cancer centers, including L’Hôpital Maisonneuve-Rosemont in Quebec, Canada, Rogue Valley Medical Center in the US, Kaoshiung Chang Gung Memorial Hospital in Taiwan and Centrum Onkologii Ziemi Lubelskiej in Poland. In addition, Raysearch secured a significant order for RayStation from a major radiotherapy machine manufacturer.  
• Since October 8, 2018, RayCare together with RayStation have been used to plan and manage the treatment of patients at Provision CARES Proton Therapy Center in Nashville in the US. This marks the introduction into clinical use of RayCare. 
• RaySearch and Canon Medical Systems Corporation entered into a collaborative agreement to integrate RayStation/RayCare with Canon Medical’s imaging systems and advanced visualization solutions. 
• RayStation 8B* was launched with machine learning and deep learning applications, a new module for evaluation of robustness of treatment plans and Monte Carlo dose computation for photons. 
• RayCare 2C* was released with comprehensive improvements and new advanced workflow features as well as enhanced activity and order management. 
• RaySearch expanded its product line-up with the RayCommand treatment control system and has secured an initial order from Advanced Oncotherapy (AVO) in the UK. Refer to page 10 for more details about RayCommand. 

SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD

• RaySearch has won five orders for RayStation in the UK with a total order value of SEK 48 M.

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 February 20, 2019 at 7:45 a.m. CET. 

TELECONFERENCE
CEO Johan Löf and CFO Peter Thysell will present RaySearch’s year-end report for January-December 2018 at a teleconference on Wednesday, February 20, 2019 at 10:00 a.m. CET. 
To participate in the teleconference, call +46 8 22 90 90 (Sweden), +44 330 336 6027 (UK) or +1 719 325 2054 (US). The access code is 188791#. Please call a few minutes before the teleconference begins. The presentation will be held in English. 

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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