Within the Imaging IT Solutions operating area, the US is currently one of our fastest-growing markets. During the quarter, we received orders from new customers, including the Vanderbilt Medical Center, one of the most famous hospitals in the US. We also completed the installation at Stanford Health Care, a prestigious order that we received one year ago. Sectra’s high levels of customer satisfaction and long-term work are strengthening our position, and the US has now outgrown Sweden as the Group’s largest market in terms of sales.
As for our security operations, we acquired the assets of the Swedish IT security company Columbitech AB and shares in its US subsidiary during the quarter. The acquisition is in line with our strategy to expand primarily through organic growth, supplemented by acquisitions that strengthen this organic growth. The acquisition will establish Secure Communications in the US, while also strengthening our expertise and complementing the operating area’s cybersecurity products.
I’m pleased to welcome Vanderbilt Health to our growing customer community. Sectra is providing an imaging solution that will easily scale for growth. Additionally, we have created a customized resident workflow to address their important teaching and research requirements.
Every year, Sectra’s products and services contribute to improved care for millions of patients across the world. At the same time, we are reducing the risk of eavesdropping on society’s most important secrets and of unauthorized access to sensitive infrastructure, such as electricity production and distribution.
Digital pathology will be an enabler for collaborative working across large geographic areas, streamlining pathology diagnostic decision making, particularly for cancer diagnosis and multidisciplinary team meeting discussions. This represents the biggest and most exciting change to the way Cellular Pathologist work in a generation.
Every year, Sectra’s products and services contribute to improved care for millions of patients across the world. We also help customers reduce the risk of eavesdropping on society’s most important secrets and of unauthorized data access and disruptions to its most sensitive infrastructure.
We are continuing to grow. Particular focus is being devoted to North America, where we have a very high level of customer satisfaction and major growth potential. Our profit is also being reinvested in new geographic markets and more in-depth product offerings. Our order bookings for 2018/2019 exceeded SEK 2 million. Nearly half of these orders were from new customers. This impressive growth was mainly attributable to major multiyear customer contracts in the Imaging IT Solutions operating area. I’m particularly pleased to report that our growth initiatives and new markets in both medical imaging IT and cybersecurity are beginning to gain momentum. Major long-term customer contracts provide us with greater stability for the coming years, but also result in significant fluctuations between quarters.
Thanks to a combination of significant growth opportunities in all of our operating areas, stable development, positive underlying cash flows and profit in our core operations, I have every reason to remain optimistic about the future.
Working close to our customers and supporting them in providing patients with better and more effective care is part of our identity as a company. It means a lot to us when we get the opportunity to be part of a healthcare provider’s digitization journey for so many years as we have with Region Skåne.
It was important for us to select a dedicated and experienced vendor and with Sectra we’ll have a partner that will enable us to meet demands both today and in the future. The solution’s track record of high system availability and its ease of use will help us achieve increased productivity and improved care of our patients.
We look forward to supporting Region Syddanmark in their quest to improve patient care with our digital pathology solution and experience from other pioneers in the field. The region is taking an important step towards the global forefront of digital pathology.
As demand for hospital services continues to grow, we need a scalable solution that fits our organizational imaging strategy. It is important that we are able to provide our clinicians with tools that are easy to use and help them serve patients more efficiently. Sectra will allow us to meet these objectives and will enable us to continue to deliver high-quality care and exceptional experiences for our patients.
The enterprise radiology imaging service comprises a common platform for handling all image information, which allows efficient collaboration around medical images and information across the multiple clinical teams and health organizations.
For us, it has been key to find a true partner for our imaging needs. Our own research clearly showed that Sectra’s customers, in France and in other countries, are very satisfied. We look forward to working with a vendor that focuses on customer needs and provides a stable solution known for its ease of use.
In today’s environment, hospitals are the target of organized cyber attacks, and this represents a serious threat to patient integrity and the efficiency of healthcare. At Sectra, we have a globally unique combination of healthcare and secure communications through our Secure Communications and Medical Imaging IT Solutions operating areas. This allows us to provide optimal support to customers in their efforts to tackle these challenges.
We are growing as a company by making our customers successful. With all of our financial goals fulfilled and a strong cash flow, our aim is to continue growing in the long term. High customer satisfaction, favorable profitability and long-term customer contracts have laid a solid foundation for our future growth.
Our customer satisfaction surveys show continued high results. For the sixth consecutive year, major US customers have given our IT solution for managing radiology images, Sectra PACS, a top ranking. Satisfied customers are a testament to our success and I am extremely proud of this distinction. We may have outstanding products, but our main strength lies in how our customers perceive the stability of our products, our employees and our corporate culture.
One highly positive trend for Sectra is the growing synergies between IT security and medical IT. Hospitals and healthcare are facing an increasing risk of data breaches and intrusions. Having both of these operating areas under the same roof is a strength and sets us apart from the competition. Sectra is unique in this regard. We are also seeing an increasing interest in digital pathology—which is growing fast—and we recently secured a number of strategically important orders in Europe. Sectra also has a unique strength in this area, because we can deliver systems that can handle both radiology and pathology in a single system. This increases efficiency and saves money for our customers.
I believe that the qualities of Sectra’s pathology solution, their extensive experience both in pathology and in working with university hospitals, together with our own world-leading work within computational pathology research will enable us to improve efficiency and outcomes in pathology diagnostics and cancer care.
We are dedicated to contributing to improving the effectiveness in healthcare, and happy users are the ultimate proof that Sectra’s staff and solutions achieve that in the best possible way. I am thankful and honored to be acknowledged for our top ratings in customer satisfaction.
“We live in a rapid changing world where healthcare across the globe is facing major challenges and responsibilities. Within Imaging IT, we specialize in imaging diagnostics for radiology, pathology and increasingly even cardiology. The day will be about how we’re positioning ourselves in relation to these areas to meet customers’ needs for solutions that increase productivity, coordinate resources and improve quality of care. That’s how we help more patients receive care and save more lives.
This time we’ve chosen to dive deeper into our largest business area, Imaging IT Solutions, but we also have other exciting opportunities that we’ll touch on briefly as well as our financial goals. The focus is still on long-term growth, wherein we consider the two financial goals of equity/assets ratio and operating margin to be hygiene factors. Any profits we generate over a 15% operating margin will be re-invested in growth opportunities—a strategy that’s historically been very successful for the company’s shareholders.
Even in an ever-evolving industry, our practice is thriving. Specifically, our breast imaging program is viewed as a national leader in the field, optimizing new technologies while continuing to elevate patient care. We could not achieve these successes without key partners and tools that maximize our efficiencies like those offered by Sectra.
Healthcare and cybersecurity are growing and rapidly changing markets, where numerous opportunities are being created for companies like Sectra. With stable underlying operations with favorable profitability and long-term customer contracts, we have laid a solid foundation for growth. Our high customer satisfaction, our fantastic employees—who make a difference in society and for their fellow human beings—and our exciting future initiatives will serve as the basis for our long-term success.
South Korea is the third largest economy in East Asia with a rapidly aging population and the cancer projections are growing. Increased efficiency and more accurate diagnostics are crucial to meet the country’s needs, and digital pathology can contribute to achieving this. This distribution agreement with HuminTec will enable us to address these demands by combining their market-specific expertise with our world-leading position in the rapidly expanding field of digital pathology.
I am elated that Kettering Health Network has chosen our imaging solution for their enterprise. Our consistently high system uptimes and intuitive workflow will improve performance for radiologists and referring physicians. I’m also eager to together, break new grounds in digital pathology. We, at Sectra, are hopeful that these efforts will produce results that will benefit patient outcomes.
Recent reports from the US Department of Homeland Security have shown critical vulnerabilities in the imaging IT solutions of a number of established vendors. This is a serious threat to patient integrity, security and efficiency of care. In addition to medical imaging, Sectra’s operating area Secure Communication has more than 30 years’ experience, and today protects many European countries’ most sensitive information at the highest security levels. This level of knowledge in security issues is a great asset when designing, deploying and upgrading our medical imaging IT solutions. Even though no IT system is ever 100% secure, a knowledgeable vendor can improve IT security tremendously. And nowadays, hospitals are prime targets for organized cybercrime.
A PACS is a lifeline of a health system. Everyday tasks, including importing/exporting patient studies, helping referring physicians easily view images, and high-level analysis by radiologists—all are more easily implemented by partnering with a proven company. For us, Sectra is the market leader in PACS, and we are delighted to start our relationship with the best team in PACS performance.
Nearly one year ago, Regional Health launched Epic, an electronic medical record system, but soon realized we needed to replace our outdated PACS with similarly matched, state of the art technology that could carry us into the future. Sectra was the vendor we determined would be our best partner. We are committed to making a difference every day, and advanced technologies in the hands of our skilled providers is one way we will do that.
We have a long and fruitful cooperation with the NL-NCSA. This order from NATO confirms that the result of our cooperation meets the highest requirements for communication security and solves communication challenges related to confidentiality and availability at the highest political level.
The trend with respect to order bookings and sales remained positive. The order book is healthy, and all operating areas reported an increase in sales. We are also benefiting from exchange-rate movements compared with the corresponding quarter in the preceding year, which has impacted our financial items. We intensified our focus on North America and on new product areas and geographic markets. The cost for this work was charged to earnings but is ultimately expected to generate a positive return. Cash flow was burdened by the signing of several major agreements with customers in Imaging IT Solutions and Secure Communications over the past year, which are initially generating more expenditures than income.
Within Imaging IT Solutions, the US is currently our most exciting growth market and we kicked off the fiscal year with orders from new, reputable customers in the country, including Stanford University Hospital in California and Sanford Health, a hospital chain primarily operating in North and South Dakota. Agreements with such large, respected customers strengthen Sectra’s market position and will provide the company with solid future references.
Our high customer satisfaction, benefits for society and future initiatives will serve as the basis for our long-term success. I am therefore optimistic when it comes to our ability to continue this positive trend going forward.
Our combination of business operations within medical IT and information security is unique. Cybersecurity is where our roots are, as Sectra once started as a secure communications company. The “Cyber Essentials” certification, in combination with our ISO certificate for information security management systems, demonstrates that we have robust information security and cybersecurity policies and processes in place across the business.
On behalf of the 700 employees at Sectra, we are delighted to work with a prestigious institution such as Stanford Health Care. We look forward to exceeding their expectations and collaborating on future research endeavors.
Sectra’s success is attributable to the fact that we always put the customer first. We are well positioned to continue delivering a strong performance and our goal for the future is clear.
The overall aim of Sectra’s business operations is to solve major social problems that must be addressed in the foreseeable future. Helping customers to improve the efficiency and quality of patient care and increase cybersecurity in critical social functions is Sectra’s most significant contribution to a more sustainable society.
The use of a single system for the entire hospital guarantees a universal availability of resources and the possibility to work remotely. An immediate additional benefit is that the solution will provide increased efficiency in the preparations for multidisciplinary meetings.
Together with UMC Utrecht, we have been testing the functionality of automatic upload of all images connected to a case. What impresses me the most is the ease of use and few clicks required.
It is important for us to unify our imaging IT solutions across our broad footprint of patient care. Sectra’s solution will allow us to integrate all images and information throughout our healthcare system to continue our focus of providing excellent patient care.
The 2017/2018 fiscal year was characterized by successes that strengthened Sectra’s position in our niche markets. We have achieved all of our financial goals and are growing through collaboration with new and existing customers and partners. Our customers have entrusted us to execute projects with innovative solutions that could ultimately lead to new advances in critical social functions. The overall aim of all our projects and business ventures is to solve major social problems that must be addressed in the foreseeable future. Helping customers to improve the efficiency and quality of patient care and increase cybersecurity in critical social functions is Sectra’s most significant contribution to a more sustainable society.
A year ago, our order bookings looked somewhat worrying, but after the most recent quarter we are ending the fiscal year with a healthy order book. This will provide a solid foundation for continued growth. Sectra has stable underlying operations, with favorable profitability and cash flow. We also have a number of highly exciting projects in the pipeline that could eventually become major endeavors, although, as always, there are no guarantees with such projects.
It is rewarding to lead and work for a company with satisfied customers and employees who do an outstanding job every day. The Group’s performance is a result of our targeted efforts to understand our customers’ environments and of our culture, with employees who truly care about and assume responsibility for our customers. I am incredibly proud of the Sectra culture and the way it is ingrained in every operating area in the company. This further strengthens our reputation and helps to boost our profitability. This ultimately benefits our customers, employees and shareholders—and, above all, the patients who benefit from our medical IT systems and the citizens of the democratic, open societies protected by our security solutions.
Both Sectra and Texas Scottish Rite Hospital for Children share a focus on improving orthopedic patient outcomes. We look forward to playing a part in the healthcare delivery for children in the greater Dallas area
“We are happy to confirm that Sectra has been selected as the preferred vendor for the PACS/RIS solution for 10 Local Health Districts and NSW Pathology. The solution was selected by clinicians, radiology subject matter experts and ICT professionals which ensures that the best available solution will be delivered to support our highly skilled clinical staff in providing excellent patient care. We expect that the solution will also provide significantly improved capability for result notification, scheduling, and secure sharing of images across the health system.
Security is a top priority for government organizations when choosing mobile technology. Leveraging our enterprise grade security, we’ve collaborated with Sectra to create a unique and highly customized platform that manages and protects the most sensitive and confidential information.
The nationwide telepathology solution makes it easy to consult with other pathologists around the country and facilitates digital and remote panel meetings.
The scalability and enterprise management that the Sectra solution offers is of great importance to us and the future of our practice. It was also important to choose a future-proof vendor. Sectra’s VNA design and record of demonstrated excellent customer support, high system uptimes and continuous improvements of clinical imaging workflows are good examples of that.
For a company such as Sectra, which competes with some of the largest companies in the world, it is extremely important to have satisfied, long-standing customers. Our success in this area is confirmed by the recognition of Sectra’s medical IT system (PACS) for having the highest customer satisfaction in the US for the fifth consecutive year, and globally for the fourth year straight. This is mainly the result of our corporate culture, where the needs and problems of our customers always come first. I am proud of the positive feedback we continue to receive from users across the globe and of our employees, who truly care about and assume responsibility for our customers.
The increase in order bookings is attributable to several comprehensive, long-term customer contracts in both Secure Communications and Imaging IT Solutions. A significant portion of our expenditures arise in the early stages of the multiyear projects, while revenue and profit recognition are distributed over the entire duration of the customer contract. Accordingly, several of the new orders will tie up considerable capital during the installation phase, which will place a greater burden on cash flow.