Sectra’s six-month interim report 2020/2021: Increase in profit and order bookings, but deliveries impacted by pandemic restrictions

Press release – Linköping, November 27, 2020 – Demand for the international medical imaging IT and cybersecurity company Sectra’s (STO: SECT B) services and products remained high during the second quarter and order bookings for the first half of the year increased over the year-earlier period. Sales growth and lower operating expenses enabled increased profits despite delivery opportunities in parts of our operations being limited by restrictions in society as a consequence of the pandemic. The reintroduction of tighter restrictions in many countries could lead to greater fluctuations between quarters and increase the risk of delays in deliveries. However, Sectra is relatively well equipped to manage the pandemic based on a strong financial position, positive cash flow and significant recurring revenue.

Six-month period May–October 2020, in figures

• Order bookings rose 105.4% to SEK 1,364.4 million (664.4). 
• Net sales increased 2.3% to SEK 712.1 million (696.1). Based on unadjusted exchange rates, the increase was 6.1%.
• Operating profit rose 62.5% to SEK 117.0 million (72.0), corresponding to an operating margin of 16.4% (10.3). Based on unadjusted exchange rates, operating profit increased 75.9%. 
• Profit before tax amounted to SEK 113.9 million (75.6). 
• Cash flow after changes in working capital increased to SEK 121.8 million (81.2).

Second quarter August–October, in figures

• Order bookings increased 76.7% to SEK 752.1 million (425.7). Of the order bookings during the quarter, 13% were recognized as revenue during the quarter and a further estimated 22% to 32% pertains to revenue within 12 months after the end of the quarter.
• Net sales increased 13.7% to SEK 413.2 million (363.3). Based on unadjusted exchange rates, the increase was 18.8%. 
• Operating profit rose 109.8% to SEK 89.6 million (42.7), corresponding to an operating margin of 21.7% (11.8). Based on unadjusted exchange rates, operating profit increased 127.3%. 
• Profit before tax amounted to SEK 92.5 million (44.9). 
• Cash flow after changes in working capital amounted to SEK 36.3 million (109.2). During the quarter, Sectra distributed SEK 173.3 million (172.6) to its shareholders through a share redemption program.

Comments from Torbjörn Kronander, President and CEO of Sectra AB
– Possibilities for working remotely with the same functionality and security as the workplace, as well as comprehensive consolidation in healthcare to promote higher productivity, are some of the factors that drive the markets for medical IT and cybersecurity. With increased order bookings and profits in the first half of the year, we have shown that our focus on customer satisfaction is paying off. This is how we grow and achieve our goals.

– In the year-earlier period, we reported record-high order bookings. This trend has continued, and now we are doing it again. After having recovered from a weak start to the fiscal year, we are reporting positive financial performance for the second quarter. This despite the impact of the pandemic, above all in our Business Innovation and Secure Communications operating areas. At the same time, more extensive lockdowns are once again taking place in society, and it appears that a second wave of the pandemic will continue for several months to come. This severely limits the opportunities for visiting customers in the field, and will have an effect on delivery plans for certain projects in the immediate future. The impact on long-term sales activities such as trade fairs and physical meetings with customers will lead to reduced costs over the short term, but could have effects on order bookings over the long term. This applies not only to us, but to other players in our industries as well.

– The situation for many of our customers is far from ideal, owing to the ongoing pandemic, and we are doing what we can to help. Based on their feedback, we have done well at maintaining a high level of customer satisfaction. This feels fantastic and encourages us to continue to do our utmost to meet our customers’ needs so that they can provide their patients with the best care possible and protect critical infrastructure and communication, where society is at its most vulnerable.

See the attached interim report for further CEO comments and information. 

Presentation of the interim report 
Torbjörn Kronander, President and CEO of Sectra AB, and Mats Franzén, CFO of Sectra AB, will present the financial report and answer questions. The presentation will be held in English.

Time: November 27, 2020, 10:00 a.m. CET

Follow live or listen to the recording afterward at investor.sectra.com/q2report2021

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This information constitutes information that Sectra AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and/or the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out below, at 08:15 a.m. (CET) on November 27, 2020.

About Sectra
Sectra assists hospitals throughout the world to enhance the efficiency of care, and authorities and defense forces in Europe to protect society’s most sensitive information. Thereby, Sectra contributes to a healthier and safer society. The company was founded in 1978, has its head office in Linköping, Sweden, with direct sales in 19 countries, and operates through partners worldwide. Sales in the 2019/2020 fiscal year totaled SEK 1,661 million. The Sectra share is quoted on the Nasdaq Stockholm exchange. For more information, visit https://sectra.com/.

For further information, please contact:
Dr. Torbjörn Kronander, President and CEO, Sectra AB, +46 (0) 705 23 52 27

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