Sectra’s six-month interim report 2023/2024: Strong performance in all operating areas

Press release – Linköping, December 15, 2023 – Customers’ use of international medical imaging IT and cybersecurity company Sectra’s (STO: SECT B) products and services for medical imaging IT and secure communications is increasing. All operating areas reported their highest sales to date for a single quarter as well as their best operating profit for a second quarter. The transition to service sales is progressing, and recurring revenue is continuing to grow quickly. Strong growth, favorable currency movements and a turnaround in secure communications helped offset the short-term negative effects of the transition of Sectra’s business model.

Quarter (August–October 2023) in figures

• Contracted order bookings amounted to SEK 503.0 million (664.2), of which SEK 460.1 million (605.6) pertained to guaranteed order bookings. Of the guaranteed order bookings, 26% were recognized during the quarter and a further 28–38% are deemed to pertain to revenue within 12 months after the end of the quarter.
• Net sales increased 40.2% to SEK 787.7 million (561.7). Based on unadjusted exchange rates, the increase was 36.3%. Recurring revenue accounted for SEK 429.6 million (316.4) of net sales, up 35.8%. Based on unadjusted exchange rates, the increase was 32.0%. Cloud recurring revenue (CRR) increased 56.7% to SEK 93.4 million (59.6).
• Operating profit rose 64.2% to SEK 176.7 million (107.6), corresponding to an operating margin of 22.4% (19.2). Based on unadjusted exchange rates, operating profit increased 57.0%.
• Profit for the period amounted to SEK 150.6 million (93.9).
• Cash flow from operations amounted to SEK 57.7 million (38.9).

Six-month period (May–October 2023) in figures

• Contracted order bookings rose 19.8% to SEK 3,472.9 million (2,899.6), of which SEK 804.5 million (1,310.9) pertained to guaranteed order bookings. 
• Net sales increased 31.1% to SEK 1,371.5 million (1,045.8). Based on unadjusted exchange rates, the increase was 26.1%. Recurring revenue accounted for SEK 826.7 million (626.8) of net sales, up 31.9%. Based on unadjusted exchange rates, the increase was 26.8%. Cloud recurring revenue (CRR) increased 64.1% to SEK 179.8 million (109.6). 
• Operating profit rose 43.1% to SEK 246.0 million (171.9), corresponding to an operating margin of 17.9% (16.4). Based on unadjusted exchange rates, operating profit increased 33.7%. 
• Profit for the period amounted to SEK 212.1 million (148.0). 
• Cash flow from operations amounted to SEK -40.6 million (-25.3).

Comments from Torbjörn Kronander, President and CEO of Sectra AB
“Our most valuable asset is our customers’ confidence in our ability to deliver the best possible quality and in our employees’ expertise. We drive innovation through partnerships with customers and various players in the industry. These partnerships aren’t just about research and development, or integration with systems from other suppliers. They are also part of a journey to discover and implement ground-breaking solutions for medical diagnostic imaging and advanced cybersecurity. Our work improves healthcare and makes society more secure. Each step forward that we take together with our customers confirms that Sectra is more than a supplier—we’re seen as a partner, a trusted advisor, who always strives to help our customers.

“A long-term approach and long-term relationships lead to success. It is incredibly exciting to see all of our operating areas grow. Together, we reported our highest sales to date for a single quarter, and our operating profit exceeded previous second-quarter records. 

“Overall, Sectra had a positive quarter and I look to the future with confidence. Healthcare and data security are both areas that are expected to grow for a long time to come, and that are relatively unaffected by the economy. Customer confidence is crucial in these areas, and Sectra has built up a strong brand in both areas over the course of several years, with happy customers and employees. While the transition to service sales is having a short-term negative impact on our financial outcome, it will be beneficial in the long term. Especially because we have low churn. Sectra’s customers continue to be satisfied and stay with us for a long time.”

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

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

Time: December 15, 2023 at 10:00 a.m. CET
Follow live or listen to the recording afterward: https://investor.sectra.com/Q2report2324

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 8:15 a.m. (CET) on December 15, 2023.
 

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

About Sectra
Sectra contributes to a healthier and safer society by assisting health systems throughout the world to enhance the efficiency of care, and authorities and defense forces in Europe to protect society’s most sensitive information. The company, founded in 1978, is headquartered in Linköping, Sweden, with direct sales in 19 countries, and distribution partners worldwide. Sales in the 2022/2023 fiscal year totaled SEK 2,351 million. The Sectra share is quoted on the Nasdaq Stockholm exchange. For more information, visit Sectra’s website.

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