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Sectra’s six-month report for the May-October 2015 period: Growth and strong cash flow

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Linköping, Sweden, December 8, 2015 – The IT and medical technology company Sectra (STO: SECT B) reports growth and strong cash flow for the second quarter of the 2015/2016 fiscal year. All operating segments reported increased sales during the most recent quarter. The Group’s net sales rose 10.8% compared with the year-earlier period. Although operating profit was impacted by large, ongoing installation projects for healthcare customers, these projects will contribute to a stable long-term trend when they enter the operational phase.

Six-month period in figures

  • The Sectra Group’s order bookings amounted to SEK 505.2 million (632.4). Order bookings continued to exceed net sales.
  • Net sales totaled SEK 489.5 million (451.5), up 8.4%. Excluding a nonrecurring item of SEK 16.3 million for the sale of patents in the comparative period, net sales increased 12.5%.
  • Operating profit totaled SEK 63.5 million (76.0), corresponding to an operating margin of 13.0% (16.8). Excluding the nonrecurring item in the comparative period, operating profit rose 6.4%.
  • Cash flow after changes in working capital amounted to SEK 58.6 million (55.7).

Second quarter in figures

  • Order bookings amounted to SEK 205.3 million (244.3).
  • Net sales totaled SEK 264.7 million (239.0), up 10.8%.
  • Operating profit totaled SEK 32.1 million (35.5), corresponding to an operating margin of 12.1% (14.9).
  • Cash flow after changes in working capital amounted to SEK 52.0 million (27.7).

Torbjörn Kronander, President and CEO of Sectra AB, comments

“We reported strong sales growth in all operating segments during the quarter, but our expenses also increased. This was mainly attributable to the resources and expenses incurred in connection with large, ongoing installation projects in Imaging IT Solutions – Group-financed projects that have not yet been recognized in earnings at Group level. To a lesser extent, we are seeing the effects of our investments in future growth, particularly with respect to digital pathology. However, we believe that our profit level will improve again once these large installation projects reach the operational phase and thereby begin contributing to stable long-term development.”

“In our major business areas, we often perform better in markets where Sectra conducts its own sales than we do through partnerships. Accordingly, we plan to devote greater focus to establishing operations in markets that we believe have significant potential. One such area is the market for secure communication systems in Finland, where the Secure Communications business area acquired EXP Analytics Oy during the second quarter. EXP Analytics Oy sells consulting services in the field of information security.”

“Thanks to our close, long-term customer relationships, our focus on high customer satisfaction, our high-quality and innovative products, and our strong financial position, we have the necessary prerequisites to continue driving the development of solutions that can improve people’s quality of life, reduce society’s healthcare costs and contribute to a safer society. This is how we create customer value, which in turn can lead to a favorable, long-term return for our shareholders.”

For further CEO comments and information, see the attached interim report.

Presentation of the interim report

Sectra will present its interim report during a teleconference with President Torbjörn Kronander and CFO Simo Pykälistö. The presentation will be held in English.

Time: December 8, 2015, 10:00 a.m. (CET)

To participate, call:

  • SE +46 8 56 64 26 91
  • UK +44 2034281400
  • US +1 6465025119

or follow online via: http://media.fronto.com/cloud/sectra/151208/  

A recorded version will be available on Sectra’s website after the conference: www.sectra.se/irwebcast

The information in this report is such that Sectra AB (publ) is obligated to disclose in compliance with the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted to the media for publication on December 8, 2015, at 8:00 a.m. (CET).

For further information, please contact:
Dr. Torbjörn Kronander, CEO and President Sectra  AB, +46 (0) 705 23 52 27
Pictures: http://flickr.com/photos/sectramedicalsystems

About the Sectra Group
Sectra was founded in 1978 and has its roots in Linköping University in Sweden. The company’s business operation includes cutting-edge products and services within the niche segments of medical IT and secure communication. Sectra has subsidiaries in 14 countries and operates through partners worldwide. Sales in the 2014/2015 fiscal year totaled SEK 961 million. The Sectra share is quoted on the Nasdaq Stockholm exchange. For more information, visit www.sectra.com

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We reported strong sales growth in all operating segments during the quarter, but our expenses also increased. This was mainly attributable to the resources and expenses incurred in connection with large, ongoing installation projects in Imaging IT Solutions – Group-financed projects that have not yet been recognized in earnings at Group level. To a lesser extent, we are seeing the effects of our investments in future growth, particularly with respect to digital pathology. However, we believe that our profit level will improve again once these large installation projects reach the operational phase and thereby begin contributing to stable long-term development.
Torbjörn Kronander, President and CEO of Sectra AB
In our major business areas, we often perform better in markets where Sectra conducts its own sales than we do through partnerships. Accordingly, we plan to devote greater focus to establishing operations in markets that we believe have significant potential. One such area is the market for secure communication systems in Finland, where the Secure Communications business area acquired EXP Analytics Oy during the second quarter. EXP Analytics Oy sells consulting services in the field of information security.
Torbjörn Kronander, President and CEO of Sectra AB
Thanks to our close, long-term customer relationships, our focus on high customer satisfaction, our high-quality and innovative products, and our strong financial position, we have the necessary prerequisites to continue driving the development of solutions that can improve people’s quality of life, reduce society’s healthcare costs and contribute to a safer society. This is how we create customer value, which in turn can lead to a favorable, long-term return for our shareholders.
Torbjörn Kronander, President and CEO of Sectra AB