Sectra’s year-end report 2013/2014: Strong end to the fiscal year – Sectra achieves operating margin target

2013/2014 fiscal year

• The IT and medical technology company Sectra (STO: SECT B) increased operating profit 49.1% to SEK 128.1 million (85.9), corresponding to an operating margin of 15.0% (10.5).

• Non-recurring items had an impact of SEK 16.2 million on other income and SEK 19.0 million on depreciation and amortization. Excluding non-recurring items, the operating margin was 15.3%.

• Net sales rose 4.5% to SEK 853.8 million (817.0).

• Cash flow after changes in working capital amounted to SEK 123.7 million (191.2).

• The Sectra Group’s order bookings increased 1.1% to SEK 925.7 million (916.0).

• The Group’s development remains stable, with a solid financial position and strong cash flow. Accordingly, the Board has decided to propose to the 2014 Annual General Meeting that SEK 4.50 per share, the same amount as in the preceding year, be transferred to the shareholders through a share redemption program.

Fourth quarter

• Operating profit rose 43.9% to SEK 54.1 million (37.6), corresponding to an operating margin of 20.0% (15.2).

• Excluding non-recurring items, the operating margin was 21.0%.

• Net sales increased 9.1% to SEK 270.6 million (248.1).

• Order bookings amounted to SEK 264.6 million (350.0), down 24.4% compared with the year-earlier period.

Torbjörn Kronander, CEO and President Sectra AB, comments:

“We experienced a strong trend in earnings and I am pleased to announce that Sectra’s recent product and organizational development has enabled us to achieve our target operating margin of 15%. Through continued business development in our niche areas, we will now prioritize growth while at the same time maintaining our operating margin.”

“Sectra’s order bookings and cash flow for the fourth quarter declined compared with the year-earlier period. Accordingly, I feel it is important to emphasize that it is not unusual for our results to vary significantly between quarters since we sometimes receive particularly large orders and the proportion of internally financed service agreements in the Group has increased.”

“Sales growth was generated by our largest business area, Imaging IT Solutions, as well as our business lines and projects in Business Innovation. Our operations in the UK and the Netherlands reported particularly strong growth. These markets now account for more than 10% of total Group sales. Partner sales also increased in a number of areas, including the Middle East.”

“The Secure Communications business area experienced a difficult year, but recovered to a certain extent during the fourth quarter having turned an earlier loss into a break-even result. However, the situation remains uncertain, mainly due to slow approval processes, which could lead to further delays in product deliveries.”

“Sectra has a high proportion of long-term customer contracts, which provides us with stability and enables long-term investments in products and services, which in turn creates added value for customers. Together with our customers and employees, we have what it takes to drive the development of efficient solutions that can improve people’s quality of life, reduce society’s healthcare costs and contribute to a safer society.”

Please find the full version of the year-end report enclosed (PDF).

Presentation of the year-end report May 27

with Dr. Torbjörn Kronander, President and CEO of Sectra AB and Simo Pykälistö, CFO and Executive VP of Sectra AB

Time: 09:00 CET May 27, 2014

Place: Operaterrassen in Stockholm, Sweden

To attend the presentation, register via www.financialhearings.com

The presentation can be followed live via http://media.fronto.com/cloud/sectra/140527/ and a recording will be available via http://www.sectra.se/irwebcast

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 offices in 12 countries and operates through partners worldwide. Sales in the 2012/2013 fiscal year totaled SEK 853 million. The Sectra share is quoted on the NASDAQ OMX Stockholm exchange. For more information, visit www.sectra.com.

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