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Sectra’s year-end report 2016/2017: High quality and customer satisfaction increase profitability, Board proposes share redemption program

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Linköping, Sweden, May 30, 2017 – International medical imaging IT and cybersecurity company Sectra (STO: SECT B) reported positive trends for the Group’s sales and operating profit for the fourth quarter of 2016/2017. The earnings trend was in line with Sectra’s traditional seasonal pattern, with the majority of earnings generated in the latter part of the fiscal year. Sectra’s financial focus is to increase its operating profit per share while maintaining its operating margin and Sectra’s financial performance measures for 2016/2017 exceeded the Group’s target levels. Taking into consideration this favorable performance and the company’s strong financial position, the Board and the CEO have decided to propose to the Annual General Meeting (AGM) that SEK 4.50 per share be distributed to the shareholders through a share redemption program.

Fiscal year in figures 

  • Order bookings amounted to SEK 1,177.7 million (1,322.0). Order bookings for the fiscal year were 3.2% higher than net sales for the same period.
  • Net sales totaled SEK 1,140.9 million (1,073.6), up 6.3%. Adjusted for currency fluctuations, growth was unchanged at 6.3%.
  • Operating profit rose 21.1% to SEK 200.4 million (165.5), corresponding to an operating margin of 17.6% (15.4). Adjusted for currency fluctuations, operating profit increased 19.2%.
  • Cash flow after changes in working capital increased to SEK 235.2 million (185.9).

Fourth quarter in figures 

  • Order bookings amounted to SEK 349.6 million (447.8).
  • Net sales totaled SEK 340.8 million (315.1), up 8.2%. Adjusted for currency fluctuations, sales increased 6.6%.
  • Operating profit rose 29.0% to SEK 74.8 million (58.0), corresponding to an operating margin of 21.9% (18.4). Adjusted for currency fluctuations, operating profit increased 27.1%.
  • Cash flow after changes in working capital amounted to SEK 60.2 million (62.1).

Torbjörn Kronander, President and CEO of Sectra AB, comments 

“As I look back on the 2016/2017 fiscal year, I am most pleased with the positive feedback we continue to receive from users around the world. After all, operating a business is all about keeping your customers and users happy – and being paid to do so. The market’s view of Sectra reflects the high quality of our deliveries, regardless of where in the world our customers are located or the solutions they use. This high customer satisfaction is the result of our targeted efforts to understand our customers’ environments and of our culture, with outstanding employees who truly care about and assume responsibility for our customers.

“Our profit increased, despite earnings being charged with several long-term investments in future growth. As the markets mature, our hope is that a number of these activities will contribute significantly to our growth. In the short term, however, Sectra’s growth will mainly be dependent on our sales in our largest business area, Imaging IT Solutions, where our order bookings over the past year did not quite meet our expectations. This was partly due to the trend in the UK, where we faced a falling GBP rate and a shrinking market in local currency, as well as the fact that in certain countries we now have such a large market share in our main area of medical IT systems (PACS) for radiology that it is difficult to continue growing at the same rate as we have in the past. However, in the US, for example, where Sectra so far has a relatively small market share and thus significant potential, order bookings are growing sharply. To create the scope for further growth in Imaging IT Solutions, we are also focusing on establishing a presence in two new countries: France and Canada. However, we do not expect to see the results of this work until a few years from now, since we operate in a slow industry.

“In light of recent global cyberattacks, our corporate culture, where the needs of the customer are always our top priority, and our combination of niche areas are clear strengths. Healthcare and cybersecurity are growing and rapidly changing markets, where numerous opportunities are being created for companies such as Sectra. We are well positioned in these markets and we operate in segments where a strong brand, such as the Sectra brand, is an important and decisive factor. I therefore have high hopes when it comes to our ability to continue this positive trend over the years ahead.”

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

Presentation of the year-end report  

A presentation will be held by Torbjörn Kronander, President and CEO of Sectra AB, and Mats Franzén, CFO of Sectra AB. Marie Ekström Trägårdh, President of Imaging IT Solutions and Executive Vice President of Sectra AB, will participate and answer any questions. The presentation will be held in English. 

Time: May 30, 2017, at 12:00 noon (CET)

Location: Operaterrassen in Stockholm, Sweden

Register to participate here: www.financialhearings.com/event/6797

or follow the report presentation online via: www.sectra.com/irwebcast 

A recorded version will also be available via this link after the conference.

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 8:00 a.m. (CET) on May 30, 2017.

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

About Sectra 
The world needs more efficient healthcare and increased security in society’s communication and IT systems. Sectra plays a key role in meeting these needs. 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. The company was founded in 1978, has its head office in Linköping, Sweden, with subsidiaries in 14 countries, and operates through partners worldwide. Sales in the 2016/2017 fiscal year totaled SEK 1,141 million. The Sectra share (STO: SECT B) is quoted on the Nasdaq Stockholm exchange. For more information, visit www.sectra.com.

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Year-End Report Sectra Torbjörn Kronander share redemption

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As I look back on the 2016/2017 fiscal year, I am most pleased with the positive feedback we continue to receive from users around the world. After all, operating a business is all about keeping your customers and users happy – and being paid to do so. The market’s view of Sectra reflects the high quality of our deliveries, regardless of where in the world our customers are located or the solutions they use. This high customer satisfaction is the result of our targeted efforts to understand our customers’ environments and of our culture, with outstanding employees who truly care about and assume responsibility for our customers.
Torbjörn Kronander, President and CEO of Sectra AB
Our profit increased, despite earnings being charged with several long-term investments in future growth. As the markets mature, our hope is that a number of these activities will contribute significantly to our growth. In the short term, however, Sectra’s growth will mainly be dependent on our sales in our largest business area, Imaging IT Solutions, where our order bookings over the past year did not quite meet our expectations. This was partly due to the trend in the UK, where we faced a falling GBP rate and a shrinking market in local currency, as well as the fact that in certain countries we now have such a large market share in our main area of medical IT systems (PACS) for radiology that it is difficult to continue growing at the same rate as we have in the past. However, in the US, for example, where Sectra so far has a relatively small market share and thus significant potential, order bookings are growing sharply. To create the scope for further growth in Imaging IT Solutions, we are also focusing on establishing a presence in two new countries: France and Canada. However, we do not expect to see the results of this work until a few years from now, since we operate in a slow industry.
Torbjörn Kronander, President and CEO of Sectra AB
In light of recent global cyberattacks, our corporate culture, where the needs of the customer are always our top priority, and our combination of niche areas are clear strengths. Healthcare and cybersecurity are growing and rapidly changing markets, where numerous opportunities are being created for companies such as Sectra. We are well positioned in these markets and we operate in segments where a strong brand, such as the Sectra brand, is an important and decisive factor. I therefore have high hopes when it comes to our ability to continue this positive trend over the years ahead.
Torbjörn Kronander, President and CEO of Sectra AB