Sectra’s year-end report 2020/2021: Increased profitability and record-breaking order bookings

Press release – Linköping, June 2, 2021 – International medical imaging IT and cybersecurity company Sectra (STO: SECT B) helps customers provide patients with the best possible care and protect society’s critical infrastructure and communication where it is the most vulnerable. Although the COVID-19 pandemic has temporarily dampened sales in some markets, demand for Sectra’s offering is growing. In 2020/2021, the Group’s order bookings increased 46% to a record-breaking SEK 2.7 billion. The fiscal year was also the best to date for Sectra in terms of earnings, and the Group’s three financial goals were exceeded. In light of this, it is proposed that the Annual General Meeting (AGM) resolve that SEK 4.50 per share be distributed to the shareholders through a share redemption program. It is also proposed that the Meeting resolve on a share split.

2020/2021 fiscal year in figures

• Order bookings increased 46.0% to SEK 2,651.6 million (1,816.0). 
• Net sales declined 1.7% to SEK 1,632.4 million (1,661.1). Based on unadjusted exchange rates, net sales increased 3.4%.
• Operating profit rose 18.6% to SEK 350.1 million (295.3), corresponding to an operating margin of 21.4% (17.8). Based on unadjusted exchange rates, the increase was 32.2%. 
• Profit before tax amounted to SEK 348.2 million (303.0). 
• Cash flow after changes in working capital increased to SEK 372.2 million (296.3). 

Fourth quarter in figures, February–April 2021 

• Order bookings amounted to SEK 689.2 million (716.2), down 3.8% from the comparative quarter. Of the order bookings during the quarter, 16.8% were recognized during the quarter and a further estimated 48% to 58% pertains to revenue within 12 months after the end of the quarter.  
• Net sales increased 3.7% to SEK 526.2 million (507.6). Based on unadjusted exchange rates, the increase was 10.4%. 
• Operating profit rose 32.6% to SEK 163.9 million (123.6), corresponding to an operating margin of 31.1% (24.3). Based on unadjusted exchange rates, operating profit increased 49.8%. 
• Profit before tax amounted to SEK 166.5 million (126.7). 
• Cash flow after changes in working capital amounted to SEK 113.7 million (81.0).  

Proposal to 2021 AGM concerning share split and share redemption program 

• The Board of Directors and the CEO propose that the 2021 AGM resolve on a share split whereby each share, regardless of class, be divided into five shares of the same class. 
• The Board and the CEO have proposed that the 2021 AGM resolve that SEK 4.50 per share be transferred to the shareholders through a share redemption program (or SEK 0.90 per share after the completion of the 5:1 share split proposed by the Board for resolution by the AGM). No ordinary dividend is proposed. 

Comments from Torbjörn Kronander, President and CEO of Sectra AB

“It is difficult to discuss where we stand as a company after the 2020/2021 fiscal year without mentioning the pandemic. Sectra does all it can to contribute to society by helping customers treat patients, cure diseases, and safeguard society from cybercrime. Our results reflect our success in these areas.”

“During difficult circumstances, we are guided by our corporate culture, our core values and our vision. This is an important reason why things have continued to go well for us during the COVID-19 pandemic. We posted record-breaking order bookings for the fiscal year, which shows that our focus on customer satisfaction is paying off, and we exceeded the Group’s three financial goals. Our operating margin was well over the target of 15%, which is mainly due to the effect of temporarily lower costs for travel and trade fair events due to pandemic restrictions. We expect these effects to gradually decline as society returns to more normal conditions. However, developments after the COVID-19 pandemic are difficult to predict. Even if customers have increasingly accepted new ways of working remotely, we do not consider this year’s level to be sustainable, so the long-term target margin remains unchanged.”

“We are currently adapting our organization, product development and price models to meet the demand for cloud services and to scale our operations efficiently as we grow. The pandemic has accelerated customer acceptance of our new Sectra One subscription model, which was introduced in North America at the beginning of the fiscal year. Payment and subscription models based on per-use invoicing will enable a more even balance between quarters over the long term, but are not expected to have a major effect over the next few years. We will continue to see significant variations in financial outcomes between quarters. This is due in part to the deployment of comprehensive customer projects and project deliveries, but is also a natural consequence of seasonal variations, since many customers want to go live before the relatively calm summer period. Accordingly, it remains important to look more at trends than at the outcome for an individual quarter when assessing Sectra’s development.”

Read the attached year-end 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: June 2, 2021, at 10:00 (CEST)

Follow live or listen to the recording afterward at investor.sectra.com/q4report2021

To participate by phone, call one of the following numbers 10 to 15 minutes before the scheduled start time:

SE +46850558355
UK +443333009265
US +18338230590

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 CEST on June 2, 2021.

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 2020/2021 fiscal year totaled SEK 1,632 million. The Sectra share is quoted on the Nasdaq Stockholm exchange. For more information, visit Sectra's website.

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

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