Sectra’s year-end report 2021/2022: Higher sales and profit for the fiscal year—Board of Directors proposes increased dividend

Press release – Linköping, June 3, 2022 – International medical imaging IT and cybersecurity company Sectra (STO: SECT B) posted its highest sales to date, growth in recurring revenue and increased profit compared with the comparative year. This financial performance was a result of the company’s efforts to assist customers in providing the best possible care and increasing cybersecurity in areas where society’s critical functions are the most vulnerable. Customers’ need for Sectra’s offerings was confirmed by the fact that order bookings surpassed SEK 1 billion during the quarter. In light of the above, the Board of Directors and President have proposed that the Annual General Meeting resolve that SEK 1.00 per share be distributed to the shareholders through a share redemption program.

2021/2022 fiscal year

• Order bookings amounted to SEK 2,320.2 million (2,651.6), down 12.5% from the comparative year.
• Net sales rose 19.4% to SEK 1,949.1 million (1,632.4). Based on unadjusted exchange rates, the increase was 16.9%.
• Recurring revenue accounted for SEK 1,081.4 million (967.8) of sales, up 11.7%. Based on unadjusted exchange rates, the increase was 9.6%.
• Operating profit rose 9.5% to SEK 383.4 million (350.1), corresponding to an operating margin of 19.7% (21.4). Based on unadjusted exchange rates, operating profit increased 4.8%.
• Profit after financial items amounted to SEK 394.5 million (348.2).
• Cash flow from operations amounted to SEK 616.9 million (372.2).
• The Board of Directors and President have proposed that the 2022 Annual General Meeting (AGM) resolve to distribute SEK 1.00 (0.90) per share to the shareholders through a share redemption program.

Fourth quarter: February–April 2022

• Order bookings amounted to SEK 1,017.4 million (689.2), up 48% from the comparative quarter. Of the order bookings, 15% were recognized during the quarter and a further estimated 26–36% pertains to revenue within 12 months after the end of the quarter.
• Net sales increased 23.3% to SEK 649.0 million (526.2). Based on unadjusted exchange rates, the increase was 17.6%.
• Recurring revenue accounted for SEK 280.8 million (252.4) of sales, up 11.3%. Based on unadjusted exchange rates, the increase was 6.3%. 
• Operating profit declined 13.9% to SEK 141.1 million (163.9), corresponding to an operating margin of 21.7% (31.1). Based on unadjusted exchange rates, operating profit decreased 21.3%.
• Profit after financial items amounted to SEK 141.4 million (166.5).
• Cash flow from operations amounted to SEK 414.4 million (113.7) and was mainly attributable to an increase in advances from customers.

Comments from Torbjörn Kronander, President and CEO of Sectra AB
“Our growth potential is favorable in all operating areas. The need for higher productivity, scalability and access to new technology is growing in all product areas. Our recipe for success is customer satisfaction, which in turn requires happy employees, in that order. Add to this a clear focus on growing markets, reasonable cost control, a clear vision of where we are headed and the perseverance to stay the course. Sectra’s development over the years is a testament to what a strong combination this is.

“All of the Group’s financial goals have been achieved. Both Imaging IT Solutions and Business Innovation reported growth in revenue and operating profit. Secure Communications, which was hit hard by the pandemic, improved its outcome over the past quarter. We are also working on initiatives and innovation projects that will create additional customer value and growth going forward.

“We currently find ourselves in the middle of a shift to delivering our products as services. This is one of the largest transitions Sectra has ever faced and is expected to continue for many years. Another change currently under way is the transition to cloud deliveries. Instead of installing our solutions on the customer’s hardware, deliveries are made from central server systems where many customers share the same resources in the cloud. The transition will entail changes to our organization, product development and processes as well as how we package and sell our offerings. To increase transparency regarding the transition, we have decided to supplement our financial reporting with a performance measure for recurring revenue from cloud-based services, Cloud Recurring Revenue.”

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 Jessica Holmquist, CFO of Sectra AB, will present the financial report and answer questions. Fredrik Gustavsson, CTO of Sectra’s Imaging IT Solutions operations, will also participate to provide more information about the transition to selling software as cloud-based services and the future changes in Sectra’s financial statements. The presentation will be held in English.

Time: June 3, 2022, at 10:00 a.m. CEST

Follow live or listen to the recording afterward: https://investor.sectra.com/q4report2122

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 3, 2022.
 

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 2021/2022 fiscal year totaled SEK 1,949 million. The Sectra share is quoted on the Nasdaq Stockholm exchange. For more information, visit Sectra's website.

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