The first half of the year can be summarized as follows: record-breaking order bookings, a continued positive trend for secure communications and significant progress in the transition to selling medical diagnostic imaging as a service. More extensive contracts with customers lead to large variations in order bookings, sales and earnings between quarters. The new business model, which generates higher revenue in the long term but lower revenue in the short term, had a clear impact on the quarter and will continue to have such an effect until the major customer contracts with recurring revenue that are currently in the start-up phase properly get under way. 

During the most recent quarter, we booked our largest order ever, worth over SEK 3 billion. It concerns a multiyear contract for Sectra One Cloud for public healthcare in Québec, Canada. The order is a clear example of how extensive certain procurements have become within healthcare, with future IT systems expected to cover larger regions for longer periods. This pattern of larger contracts becomes even clearer when you also consider the trend toward consolidating all medical imaging IT into a single solution.

Our security customers are investing heavily in strengthening information security and making society more resistant to cyberthreats. This means that Secure Communications is currently our fastest-growing operating area. After the end of the quarter, we also reached a settlement with a US company regarding our patented technology for secure communications. This is a non-recurring business transaction that will have a significant positive effect in the third quarter (see page 5 for more information).

Healthcare and data security are both areas that are expected to grow for a long time to come, and that are relatively unaffected by the economic climate. With loyal customers combined with a strong brand in growing areas, we have every reason to remain optimistic about the future.

We have used Sectra’s solution for many years to enhance our radiology operations and now look forward to realizing similar benefits in the diagnostic workflows in pathology. We anticipate that the digital solution will enhance collaboration both between hospitals who often support each other with second opinions and expertise, and between the medical specialties that collaborate in complex care pathways such a cancer care.

We are thrilled to expand our partnership with Helse Nord RHF to include digital pathology. Many healthcare providers are adopting an enterprise imaging strategy as a key component to enhance patient outcomes. By integrating digital pathology into their workflow, Helse Nord RHF will experience enhanced collaboration among pathologists and other medical specialties, leading to more accurate and timely diagnoses.

By choosing Sectra, we’re investing in a solution that will enhance our radiologists' efficiency. The built-in reporting eliminates the need to switch between multiple applications. With Sectra’s high availability, we ensure our radiologists can perform imaging exams anytime and anywhere. This streamlined workflow will allow us to reduce turnaround times and increase the high-quality care for our patients.

Radiologists today are under more pressure than ever. The demand for imaging is growing rapidly, and radiologists must manage heavy workloads while maintaining high diagnostic accuracy and have a reasonable work-life balance. AZ Sint-Lucas Gent's commitment in enhancing radiology workflows reflects their mission to deliver the best possible patient care. We are looking forward to supporting them in this mission.

Going digital within our pathology operations will provide us with tools necessary for an efficient workflow. It will also enhance the collaboration between our region’s hospitals, facilitating sharing of resources and expertise so that we can ensure precise and accurate diagnoses and faster cancer care for our patients.

Providing high-quality care, especially in complex cases like cancer, is increasingly challenging for smaller hospitals. Digital pathology is an important part of the solution and we have seen tangible positive outcomes in France when technology has enabled deepened collaboration between care providers to better support patients in their regions. I look forward to supporting CH Beziers in their mission for improved cancer care.

As imaging demands grow, radiologists are tasked with balancing high diagnostic accuracy and heavier workloads. I truly believe technology can lighten this burden. For example, bringing together the entire diagnostic workflow, from case management to collaboration and final report, in a single workspace eliminates the extra time and effort involved in switching context. Our latest developments on this and more will be shown at the Sectra booth at RSNA in December.

Going cloud is becoming the first choice for healthcare providers to efficiently handle growing imaging volumes and reinforce data security. In an era where data breaches and cyber threats are increasing, it's vital that these cloud solutions follow robust security standards. The CSA STAR Level 2 certificate provides healthcare providers that assurance.

We have been using digital pathology in a limited capacity for multiple years. As we now take the step to go fully digital for primary diagnostics, we want to ensure to have a solution that both provides pathologists with a state-of-the-art application and gives us the freedom to optimize our choice of related software and scanners.

Healthcare providers, especially the larger university hospitals, have gathered experiences from their own or others’ implementations of digital pathology. The value of vendor neutrality when it comes to choosing scanners is becoming clear in many of these projects. Sectra has a track record of both promoting and enabling open integrations and of supporting large-scale primary diagnostic workflows. I look forward to utilizing that know-how to support UZ Leuven as they take their next steps for improved patient care.

We cooperate extensively with Homerton to ensure the patients in our region receive timely care, and therefore see huge benefits of further facilitating that collaboration. By having a joint Sectra solution, our radiologists will have immediate access to each other’s images and patient data, which will make it easier for us to collaborate around patient cases. As Sectra takes responsibility for the operation and maintenance of the system, the resilience of the service we provide to our patients will improve, whilst our maintenance overhead will be reduced.

An increasing number of hospitals are transitioning to cloud-based solutions to enhance security and reduce IT burdens. This shift addresses the widespread challenge of shortages in IT staff required to manage hospital systems. Therefore, we are proud to provide BHRUT with a solution that relieves this significant burden. We are looking forward to continuing to support them and to enhance their cooperation with Homerton for improved patient care in the region.

We’re excited to implement Sectra’s advanced enterprise imaging solution. The system also has the potential to replace some of what we currently use for other specialties, including cardiology, oncology and pathology. Sectra has an excellent reputation for service, reliability, and continuously improving their products and services.

Radiologists everywhere face high demands and need solutions that help maintain diagnostic speed. That speed isn't just about how quickly images load. It's also about system reliability, having advanced clinical tools at your fingertips, and features that ensure each case is read by the right person at the right time. Sectra One Cloud addresses these needs, helping MaineGeneral optimize workflows and support their mission of delivering excellent healthcare.

I am honored by the trust MSSS Québec has placed in us in helping them enhance patient care across the province. This opportunity represents a significant milestone for Sectra in Canada and highlights our commitment to delivering innovative healthcare solutions. As we enter this exciting phase, we are excited about the possibilities that lie ahead. We will leverage our knowledge in deploying solutions for multi-site health systems to contribute to MSSS Québec’s aim of significantly enhancing the quality of care provided in the region.

The first quarter was dominated by deliveries of previously ordered customer projects. Additional hospitals have gone live with our cloud-based services for medical imaging and we have delivered several products for secure communication to defense forces and authorities.

In Business Innovation, the launch of the new genomics IT module marked a major milestone during the quarter. Cancer diagnostics based on genetic information (genomics) is developing quickly and has, until this point, lacked effective IT support for high production. Our new offering strengthens Sectra’s position in integrated diagnostics for cancer care, an area that we have seen grow in importance when healthcare providers evaluate potential suppliers.

Financially speaking, we had a stable beginning to the fiscal year. Positive performances in all operating areas contributed to our highest-ever sales and operating profit figures for a first quarter. To some extent, this is because increased recurring revenue has helped to even out the results between quarters.

With an aging population come increasing needs. We are already experiencing a lack of resources and heavier workload. With more and more exams to report on and a shortage of staff, our radiologists are having a hard time coping with the everyday workload. A state-of-the art communal PACS system could help streamline workflow and improve efficiency.

Healthcare today needs to be able to cope with the increasing need for diagnostics and specialized care. Transitioning to the cloud is the first step for hospitals wanting to use new technology to cope with these challenges, as the service offers the needed scalability and security. Many hospitals also deal with staff shortages when it comes to qualified IT staff. I am very happy to offer a solution that will take away some of the stress and resources usually needed to manage the system. AZ Sint Jan and AZ Sint Lucas pave the way for the transition to public cloud for medical imaging in the Benelux and I’m excited to follow their journey

The fact that it is a fully managed service and deployed in the cloud gives us more time to focus on the care of our patients rather than on the maintenance of the IT-system and the storage and accessibility of data.

Moving everything to the cloud is a monumental task, but Sectra's commitment made it manageable and efficient.

The new system has already enhanced our ability to share resources and collaborate on patient cases. The ability to tailor our workflows has also greatly benefited our radiologists, especially for overarching multidisciplinary team meetings. The implementation and experience so far have been very positive, and I look forward to seeing the ongoing benefits of this cloud service.

At Sectra, we prioritize long-term earnings performance over short-term margin increases. The long-term perspective and close customer relationships have resulted in a solid performance throughout the years, and 2023/2024 is no exception. Among other achievements, we won several long-term, major customer contracts in both secure communications and medical IT.

Sectra is in the middle of a major transition of the business model in its largest operating area, Imaging IT Solutions. We are moving from license sales to service sales, which means that revenue will be spread out over a longer period of time. In the short term, this will affect growth in both sales and profit. Despite this, the outcome for the year was good, driven largely by our success in the US and the UK and by major improvements in Secure Communications. All business areas are growing, with positive earnings.

I’m proud of what we’ve accomplished so far and would like to express my appreciation to all of our customers, employees, partners and shareholders for the confidence and support you are giving Sectra. Together, we are creating value both for individual patients and for government officials as well as for society as a whole.

An IT solution that efficiently allows healthcare providers to handle genomic sequencing marks a significant step forward for the adoption of personalized medicine. It will enable more patients to benefit from individually tailored treatments. Working to tailor a solution for genomic data that really fits the needs of a molecular pathology department underscores our commitment to advancing precision medicine, revolutionizing how we approach healthcare, particularly in cancer treatment. I look forward to further developing the product to ensure improved and continuous support for cancer diagnostics in the future.

NATO has been using Sectra’s solutions for secure communications for many years, and we have collaborated with the alliance for over 20 years. We are honored to continue being entrusted with securing their exchange of classified information. It is very important for our customers to uphold their digital sovereignty, and this order confirms that our Sectra Tiger solution meets the high assurance requirements that this task entails. We look forward to further developing this cooperation and continuing to support the organization with products that protect classified information, thereby enhancing efficient digital collaboration between NATO officials.

Our goal is to streamline workflows while fostering seamless collaboration across different specialties. To achieve this, the first step is to acquire a stable and quick solution that enables an integrated environment for all specialties to gain a more streamlined diagnosis process. Moving from the current provider to a world class solution will be beneficial in terms of increased security and clinical standards, among other things. Moreover, the solution from Sectra supports our ambition and strategy as we will be able to easily expand the solution to include pathology, for example, which we are planning on including in the near future.

Given the rigorous review and clearance process leading up to this point, I see the new FDA clearance as strong proof of the quality of our solution. It is also an enabler for pathology departments to benefit from the latest scanner technology as well as the standardization that is happening within digital pathology. We have already seen how our customers utilize digital pathology to improve patient care, especially in complex cases such as cancer, and I am proud to be part of that journey.

Sectra has a strong track record of promoting and enabling open integrations and of pushing the development towards standardization within medical imaging IT. The recent FDA clearance including the clearance to utilize DICOM images for pathology diagnostics therefore makes me very proud. Due to the unique nature of the images used in digital pathology, proprietary formats have previously dominated. This FDA approval, including DICOM, shows that standardization is possible also within pathology. This is an important first step to a reality where healthcare providers can start reaping the benefits of a larger degree of freedom in choosing what hardware and software to combine, within pathology. This has the potential to increase workflow efficiency, facilitate the adoption of new technology and in the end—benefit patient care.

We have previously used what you might call a lite version of the Sectra PACS with the purpose of making clinical images a part of our training program. By transferring to the education portal, we look forward to greatly enhancing the learning experience for our radiographer students. For the faculty, this will facilitate the development of tailored learning materials, lessons, and assessments, while enabling the sharing of material and lessons among the four universities and their campuses.

A significant challenge facing the healthcare system today is the shortfall of radiographers available to conduct imaging exams, leading to substantial delays in diagnosis and patient care. Across many countries, attracting students to enroll in radiographer programs at universities is extremely difficult, and of the students who actually start, too many drop out before graduation. Therefore, making the education for radiographers more attractive is of huge importance. I am honored to receive the confidence and support of these four esteemed university colleges. This marks a significant step forward in enhancing educational standards and ultimately, patient care in Denmark

When choosing a vendor, we wanted one that could provide us with a stable and fast system. We also wanted one facilitating collaboration among our radiologists. That way we can streamline our radiology workflows and in turn shorten lead times for patients as well as reduce the ever increasing workload for radiologists.

Radiologists are under a lot of pressure as they are challenged to handle more images and more complex cases with less resources. Having a solution designed to streamline radiology workflows, facilitating reading and reporting of images, is therefore paramount. I am happy and excited to support Universitätsmedizin Göttingen and Universitätsklinikum Tübingen on their journey towards efficient radiology diagnostics.

In selecting a vendor, our top priority was to find a robust solution with peak performance to enhance our workflow efficiency. We also needed to be proactive and choose a partner with security expertise and ongoing support to ensure a stable full featured system and reliable remote reading capability. Sectra’s cloud service surpassed all our requirements. This service will also enable us to explore additional technologies such as integrating AI-powered workflows and expanding into other enterprise imaging modalities in the future. We are excited to realize the positive impacts and advantages that this implementation will offer to our staff, patients, and community.

At Sectra, security is engrained in our roots and is an essential part of our enterprise imaging solutions. In fact, our company name is derived from ‘secure transmissions’ and reflects our commitment to upholding high security standards. I am thankful for the trust Halton Healthcare has in Sectra as we move towards a future-state for medical imaging in Canada with our service Sectra One Cloud. I look forward to embarking this cloud partnership with Halton and supporting them every step of the way.

As a first-of-type for public cloud in the NHS, we have proven this works. Being bleeding edge can be a challenge. But we have achieved a milestone in cloud adoption for NHS imaging. Feedback from radiologists has been nothing but positive. The system is highly reliable, secure, resilient and performs well, supporting our diagnostic teams with lots more functionality that is proving very popular with radiologists. This also has the potential to help us to adopt AI into the future.

Having imaging available in the public cloud will enable closer collaboration and better access to expertise, especially in areas where there are finite number of specialist radiologists. The team at Homerton Healthcare have not only made a significant achievement in demonstrating to the NHS what is possible in the cloud, but have completed a stage towards regional consolidation.

What has been achieved by pioneering imaging professionals in Homerton could very quickly become the norm in the NHS. I’m sure many trusts, integrated care systems and NHS imaging networks will look to the trust to learn how they can replicate success as they transition to public cloud. We will certainly be sharing knowledge from this deployment with other NHS customers, as public cloud adoption continues at pace with the potential to enhance how staff work and to save important time in technology adoption.

A sustainable future is about making our customers successful. I can’t repeat this enough. To succeed we must have satisfied customers, which in turn requires that we have satisfied employees and a corporate culture that encourages engagement and motivation. At Sectra, we are proud that our customers time and time again say how satisfied they are with our employees and our efforts to make a positive difference in society.

All of our operating areas are growing. Secure Communications is continuing to make a more significant contribution to the Group’s profit than in the past and, for the first time, exceeded SEK 300 million in sales for the rolling 12-month period. We are also in an expansive phase in medical imaging IT, with major investments in delivery capacity in parallel with transitioning our business to service sales instead of product sales.

The Group’s profitability for the nine-month period exceeded our target operating margin, even if variations between individual quarters still are significant. We will have to live with this for a while yet. The important things in the long term are that we continue to have satisfied customers and that we are continuing to grow. 

Healthcare and data security are both areas that are expected to grow for a long time to come, and that are relatively unaffected by the economic climate. While our strategic investment in service sales is having a short-term negative impact on our financial outcome and growth, it will be beneficial in the long term. Not least because Sectra’s customers are satisfied and stay with us for a long time. With loyal customers and long-term relationships combined with a strong brand in growing areas, we have every reason to remain optimistic about the future.

I am proud to be able to offer a solution that helps hospitals deal with both growing imaging volumes as well as cyberthreats. Our experience in assisting large health networks is key when helping customers on their cloud journey.

Collaborating across sites and providing efficient radiology workflows are needed to cope with the increasing imaging volumes. This new customer is the 60th healthcare provider to use Sectra in the US Midwest and I’m pleased to be continuing our work in this area. With our local experience as well as our knowledge in providing multi-site solutions for large organizations we will help them on this journey in the best way possible.