Interim report January – June 2018

Second quarter in brief

• SyntheticMRs had sales growth of 97% in the second quarter compared to the previous year.
• Net sales amounted to SEK 11.1 million (5.7)
• Operating profit increased to SEK 4.4 million (0.03)
• Profit for the period amounted to SEK 3.2 million (0)
• Earnings per share amounted to SEK 0.80 (0.00)
• Sales for rolling 12 months amounted to SEK 42.6 million (27.6)

First half year in brief

• Net sales amounted to SEK 21.8 M (14.9), which meant sales growth of 47 percent
• Operating profit increased to SEK 7.9 M (3.5)
• Profit for the period amounted to SEK 6.0 M (2.7)
• Earnings per share amounted to SEK 1.48 (0.67)

Significant events during the second quarter

Market and sales
SyntheticMR has received further clearance by the FDA for the company's software SyMRI. The clearance concerns the clinical use of SyMRI together MRI systems from Philips. This means that SyMRI is now cleared for sale in the US together with MR systems both from Philips and GE Healthcare. 

SyntheticMR has sold the first MAGiC licenses to GE Healthcare in China during the quarter. MAGiC was cleared by the CFDA in the first quarter of 2018.

Significant events after the second quarter
No significant events after the balance sheet date. 

CEO comments

The growth in revenue, earnings and cash flow has continued in Q2 2018. The sales growth during the second quarter of the year amounted to 97 percent compared to the same period last year. Sales for the quarter and first half year were SEK 11.1 M (+ 97%) and SEK 21.8 M (+ 47%). Operating profit amounted to SEK 4.4 million, which resulted in an operating margin of 39%. On a rolling 12-month basis, sales amounted to SEK 42.6 M (+ 54%), with an operating profit of SEK 15.5 M. (margin 36%).

The outcome in cash flow continues to show a strong cash-conversion rate. Cash flow for the first 6 months amounted to SEK 7.4 M (3.3 M), with a net profit of SEK 6.0 M (2.7 m). In rolling 12 months, cash flow was SEK 11.8 M (6.1 M), with a net profit of SEK 11.6 M (4.3 M)

Sales of MAGiC licenses are in line with our expectations. During the second quarter, we delivered the first licenses to GE Healthcare in China, as a direct consequence of the regulatory clearance of MAGiC in China during the first quarter of this year. The Chinese market is the fastest growing market and the customer values we offer fit well with the needs in China.

During the second quarter, Siemens launched syngo.via Open Apps, where SyMRI is one of the applications that Siemens customers can license. The business model in this channel is based on subscription with an annual fee per concurrent user. Siemens is early on offering clinical applications according to this business model to its customers. I see great potential that the entire industry may transfer to business models based on subscription, as many other industries have done before. However, the change will take place gradually. Limited volumes are expected in this channel initially, as Siemens is now in the process of establishing and introducing the platform as well as the business model on the market.

During the annual meeting for the International Society for Magnetic Resonance in Medicine (ISMRM) in Paris, Philips presented the latest version of our product in its booth. We continue to work with Philips to simplify the sales process to hospitals and clinics. A positive development during the quarter was that we received clearance from the FDA for clinical use of SyMRI together with Philips systems. Through more regulatory approvals, we enable the establishment of our product in the global market.

During May, we were represented at the Neuro Summit in London. One of the main subjects was "quantitative MR and diagnosis of the individual". A clear conclusion from presentations and the panel discussion we participated in was that healthcare needed simpler and more accessible tools to increase the use of quantitative MRI in the diagnosis and follow-up of patients. This strengthens and validates the strategy we have chosen, which is to deliver a well-integrated product through our partnerships to satisfy market needs for quantitative MRI.

The second quarter was positive in terms of sales development and we are seeing progress in our partnerships. Establishing a new technology takes time, we follow our plan and remain well positioned to continue increasing our installed base. 

Stefan Tell 
CEO SyntheticMR AB

For more information please contact Fredrik Jeppsson, CFO and Head of Investor Relations SyntheticMR AB +46 72 303 13 39 or Stefan Tell, CEO SyntheticMR AB, +46 73 373 40 90.

This information is information that SyntheticMR AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, on August 22nd 2018.

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