Year-End report January - December 2019
Fourth quarter in brief
- SyntheticMR had a sales growth of -31% in the fourth quarter compared to the previous year.
- Net sales amounted to 10.6 MSEK (15.3).
- Operating profit amounted to -4.6 MSEK (5.4), of which -2.2 MSEK relates to SyntheticMR U.S. Inc.
- Profit for the period amounted to -3.5 MSEK (4.4).
- Earnings per share amounted to -0.84 SEK (1.10).
Full year in brief
- Net sales amounted to 45.8 MSEK (48.3), which means a sales growth of -5%.
- Operating profit amounted to 4.9 MSEK (18.7), of which -2.7 MSEK relates to SyntheticMR U.S. Inc.
- Profit for the period amounted to 3.8 MSEK (14.7).
- Earnings per share amounted to 0.94 SEK (3.63).
- The Board of Directors proposes to the Annual General Meeting to decide on a dividend of 1.50 SEK (1.50) per share.
Significant events during the fourth quarter
Marketing and sales
SyntheticMR continues to implement its strategy by strengthening its local presence in the US, Japan, India and EU.
Participation with own stand at RSNA, which is the world's largest conference for radiologists.
SyntheticMR received the first direct order of SyMRI from a reputable hospital in the US, thanks to investments in its own local sales resources.
SyntheticMR US Inc has recruited an additional 3 people during the fourth quarter.
Significant events during the full year 2019
Marketing and sales
SyntheticMR has strengthened its sales organization globally and has, among other things, registered a subsidiary in the US, SyntheticMR U.S. Inc.
SyntheticMR received approval from the US medicines agency (FDA) for the use of SyMRI in conjunction with Siemens scanners.
SyntheticMR's SyMRI software has been launched in the US together with Siemens Healthineers via their platform syngo.via Open apps.
The interim report for the third quarter was the first report in which the consolidated accounts were prepared. The figures stated in the financial statements refer to the Group unless otherwise stated.
The Board decided to postpone the application for a list change to NASDAQ OMX Stockholm.
SyntheticMR carried out a change of CEO and Ulrik Harrysson took over as CEO on July 1, 2019.
SyntheticMRs resources are focused on the business operations to further establish the Group's products on the global market.
Yvonne Mårtensson resigned her assignment as the Chairman of the Board in September. Johan Sedihn was elected as acting chairman.
Significant events after the end of the quarter
MD Anderson Cancer Center, a global highly respected cancer hospital in the US, placed an order of SyMRI.
In addition to the above, SyntheticMR has received further orders of SyMRI from reputable hospitals in Japan and India.
Cincinnati Childrens Hospital Medical Center, which is one of America's leading pediatric hospitals, announced that they now use SyMRI in clinical use for the majority of all brain examinations.
My experiences since I took over as CEO of SyntheticMR on July 1, 2019 have reinforced my belief that our unique product offering is truly appreciated by our customers and that we as an organization have all the prerequisites to continue to develop our position in the market. In our priority markets, USA, Japan, India and the EU, we have added over 10,000 annual hours of sales resources in recent months. I am convinced that this will result in sales and future earnings during 2020. The company enters the year with a strong financial position and the increased costs are scalable, which means that if we need to slow down in any area, the downtime is short.
At the end of 2019, we received an SyMRI order from a reputable hospital in the US, the first after we invested a relatively short time ago in our own sales resources in the market. Similarly, our investments in India and Japan have resulted in a first order in each country. We were also very pleased to receive an order from MD Anderson Cancer Center, a world-renowned cancer hospital in the USA. With these orders, directly from the hospitals, we will see a very positive start to the first quarter of 2020. These four examples support the perception that we are implementing the right strategies to ensure long-term profitable sales growth.
Sales in the fourth quarter amounted to 10.6 MSEK (15.3), which represents a negative sales growth of -31%. The reason for this development is a strong comparison quarter, which comes from the quarterly variations we see in the sales of MAGiC. On the positive side, sales of MAGiC licenses in the fourth quarter were the average of the sales volumes of the past eight quarters, which means that over time we continue to see good sales volume for this product through GE Healthcare.
Operating profit for the quarter amounted to -4.6 MSEK (5.4), which is a consequence of lower sales growth, but also an effect of the investments we have now initiated to strengthen SyntheticMR's sales resources in priority markets. The investments made mean that we are getting closer to our end customers more efficiently and that we can continue to develop existing and potentially new partner collaborations in a more powerful way.
Sales for the full year 2019 amounted to 45.8 MSEK (48.3), which is a decrease of -5%. The decrease is due to lower sales of MAGiC licenses through GE Healthcare than the previous year and then mainly attributable to the fourth quarter. Sales of SyMRI via other channels are increasing in comparison with 2018 but have not yet reached the growth ambitions that SyntheticMR has as a company. Operating profit for 2019 was positive and amounted to 4.9 MSEK (18.7), corresponding to a margin of 11 percent (39).
SyntheticMR is a growth company with high ambitions. To ensure profitable sales growth in the long term, we continue to implement our strategies at a high rate.
The development of our investments in the USA has so far exceeded expectations. In addition to the initial orders from SyMRI already generated, the team works with a large number of business opportunities that have come a long way in the sales process. On the positive side, several of these are negotiated as a subscription over several years, which is a payment model that secures revenue for SyntheticMR over time.
Our participation at RSNA, the world's largest congress for radiologists, in Chicago in December contributed significantly to increased interest from potential customers in the US, but also from the other markets where we prioritized our own sales resources.
As in the US, our sales processes are developing beyond expectations in, for example, India and Japan. The cooperation with our existing partners continues to be strengthened in a positive direction. All commercial partners are more active with sales activities in the local markets. This is another positive effect of our increased geographical presence, where we, together with our partners closer to the market, can deliver the benefits demanded by our end customers.
At a global level, we continue to broaden and deepen our partnership with GE Healthcare, including existing MAGiC products. In addition, we are developing our collaboration on new customer offerings to existing and new customer segments, both in the short and long term.
With Siemens Healthineers, we continue to develop our collaboration on, among other things, the offering of SyMRI in the platform syngo.via Open Apps, which is now also launched in the US, and that we continue the work on a number of development projects in the long term. Collaboration in development projects is also underway with Philips Healthcare, where in the short term we are also taking steps in the right direction to have SyMRI included in their global product catalog.
In addition to all the efforts we make with our existing partners, we have also recently initiated several development projects with other parties, which aim to increase our market potential and contribute to long-term sales growth.
As mentioned, it is my strong conviction that the investments and investments we are now making, including in the form of increased sales resources in priority markets, are the right initiatives for SyntheticMR to show long-term profitable sales growth again. We will further strengthen our position with existing and new partners and get closer to our end customers. This is how we will create growth in the future.
For additional information, please contact Ulrik Harrysson, CEO, SyntheticMR AB, +46 70 529 29 87
SyntheticMR AB develops and markets innovative software solutions for Magnetic Resonance Imaging (MRI). SyntheticMR AB product SyMRI® delivers multiple contrast images and quantitative data from a single 6-minute scan – to improve patient throughput and objective decision support for clinicians. SyMRI is CE-marked and FDA 510(k) cleared. SyMRI is a registered trademark in Europe and in the USA. SyntheticMR is listed on the Spotlight Stock Market in Stockholm, Sweden. For additional information, please visit www.syntheticmr.com.
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 February 27th, 2020.