Sectra’s year-end report 2018/2019: Order bookings doubled in the fourth quarter and operating profit up 15%

May 28, 2019 | Financial Information

Press release – Linköping, May 28, 2019 – International medical imaging IT and cybersecurity company Sectra (STO: SECT B) is growing in the medical IT and cybersecurity markets. This success is based on high customer satisfaction and the company’s corporate culture, innovation and long-term approach. Major long-term customer contracts and a focus on the company’s growth areas—which are starting to gain momentum—contributed to record-high order bookings. All of the financial goals have been achieved. Taking into consideration this favorable performance and the company’s strong financial position, 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.

Fiscal year in figures

  • Order bookings increased 42.9% to SEK 2,132.8 million (1,492.5).
  • Net sales rose 16.9% to SEK 1,413.5 million (1,209.2). Adjusted for currency fluctuations, sales increased 12.0%.
  • Operating profit rose 9.9% to SEK 235.5 million (214.3), corresponding to an operating margin of 16.7% (17.7). Adjusted for currency fluctuations, operating profit increased 0.7%.
  • Under the previous accounting policy, operating profit would have increased 8.3% to SEK 259.0 million (239.1) (refer to Note 3 on page 24 in the enclosed Year-end report).
  • Profit before tax rose 7.6% to SEK 248.8 million (231.2). Excluding nonrecurring items in the preceding year, profit after net financial items rose 12.0%.
  • Cash flow after changes in working capital increased to SEK 250.7 million (207.5).
  • The Board and the President propose that the 2019 AGM resolve to distribute SEK 4.50 per share to the shareholders through a 2:1 share split in combination with a mandatory redemption process. No ordinary dividend is proposed.

Fourth quarter in figures

  • Order bookings increased 120.9% to SEK 1,104.9 million (500.3). Of the order bookings during the quarter, an estimated 13–23% pertains to invoicing within 12 months after the end of the quarter.  
  • Net sales increased 32.8% to SEK 474.1 million (357.1). Adjusted for currency fluctuations, sales increased 27.3%. 
  • Operating profit rose 15.4% to SEK 104.7 million (90.7), corresponding to an operating margin of 22.1% (25.4). Adjusted for currency fluctuations, operating profit increased 7.5%. 
  • Under the previous accounting policy, operating profit would have increased 29.7% to SEK 108.6 million (83.7) (refer to Note 3 on page 24 in the enclosed Year-end report). 
  • Profit before tax declined 9.3% to SEK 110.9 million (122.3). Excluding nonrecurring items in the preceding year, profit after net financial items decreased 1.4%. 
  • Cash flow after changes in working capital amounted to SEK 103.8 million (114.7).  

Change in accounting policies and timing of transfer of risk and restatement of consolidated financial statements and segment reporting

In conjunction with the implementation of IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases, the company performed a new analysis of its customer contracts, which resulted in a change to the view of the point in time when the transfer of risk takes place for Group-financed managed-services agreements in the UK. The consolidated financial statements and segment reporting have been retroactively restated. Read more about the impact of the change in assessment and the new accounting standards in the notes on pages 22–28 standards in the attached Year-end report. These changes will have no impact on cash flow for the year or future cash flow.

Torbjörn Kronander, President and CEO of Sectra AB, comments
“Every year, Sectra’s products and services contribute to improved care for millions of patients across the world. We also help customers reduce the risk of eavesdropping on society’s most important secrets and of unauthorized data access and disruptions to its most sensitive infrastructure.” 

“We are continuing to grow. Particular focus is being devoted to North America, where we have a very high level of customer satisfaction and major growth potential. Our profit is also being reinvested in new geographic markets and more in-depth product offerings. Our order bookings for 2018/2019 exceeded SEK 2 billion. Nearly half of these orders were from new customers. This impressive growth was mainly attributable to major multiyear customer contracts in the Imaging IT Solutions operating area. I’m particularly pleased to report that our growth initiatives and new markets in both medical imaging IT and cybersecurity are beginning to gain momentum. Major long-term customer contracts provide us with greater stability for the coming years, but also result in significant fluctuations between quarters.” 

“Thanks to a combination of significant growth opportunities in all of our operating areas, stable development, positive underlying cash flows and profit in our core operations, I have every reason to remain optimistic about the future.”

For further CEO comments and information, see the attached interim report.

Presentation of the year-end report
A presentation will be held by Torbjörn Kronander, President and CEO of Sectra AB, and Mats Franzén, CFO of Sectra AB. The presentation will be held in English.
Time: May 28, 2019, at 12:00 noon
Location: Operaterrassen in Stockholm
To attend the presentation, register via: financialhearings.com/event/11474/register/live_event
Follow live online: investor.sectra.com/event/year-end-report-2018-2019/
A recorded version will be available on this website after the presentation.

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 08:15 a.m. (CET) on May 28, 2019.

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 2018/2019 fiscal year totaled SEK 1,413 million. The Sectra share is quoted on the Nasdaq Stockholm exchange. For more information, visit https://sectra.com/.

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