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Sectra’s nine-month interim report 2021/2022: The industry’s most satisfied customers for the ninth consecutive year

Mar 9, 2022 | Financial Information | Medical Systems | Secure Communication Systems

Press release – Linköping, March 9, 2022 – International medical imaging IT and cybersecurity company Sectra’s (STO: SECT B) radiology module for enterprise imaging, Sectra PACS, received a top ranking in customer satisfaction surveys in the US, Canada and Asia/Oceania. Satisfied customers are the foundation for the Group’s growth and the positive trend in the Imaging IT Solutions operations. Sectra’s other operating segments are affected by the pandemic to a greater extent, particularly Secure Communications. The consequences of the pandemic and the ongoing investments in the field of cybersecurity are expected to continue to have a negative impact on the earnings trend toward the end of the fiscal year, but have the potential to contribute to long-term expansion.

Nine-month period in figures, May 2021–January 2022

  • Order bookings amounted to SEK 1,302.8 million (1,962.4), down 33.6% from the comparative period.
  • Net sales rose 17.5% to SEK 1,300.1 million (1,106.2). Based on unadjusted exchange rates, the increase was 16.5%. Recurring revenue accounted for SEK 800.6 million (715.2) of sales for the period, up 11.9%. Based on unadjusted exchange rates, the increase was 10.8%.
  • Operating profit rose 30.1% to SEK 242.2 million (186.2), corresponding to an operating margin of 18.6% (16.8). Based on unadjusted exchange rates, operating profit increased 27.8%.
  • Profit after financial items amounted to SEK 253.1 million (181.8).
  • Cash flow from operations amounted to SEK 202.5 million (258.5). 

Third quarter in figures, November 2021–January 2022

  • Order bookings amounted to SEK 439.6 million (598.0), down 26.5% from the comparative quarter. Of the order bookings during the quarter, 27% were recognized during the quarter and a further estimated 25% to 35% pertains to revenue within 12 months after the end of the quarter.
  • Net sales increased 20.8% to SEK 476.2 million (394.2). Based on unadjusted exchange rates, the increase was 15.0%. Recurring revenue accounted for SEK 275.2 million (245.3) of sales for the quarter, up 12.2%. Based on unadjusted exchange rates, the increase was 7.2%.
  • Operating profit declined 1.0% to SEK 68.4 million (69.1), corresponding to an operating margin of 14.4% (17.5). Based on unadjusted exchange rates, operating profit decreased 14.0%.
  • Profit after financial items amounted to SEK 77.0 million (67.8).
  • Cash flow from operations amounted to SEK 153.1 million (136.7).

Comments from Torbjörn Kronander, President and CEO of Sectra AB

“What we are achieving together with our customers is benefiting millions of patients around the world, improving medical education and helping society’s critical functions with cybersecurity. The best way that we can grow is to continue to satisfy customers who then recommend Sectra to those who are not yet our customers.

“Early deliveries at the start of the fiscal year have contributed to more even outcomes between the quarters, and operating profit for the period as a whole increased 30%. Deliveries of medical IT systems contributed to a positive profit trend and stable growth for Imaging IT Solutions, in particular thanks to a growing customer base in the US, which is currently our fastest growing market. Business Innovation’s operations also performed well in the third quarter.

“Unfortunately, the COVID-19 pandemic had a major impact on Secure Communications during the quarter. To reverse this trend, we need to progress in procurements and deliver products to customers. We expect the operational investments we are currently carrying out to continue to have a negative impact on the Group’s outcomes for some time before the trend can be reversed. To date, we have not experienced any direct effects of the security situation in Europe, and our business operations in Russia and Ukraine are very limited. However, together with the general increase in cyber threats in society, these events are expected to contribute to growing demand for cybersecurity in the coming years. 

“During the final quarter of the fiscal year, we expect the earnings trend to weaken as a result of the situation in Secure Communications, the continued reinforcement of the Imaging IT Solutions organization and the transition to sales of software as a service instead of traditional licenses, which will distribute revenue more evenly over time. This revenue model is more stable and long-term than previous license sales, but will lead to a decline in sales growth in the short term.”

Read the attached interim report for further CEO comments and information. 

Presentation of the interim report

Torbjörn Kronander, President and CEO of Sectra AB, and Mats Franzén, CFO of Sectra AB, will present the financial report and answer questions. The presentation will be held in English.

Time: March 9, 2022 at 10:00 a.m. (CET)

Follow live or listen to the recording afterward: https://investor.sectra.com/Q3report2122

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 (CET) on March 9, 2022.

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