six-month interim report 2018/2019: stronger cash …...six-month interim report 2018/2019: stronger...
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Six-month interim report 2018/2019:
Stronger cash flow and
increased order bookings in the US
Presentation December 7, 2018
Torbjörn Kronander, CEO and President Sectra AB
Mats Franzén, CFO Sectra AB
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Summary of the quarter
▪ Imaging IT lead the way but all areas showed growth.
▪ Special focus and happy customers in the US resulted
in good order intake.
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Highlights from Q2Torbjörn Kronander, CEO and President
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1. StabilityEquity/Assets ratio,
All financial targets for the Group fulfilled
2. ProfitabilityOperating margin
3. GrowthEBIT/share growth over a 5-year period
Target >30% Target >50%
Priority
Target >15%
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Order bookings for the Group
▪ US order intake doubled.
▪ Second strongest Q2 ever,
but challenging comparison
y/y.
▪ Substantial variation between
quarters as orders
sometimes are very large.
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Imaging IT Solutions
▪ Announcement of
agreement with the
world-renowned US
university hospital
Stanford Health Care
and Lucile Packard
Children’s Hospital.
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Several orders received from
large US healthcare providers:
» Kettering Health Network
» Regional Health
» Deaconess Health System
Imaging IT Solutions
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Secure Communications
▪ NATO order for the Sectra Tiger/S
encrypted mobile phone .
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Imaging IT Solutions
▪ Sectra’s medical IT
operations received
“Cyber Essentials”
national cybersecurity
certification in the UK.
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Secure
Communications
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Trend
▪ Good growth.
▪ Growth initiatives:— Critical infrastructure product area
— Mobile secure ecosystems
— New geographic areas
▪ The costs for the initiatives are
charged to earnings but is
ultimately expected to generate
a positive return.
Sales and operating profit
Business line Secure Communications
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Critical infrastructure @ Sectra
▪ Substantial interest,
but by its nature a slow market.
▪ Several customers now fully
operational.
▪ New legislation may drive
demand.
Growth strategy:
▪ Focus on the energy sector.
▪ Expand into new geographic
markets based on solid
references in Scandinavia.
IT security solutions for the energy
sector—a fast-growing market.
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Imaging IT
Solutions
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Trend
▪ Continued trust & extended
agreements with existing
customers.
▪ Example of growth initiatives:- Special focus US
- Digital pathology
- Cardiology
- Direct sales in new markets
- Entering a new country is
costly and takes time.
- New distribution partners
Imaging IT Solutions
Sales and operating profit
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Revenue trend in the US market,
SEK million
Imaging IT Solutions in the US
▪ Special focus area
▪ Opportunity:- The world’s largest market
- Highest customer satisfaction
- Small (growing) market share
▪ Recent orders from well respected
customers strengthen Sectra’s
market position.
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Digital pathology @ Sectra
Digital pathology: The next wave in digitization of hospitals.
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Digital pathology @ Sectra
Status
▪ Rapid growth.
▪ Large synergies with
Radiology
▪ Sweden is world leading in
digital pathology penetration.
▪ Sectra has dominant market
share in Sweden.
▪ Nationwide telepathology
solution in the Netherlands.
Growth strategy
▪ One system for Pathology,
Radiology and Cardiology
Imaging.
▪ Integrated diagnostics.
▪ FDA submission as soon as
possible (must wait for
approved scanner)
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Pathology NSW
RCPAQAP
Hartford
UH Cleveland
Unilabs, NLL
Umeå
Kuopio
Sundsvall
Gävle
Värmland
Fürst
Linköping
NIPACS
Cancer
Vanguard
Utrecht
PIE – national
telepathology
TMC remote
to Linköping
Rigshospitalet
Skåne
Digital Pathology @ Sectra
References
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Business
Innovation
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Future growth projects
Software tools for
orthopedic surgeryMedical education Research
IT security for
critical infrastructure
Business Innovation
Digital pathology
Secure Communications Imaging IT
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Trend
▪ New areas within orthopaedics:- Visualization and planning for 3D trauma surgery
(Pre OP)
- IMA: Sectra Implant Movement Analysis (Post OP)
- CTMA: Computer Tomography Micro motion Analysis
(For clinical research & studies)
▪ Medical Education transition: - From device delivery to a service including cloud-
based content subscriptions
▪ Research▪ Large focus on AI for medical applications
Business Innovation
Sales and operating profit
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AI/Machine learning
▪ Increase the efficiency of
physicians’ daily work,
not replacing them.
▪ An “app-store” of AI
applications in Sectra’s
solution for managing medical
images.
▪ AI will permeate most business
units in the future.
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Customer
Financing
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Trend
▪ Main income from multiyear
contracts in the UK.
▪ Significant exposure to the
GBP.
Sectra Customer Financing
Sales and operating profit
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Financial figuresMats Franzén, CFO
Slide 1030
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Order bookings and net sales trend
Changes compared with the corresponding
period previous fiscal year.
The Group
12 month rolling
▪ Order intake y/y period down
2,6%
▪ Net sales increased 9.5%- Adjusted for currency
fluctuations up 4.6%
▪ Weaker SEK
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Sales trend by geographic market
Trend
12 month rolling
By geographic market
Changes compared with the corresponding
period previous fiscal year.
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Sales trend by business segment
Trend
12 month rollingBy business segment
Changes compared with the corresponding
period previous fiscal year.
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Operating earnings trend
By segment
Changes compared with the corresponding
period previous fiscal year.
Trend for the Group
12 month rolling
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Cash flow
▪ Several comprehensive,
long-term contracts signed
17/18
– will tie up considerable
capital during the
installation phase.
▪ Long-term, the contracts will
contribute to a solid future.
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Highlights after the periodTorbjörn Kronander, CEO and President
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▪ Northern Pathology Imaging
Co-Operative ꟷ British
research project in the field
of cancer diagnosis ꟷ to use
Sectra’s vendor neutral AI
platform.
Imaging IT Solutions
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Imaging IT Solutions
▪ South Korean distribution
agreement for digital
pathology signed with
HuminTec.
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Local and global presence
▪ Direct sales in 19 countries
– France (medical) and Finland (security)
established 2015/2016,
– Canada (medical) 2016/2017
▪ Partner sales in select markets
and business units
▪ Customers in > 60 countries
▪ Sectra’s largest markets are:
- Scandinavia
- USA
- UK
- the Netherlands
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Reflections from radiology congress
▪ RSNA 2018 kept us busier than ever before.
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Sectra’s way forwardTorbjörn Kronander, CEO and President
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Everything is the
same…
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Customer satisfaction drives all business
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Philosophy - Shareholders
If you have
▪ Happy customers
▪ Happy employees
▪ Perseverance and reasonable cost
control
▪ A good vision going forward
▪ Then shareholders WILL be happy
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…and everything
is different
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Quantum computers
▪ Will turn the security world upside down
▪ All of Internet security and all certificate-security is
at risk
▪ Nobody know if, or when, they will be for real
▪ Perhaps they already exist?
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AI landscape
Artificial intelligence
Machine learning
Deep learning
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Healthcare and Cybersecurity are in rapid change
”Where there is change, There is margin”
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Being a shareholder in Sectra
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Why Sectra?
▪ High customer satisfaction
▪ A strong brand in markets where trust is critical
▪ Profitable, strong cash flow, and a solid balance sheet
▪ Substantial and increasing recurring revenue
▪ Positioned in niche markets with substantial underlying growth
▪ Management owns shares
▪ Sustainable investments in R&D with exciting future opportunities
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Upcoming financial report, CMD & AGM
▪ January 17, 2019: Capital Markets Day
▪ March 6, 2019: Nine-month interim report
▪ May 28, 2019 : Year-end report
▪ September 5, 2019: Annual General Meeting
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Your feedback is important!
Please let us know what you think at
www.sectra.com/irsurvey
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Questions?If you follow online, please email your questions.
Use the email button.
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Torbjörn Kronander, CEO and President
Mats Franzen, CFO
Sectra AB
Ph +46 13 23 52 00