Elekta’s performance in the third quarter was mixed with strong order bookings but EBITA was below expectations.
EBITA
EBITA for the third quarter 2013/14 was weak and amounted to SEK 340 (454) M and EBIT amounted to SEK 260 (393) M, which materially deviates from Elekta’s expectations. The weaker result was primarily related to:
Lower than expected delivery volumes of Leksell Gamma Knife®
Substantial negative currency effects
Strong order bookings
Order bookings amounted to SEK 3,224 (2,856) M in the third quarter, an increase of 15* percent compared with last year.
Net sales
Net sales amounted to SEK 2,385 (2,428) M in the third quarter, an increase of 1* percent compared with last year. The third quarter was significantly impacted by lower than expected delivery volumes of Leksell Gamma Knife. In addition, weaker currencies, particularly in some emerging markets, have affected purchasing power and volumes.
Adjusted outlook for the year
Due to lower-than-expected delivery volumes of Leksell Gamma Knife and delays in expected deliveries to emerging markets, the outlook for the full year has been revised.
In fiscal year 2013/14, net sales is expected to grow by approximately 7 percent in local currency compared with last year.
EBITA is expected to grow by approximately 3 percent in local currency compared with last year. Exchange rate movements are expected to have a negative impact of approximately 5 percentage points on EBITA growth.
The prior outlook, published in the Q2 report, expected net sales to grow by more than 10 percent in local currency. EBITA was expected to grow by approximately 10 percent in local currency. Exchange rate movements were expected to have a negative impact of approximately 5 percentage points on EBITA growth.
Cash flow
Cash flow from operating activities was SEK 153 (258) M and cash flow after continuous investments was SEK -27 (112) M in the third quarter. Compared with the second quarter, inventory increased by almost SEK 250 M ahead of planned deliveries in the fourth quarter.
President and CEO comments
“Overall market development continues to be good and Elekta’s order bookings grew 15* percent in the third quarter. I am very pleased with our order booking trend, however, I am not satisfied with our Q3 results and particularly not with our Leksell Gamma Knife business. We have analyzed the prospects and initiated a number of corrective actions to ensure improved performance. We remain confident that Leksell Gamma Knife will be back on track. However, Elekta is affected by the current currency volatility and developments in certain emerging markets. Our long-term strategy and objectives remain unchanged as does the continued growing need and demand for Elekta’s superior clinical solutions,” says Tomas Puusepp, President and CEO.
