Annual Report • Feb 28, 2023
Annual Report
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Johan Löf, CEO of RaySearch
| AMOUNTS IN SEK 000s | OCT-DEC | JAN-DEC | ||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| Net sales | 264,383 | 188,573 | 843,648 | 641,673 |
| Operating profit/loss | 20,700 | -16,578 | 42,744 | -53,341 |
| Operating margin, % | 7.8 | -8.8 | 5.1 | -8.3 |
| Profit/loss for the period | 14,138 | -15,968 | 23,778 | -47,315 |
| Earnings/loss per share before/after dilution, SEK | 0.41 | -0.47 | 0.69 | -1.38 |
| Cash flow from operating activities | 158,326 | 28,397 | 372,504 | 238,162 |
| Cash flow for the period | 42,769 | -20,065 | 46,784 | -71,703 |
| Return on equity, %2 | 2.2 | -2.5 | 3.7 | -7.3 |
| Equity/assets ratio, %, at the end of the period2 | 35.0 | 36.0 | 35.0 | 36.0 |
| Share price at the end of the period, SEK | 68.0 | 56.5 | 68.0 | 56.5 |
1 For definitions of key ratios, see page 20.
It is gratifying to confirm that the quarterly order intake and net sales were the highest ever for a quarter, SEK 514 M and SEK 264 M, respectively. Compared with the year-on-year period, order intake rose 49 percent and net sales rose 40 percent. For the full-year, order intake increased 51 percent and net sales 31 percent compared with 2021. Operating profit for the quarter totaled SEK 21 M and cash flow was SEK 43 M. For the full-year, operating profit totaled SEK 43 M and cash flow was SEK 47 M. The market continued to open up and normalize during the quarter and we noted a growing interest from clinics all over the world. To leverage these opportunities, we stepped up our marketing activities – which also led to a slight increase in costs for marketing and travel. A recruitment process for key positions in the Finance Department has commenced. Costs remained in line with previous quarters, but as more permanent positions are filled,
the need for consultants – and their subsequent costs – will gradually decline. At the same time, this will create long-term stability in the department.
Our installed base continues to grow and more than 900 clinics have now purchased RayStation. Most RayStation clinics, just over 250, are located in the US. Japan, which recently reached 200 clinics, holds a solid second position, with China in third place, where RayStation can be found in about 80 clinics. We now have 22 customers for RayCare and we see a continued growing interest here.
In the second half of 2022, RaySearch participated in a public tender in Spain for the purchase of ten proton therapy systems for nine centers across Spain. The procurement process was
sponsored by the Spanish Ministry of Health and the Amancio Ortega Foundation, which agreed to pledge EUR 280 M to the Ministry of Health to finance the proton therapy systems. RaySearch submitted a tender for the contract in partnership with Ion Beam Applications S.A. (IBA), which manufactures proton therapy machines and is responsible for the system integration. In December, IBA placed an order for RayStation and RayCare for installation in all nine centers. The total value of the order is EUR 17.3 M, of which EUR 14.9 M pertains to software licenses.
In addition to the fact that this is RaySearch's largest-ever order, we are very proud to be delivering both RayStation and RayCare to such a large-scale project for proton therapy. The contract will strengthen our leading position in treatment planning for proton therapy, while significantly increasing the customer base for RayCare. We are really looking forward to working with IBA and the Spanish proton therapy centers and are convinced that the combination of RayStation and RayCare, together with IBA's proton therapy machines, will bring many synergies in terms of both implementation and clinical efficiency. Delivery is scheduled to commence in 2024 and continue for several years, consequently this order has not contributed to revenue during 2022.
The improved market conditions, another quarter with strong figures and an order backlog that once again peaked (SEK 1,940 M), mean that we have a stable base for continued growth. However, I would once again like to mention that our growth will not necessarily follow a straight line but may – as history has shown us – vary from quarter to quarter.
Finally, I would like to thank all our employees for the past year. I am proud of the drive and innovative spirit that exists in the company, and these are also the very qualities that enable us to succeed with our joint mission – to continue developing innovative software for even better and more advanced cancer treatments.
Stockholm, February 28, 2023
Johan Löf CEO and founder
RaySearch operates in a market with uneven order flows where large individual orders can have a substantial impact on revenue recognition between the quarters and, because the company has limited (less than 10 percent) variable costs for license revenue, operating profit is affected by an amount that is nearly as high. For this reason, a longer perspective than a few quarters should be taken.
In the fourth quarter of 2022, order intake rose 49.1 percent year-on-year to SEK 514.4 M (345.0). License order intake increased 66.8 percent to SEK 284.9 M (170.9) while order intake for support increased 32.6 percent to SEK 173.4 (130.7).
| Order intake (amounts in SEK M) | Q4-22 | Q3-22 | Q2-22 | Q1-22 | Q4-21 | Full-Year 2022 |
Full-Year 2021 |
|---|---|---|---|---|---|---|---|
| Licenses | 284.9 | 86.1 | 66.9 | 131.4 | 170.9 | 569.3 | 350.7 |
| Hardware | 21.4 | 25.9 | 21.2 | 24.1 | 35.7 | 92.7 | 65.0 |
| Support (incl. warranty support) | 173.4 | 97.7 | 118.7 | 111.2 | 130.7 | 501.0 | 365.0 |
| Training and other | 34.7 | 9.4 | 5.7 | 5.8 | 7.7 | 55.5 | 27.1 |
| Total order intake | 514.4 | 219.1 | 212.5 | 272.5 | 345.0 | 1.218,5 | 807,8 |
| Order backlog (amounts in SEK M) | Q4-22 | Q3-22 | Q2-22 | Q1-22 | Q4-21 | ||
| Licenses | 395.3 | 237.3 | 213.3 | 184.1 | 176.6 | ||
| Hardware | 64.7 | 81.8 | 82.4 | 74.2 | 66.2 | ||
| Support (incl. warranty support) | 1.380,0 | 1.320,5 | 1.169,9 | 1.159,9 | 1.053,3 | ||
| Training and other | 100,1 | 75,6 | 74,7 | 70,5 | 66,8 | ||
| Total order backlog at the end of the period | 1.940,1 | 1.715,2 | 1.540,3 | 1.488,7 | 1.362,9 |
For the full year 2022, order intake increased by 50.8 percent and amounted to SEK 1,218.5 (807.8). License order intake increased by 62.3 percent and amounted to SEK 569.3 (SEK 350.7), while order intake for support increased by 37.3 percent and amounted to 501.0 (365.0) MSEK.
As of December 31, 2022, the total order base amounted to SEK 1,940.1 (SEK 1,362.9), which is expected to generate revenue of approximately SEK 441 in the next 12 months. The remaining amount in the order backlog mainly refers to support commitments that are primarily expected to generate revenue during the following four -year period.
In the fourth quarter of 2022, net sales rose 40.2 percent to SEK 264.4 M (188.6). The change was attributable to higher license sales, which increased 25.0 percent to SEK 131.9 M (105.5). The change in sales at unchanged currencies was 41.3 (22.0) percent.
Support revenue rose 19.7 percent to SEK 85.9 M (71.8), accounting for 33 percent (38) of net sales in the fourth quarter. Hardware sales, which have a limited profit margin, increased by 340.5 percent to SEK 40.5 M (9.2). Excluding hardware, sales rose 24.8 percent year-on-year.
| Revenue (amounts in SEK M) | Q4-22 | Q3-22 | Q2-22 | Q1-22 | Q4-21 | Full-year 2022 |
Full-year 2021 |
|---|---|---|---|---|---|---|---|
| License revenue | 131.9 | 76.4 | 68.4 | 111.7 | 105.5 | 388.5 | 307.1 |
| Hardware revenue | 40.5 | 33.9 | 14.8 | 16.6 | 9.2 | 105.8 | 51.5 |
| Support revenue | 85.9 | 87.4 | 73.1 | 76.6 | 71.8 | 323.1 | 268.5 |
| Training and other revenue | 6.1 | 13.1 | 3.9 | 3.2 | 2.1 | 26.3 | 14.5 |
| Net sales | 264.4 | 210.9 | 160.2 | 208.1 | 188.6 | 843.6 | 641.7 |
| Change in sales, corresp. period, % | 40.2 | 54.6 | 3.7 | 28.4 | 17.6 | 31.5 | -1.6 |
| Change in currency adjusted sales, corresp. period, % | 41.3 | 33.9 | -5.5 | 19.0 | 22.0 | 23.2 | 1.6 |
For the full year 2022, net sales increased 31.5 percent to SEK 843.6 M (641.7). The change was attributable to higher license revenue, which increased 26.5 percent to SEK 388.5 M (307.1).
During 2022, net sales had the following geographic distribution: North America, 47 percent (35), Asia 22 percent (27), Europe and the rest of the world, 31 percent (38).
In the fourth quarter of 2022 operating profit amounted to SEK 20.7 M (-16.6), representing an operating margin of 7.8 percent (-8.8). In the fourth quarter, operating expenses increased 18.8 percent to SEK 243.7 M (205.2).
In the fourth quarter, the net of exchange-rate gains and losses amounted to SEK -9.6 M (1.5) since a large portion of the Group's receivables are denominated in USD and EUR and are revaluated in accordance with current currency rates. Adjusted for these currency translations, the operating result for the third quarter would have totaled SEK 30.3 M (-18.1.
During the full year 2022, the operating result increased to SEK 42.7 M (-53.3), representing an operating margin of 5.1 percent (-8.3).
Consolidated sales and earnings are impacted by USD/EUR to SEK exchange rates, since most sales are invoiced in USD and EUR, while most costs are denominated in SEK.
At unchanged exchange rates, the change in sales was 41 percent in the fourth quarter of 2022 compared with the year-earlier period.
A sensitivity analysis of the Group's currency exposure shows that a 1-percentage point change in the USD exchange rate against the SEK would have impacted consolidated operating profit by approximately +/- SEK 1.0 M in the fourth quarter of 2022, while a corresponding change in the EUR exchange rate would have impacted consolidated operating profit by approximately +/- SEK 0.7 M.
The Group follows the financial policy established by the Board, whereby exchange-rate fluctuations are not hedged.
RaySearch is a research and development-oriented company that makes significant investments in the development of software solutions for improved cancer treatment. At December 31, 2022, 193 employees (211) were engaged in R&D, corresponding to 52 percent (50) of the total number of employees.
| Q4-22 | Q3-22 | Q2-22 | Q1-22 | Q4-21 | Full-year 2022 |
Full-year 2021 |
|
|---|---|---|---|---|---|---|---|
| Research and development costs | 58.5 | 51.8 | 59.9 | 64.3 | 79.1 | 234.6 | 270.0 |
| Capitalization of development costs | -49.4 | -40.2 | -46.0 | -52.4 | -59.3 | -188.0 | -203.3 |
| Amortization of capitalized development costs | 50.9 | 50.9 | 45.4 | 45.0 | 44.1 | 192.2 | 166.7 |
| Research and development costs | 60.1 | 62.5 | 59.2 | 57.0 | 63.9 | 238.8 | 233.4 |
In 2022, RaySearch continued to invest in both existing products and future products. Overall, research and development costs decreased 13.1 percent to SEK 234.6 M (270.0) during 2022, corresponding to 28 percent (42) of the Group's net sales. The decrease was attributable to a lower number of employees in research and development.
Development costs of SEK 188.0 M (203.3) were capitalized, down 7.5 percent, representing 80.1 percent (75.1) of total research and development costs.
Amortization of capitalized development costs rose 15.3 percent to SEK 192.2 M (166.7), and the increase was attributable to the launching of new products.
Research and development costs (after adjustments for capitalization and amortization of development costs) rose 5,4 percent to SEK 238.8 M (233.4).
In the fourth quarter of 2022, total amortization and depreciation increased 11.7 percent to SEK 78.0 M (69.9), of which amortization of intangible fixed assets accounted for SEK 50.9 M (44.2), mainly related to capitalized development costs. Depreciation of tangible fixed- and right of use assets amounted to SEK 27.0 M (25.7).
For the full year 2022, total amortization and depreciation amounted to SEK 297.0 M (250.2), of which amortization of intangible fixed assets amounted to SEK 192.4 M (167.0), mainly related to capitalized development costs. Depreciation of tangible fixed- and right of use assets amounted to SEK 104.6M (83.1).
In the fourth quarter of 2022, profit after tax totaled SEK 14.1 M (-16.0), corresponding to profit per share of SEK 0.41 M (-0.47) before and after dilution. For the full year of 2022, profit after tax totaled SEK 23.8 M (-47.3), bringing profit per share before and after dilution to SEK 0.69 (-1.38).
Tax expense for the full year o2 2022 amounted to SEK 8.6 M (-11.4), corresponding to an effective tax rate of 26.6 percent (-19.4). Previous year a tax income related to deferred tax assets in the parent company was recognized, related to tax deficits.
In the fourth quarter of 2022, cash flow from operating activities was SEK 158.3 M (28.4), and the change is attributable change in operating liabilities. Working capital mainly comprises various types of customer receivables, such as accounts receivable and current and long-term unbilled customer receivables in instances where payment plans exist. For the full year 2022, cash flow from operating activities was SEK 372.5 M (238.2).
At the end of the period, the company's total customer receivables amounted to 50 percent (57) of net sales over the past 12 months. Working capital amounted to 5 percent (7) of net sales over the past 12 months. The decline is attributable to changes in operating liabilities including advance payments from customers.
In the fourth quarter, cash flow from investing activities was SEK -95.5 M (-60.9). Investments in intangible fixed assets amounted to SEK -49.4 M (-59.3) and comprised capitalized development costs for the company's products – RayStation, RayCare, RayCommand and RayIntelligence. Investments in tangible fixed assets amounted to SEK -42.0 M (-18.6), mainly related to the head office in Stockholm.
In the fourth quarter, cash flow from financing activities amounted to SEK -19.9 M (12.5), and SEK -49.7 M (- 72.2) during the full year 2022. A repayment of SEK 21 M of the company's credit facility was done in the first quarter.
Cash flow for the period was SEK 42.8 M (-20.1) for the fourth quarter and SEK 46.8 M (-71.7) for the full year. At December 31, consolidated cash and cash equivalents amounted to SEK 160.3 M (102.5).
At September 30, 2022, RaySearch's total assets amounted to SEK 1,876 M (1,745) and the equity/assets ratio was 35.0 percent (36.0). Current receivables amounted to SEK 468 M (414). The receivables mainly comprise various types of customer receivables.
RaySearch's credit facilities comprise a revolving loan facility of up to SEK 150 M maturing in Mars 2025 and an overdraft facility of SEK 50 M, renewed with 12 months yearly on December 31st. Chattel mortgages amounted to SEK 100 M. On December 31, 2022, short-term loans totaling SEK 0 M (0) had been raised under the company's revolving loan facility and SEK 0 M (21) of the credit facility had been drawn.
On December 31, 2022, the Group's net debt amounted to SEK 395.9 M (458.9). The change is mainly due to increased cash and cash equivalents.
For the full year of 2022, the average number of employees in the Group was 382 (419). At the end of the year, the Group had 370 (418), employees, of whom 267 (308) were based in Sweden and 103 (110) in foreign subsidiaries.
RaySearch Laboratories AB (publ) is the Parent Company of the RaySearch Group. Since the Parent Company's operations are consistent with the Group's operations in all material respects, the comments for the Group are also largely relevant for the Parent Company.
Differences in profitability between the Parent Company and the Group are attributable to the Parent Company accounting for a relatively high proportion of operating expenses, and to the capitalization of development costs being recognized in the Group but not in the Parent Company. The Parent Company was also not affected by the changes pertaining to lease recognition under IFRS 16, and instead continues to recognize lease payments as operating lease payments. This reduces operating profit marginally compared with if IFRS 16 had been applied.
The Parent Company's current receivables mainly comprise receivables from Group companies and external customers.
In December, RaySearch received its largest ever order when Ion Beam Applications S.A. (IBA) placed an order for RayStation and RayCare for installation on ten proton therapy units, at nine different proton centers, in Spain. RaySearch participated in a public procurement in collaboration with IBA, who are mainly responsible for the
system integration. The total order value is 17.3 million euros, of which 14.9 million euros refer to software licenses. Consequently, this order has not contributed to revenue during 2022.
In December, University Hospitals Seidman Cancer Center/Case Western Reserve University in Cleveland, Ohio, in the US, placed an order for the RayStation. The revenue from the order was reported in the fourth quarter of 2022. UH Seidman Cancer Center is part of the Case Comprehensive Cancer Center, which is one of the US's leading academic and research institutions with 15 cancer clinics, nine of which have radiation therapy.
In December 2022, CGN Medical Technologies placed an order for the RayStation, which CGN sold along with IBA's proton therapy system to Yangzhou Hospital in China. CGN Medical Technologies markets and sells IBA's proton therapy systems in China. The order value was EUR 2.4 million (corresponding to around SEK 27 million) including a 5-year service contract. Revenue from the order was not reported in 2022.
In December, the Ohio State University Comprehensive Cancer Center - Arthur G. James Cancer Hospital and Richard J. Solove Research Institute (OSUCCC – James) in the United States placed an order for the RayStation. OSUCCC – James is the third largest cancer hospital in the United States. The revenue from the order was reported in the fourth quarter of 2022.
No significant events have been announced after the end of the period. It should be noted that press releases for University Hospitals Seidman, CGN Medical Technologies and Ohio State University Comprehensive Cancer Center were published in January, after wording was agreed with the respective client, but refer to events in the fourth quarter.
On December 31, 2022, the total number of registered shares in RaySearch was 34,282,773, of which 8,454,975 were Class A and 25,827,798 Class B shares. The quotient value was SEK 0.50 and the company's share capital amounted to SEK 17 141 386,50. Each Class A share entitles the holder to ten votes, and each Class B share to one vote, at a general meeting. On December 31, 2022, the total number of voting rights in RaySearch was 110,377,548.
At December 31, 2022, the number of shareholders in RaySearch was 7,165 according to Euroclear, and the largest shareholders were as follows:
| Name | Class A shares |
Class B shares |
Total shares | Share capital, % |
Votes, % |
|---|---|---|---|---|---|
| Johan Löf | 6,243,084 | 18,393 | 6,261,477 | 18.3 | 56.6 |
| State Street Bank and Trust Co, W9 | 0 | 4,218,524 | 4,218,524 | 12.3 | 3.8 |
| BNP Paribas Sec Services Paris, W8IMY | 0 | 2,406,650 | 2,406,650 | 7.0 | 2.2 |
| Swedbank Robur Ny Teknik BTI | 0 | 1,800,000 | 1,800,000 | 5.3 | 1.6 |
| BNY Mellon SA/NV (Former BNY), W8IMY | 0 | 1,442,723 | 1,442,723 | 4.2 | 1.3 |
| Anders Brahme | 1,150,161 | 200,000 | 1,350,161 | 3.9 | 10.6 |
| Andra AP-fonden | 0 | 1,220,942 | 1,220,942 | 3.6 | 1.1 |
| Carl Filip Bergendal | 1,061,577 | 139,920 | 1,201,497 | 3.5 | 9.7 |
| Nordnet Pensionsförsäkring AB | 0 | 718,905 | 718,905 | 2.1 | 0.7 |
| Avanza Pension | 0 | 672,341 | 672,341 | 2.0 | 0.6 |
| Totalt 10 största ägare | 8,454,822 | 13,838,398 | 21,293,220 | 62.1 | 88.3 |
| Övriga | 153 | 12,989,400 | 12,989,553 | 37.9 | 11.7 |
| Totalt | 8,454,975 | 25,827,798 | 34,282,773 | 100.0 | 100.0 |
|---|---|---|---|---|---|
| Source: Euroclear |
The Annual General Meeting of RaySearch Laboratories AB (publ) will take place on Thursday, May 25, 2023. Shareholders who wish to have a matter dealt with at the Annual General Meeting must submit a written request to the board. The request must normally reach the board no later than (7) weeks before the general meeting is to take place.
As the company is in an expansive the board of RaySearch proposes that no dividend be paid for the operating year 2022.
As a global Group with operations in different parts of the world, RaySearch is exposed to various risks and uncertainties, such as market risk, operational and legal risk, as well as financial risk pertaining to exchange-rate fluctuations, interest rates, liquidity and financing opportunities. RaySearch's risk management aims to identify, measure and reduce risks related to the Group's transactions and operations. For more information about risks and risk management, refer to pages 39 – 41 of RaySearch's 2021 Annual Report. There have been no significant changes with any impact on the risks reported. This also applies to the risks and uncertainties arising from the COVID-19 pandemic that could affect RaySearch's sales, earnings and financial position.
RaySearch's customers are healthcare providers and the company's operations are somewhat characterized by seasonal variations that are typical for the industry, whereby the fourth quarter is normally the strongest – mainly because many customers have budgets that follow the calendar year.
Sustainability is a key aspect of RaySearch's strategy and operations, and the company is working actively to become a sustainable enterprise. The primary aim of RaySearch's operations is to help cancer clinics improve and save the lives of cancer patients. Through innovative software solutions, the company is continuously striving to improve and streamline workflows in clinical environments and to improve treatment outcomes for cancer patients. The customer value created presents business opportunities for RaySearch, but also major social benefit and economic gains.
The negative environmental impact of the company's products is limited. The company's environmental impact is mainly related to the purchase of goods and services, energy use and transportation. RaySearch aims to contribute to sustainable development and therefore works actively to improve the company's environmental performance wherever this is economically viable. More information about the company's environmental and sustainability initiatives is available in the company's Sustainability Report on pages 22 – 28 of RaySearch's 2021 Annual Report.
This interim report has not been reviewed by the company's auditors.
The Board of Directors and CEO give their assurance that this interim report gives a true and fair view of the Group's and the Parent Company's operations, position and earnings, and describes the significant risks and uncertainties facing the Parent Company and the companies included in the Group.
Stockholm, February 28, 2023 The Board of Directors of RaySearch Laboratories AB (publ)
Hans Wigzell Chairman of the Board Johan Löf CEO and Board member Carl Filip Bergendal Board member
Britta Wallgren Board member
Günther Mårder Board member
Johan Löf, CEO Tel: +46 8 510 530 00 [email protected] Henrik Bergentoft, CFO Tel: +46 8 510 530 00 [email protected]
The information contained in this interim report is such that RaySearch Laboratories AB (publ) is obliged to disclose under the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication on February 28, 2023, at 7:45 a.m. CET.
CEO Johan Löf and CFO Henrik Bergentoft will present RaySearch's the year-end report 2022 at a webcast to be held in English on Tuesday, February 28, 2023, at 10:00-10:30 a.m. CET.
Link to webcast: https://raysearchlabs.creo.se/230228
You can also join the webcast by phone: Sverige: +46 8 505 583 51 UK: +44 333 300 92 67 US: +1 646 722 49 56
| 2022 Annual Report (published on the website) | April 27, 2023 |
|---|---|
| Interim report for the first quarter, 2023 | May 17, 2023 |
| Annual General Meeting 2023 | May 25, 2023 |
| Interim report for the second quarter, 2023 | August 25, 2023 |
| Interim report for the third quarter, 2023 | November 17, 2023 |
| AMOUNTS IN SEK 000s | OCT-DEC | JAN-DEC | |||
|---|---|---|---|---|---|
| Not | 2022 | 2021 | 2022 | 2021 | |
| Net sales 2,3 |
264,383 | 188,573 | 843,648 | 641,673 | |
| Cost of goods sold1 | -38,177 | -10,933 | -94,991 | -50,397 | |
| Gross profit | 226,206 | 177,640 | 748,657 | 591,276 | |
| Other operating income | 9,173 | 5,592 | 49,504 | 32,779 | |
| Selling expenses | -88,964 | -95,633 | -309,424 | -300,192 | |
| Administrative expenses | -47,443 | -36,828 | -171,719 | -122,036 | |
| Research and development costs | -60,080 | -63,921 | -238,769 | -233,443 | |
| Other operating expenses | -18,192 | -3,428 | -35,505 | -21,725 | |
| Operating profit/loss | 20,700 | -16,578 | 42,744 | -53,341 | |
| Financial net | -2,451 | -2,370 | -10,369 | -5,332 | |
| Profit/loss before tax | 18,249 | -18,948 | 32,375 | -58,673 | |
| Tax | -4,111 | 2,980 | -8,597 | 11,358 | |
| Profit/loss for the period2 | 14,138 | -15,968 | 23,778 | -47,315 | |
| Other comprehensive income | |||||
| Items to be reclassified to profit or loss | |||||
| Translation difference of foreign operations for the period | -1,947 | 852 | 5 ,066 | 2 ,242 | |
| Comprehensive income for the period2 | 12,191 | -15,116 | 28,844 | -45,073 | |
| Earnings/loss per share before and after dilution (SEK) | 0.41 | -0.47 | 0.69 | -1.38 |
1Comprises costs for hardware and license costs paid, but not amortization of capitalized development costs, which is included in research and development costs.
2Fully (100 percent) attributable to Parent Company shareholders.
| AMOUNTS IN SEK 000s Note |
Dec 31, 2022 |
Dec 31, 2021 |
|---|---|---|
| ASSETS | ||
| Intangible fixed assets | 518,663 | 523,109 |
| Tangible fixed assets and right of use assets | 649,070 | 666,539 |
| Deferred tax assets | 25,598 | 28,525 |
| Other long-term receivables | 54,697 | 10,204 |
| Total fixed assets | 1,248,028 | 1,228,377 |
| Inventories | 14,091 | 29,991 |
| Current receivables | 453,563 | 383,843 |
| Cash and cash equivalents | 160,268 | 102,535 |
| Total current assets | 627,922 | 516,369 |
| TOTAL ASSETS | 1,875,950 | 1,744,746 |
| EQUITY AND LIABILITIES | ||
| Equity | 657,156 | 628,312 |
| Deferred tax liabilities | 106,874 | 107,784 |
| Long-term interest-bearing liabilities | 497,822 | 491,896 |
| Total long-term liabilities | 604,696 | 599,680 |
| Accounts payable | 24,030 | 48,774 |
| Current interest-bearing liabilities | 58,307 | 70,381 |
| Other current liabilities | 531,761 | 397,599 |
| Total current liabilities | 614,098 | 516,754 |
| TOTAL EQUITY AND LIABILITIES | 1,875,950 | 1,744,746 |
| AMOUNTS IN SEK 000s | OCT-DEC | JAN-DEC | |||
|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | ||
| Opening balance according to adopted Annual Report |
644,965 | 664,394 | 628,312 | 694,351 | |
| Adjustment on correction of error (net of tax)1 | - | -20,966 | - | -20,966 | |
| Adjusted opening balance | 644,965 | 643,428 | 628,312 | 673,385 | |
| Profit/loss for the period | 14,138 | -15,968 | 23,778 | -47,315 | |
| Translation difference for the period | -1,947 | 852 | 5,066 | 2,242 | |
| Closing balance | 657,156 | 628,312 | 657,156 | 628,312 |
1 See Note 1 for more information about correction of previous error.
| AMOUNTS IN SEK 000s | OKT-DEC | JAN-DEC | ||
|---|---|---|---|---|
| Not | 2022 | 2021 | 2022 | 2021 |
| Profit/loss before tax | 18,249 | -18,948 | 32,375 | -58,673 |
| Adjusted for non-cash items1) | 80,397 | 63,810 | 296,104 | 226,637 |
| Taxes paid | -4,353 | 27,477 | -13,816 | 17,648 |
| Cash flow from operating activities before changes in working capital |
94,293 | 72,339 | 314,663 | 185,612 |
| Cash flow from changes in operating receivables | -48,951 | -113,836 | -50,309 | 17,053 |
| Cash flow from changes in operating liabilities | 112,985 | 69,894 | 108,151 | 35,497 |
| Cash flow from operating activities | 158,326 | 28,397 | 372,504 | 238,162 |
| Cash flow from investing activities | -95,641 | -60,944 | -275,994 | -237,631 |
| Cash flow from financing activities | -19,916 | 12,482 | -49,726 | -72,234 |
| Cash flow for the period | 42,769 | -20,065 | 46,784 | -71,703 |
| Cash and cash equivalents at the beginning of the period | 118,194 | 120,589 | 102,535 | 168,746 |
| Exchange-rate difference in cash and cash equivalents | -695 | 2,011 | 10,949 | 5,492 |
| Cash and cash equivalents at the end of the period | 160,268 | 102,535 | 160,268 | 102,535 |
1 These amounts mainly include amortization of capitalized development costs, right-of-use assets and unrealized currency effects
| AMOUNTS IN SEK 000s | OCT-DEC | JAN-DEC | ||
|---|---|---|---|---|
| Not | 2022 | 2021 | 2022 | 2021 |
| Net sales 2, 3 |
192,721 | 145,112 | 620,315 | 477,055 |
| Cost of goods sold1) | -10,098 | -11,184 | -28,688 | -26,477 |
| Gross profit | 182,623 | 133,928 | 591,627 | 450,578 |
| Other operating income | 7,986 | 5,521 | 47,917 | 32,227 |
| Selling expenses | -50,272 | -56,063 | -169,489 | -177,313 |
| Administrative expenses | -58,977 | -37,406 | -217,833 | -122,793 |
| Research and development costs | -50,743 | -79,523 | -203,678 | -270,868 |
| Other operating expenses | -18,025 | -3,249 | -34,882 | -20,704 |
| Operating profit/loss | 12,592 | -36,792 | 13,662 | -108,873 |
| Loss from financial items | -196 | -536 | -1,265 | -1,618 |
| Profit/loss after financial items | 12,396 | -37,328 | 12,397 | -110,491 |
| Appropriations | - | 32,615 | - | 32,615 |
| Profit/loss before tax | 12,396 | -4,713 | 12,397 | -77,876 |
| Tax on profit/loss for the period | -2,585 | 24 | -3,775 | 14,367 |
| Profit/loss for the period | 9,811 | -4,689 | 8,622 | -63,509 |
1Comprises costs for hardware and royalties.
| AMOUNTS IN SEK 000s | OCT-DEC | JAN-DEC | |||
|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | ||
| Profit/loss for the period | 9,811 | -4,689 | 8,622 | -63,509 | |
| Other comprehensive income | - | - | - | - | |
| Comprehensive income for the period | 9,811 | -4,689 | 8,622 | -63,509 |
| AMOUNTS IN SEK 000s Not |
Dec 31, 2022 | Dec 31, 2021 |
|---|---|---|
| ASSETS | ||
| Intangible fixed assets | 342 | 575 |
| Tangible fixed assets | 56,525 | 69,225 |
| Shares and participations | 3,958 | 3,958 |
| Deferred tax assets | 23,992 | 26,695 |
| Other long-term receivables | 8,510 | 16,344 |
| Total fixed assets | 93,327 | 116,797 |
| Inventories | 3,758 | 6,436 |
| Current receivables | 385,786 | 360,363 |
| Cash and bank balances | 79,903 | 11,165 |
| Total current assets | 469,447 | 377,964 |
| TOTAL ASSETS | 562,774 | 494,761 |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Restricted equity | ||
| Share capital | 17,141 | 17,141 |
| Statutory reserve | 43,630 | 43,630 |
| Total restricted equity | 60,771 | 60,771 |
| Unrestricted equity | ||
| Retained earnings | 118,237 | 181,733 |
| Profit/loss for the year | 8,622 | -63,509 |
| Total non-restricted equity | 126,859 | 118,224 |
| Total equity | 187,630 | 178,995 |
| Long-term liabilities | 22,824 | 6,447 |
| Accounts payable | 18,957 | 40,169 |
| Current interest-bearing liabilities | - | 21,268 |
| Other current liabilities | 333,363 | 247,882 |
| Total current liabilities | 352,320 | 309,319 |
| TOTAL EQUITY AND LIABILITIES | 562,774 | 494,761 |
This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The accounting policies applied are consistent with those described in the 2021 Annual Report for RaySearch Laboratories AB (publ), which is available at www.raysearchlabs.com
RaySearch Laboratories AB (publ) is the Parent Company of the RaySearch Group. The Parent Company applies the Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities. The Parent Company's operations are consistent with the Group's operations in all material respects.
Differences in profitability between the Parent Company and the Group are attributable to the Parent Company accounting for a relatively high proportion of operating expenses, and to the capitalization of development costs being recognized in the Group but not in the Parent Company. The Parent Company was also not affected by IFRS 16, and will continue to recognize lease payments on a straight-line basis over the lease term. This reduces operating profit compared with if IFRS 16 had been applied.
The Parent Company's current receivables mainly comprise receivables from Group companies and external customers.
In the second quarter, revenues for 2019 and 2020 have been corrected due to a previous error. The error was introduced in 2019 when a deal was separated into performance obligations in an incorrect way, which impacted amounts and timings for the revenues. The correction affects revenues in 2019 and 2020 in the Group and the Parent Company by SEK -23.9 M and SEK -2.8 M and the tax by SEK 5.1 M and SEK 0.6 M, respectively. The effect on 2021 is that the opening balance is adjusted by SEK -21.0 M, deferred tax assets by SEK 5.7 M and deferred income by SEK 26.7 M in the Parent Company. The effect is the same in the Group.
RaySearch conducts sales of goods and services in various regions. Revenue from sales of licenses and hardware is recognized in profit or loss at a point in time, while revenue from sales of training and support is recognized over time.
| AMOUNTS IN SEK 000s | JAN-DEC | |||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | Change | ||||
| Revenue by type | ||||||
| Licenses | 388,456 | 307,138 | 26.5% | |||
| Support | 323,104 | 268,526 | 20.3% | |||
| Hardware | 105,760 | 51,496 | 105.4% | |||
| Training and other | 26,328 | 14,513 | 81.4% | |||
| Total revenue from contracts with customers | 843,648 | 641,673 | 31.5% | |||
| Revenue by geographic market | ||||||
| North America | 397,919 | 224,341 | 77.4% | |||
| APAC | 183,420 | 173,547 | 5.7% | |||
| Europe and rest of the world | 262,309 | 243,785 | 7.6% | |||
| Total revenue from contracts with customers | 843,648 | 641,673 | 31.5% | |||
| Revenue by date for revenue recognition | ||||||
| Goods/services transferred at a point in time | 494,216 | 358,634 | 37.8% | |||
| Services transferred over time | 349,432 | 283,039 | 23.5% | |||
| Total revenue from contracts with customers | 843,648 | 641,673 | 31.5% |
Preparation of the interim report requires that company management make estimates that affect the carrying amounts. The actual outcome could deviate from these estimates. The critical sources of uncertainty in the estimates are the same as those in the most recent Annual Report.
RaySearch's financial assets and liabilities comprise billed and unbilled receivables, cash and cash equivalents, accrued expenses, accounts payable, bank loans and lease liabilities. Long-term receivables and lease liabilities are discounted, while other financial assets and liabilities have short maturities. Accordingly, the fair values of all financial instruments are deemed to correspond approximately to their carrying amounts.
The provision for expected credit losses is a weighted assessment of payment history, reports from external credit rating agencies and other customer-specific information. At the end of December 2022, the credit loss provision amounted to SEK 45.1 M (40.0), corresponding to 10 percent (11) of total customer receivables.
There were no transactions between RaySearch and related parties with any material impact on the company's position and earnings during the period.
| AMOUNTS IN SEK 000s | Dec 31, 2022 |
Dec 31, 2021 |
|---|---|---|
| Chattel mortgages | 100,000 | 100,000 |
| Guarantees | 33,007 | 31,046 |
| 2022 | 2021 | |||||||
|---|---|---|---|---|---|---|---|---|
| AMOUNTS IN SEK 000s | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Order intake | ||||||||
| Total order intake | 514,424 | 219,091 | 212,511 | 272,442 | 345,028 | 127,853 | 189,750 | 145,131 |
| Income statement | ||||||||
| Net sales1 | 264,383 | 210,881 | 160,235 | 208,149 | 188,573 | 136,419 | 154,579 | 162,102 |
| Change in sales, %1 | 40.2 | 54.6 | 3.7 | 28.4 | 18.5 | 15.2 | -5.2 | -22.1 |
| Operating profit/loss1 | 20,700 | 12,007 | -19,527 | 29,564 | -16,578 | -26,561 | -22,463 | 12,261 |
| Operating margin, %1 | 7.8 | 5.7 | -12.2. | 14.2 | -8.8 | -19.5 | -14.5 | 7.6 |
| Profit/loss for the period1 | 14,138 | 10,984 | -19,731 | 19,298 | -15,968 | -21,990 | -16,467 | 7,110 |
| Net margin, %1 | 5.3 | 5.2 | -12.3 | 9.3 | -8.5 | -16.1 | -10.7 | 4.4 |
| Cash flow | ||||||||
| Operating activities | 158,326 | 8,613 | 79,778 | 125,787 | 28,397 | 47,356 | 58,077 | 104,332 |
| Investing activities | -95,641 | -52,209 | -67,593 | -60,551 | -60,944 | -45,569 | -70,843 | -60,275 |
| Financing activities | -19,919 | -4,394 | 4,500 | -29,916 | 12,482 | -11,875 | -61,624 | -11,217 |
| Cash flow for the period | 42,769 | -47,990 | 16,685 | 35,320 | -20,065 | -10,088 | -74,390 | 32,840 |
| Capital structure | ||||||||
| Equity/assets ratio, %1 | 35.0 | 37.6 | 35.2 | 37.5 | 36.0 | 54.6 | 55.7 | 50.9 |
| Net debt | 395,861 | 414,273 | 386,236 | 397,045 | 459,742 | -52,983 | -50,385 | -65,952 |
| Debt/equity ratio1 | 0.6 | 0.6 | 0.6 | 0.6 | 0.7 | -0.1 | -0.1 | -0.1 |
| Net debt/EBITDA | 1.2 | 1.4 | 1.6 | 1.8 | 2.3 | -0.3 | -0.3 | -0.4 |
| Per share data, SEK | ||||||||
| Earnings/loss per share before dilution1 | 0.41 | 0.29 | -0.58 | 0.56 | -0.47 | -0.64 | -0.48 | 0.21 |
| Earnings/loss per share after dilution1 | 0.41 | 0.29 | -0.58 | 0.56 | -0.47 | -0.64 | -0.48 | 0.21 |
| Equity per share1 | 19.17 | 18.81 | 18.42 | 18.91 | 18.33 | 18.77 | 19.39 | 19.88 |
| Share price at the end of the period | 68.00 | 47.60 | 54.40 | 51.70 | 56.50 | 61.50 | 87.40 | 89.50 |
| Other | ||||||||
| No. of shares before/after dilution, 000s | 34,282,8 | 34,282,8 | 34,282,8 | 34,282,8 | 34,282,8 | 34,282,8 | 34,282,8 | 34,282,8 |
| Average no. of employees | 382 | 386 | 383 | 399 | 419 | 418 | 414 | 412 |
| Jan 2022- | Oct 2021- | Jul 2021- | Apr 2021- | Jan 2021- | Oct 2020- | Jul 2020- | Apr 2020- | |
|---|---|---|---|---|---|---|---|---|
| AMOUNTS IN SEK 000s | Dec 2022 | Sep 2022 | Jun 2022 | Mar 2022 | Dec 2021 | Sep 2021 | Jun 2021 | Mar 2021 |
| Order intake | ||||||||
| Total order intake | 1,218,468 | 1,049,070 | 957,845 | 935,073 | 807,762 | 701,859 | 712,486 | 699,868 |
| Income statement | ||||||||
| Net sales1 | 843,648 | 767,838 | 693,376 | 687,720 | 641,673 | 612,238 | 594,252 | 602,734 |
| Operating profit/loss1 | 42,744 | 5,466 | -33,102 | -36,038 | -53,341 | -52,052 | -55,665 | -44,853 |
| Operating margin, %1 | 5.1 | 0.7 | -4.8 | -5.2 | -8.3 | -8.5 | -9.4 | -7.4 |
| Cash flow | ||||||||
| Cash flow | 46,784 | -16,050 | 21,852 | -69,223 | -72,380 | -73,136 | -41,328 | 98,972 |
| Cash flow adjusted for repayment of bank loans |
68,052 | 5,218 | 43,120 | -47,955 | -22,380 | -23,136 | 8,672 | 98,972 |
1See Note 1 for more information about correction of previous error.
The interim report refers to a number of non-IFRS financial measures that are used to provide investors and company management with additional information to assess the company's operations. The various non-IFRS measures used to complement the IFRS financial statements are described below.
| Non-IFRS measures | Definition | Reason for using the measure |
|---|---|---|
| Order intake | The value (transaction price) of all orders received and | Order intake is an indicator of future revenue and thus a key |
| changes to existing orders during the current period | figure for the management of RaySearch's operations | |
| Order backlog | The value of orders at the end of the period that the | The order backlog shows the value of orders already booked |
| company has yet to deliver and recognize as revenue, | by RaySearch that will be converted to revenue in the | |
| meaning remaining performance obligations. | future. | |
| Net sales/Order intake | Recognized net sales in relation to total order intake during | The measurement is used to monitor the recognized |
| the corresponding period | revenue in relation to sales, which is part of the reason for | |
| the change in order backlog. | ||
| Change in sales | The change in net sales compared with the year-earlier period expressed as a percentage |
The measure is used to track the performance of the company's operations between periods |
| Change in sales at | Change in sales at unchanged exchange rates, i.e. excluding | This measure is used to monitor underlying change in sales |
| unchanged currencies | currency effects | driven by alterations in volume, pricing and mix for |
| comparable units between different periods | ||
| Gross profit | Net sales minus cost of goods sold | Gross profit is used to measure the margin before sales, |
| research, development and administrative expenses | ||
| Operating profit/loss | Calculated as profit for the period before financial items and | Operating profit/loss provides an overall picture of the total |
| tax | generation of earnings in operating activities | |
| Operating profit adjusted | Calculated as operating profit less other operating | Operating profit provides an overall picture of the total |
| for currency translation | income/expenses | generation of earnings in operating activities excluding |
| effects | currency translation effects for balance sheet items | |
| Operating margin | Operating profit expressed as a percentage of net sales | Together with sales growth, the operating margin is a key |
| element for monitoring value creation | ||
| Net margin | Profit for the period as a percentage of net sales for the | The net margin shows the percentage of net sales remaining |
| period | after the company's expenses have been deducted | |
| Cash flow adjusted for | Cash flow for the period less cash flow from changes to bank | The measurement shows the underlying cash flow before |
| changes in bank loans | loans | financing activities, but including amortization of lease |
| liabilities. | ||
| Equity per share | Equity divided by number of shares at the end of the period | The measurement shows the return generated on the |
| owners' invested capital per share | ||
| Rolling 12 months' sales, | Sales, operating profit or other results measured over the | This measure is used to more clearly illustrate the trends for |
| operating profit or other | past 12-month period | sales, operating profit and other results, which is relevant |
| results | because RaySearch's revenue is subject to monthly variations |
|
| Working capital | Working capital comprises inventories, operating receivables | This measure shows how much working capital is tied up in |
| and operating liabilities, and is obtained from the statement | operations and can be shown in relation to net sales to | |
| of financial position. Operating receivables comprise | demonstrate the efficiency with which working capital has | |
| accounts receivable, other current/long-term receivables | been used | |
| and non-interest bearing prepaid expenses and accrued | ||
| income. Operating liabilities include other non-interest | ||
| bearing long-term liabilities, advance payments from | ||
| customers, accounts payable, other current liabilities and | ||
| non-interest bearing accrued expenses and deferred | ||
| income. | ||
| Return on equity | Calculated as profit/loss for the period as a percentage of | Shows the return generated on the owners' invested capital |
| average equity. Average equity is calculated as the sum of | from a shareholder perspective | |
| equity at the end of the period plus equity at the end of the | ||
| year-earlier period, divided by two | ||
| Equity/assets ratio | Equity expressed as a percentage of total assets at the end | This is a standard measure to show financial risk, and is |
| of the period | expressed as the percentage of the total restricted equity | |
| Net debt | Interest-bearing liabilities less cash and cash equivalents | financed by the owners This measure shows the Group's total indebtedness |
| and interest-bearing current and long-term receivables | ||
| Debt/equity ratio | Net debt in relation to equity | The measure shows financial risk and is used by |
| management | ||
| to monitor the Group's indebtedness | ||
| EBITDA | Operating profit before financial items, tax, | The measurement is a way to evaluate the result without |
| depreciation/amortization and impairment | taking into consideration financial decisions or taxes | |
| Net debt/EBITDA | Net debt at the end of the period in relation to operating | A relevant measure from a credit perspective that shows the |
| profit before depreciation and amortization over the past | company's ability to handle its debt | |
| 12-month period |
YEAR-END REPORT, 2022
| AMOUNTS IN SEK 000s | Dec 31, 2022 | Dec 31, 2021 |
|---|---|---|
| Working capital | ||
| Accounts receivable (current billed customer receivables) | 246,742 | 170,591 |
| Current unbilled customer receivables | 123,827 | 146,771 |
| Long-term unbilled customer receivables | 54,697 | 10,204 |
| Inventories | 14,091 | 29,991 |
| Other current receivables (excl. tax) | 71,711 | 63,702 |
| Accounts payable | -24,030 | -48,774 |
| Other current liabilities (excl. tax) | -526,781 | -367,212 |
| Working capital | -39,743 | 5,273 |
| AMOUNTS IN SEK 000s | Dec 31, 2022 | Dec 31, 2021 |
| Net debt | ||
| Current interest-bearing liabilities | 58,307 | 70,381 |
| Long-term interest-bearing liabilities | 497,822 | 491,017 |
| Cash and cash equivalents | -160,268 | -102,535 |
| Net debt | 395,861 | 458,863 |
| AMOUNTS IN SEK 000s | Full-year 2022 | Full-year 2021 |
| EBITDA | ||
| Operating profit/loss1 | 42,744 | -53,341 |
| Amortization and depreciation | 296,994 | 250,184 |
| EBITDA | 339,738 | 196,843 |
| CHANGE IN SALES AT UNCHANGED CURRENCIES | Full-year 2022 | Full-year 2021 |
| Net sales for the year | 843,648 | 641,673 |
| Currency adjustment | -52,793 | 20,868 |
| Adjusted Net sales | 790,855 | 662,541 |
| Net sales, preceding year | 641,673 | 651,612 |
| Change in sales at unchanged currencies (organic growth) | 23,2% | 1,7% |
YEAR-END REPORT, 2022
RaySearch Laboratories AB (publ) Box 451 69 104 30 Stockholm, Sweden
Eugeniavägen 18 C SE-113 68 Stockholm, Sweden Tel: +46 (0)8 510 530 00 raysearchlabs.com Corp. Reg. No. 556322-6157
RaySearch Laboratories AB (publ) is a medical technology company that develops innovative software solutions for improved cancer treatment. The company develops and markets the RayStation treatment planning system (TPS) and RayCare oncology information system (OIS) to cancer centers all over the world and distributes the products through licensing agreements with leading medical technology companies. The latest additions to the RaySearch product line are RayIntelligence and RayCommand. RayIntelligence is a cloud-based oncology analytics system that cancer clinics can use to collect, structure and analyze data. The Treatment Control System (TCS) RayCommand is designed as a link between the treatment machine and the dose planning and oncology information systems.
RaySearch's software is currently used by over 900 clinics in more than 40 countries. The company was founded in 2000 as a spin-off from the Karolinska Institute in Stockholm and the share has been listed on Nasdaq Stockholm since 2003.
More information about RaySearch is available at raysearchlabs.com.
The company's vision is a world where cancer is conquered and RaySearch's mission is to provide innovative software to continuously improve cancer treatment.
A radiation therapy center essentially needs two software platforms for its operations: a treatment planning system, and an information system. With RayStation and RayCare, RaySearch will strengthen its position and continue to grow with high profitability. The company's strategy is based on a strong focus on innovative software development with leading functionality, support for efficient workflows – including via digitization and automation with machine learning – broad support for a wide range of treatment modes and radiation therapy devices, close collaboration with world-leading cancer centers and industrial partners, and extensive investment in research and development.
RaySearch's main revenue is generated by customers paying an initial license fee for the right to use RaySearch's software and an annually recurring service fee for access to updates and support. All software systems are developed at RaySearch's head office in Stockholm and distributed and supported by the company's global marketing organization.
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