Earnings Release • Nov 29, 2022
Earnings Release
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Johan Löf, CEO of RaySearch
| AMOUNTS IN SEK 000s | JUL-SEP | JAN-SEP | OCT 2021 - | FULL-YEAR | ||
|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | SEP 2022 | 2021 | |
| Net sales | 210,881 | 136,419 | 579,265 | 453,100 | 767,838 | 641,673 |
| Operating profit/loss | 12,007 | -26,561 | 22,044 | -36,763 | 5,466 | -53,341 |
| Operating margin, % | 5.7 | -19.5 | 3.8 | -8.1 | 0.7 | -8.3 |
| Profit/loss for the period | 10,073 | -21,990 | 9,640 | -31,347 | -6,328 | -47,315 |
| Earnings/loss per share before/after dilution, SEK | 0.29 | -0.64 | 0.28 | -0.91 | -0.18 | -1.38 |
| Cash flow from operating activities | 8,613 | 47,356 | 214,178 | 209,765 | 242,575 | 238,162 |
| Cash flow for the period | -47,990 | -10,088 | 4,015 | -51,638 | -16,050 | -71,703 |
| Return on equity, %2 | 1.6 | -3.3 | 1.5 | -4.8 | -1,0 | -7.3 |
| Equity/assets ratio, %, at the end of the period2 | 37.4 | 55.0 | 37.4 | 55.0 | 37.4 | 36.0 |
| Share price at the end of the period, SEK | 47.6 | 61.5 | 47.6 | 61.5 | 47.6 | 56,5 |
1 For definitions of key ratios, see page 20.
It is gratifying to note that the quarter had the highest order intake and net sales ever for a third quarter, SEK 219 M and SEK 211 M, respectively. If we disregard for a moment the pandemic years 2020 and 2021 and instead compare with the third quarter of 2019, when we noted an order intake of SEK 197 M and net sales of SEK 144 M, order intake has increased by 11 percent and net sales by 46 percent.
Furthermore, during the first nine months of the year, we noted an increase in order intake by 52 percent and an increase in net sales by 28 percent year-on-year. The operating profit was SEK 22 M.
In October, for the first time after the pandemic, we were able to be on site at ASTRO, which is one of the most important trade shows in the USA. Together with our partner Accuray we had the pleasure of showcasing exciting innovations in online adaptive. Also, with our partners Leo Cancer Care and GE Healthcare we demonstrated new
solutions, which were received very positively and with great interest among the visitors. The interest in our products was great – the major interest in RayCare was particularly gratifying – and we conducted many demonstrations and engaged in a number of rewarding discussions with many of our clinical and industrial partners.
In September, the renowned center Instituto Europeo di Oncologia (IEO) placed an order for RayStation and RayCare for its proton clinic in Milan. IEO has been a customer for several years and uses RayStation for its photon treatment. Next fall, the center plans to take a proton machine in clinical use, and for this reason they have now chosen to expand their use of RayStation and, in connection with that, also add RayCare. During the quarter Seoul National University Hospital in South Korea also decided to purchase RayCare, after placing an order for RayStation in April. These two orders confirm the interest we see in all regions to add RayCare to create an integrated solution and get the full potential of having all our systems in a single software platform.
In September, one of Canada's largest hospitals, Sunnybrook Health Sciences Centre, placed an order for RayStation. We are proud to see that Sunnybrook has put their trust in us and look forward to working together with this large and well-known center. The agreement includes a complete configuration of RayStation, which will completely replace the hospital's existing treatment planning system, and has a total order value of approximately CAD 6.2 M (corresponding to approximately SEK 53 M). Of this, SEK 30 M constituted revenue in the quarter.
Another exciting event in September was the collaboration agreement we concluded with Leo Cancer Care in Great Britain. Leo Cancer Care are experts in upright radiotherapy and together with them we will develop a safe, efficient, and fully integrated solution for treatment planning for upright treatments.
After the end of the quarter, McLaren Proton Therapy Center at Karmanos Cancer Institute in Michigan, USA, placed an order for RayStation. This is of particular interest to us as the center is slated to become the first in the world to deliver proton therapy with Leo Cancer Care's upright treatment technology. Through our partnership with Leo Cancer Care, their technology can thus be integrated in conjunction with the implementation of RayStation at McLaren Proton Therapy Center.
At the beginning of the quarter, Henrik Bergentoft was appointed as the new CFO and a couple of days ago he took up his position. With his solid financial background and extensive experience as a CFO from global companies, including in the radiotherapy industry, he will be a valuable addition to RaySearch and our management team.
In September, Lars Wollung, Chairman, and Johanna Öberg, Board member and member of the audit committee, decided to resign due to their time-consuming operational assignments. I would like to take the opportunity to thank Lars and Johanna for their work and valuable contributions to RaySearch's Board.
At an Extraordinary General Meeting on November 9, Günther Mårder was elected as a new Board member. Günther is CEO of the organization Företagarna and has broad experience in entrepreneurship and the financial market. Combined with his commitment to RaySearch and the fight against cancer, I believe he will become an excellent addition to the Board.
Despite a mixed start to the year, the first three quarters overall indicate a positive trend.The cost-reduction program that was introduced in fall 2021 is continuing. The number of employees decreased by 13 percent year-on-year and costs for travel and market events are halved compared to the level before the pandemic. However, we have had increased costs due to initiated improvement projects in the finance department to strengthening our financial reporting. Lower capitalization and higher depreciation contribute to the fact that the effects of the program have not yet been fully reflected in the operating result. We will continue our chosen path, with a focus on sales, product development and cost control. With an order backlog that has increased to SEK 1,715 M, we have a solid foundation to generate continuous growth onwards.
Stockholm, 29 November 2022
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 third quarter of 2022, order intake rose 71.4 percent year-on-year to SEK 219.1 M (127.9). License order intake increased 86.2 percent to SEK 86.0 M (46.2), while order intake for support increased 41.3 percent to SEK 97.7 M (69.1).
| Order intake (amounts in SEK M) | Q3-22 | Q2-22 | Q1-22 | Q4-21 | Q3-21 | Rolling 12 months |
Full-Year 2021 |
|---|---|---|---|---|---|---|---|
| Licenses | 86.0 | 66.9 | 131.4 | 170.9 | 46.2 | 455.2 | 350.7 |
| Hardware | 25.9 | 21.2 | 24.1 | 35.7 | 7.9 | 106.9 | 65.0 |
| Support (incl. warranty support) | 97.7 | 118.7 | 111.2 | 130.7 | 69.1 | 458.3 | 365.0 |
| Training and other | 9.4 | 5.7 | 5.8 | 7.7 | 4.7 | 28.6 | 27.1 |
| Total order intake | 219.1 | 212.5 | 272.5 | 345.0 | 127.9 | 1,049.1 | 807.8 |
| Order backlog (amounts in SEK M) | Q3-22 | Q2-22 | Q1-22 | Q4-21 | Q3-21 | ||
| Licenses | 237.3 | 213.3 | 184.1 | 176.6 | 105.3 | ||
| Hardware | 81.8 | 82.4 | 74.2 | 66.2 | 38.4 | ||
| Support (incl. warranty support) | 1,320.5 | 1,169.9 | 1,159.9 | 1,053.3 | 1,009.2 | ||
| Training and other | 75.6 | 74.7 | 70.5 | 66.8 | 59.5 | ||
| Total order backlog at the end of the period | 1,715.2 | 1,540.3 | 1,488.7 | 1,362.9 | 1,212,4 |
In the first nine months of 2022, order intake increased 52.2 percent to SEK 704.1 M (462.7). License order intake increased by 58.1 percent to SEK 284.3 M (179.9) and order intake for support increased 39.8 percent to SEK 327.6 M (234.2).
At September 30, 2022, the total order backlog amounted to SEK 1,715.2 M (1,212.2), which is expected to generate revenue of approximately SEK 608 M over the next 12 months. The remaining amount in the order backlog mainly pertains to support commitments that are primarily expected to generate revenue during a subsequent four-year period.
In the third quarter of 2022, net sales rose 54.6 percent to SEK 210.9 M (136.4). The change was attributable to higher license sales, which increased 37.3 percent to SEK 76.4 M (55.7). The change in sales at unchanged currencies was 33,3 percent (11.9).
Support revenue rose 29.8 percent to SEK 87.4 M (67.3), accounting for 41 percent (49) of net sales in the third quarter. Hardware sales, which have a limited profit margin, increased by 379.8 percent to SEK 33.9 M (7.1). Excluding hardware, sales rose 36.8 percent year-on-year.
| Revenue (amounts in SEK M) | Q3-22 | Q2-22 | Q1-22 | Q4-21 | Q3-21 | Rolling 12 months |
Full-year 2021 |
|---|---|---|---|---|---|---|---|
| License revenue | 76.4 | 68.4 | 111.7 | 105.5 | 55.7 | 362.1 | 307.1 |
| Hardware revenue | 33.9 | 14.8 | 16.6 | 9.2 | 7.1 | 74.5 | 51.5 |
| Support revenue | 87.4 | 73.1 | 76.6 | 71.8 | 67.3 | 308.9 | 268.5 |
| Training and other revenue | 13.1 | 3.9 | 3.2 | 2.1 | 6.4 | 22.3 | 14.5 |
| Net sales | 210.9 | 160.2 | 208.1 | 188.6 | 136.4 | 767.8 | 641.7 |
| Change in sales, corresp. period, % | 54.6 | 3.7 | 28.4 | 17.6 | 14.5 | 25.3 | -1.6 |
| Change in currency adjusted sales, corresp. period, % | 33.3 | -5.5 | 19.0 | 22.0 | 11.9 | 15.9 | 1.6 |
In the first nine months of 2022, net sales increased 27.8 percent to SEK 579.3 M (453.1). The change was attributable to higher license revenue, which increased 27.3 percent to SEK 256.6 (201.6).
During the first nine months of 2022, net sales had the following geographic distribution: North America, 47 percent (36), Asia 22 percent (25), Europe and the rest of the world, 31 percent (39).
In the third quarter of 2022 operating profit increased to SEK 12.0 M (-26.6), representing an operating margin of 5.7 percent (-19.5). In the third quarter, operating expenses increased 22.0 percent to SEK 198.9 M (163.0).
In the third quarter, the net of exchange-rate gains and losses amounted to SEK 13.0 M (3.5) since a large portion of the Group's receivables are denominated in USD and EUR, which strengthened against the SEK in the third quarter compared with the end of the second quarter. Adjusted for these currency translations, the operating result for the third quarter would have totaled SEK -1,0 M (-30.1) in the third quarter.
During the first nine months, the operating result increased to SEK 22.0 M (-36.8), representing an operating margin of 3.8 percent (-8.1).
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 33,3 percent in the third quarter of 2022 compared with the year-earlier period. In addition, the Group incurred an exchange rate effect of SEK 13,4 M (3.5) for balance sheet items in the third quarter. Currency effects therefore had a positive impact on net sales and operating profit in the third quarter of 2022.
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 0,9 M in the third quarter of 2022, while a corresponding change in the EUR exchange rate would have impacted consolidated operating profit by approximately +/- SEK 0,6 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 September 30, 2022, 195 employees (217) were engaged in R&D, corresponding to 52 percent (51) of the total number of employees.
| Capitalization of development costs | Q3-22 | Q2-22 | Q1-22 | Q4-21 | Q3-21 | Rolling 12 months |
Full-year 2021 |
|---|---|---|---|---|---|---|---|
| Research and development costs | 51.8 | 59.9 | 64.3 | 79.1 | 57.9 | 255,1 | 270.0 |
| Capitalization of development costs | -40.2 | -46.0 | -52.4 | -59.3 | -40.0 | -197.9 | -203.3 |
| Amortization of capitalized development costs | 50.9 | 45.4 | 45.0 | 44.1 | 43.2 | 185.4 | 166.7 |
| Research and development costs | 62.5 | 59.2 | 57.0 | 63.9 | 61.2 | 242.6 | 233.4 |
In 2022, RaySearch continued to invest in both existing products and future products. Overall, research and development costs decreased 7.8 percent to SEK 176.0 M (190.9) in the first nine months of 2022, corresponding to 30 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 138.6 M (144.0) were capitalized, down 3.7 percent, representing 79 percent (75) of total research and development costs.
Amortization of capitalized development costs rose 15.3 percent to SEK 141.3 M (122.6), 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 178.7 M (169.5).
In the third quarter of 2022, total amortization and depreciation increased 25 percent to SEK 77.9 M (62.2), of which amortization of intangible fixed assets accounted for SEK 51.0 M (43.3), mainly related to capitalized development costs. Depreciation of tangible fixed- and right of use assets amounted to SEK 26.9 M (19.1).
In the first nine months of 2022, total amortization and depreciation amounted to SEK 219.0 M (180.3), of which amortization of intangible fixed assets amounted to SEK 141.5 M (122.8), mainly related to capitalized development costs. Depreciation of tangible fixed- and right of use assets amounted to SEK 77.5 M (57.4).
In the third quarter of 2022, profit after tax totaled SEK 10.1 M (-22.0), corresponding to profit per share of SEK 0.29 M (-0.64) before and after dilution. For the first nine months of 2022, profit after tax totaled SEK 9.6 M (-31.3), bringing profit per share before and after dilution to SEK 0.28 (-0.91).
Tax expense for the first nine months of the year amounted to SEK 4,5 M (-8,4), corresponding to an effective tax rate of 31.8 percent (-21.1). Previous year a tax income related to deferred tax assets in the parent company was recognized, related to tax deficits.
In the third quarter of 2022, cash flow from operating activities was SEK 8.6 M (47.4), 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. In the first nine months of 2022, cash flow from operating activities was SEK 214.2 M (209.8).
At the end of the period, the company's total customer receivables amounted to 40 percent (39) of net sales over the past 12 months. Working capital amounted to -2 percent (3) of net sales over the past 12 months. The decline is attributable to changes in operating liabilities including advance payments from customers.
In the third quarter, cash flow from investing activities was SEK -52.2 M (-45.6). Investments in intangible fixed assets amounted to SEK -40.2 M (-40.0) and comprised capitalized development costs for the company's products – RayStation, RayCare, RayCommand and RayIntelligence. Investments in tangible fixed assets amounted to SEK -8.2 M (-5.6), mainly related to inventories and equipment in a new head office in Stockholm.
In the third quarter, cash flow from financing activities amounted to SEK -4.4 M (-11.9), and SEK -29.8 M (-84.7) during the first nine months. The change was largely due to a repayment of SEK 21 M on the company's credit facility in the second quarter.
Cash flow for the period was SEK -48.0 M (-10.1) for the third quarter and SEK 4.0 M (-51.6) for the nine first months. At September 30, consolidated cash and cash equivalents amounted to SEK 118.2 M (120.6).
At September 30, 2022, RaySearch's total assets amounted to SEK 1,724 M (1,178) and the equity/assets ratio was 37.4 percent (55.0). Current receivables amounted to SEK 417 M (339). 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 maturing in December 2022. Chattel mortgages amounted to SEK 100 M. On September 30, 2022, shortterm loans totaling SEK 0 M (0) had been raised under the company's revolving loan facility and SEK 0 M (0) of the credit facility had been drawn.
On September 30, 2022, the Group's net debt (previous year net cash) amounted to SEK 414.3 M (-53.0). The change was due to increased lease liabilities for the new headquarter facilities in the fourth quarter 2021.
In the January-September period of 2022, the average number of employees in the Group was 386 (418). At the end of the third quarter, the Group had 373 (428), employees, of whom 269 (319) were based in Sweden and 104 (109) 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.
Instituto Europeo di Oncologia (IEO) placed an order for RayStation and RayCare to be used at its proton center in Milan, Italy. IEO has used RayStation for radiation treatment with photons since 2017. Now, the center has extended its use of RayStation as well as add RayCare.The combination of RayStation, RayCare and an IBA machine will provide a more integrated and unified solution throughout the complete workflow.
Sunnybrook Health Sciences Centre – Odette Cancer Centre – in Toronto, Canada, placed an order for RayStation. The agreement includes a complete configuration of RayStation to fully replace the hospital's existing treatment planning systems. Total order value amounts to approximately CAD 6.2 M (approximately SEK 53 M), excluding expected support services of an additional CAD 1.88 M (approximately SEK 16 M) over the next eight years.
New Mexico Comprehensive Cancer Center (UNMCCC) placed an order for RayStation through a public tender process.The center is expanding its clinical radiation oncology services and as part of this investment RayStation will replace the center's current treatment planning system.
Harris Health System in Texas, the USA, placed an order for RayStation to be used at its center Smith Clinic. RayStation will replace the center's current treatment planning system.
Seoul National University Hospital (SNUH) placed an order for RayCare. In the second quarter of 2022 SNUH placed an order for RayStation. SNUH is the second carbon ion center in Korea to select RaySearch with RayStation and RayCare, the first customer was Yonsei Cancer Center in Seoul.
Henrik Bergentoft was appointed new CFO of RaySearch and took up his position November 15, 2022. Henrik Bergentoft joins RaySearch from C-RAD (publ), where he also held the position as CFO.
On September 30, Lars Wollung, Chairman, and Johanna Öberg, Board member and member of the audit committee, resigned from RaySearch 's Board. Both stated their time-consuming operational assignments as basis for their decisions. The Board decided to appoint Hans Wigzell as new Chairman and to recruit additional members, which happened in an Extraordinary General Meeting on November 9, when Günther Mårder was appointed as new member of RaySearch's Board.
McLaren Proton Therapy Center – Karmanos Cancer Institute – placed an order for RayStation. RayStation will support the center's proton therapy program and will include advanced technology. Additionally, the center is slated to become the first center in the world to deliver proton therapy to patients with Leo Cancer Center's upright treatment technology, see RaySearch's press release from September 2, 2022.
In an Extraordinary General Meeting on November 9, 2022, Günther Mårder was appointed as new member of RaySearch's Board. Günther Mårder is the CEO of the organization Företagarna since 2015.
On September 30, 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 September 30, 2022, the total number of voting rights in RaySearch was 110,377,548.
At September 30, 2022, the number of shareholders in RaySearch was 6,600 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 | 4,207,167 | 4,207,167 | 12.3 | 3.8 |
| BNP Paribas Sec Services Paris, W8IMY (GC) | 0 | 2,406,504 | 2,406,504 | 7.0 | 2.2 |
| Första AP-fonden | 0 | 1,982,448 | 1,982,448 | 5.8 | 1.8 |
| Swedbank Robur Ny Teknik BTI | 0 | 1,800,000 | 1,800,000 | 5.3 | 1.6 |
| Anders Brahme | 1,150,161 | 200,000 | 1,350,161 | 3.9 | 10.6 |
| BNY Mellon SA/NV (Former BNY), W8IMY | 0 | 1,287,791 | 1,287,791 | 3.6 | 1.1 |
| 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 |
| Avanza Pension | 0 | 593 201 | 593 201 | 1.7 | 0.5 |
| Total, 10 largest shareholders | 8 454 822 | 13 856 366 | 22 311 188 | 65.1 | 89.2 |
| Others | 153 | 11 971 432 | 11 971 585 | 34.9 | 10.8 |
| Total | 8 454 975 | 25 827 798 | 34 282 773 | 100 | 100 |
Source: Euroclear
The Annual General Meeting (AGM) of RaySearch Laboratories AB (publ) took place on Wednesday, May 25, 2022, and was held only through postal voting in accordance with temporary legislation.The annual general meeting re-elected Lars Wollung, Carl Filip Bergendal, Johan Löf, Britta Wallgren, Hans Wigzell and Johanna Öberg as members of the Board. Lars Wollung was also re-elected as Chairman of the Board. The annual general meeting resolved that no dividend would be paid for the 2021 fiscal year.
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.
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, November 29, 2022 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
We have performed a review of the interim financial information (interim report) for RaySearch Laboratories AB (publ) at September 30, 2022 and for the nine-month period that ended on that date. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express an opinion on this interim report based on our review.
We have conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical audit and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing standards. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the opinion expressed on the basis of a review does not give the same assurance as an opinion expressed on the basis of an audit.
Based on our review, nothing has come to our attention that causes us to believe that the interim financial information is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act for the Group, and in accordance with the Swedish Annual Accounts Act for the Parent Company.
Stockholm at the day as stated in our electronical signature
Ernst & Young AB
Anna Svanberg Authorized Public Accountant
| Johan Löf, CEO | Tel: +46 (0)8 510 530 00 | [email protected] |
|---|---|---|
| Henrik Bergentoft, CFO | Tel: +46 (0)8 510 530 13 | [email protected] |
CEO Johan Löf and CFO Henrik Bergentoft will present RaySearch's interim report for January-September 2022 in a webcast to be held in English on Tuesday, November 29, 2022, at 10:00-10:30 a.m. CET.
Link to webcast: https://raysearchlabs.creo.se/221129
You can also join the webcast by phone: Sweden: +46 8 505 583 51 UK: +44 333 300 92 67 US: +1 646 722 49 56
| Year-end report, 2022 | February 28, 2023 |
|---|---|
| 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 | JUL-SEP | JAN-SEP | OCT 2021 FULL-YEAR | |||
|---|---|---|---|---|---|---|
| Not | 2022 | 2021 | 2022 | 2021 | -SEP 2022 | 2021 |
| Net sales 2,3 |
210,881 | 136,419 | 579,265 | 453,100 | 767,838 | 641,673 |
| Cost of goods sold1 | -28,769 | -6,448 | -56,814 | -39,464 | -67,747 | -50,397 |
| Gross profit | 182,112 | 129,971 | 522,451 | 413,636 | 700,091 | 591,276 |
| Other operating income | 17,109 | 6,684 | 40,331 | 27,187 | 45,923 | 32,779 |
| Selling expenses | -79,352 | -71,726 | -220,460 | -204,559 | -316,093 | -300,192 |
| Administrative expenses | -41,269 | -27,131 | -124,276 | -85,208 | -161,104 | -122,036 |
| Research and development costs | -62,515 | -61,189 | -178,689 | -169,522 | -242,610 | -233,443 |
| Other operating expenses | -4,078 | -3,170 | -17,313 | -18,297 | -20,741 | -21,725 |
| Operating profit/loss | 12,007 | -26,561 | 22,044 | -36,763 | 5,466 | -53,341 |
| Financial net | -2,348 | -878 | -7,918 | -2,962 | -10,288 | -5,332 |
| Profit/loss before tax | 9,659 | -27,439 | 14,126 | -39,725 | -4,822 | -58,673 |
| Tax | 414 | 5,449 | -4,486 | 8,378 | -1,506 | 11,358 |
| Profit/loss for the period2 | 10,073 | -21,990 | 9,640 | -31,347 | -6,328 | -47,315 |
| Other comprehensive income | ||||||
| Items to be reclassified to profit or loss | ||||||
| Translation difference of foreign operations for the period | 3,305 | 712 | 7,013 | 1,390 | 7,865 | 2,242 |
| Comprehensive income for the period2 | 13,378 | -21,278 | 16,653 | -29,957 | 1,537 | -45,073 |
| Earnings/loss per share before and after dilution (SEK) | 0.29 | -0.64 | 0.28 | -0.91 | -0.18 | -1.38 |
1 Comprises costs for hardware and license costs paid, but not amortization of capitalized development costs, which is included in research and development costs. 2 Fully (100 percent) attributable to Parent Company shareholders.
| AMOUNTS IN SEK 000s Note |
Sep 30, 2022 | Sep 30, 2021 | Dec 31, 2021 |
|---|---|---|---|
| ASSETS | |||
| Intangible fixed assets | 520,258 | 508,025 | 523,109 |
| Tangible fixed assets and right of use assets | 634,095 | 175,217 | 666,539 |
| Deferred tax assets | 27,438 | 26,784 | 28,525 |
| Other long-term receivables | 6,829 | 8,263 | 10,204 |
| Total fixed assets | 1,188,620 | 718,289 | 1,228,377 |
| Inventories | 29,443 | 21,295 | 29,991 |
| Current receivables | 387,773 | 317,586 | 383,843 |
| Cash and cash equivalents | 118,194 | 120,589 | 102,535 |
| Total current assets | 535,410 | 459,470 | 516,369 |
| TOTAL ASSETS | 1,724,030 | 1,177,759 | 1,744,746 |
| EQUITY AND LIABILITIES | |||
| Equity | 644,964 | 643,428 | 628,312 |
| Deferred tax liabilities | 107,201 | 111,849 | 107,784 |
| Long-term interest-bearing liabilities | 478,527 | 50,380 | 491,896 |
| Total long-term liabilities | 585,728 | 162,229 | 599,680 |
| Accounts payable | 25,629 | 30,076 | 48,774 |
| Current interest-bearing liabilities | 53,940 | 17,226 | 70,381 |
| Other current liabilities | 413,769 | 324,800 | 397,599 |
| Total current liabilities | 493,338 | 372,102 | 516,754 |
| TOTAL EQUITY AND LIABILITIES | 1,724,030 | 1,177,759 | 1,744,746 |
| AMOUNTS IN SEK 000s | JUL-SEP | JAN-SEP | FULL-YEAR | ||
|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | 2021 | |
| Opening balance according to adopted Annual Report | 631,587 | 685,672 | 628,312 | 694,351 | 694,351 |
| Adjustment on correction of error (net of tax)3 | - | -20,366 | - | -20,966 | -20,966 |
| Adjusted opening balance | 631,587 | 664,706 | 628,312 | 673,385 | 673,385 |
| Profit/loss for the period | 10,073 | -21,990 | 9,640 | -31,347 | -47,315 |
| Translation difference for the period | 3,305 | 712 | 7,013 | 1,390 | 2,242 |
| Closing balance | 644,964 | 643,428 | 644,964 | 643,428 | 628,312 |
3 See Note 1 for more information about correction of previous error.
| AMOUNTS IN SEK 000s | JUL-SEP | JAN-SEP | OKT 2021 | FULL-YEAR | ||
|---|---|---|---|---|---|---|
| Not | 2022 | 2021 | 2022 | 2021 | -SEP 2022 | 2020 |
| Profit/loss before tax | 9,659 | -27,439 | 14,126 | -39,725 | -4,822 | -58,673 |
| Adjusted for non-cash items1) | 74,156 | 57,528 | 215,707 | 162,827 | 279,517 | 226,637 |
| Taxes paid | -1,267 | 682 | -9,463 | -9,829 | 18,014 | 17,648 |
| Cash flow from operating activities before changes in working capital |
85,548 | 30,771 | 220,370 | 113,273 | 292,709 | 185,612 |
| Cash flow from changes in operating receivables | -5,839 | 12,102 | -1,358 | 130,889 | -115,194 | 17,053 |
| Cash flow from changes in operating liabilities | -68,096 | 4,483 | -4,834 | -34,397 | 65,060 | 35,497 |
| Cash flow from operating activities | 8,613 | 47,356 | 214,178 | 209,765 | 242,575 | 238,162 |
| Cash flow from investing activities | -52,209 | -45,569 | -180,353 | -176,687 | -241,297 | -237,631 |
| Cash flow from financing activities Cash flow for the period |
-4,394 -47,990 |
-11,875 -10,088 |
-29,810 4,015 |
-84,716 -51,638 |
-17,328 -16,050 |
-72,234 -71,703 |
| Cash and cash equivalents at the beginning of the period | 162,068 | 128,815 | 102,535 | 168,746 | 120,589 | 168,746 |
| Exchange-rate difference in cash and cash equivalents | 4,116 | 1,862 | 11,644 | 3,481 | 13,655 | 5,492 |
| Cash and cash equivalents at the end of the period | 118,194 | 120,589 | 118,194 | 120,589 | 118,194 | 102,535 |
1 These amounts mainly include amortization of capitalized development costs, right-of-use assets and unrealized currency effects
| AMOUNTS IN SEK 000s | JUL-SEP | JAN-SEP | FULL-YEAR | ||
|---|---|---|---|---|---|
| Not | 2022 | 2021 | 2022 | 2021 | 2021 |
| Net sales 2, 3 |
145,713 | 99,038 | 427,594 | 331,943 | 477,055 |
| Cost of goods sold1) | -9,155 | -2,144 | -18,590 | -15,293 | -26,477 |
| Gross profit | 136,558 | 96,894 | 409,004 | 316,650 | 450,578 |
| Other operating income | 16,992 | 6,467 | 39,931 | 26,706 | 32,227 |
| Selling expenses | -39,675 | -43,247 | -119,217 | -121,250 | -177,313 |
| Administrative expenses | -50,433 | -27,216 | -158,856 | -85,387 | -122,793 |
| Research and development costs | -43,994 | -58,096 | -152,935 | -191,345 | -270,868 |
| Other operating expenses | -3,828 | -2,712 | -16,857 | -17,455 | -20,704 |
| Operating profit/loss | 15,620 | -27,910 | 1,070 | -72,081 | -108,873 |
| Loss from financial items | 4 | -311 | -1,069 | -1,082 | -1,618 |
| Profit/loss after financial items | 15,624 | -28,221 | 1 | -73,163 | -110,491 |
| Appropriations | - | - | - | - | 32,615 |
| Profit/loss before tax | 15,624 | -28,221 | 1 | -73,163 | -77,876 |
| Tax on profit/loss for the period | -1,584 | 5,600 | -1,190 | 14,343 | 14,367 |
| Profit/loss for the period | 14,040 | -22,621 | -1,189 | -58,820 | -63,509 |
1 Comprises costs for hardware and royalties.
| AMOUNTS IN SEK 000s | JUL-SEP | JAN-SEP | FULL-YEAR | ||
|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | 2021 | |
| Profit/loss for the period | 14,040 | -22 621 | -1,189 | -58,820 | -63,509 |
| Other comprehensive income | - | - | - | - | - |
| Comprehensive income for the period | 14,040 | -22,621 | -1,189 | -58,820 | -63,509 |
| AMOUNTS IN SEK 000s Not |
Sep 30, 2022 | Sep 30, 2021 | Dec 31, 2021 |
|---|---|---|---|
| ASSETS | |||
| Intangible fixed assets | 401 | 634 | 575 |
| Tangible fixed assets | 60,418 | 65,022 | 69,225 |
| Shares and participations | 3,958 | 3,958 | 3,958 |
| Deferred tax assets | 26,785 | 26,632 | 26,695 |
| Long-term receivables from Group companies | - | 18,252 | - |
| Other long-term receivables | 12,328 | 7,583 | 16,344 |
| Total fixed assets | 103,890 | 122,081 | 116,797 |
| Inventories | 4,039 | 917 | 6,436 |
| Current receivables | 323,246 | 284,584 | 360,363 |
| Cash and bank balances | 48,256 | 43,741 | 11,165 |
| Total current assets | 375,541 | 329,242 | 377,964 |
| TOTAL ASSETS | 479,431 | 451,323 | 494,761 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Restricted equity | |||
| Share capital | 17,141 | 17,141 | 17,141 |
| Statutory reserve | 43,630 | 43,630 | 43,630 |
| Total restricted equity | 60,771 | 60,771 | 60,771 |
| Unrestricted equity | |||
| Retained earnings | 118,234 | 181,733 | 181,733 |
| Profit/loss for the year | -1,189 | -58,820 | -63,509 |
| Total non-restricted equity | 117,045 | 122,913 | 118,224 |
| Total equity | 117,816 | 183,684 | 178,995 |
| Untaxed reserves | - | 32,615 | - |
| Long-term liabilities | 23,511 | 879 | 6,447 |
| Accounts payable | 23,284 | 35,138 | 40,169 |
| Current interest-bearing liabilities | - | - | 21,268 |
| Other current liabilities | 254,820 | 199,007 | 247,882 |
| Total current liabilities | 278,104 | 234,145 | 309,319 |
| TOTAL EQUITY AND LIABILITIES | 479,431 | 451,323 | 494,761 |
The RaySearch Group applies International Financial Reporting Standards (IFRS) as adopted by the EU. 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 This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act.
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 | JUL - SEP | ||||
|---|---|---|---|---|---|
| 2022 | 2021 | Change | OKT 2021 - SEP 2022 |
Full-year 2021 |
|
| Revenue by type | |||||
| Licenses | 76,442 | 55,676 | 37.3% | 362,099 | 307,138 |
| Support | 87,390 | 67,322 | 29.8% | 308,941 | 268,526 |
| Hardware | 33,906 | 7,066 | 379.8% | 74,452 | 51,496 |
| Training and other | 13,143 | 6,355 | 106.8% | 22,346 | 14,513 |
| Total revenue from contracts with customers | 210,881 | 136,419 | 54.6% | 767,838 | 641,673 |
| Revenue by geographic market | |||||
| North America | 116,553 | 44,841 | 159.9% | 329,828 | 224,341 |
| APAC | 43,553 | 37,692 | 15.5% | 191,794 | 173,547 |
| Europe and rest of the world | 50,775 | 53,886 | -5.8% | 246,216 | 243,785 |
| Total revenue from contracts with customers | 210,881 | 136,419 | 54.6% | 767,838 | 641,673 |
| Revenue by date for revenue recognition | |||||
| Goods/services transferred at a point in time | 110,348 | 62,742 | 75.9% | 436,551 | 358,634 |
| Services transferred over time | 100,533 | 73,677 | 36.5% | 331,287 | 283,039 |
| Total revenue from contracts with customers | 210,881 | 136,419 | 54.6% | 767,838 | 641,673 |
| AMOUNTS IN SEK 000s | JAN - SEP | ||||
|---|---|---|---|---|---|
| 2022 | 2021 Change | OKT 2021 - SEP 2022 |
Full-year 2021 |
||
| Revenue by type | |||||
| Licenses | 256,596 | 201,635 | 27.3% | 362,099 | 307,138 |
| Support | 237,159 | 196,744 | 20.5% | 308,941 | 268,526 |
| Hardware | 65,257 | 42,301 | 54.3% | 74,452 | 51,496 |
| Training and other | 20,253 | 12,420 | 63.1% | 22,346 | 14,513 |
| Total revenue from contracts with customers | 579,265 | 453,100 | 27.8% | 767,838 | 641,673 |
| Revenue by geographic market | |||||
| North America | 269,418 | 163,931 | 64.3% | 329,828 | 224,341 |
| APAC | 129,079 | 110,832 | 16.5% | 191,794 | 173,547 |
| Europe and rest of the world | 180,768 | 178,337 | 1.4% | 246,216 | 243,785 |
| Total revenue from contracts with customers | 579,265 | 453,100 | 27.8% | 767,838 | 641,673 |
| Revenue by date for revenue recognition | |||||
| Goods/services transferred at a point in time | 321,853 | 243,936 | 31.9% | 436,551 | 358,634 |
| Services transferred over time | 257,412 | 209,164 | 23.1% | 331,287 | 283,039 |
| Total revenue from contracts with customers | 579,265 | 453,100 | 27.8% | 767,838 | 641,673 |
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 June 2022, the credit loss provision amounted to SEK 43.5 M (26,0), corresponding to 11 percent (11) of total customer receivables. The Group's credit losses have historically been limited and amounted to about 1.3 percent of the company's average customer receivables over the past five years.
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 | Sep 30, 2022 | Sep 30, 2021 | Dec 31, 2021 |
|---|---|---|---|
| Chattel mortgages | 100,000 | 100,000 | 100,000 |
| Guarantees | 33 121 | 27,833 | 31,046 |
| 2022 | 2021 | 2020 | ||||||
|---|---|---|---|---|---|---|---|---|
| AMOUNTS IN SEK 000s | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
| Order intake | ||||||||
| Total order intake | 219,091 | 212,511 | 272,442 | 345,028 | 127,853 | 189,750 | 145,131 | 239,125 |
| Income statement | ||||||||
| Net sales1 | 210,881 | 160,235 | 208,149 | 188,573 | 136,419 | 154,579 | 162,102 | 159,138 |
| Change in sales, %1 | 54.6 | 3.7 | 28.4 | 18.5 | 15.2 | -5.2 | -22.1 | -30.4 |
| Operating profit/loss1 | 12,007 | -19,527 | 29,564 | -16,578 | -26,561 | -22,463 | 12,261 | -15,289 |
| Operating margin, %1 | 5.7 | -12.2 | 14.2 | -8.8 | -19.5 | -14.5 | 7.6 | -9.6 |
| Profit/loss for the period1 | 10,073 | -19,731 | 19,298 | -15,968 | -21,990 | -16,467 | 7,110 | -14,712 |
| Net margin, %1 | 4,8 | -12.3 | 9.3 | -8.5 | -16.1 | -10.7 | 4.4 | -9.2 |
| Cash flow | ||||||||
| Operating activities | 8,613 | 79,778 | 125,787 | 28,397 | 47,356 | 58,077 | 104,332 | 51,505 |
| Investing activities | -52,209 | -67,593 | -60,551 | -60,944 | -45,569 | -70,843 | -60,275 | -64,094 |
| Financing activities | -4,394 | 4,500 | -29,916 | 12,482 | -11,875 | -61,624 | -11,217 | -8,909 |
| Cash flow for the period | -47,990 | 16,685 | 35,320 | -20,065 | -10,088 | -74,390 | 32,840 | -21,498 |
| Capital structure | ||||||||
| Equity/assets ratio, %1 | 37.4 | 35.2 | 37.5 | 36.0 | 54.6 | 55.7 | 50.9 | 52.2 |
| Net debt | 414,273 | 386,236 | 397,045 | 459,742 | -52,983 | -50,385 | -65,952 | -22,439 |
| Debt/equity ratio1 | 0.6 | 0.6 | 0.6 | 0.7 | -0.1 | -0.1 | -0.1 | 0.0 |
| Net debt/EBITDA | 1.4 | 1.6 | 1.8 | 2.3 | -0.3 | -0.3 | -0.4 | -0.1 |
| Per share data, SEK | ||||||||
| Earnings/loss per share before dilution1 | 0.29 | -0.58 | 0.56 | -0.47 | -0.64 | -0.48 | 0.21 | -0.43 |
| Earnings/loss per share after dilution1 | 0.29 | -0.58 | 0.56 | -0.47 | -0.64 | -0.48 | 0.21 | -0.43 |
| Equity per share1 | 18.81 | 18.42 | 18.91 | 18.33 | 18.77 | 19.39 | 19.88 | 19.64 |
| Share price at the end of the period | 47.60 | 54.40 | 51.70 | 56.50 | 61.50 | 87.40 | 89.50 | 82.70 |
| 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 | 386 | 383 | 399 | 419 | 418 | 414 | 412 | 404 |
| Oct 2021- | Jul 2021- | Apr 2021- | Jan 2021- | Oct 2020- | Jul 2020- | Apr 2020- | Jan 2020- | |
|---|---|---|---|---|---|---|---|---|
| AMOUNTS IN SEK 000s | Sep 2022 | Jun 2022 | Mar 2022 | Dec 2021 | Sep 2021 | Jun 2021 | Mar 2021 | Dec 2020 |
| Order intake | ||||||||
| Total order intake | 1,049,070 | 957,845 | 935,073 | 807,762 | 701,859 | 712,486 | 699,868 | 854,755 |
| Income statement | ||||||||
| Net sales1 | 767,838 | 693,376 | 687,720 | 641,673 | 612,238 | 594,252 | 602,734 | 648,824 |
| Operating profit/loss1 | 5,466 | -33,102 | -36,038 | -53,341 | -52,052 | -55,665 | -44,853 | -6,254 |
| Operating margin, %1 | 0.7 | -4.8 | -5.2 | -8.3 | -8.5 | -9.4 | -7.4 | -1.0 |
| Cash flow | ||||||||
| Cash flow | -16,050 | 21,852 | -69,223 | -72,380 | -73,136 | -41,328 | 98,972 | 61,890 |
| Cash flow adjusted for repayment of bank loans |
5,218 | 43,120 | -47,955 | -22,380 | -23,136 | 8,672 | 98,972 | 61,890 |
1 See 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 changes to | Order intake is an indicator of future revenue and thus a key figure |
| existing orders during the current period | for the management of RaySearch's operations | |
| Order backlog | The value of orders at the end of the period that the company has | The order backlog shows the value of orders already booked by |
| yet to deliver and recognize as revenue, meaning remaining | RaySearch that will be converted to revenue in the future. | |
| performance obligations. | ||
| Net sales/Order intake | Recognized net sales in relation to total order intake during the | The measurement is used to monitor the recognized revenue in |
| corresponding period | 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 | The measure is used to track the performance of the company's |
| expressed as a percentage | 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 driven |
| unchanged currencies | currency effects | 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 tax | Operating profit/loss provides an overall picture of the total |
| generation of earnings in operating activities | ||
| Operating profit adjusted for | Calculated as operating profit less other operating | Operating profit provides an overall picture of the total generation of |
| currency translation effects | income/expenses | earnings in operating activities excluding 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 period | The net margin shows the percentage of net sales remaining after |
| the company's expenses have been deducted | ||
| Cash flow adjusted for | Cash flow for the period less cash flow from changes to bank loans | The measurement shows the underlying cash flow before financing |
| changes in bank loans | 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, operating profit or other |
Sales, operating profit or other results measured over the past 12- month period |
This measure is used to more clearly illustrate the trends for sales, operating profit and other results, which is relevant because |
| results | RaySearch's revenue is subject to monthly variations | |
| Working capital | Working capital comprises inventories, operating receivables and | This measure shows how much working capital is tied up in |
| operating liabilities, and is obtained from the statement of financial | operations and can be shown in relation to net sales to | |
| position. Operating receivables comprise accounts receivable, | demonstrate the efficiency with which working capital has been | |
| other current/long-term receivables and non-interest bearing | used | |
| 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 average | Shows the return generated on the owners' invested capital from a |
| equity. Average equity is calculated as the sum of equity at the end | shareholder perspective | |
| 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 of the | This is a standard measure to show financial risk, and is expressed |
| period | as the percentage of the total restricted equity financed by the | |
| owners | ||
| Net debt | Interest-bearing liabilities less cash and cash equivalents | 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 taking into |
| depreciation/amortization and impairment | consideration financial decisions or taxes | |
| Net debt/EBITDA | Net debt at the end of the period in relation to operating profit | A relevant measure from a credit perspective that shows the |
| before depreciation and amortization over the past 12-month | company's ability to handle its debt | |
| period |
| AMOUNTS IN SEK 000s | Sep 30, 2022 | Sep 30, 2021 | Dec 31, 2021 |
|---|---|---|---|
| Working capital | |||
| Accounts receivable (current billed customer receivables) | 143,264 | 151,448 | 170,591 |
| Current unbilled customer receivables | 160,706 | 82,383 | 146,771 |
| Long-term unbilled customer receivables | 6,829 | 8,263 | 10,204 |
| Inventories | 29,443 | 21,295 | 29,991 |
| Other current receivables (excl. tax) | 82,313 | 79,283 | 63,702 |
| Accounts payable | -25,629 | -30,076 | -48,774 |
| Other current liabilities (excl. tax) | -412,195 | -296,757 | -367,212 |
| Working capital | -15,269 | 15,839 | 5,273 |
| AMOUNTS IN SEK 000s | Sep 30, 2022 | Sep 30, 2021 | Dec 31, 2021 |
| Net debt | |||
| Current interest-bearing liabilities | 53,940 | 17,226 | 70,381 |
| Long-term interest-bearing liabilities | 478,527 | 50,380 | 491,017 |
| Cash and cash equivalents | -118,194 | -120,589 | -102,535 |
| Net debt | 414,273 | -52,983 | 458,863 |
| AMOUNTS IN SEK 000s | OCT 2021 - SEP 2022 |
OCT 2021 – SEP 2022 |
Full-year 2021 |
| EBITDA | |||
| Operating profit/loss1 | 5,466 | -51,355 | -53,341 |
| Amortization and depreciation | 288,829 | 236,409 | 250,184 |
| EBITDA | 294,295 | 185,054 | 196,843 |
| CHANGE IN SALES AT UNCHANGED CURRENCIES | OCT 2021 - SEP 2022 |
OCT 2021 – SEP 2022 |
Full-year 2021 |
| Net sales for the year | 767,838 | 610,115 | 641,673 |
| Currency adjustment | -59 639 | 31,915 | 20,868 |
| Adjusted Net sales | 708,199 | 642,030 | 662,541 |
| Net sales, preceding year | 610,115 | 726,276 | 651,612 |
| Change in sales at unchanged currencies (organic growth) | 16.1% | -11,2% | 1,7% |
RaySearch Laboratories AB (publ) Box 3297 103 65 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 and RayCare oncology information system to cancer centers all over the world and distributes the products through licensing agreements with leading medical technology companies.
In December 2020, the RayCommand treatment control system and RayIntelligence oncology analytics system were also launched. RaySearch's software is currently used by over 800 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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