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RaySearch Laboratories
Earnings Release • Feb 23, 2022
3101_10-k_2022-02-23_896c9415-33c2-48aa-a608-4dee5d279b22.pdf
Earnings Release
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"During the fourth quarter of 2021, order intake rose 44 percent and net sales 18 percent. Operating loss amounted to SEK -17 M (-15)."
Johan Löf, CEO of RaySearch
FOURTH QUARTER (OCTOBER – DECEMBER 2021)
- Order intake SEK 345.0 M (239.1)
- Net sales SEK 188.0 M (159.8)
- Operating loss SEK -16.8 M (-14.6)
- Loss after tax SEK -16.0 M (-14.2)
- Loss per share before/after dilution SEK -0.47 (-0.41)
- Cash flow SEK -20.7 M (-21.5)
- Order backlog SEK 1,362.9 M (1,169.2) at the end of the period
SIGNIFICANT EVENTS DURING THE FOURTH QUARTER
TWELVE MONTHS (JANUARY – DECEMBER 2021)
- Order intake SEK 807.8 M (854.8)
- Net sales SEK 641.1 M (651.6)
- Operating loss SEK -53.5 M (-3.5)
- Loss after tax SEK -47.3 M (-9.1)
- Loss per share before/after dilution SEK -1.38 (-0.26)
- Cash flow SEK -72.4 M (pos: 61.9)
- In October, RayCare was taken into clinical use with Accuray's Radixact® treatment delivery system at Swiss Medical Network in Switzerland.
- RaySearch secured a large order for RayStation from Lanzhou Ion Therapy, a Chinese manufacturer of accelerator systems.
- RaySearch and IBA have expanded their collaboration in proton therapy around the areas of FLASH radiotherapy, proton arc therapy and management of uncertainty regarding the location of the tumo.
- RaySearch and Mevion Medical Systems have expanded their collaboration on the development of advanced treatment planning techniques for FLASH delivery with the Mevion S250i Proton Therapy System.
- A new version of RaySearch's RayCare oncology information system was launched (5B). This version allows clinics to configure and tailor their workflows for radiation therapy.
- Launch of new version of RaySearch's advanced treatment planning system RayStation (11B), with new features for adaptive workflows, brachytherapy and ion-radiation therapy.
- During the fourth quarter, RaySearch relocated its head office to new premises, which has a significant impact on total consolidated assets.
- New CFO of RaySearch took over on November 15, 2021.
- RaySearch signed an agreement with Proton International Arkansas to provide RayStation at the UAMS Radiation Oncology Center.
THE COVID-19 PANDEMIC
• The COVID-19 pandemic, with substantial reorganizations in healthcare, had a negative impact on sales also in the fourth quarter. RaySearch expects that the negative effects of the COVID-19 pandemic on the company's sales and earnings will continue for some months to come, mainly because orders may be delayed.
NO SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
FINANCIAL SUMMARY1
| AMOUNTS IN SEK 000s | OCT-DEC | JAN-DEC | |||
|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | ||
| Net sales | 188,040 | 159,835 | 641,140 | 651,612 | |
| Operating loss | -16,762 | -14,592 | -53,525 | -3,466 | |
| Operating margin, % | -8.9 | -9.1 | -8.3 | -0.5 | |
| Loss for the period | -15,955 | -14,164 | -47,302 | -9,080 | |
| Loss per share before/after dilution, SEK | -0.47 | -0.41 | -1.38 | -0.26 | |
| Cash flow from operating activities | 54,988 | 51,505 | 264,753 | 331,508 | |
| Cash flow for the period | -20,739 | -21,498 | -72,377 | 61,890 | |
| Return on equity, % | -2.4 | -2.0 | -7.0 | -1.3 | |
| Equity/assets ratio, %, at the end of the period | 37.1 | 54.0 | 37.1 | 54.0 | |
| Share price at the end of the period, SEK | 56.5 | 82.7 | 56.5 | 82.7 |
1 For definitions of key ratios, see page 20.
CEO COMMENTS
STRONG ORDER INTAKE IN THE FOURTH QUARTER OF 2021
The pandemic had a negative effect on RaySearcg sales. It is very gratifying, therefore, that order intake rose 44 percent in the fourth quarter of 2021 compared with the year-on-year period. We noted a clearly positive trend in Asia, while market conditions in some European countries and North America remained challenging.
Towards the end of last year, however, we began to note increased opportunities for physical interaction with customers. One example was in October, when we met customers at the ASTRO Annual Meeting in Chicago, which is the leading trade fair in our field. We also arranged two major user meetings for customers – one in Europe and one in the US. The European meeting was fully virtual, but the meeting in the US was hybrid, with both physical and remote
participants. In the past, these customer meetings have been very important for our sales, and it was gratifying to see the high number of participants and the great interest in our products.
LARGE ORDERS, NEW COLLABORATION AGREEMENTS AND KEY MILESTONES
RaySearch received several significant orders during the quarter. One of these was a major RayStation order in China for carbon ion therapy, which is a highly advanced method of radiotherapy that may be effective for tumors that are difficult to treat with more conventional approaches. The carbon ion therapy market is gaining momentum in China with several facilities either under construction, or in a planning phase. The order from Lanzhou Ion Therapy Co includes RayStation licenses for three new carbon ion centers in China.
At the end of December, RaySearch signed an agreement with Proton International Arkansas to provide RayStation at the UAMS Radiation Oncology Center. RaySearch's products are now present in 30 proton therapy centers in North America, which is by far the majority of existing proton centers.
RaySearch also entered into a collaboration agreement with Mevion for the development of next-generation treatment planning techniques for proton radiotherapy treatment with FLASH, which complements Mevion's advanced HYPERSCAN delivery system.
Another important collaboration agreement during the quarter was between RaySearch and IBA. The agreement will expand the partnership in proton therapy between the companies in the areas of FLASH, proton arc therapy and management of uncertainty regarding the location of the tumor.
One key milestone during the fourth quarter was that RayCare is now fully integrated and in clinical use with Accuray's Radixact machine. Another was that Iridium Network in Antwerp in Belgium decided to invest in RayCare as its primary oncology information system.
Yet another important milestone was that in October, Heidelberg Ion Beam Therapy Center treated its first patient using helium ion therapy with RayStation treatment planning system. This is a world first for helium ion treatments with the modern pencil-beam scanning technique. The center will initiate a large clinical trial in this field.
CONTINUED DEVELOPMENT OF OUR PRODUCT PORTFOLIO
We are a company with a strong R&D focus. During the pandemic, our priority was to maintain our strategically important product expansion, while continuing to develop our existing products. In line with the development plan, new versions of RayStation (11B), RayCare (5B) and RayCommand (2B) were released in December.
RayStation 11B offers improvements for adaptive radiation therapy and tools for combined treatments, such as brachytherapy combined with external radiotherapy. Both of these features are at the forefront of new possibilities in
radiotherapy. In addition, RayStation is the first treatment planning system on the market to support clinical evaluation of linear energy transfer (LET) for protons and other ions.
The focus for RayCare 5B has been improved workflows and the integration of RayCare with various treatment machines. The biggest news in the latest version of RayCare is that users can now configure their own workflows, something that previously required assistance from RaySearch. It is now easier for clinics to implement and configure RayCare to their specific way of working. Another important area is the integration of RayCare with treatment machines, since this is one of the key features of an oncology information system.
RayCommand is a treatment control system that serves as a link between the treatment machine and the treatment planning and oncology information systems, and helps to achieve efficient coordination between the multitude of systems in a treatment room. In the latest version we have implemented the functions needed for MedAustron, one of our first customers of this system, to be able to safely and efficiently take the product into clinical use in all its treatment rooms, something that is planned to happen this spring.
For RayIntelligence, development continued during the quarter and we are looking forward to presenting news about this product in 2022.
INCREASED FOCUS ON COSTS
Our costs increased in the fourth quarter, mainly due to increased marketing activities and the relocation of our head office to new premises at New Karolinska. The vast majority of these costs were non-recurring and we are now expecting a cost level for full-year 2022 that is on par with the year-on-year, but with the costs redirected to our core business of product development and sales activities. To ensure this, we intend to strengthen our purchasing processes and the monitoring of our financial performance.
LOOKING AHEAD WITH CONFIDENCE
It is gratifying to report that our operational activities – R&D and our delivery capacity – are still relatively unaffected by the pandemic.
Although 2021 was a challenging year in many respects, we decided to continue investing in and developing both existing and new products, and to relocate our head office to new premises.
In 2022, we will continue to develop our products and focus on costs. At the same time, we are expecting that market conditions will continue to improve, partly the result of better access to existing and potential customers, but also due to the growing need faced by cancer centers all over the world for effective cancer care. Since our total order backlog of 1,363 is the highest ever, we have a solid foundation in place for resuming growth during the year.
With products that are better than ever and a very strong team, we are well-positioned to grow without increasing our costs in 2022.
Finally, I would like to thank all our employees for the flexibility, creativity, and dedication you have continued to show in the second year of this pandemic. While these past two years have been challenging, the most difficult times seem to be over, and we are looking forward to 2022 with confidence.
Stockholm, February 23, 2022
Johan Löf CEO and founder
FINANCIAL INFORMATION
ORDER INTAKE AND ORDER BACKLOG
In the fourth quarter of 2021, order intake rose 44.3 percent to SEK 345.0 M (239.1). License order intake increased 55.8 percent to SEK 170.9 M (109.7) while order intake for support increased 36.3 percent to SEK 130.7 M (95.9).
| Order intake (amounts in SEK M) | Q4-21 | Q3-21 | Q2-21 | Q1-21 | Q4-20 | Full-year 2021 |
Full-year 2020 |
|---|---|---|---|---|---|---|---|
| Licenses | 170.9 | 46.2 | 55.6 | 78.0 | 109.7 | 350.7 | 378.0 |
| Hardware | 35.7 | 7.9 | 9.3 | 12.1 | 26.7 | 65.0 | 69.5 |
| Support (incl. warranty support) | 130.7 | 69.1 | 116.6 | 48.6 | 95.9 | 365.0 | 377.4 |
| Training and other | 7.7 | 4.7 | 8.2 | 6.5 | 6.8 | 27.1 | 29.9 |
| Total order intake | 345.0 | 127.9 | 189.8 | 145.1 | 239.1 | 807.8 | 854.8 |
| Order backlog (amounts in SEK M) | Q4-21 | Q3-21 | Q2-21 | Q1-21 | Q4-20 | ||
| Licenses | 176.6 | 105.3 | 115.0 | 129.6 | 127.0 | ||
| Hardware | 66.2 | 38.4 | 36.9 | 48.5 | 50.3 | ||
| Support (incl. warranty support) | 1,053.3 | 1,009.2 | 1,001.7 | 974.2 | 942.6 | ||
| Training and other | 66.8 | 59.5 | 59.9 | 54.8 | 49.4 | ||
| Total order backlog at the end of the period | 1,362.9 | 1,212.4 | 1,213.4 | 1,207.1 | 1,169.2 |
For full-year 2021, order intake declined 5.5 percent to SEK 807.8 M (854.8). License order intake declined 7.2 percent to SEK 350.7 M (378.0), while order intake for support declined 3.3 percent to SEK 365.0 M (377.4). The change was largely due to the COVID-19 pandemic, which did not affect the company's operations until the second quarter of 2020.
At December 31, 2021, the total order backlog amounted SEK 1,362.9 M (1,169.2), which is expected to generate revenue of approximately SEK 350 M over the next 12 months. The remaining amount in the order backlog mainly pertains to support obligations, which are primarily expected to generate revenue over a subsequent four-year period.
REVENUE
In the fourth quarter of 2021, net sales rose 17.6 percent to SEK 188.0 M (159.8). The change was attributable to higher license sales, which rose 29.5 percent to SEK 105.0 M (81.1), primarily due to the COVID-19 pandemic, which had a negative impact on revenue in the fourth quarter of 2020. The change in sales at unchanged currencies was 22.0 percent (-28.5).
In the fourth quarter, support revenue rose 12.3 percent to SEK 71.8 M (63.9), accounting for 38 percent (40) of net sales. Hardware sales, which have a limited profit margin, declined 9.8 percent to SEK 9.2 M (10.2). Excluding hardware, sales rose 19.5 percent compared with the corresponding period in 2020.
| Revenue (amounts in SEK M) | Q4-21 | Q3-21 | Q2-21 | Q1-21 | Q4-20 | Full year 2021 |
Full year 2020 |
|---|---|---|---|---|---|---|---|
| License revenue | 105.0 | 55.7 | 63.4 | 82.6 | 81.1 | 306.6 | 340.8 |
| Hardware revenue | 9.2 | 7.1 | 19.8 | 15.4 | 10.2 | 51.5 | 48.0 |
| Support revenue | 71.8 | 67.3 | 67.5 | 61.9 | 63.9 | 268.5 | 243.9 |
| Training and other revenue | 2.1 | 6.4 | 3.9 | 2.1 | 4.6 | 14.5 | 18.9 |
| Net sales | 188.0 | 136.4 | 154.6 | 162.1 | 159.8 | 641.1 | 651.6 |
| Change in sales, corresp. period, % | 17.6 | 14.5 | -5.6 | -22.4 | -31.8 | -1.6 | -12.1 |
| Change in organic sales, corresp. period, % | 22.0 | 11.9 | 4.5 | -14.2 | -28.5 | 1.6 | -10.3 |
For full-year 2021, net sales declined 1.6 percent to SEK 641.1 M (651.6). The change was attributable to lower license revenue, which declined 10.0 percent to SEK 306.6 M (340.8), a result of the COVID-19 pandemic. The change in sales at unchanged currencies was 1.6 percent (-10.3).
In 2021, net sales had the following geographic distribution: North America, 35 percent (37); Asia, 27 percent (25); Europe and the rest of the world, 38 percent (38).
OPERATING PROFIT
In the fourth quarter of 2021, operating loss totaled SEK -16.8 M (-14.6), representing an operating margin of -8.9 percent (-9.1). The increased loss was largely attributable to higher operating expenses, which was partly offset by higher license revenue and positive currency translation effects.
In the fourth quarter, operating expenses increased 17.4 percent to SEK 204.8 M (174.4). The change was largely due to increased selling expenses, higher costs in conjunction with the relocation of the head office and increased amortization expense. Selling expenses were lower in the year-earlier quarter due to the cancellation of marketing and sales activities due to the pandemic.
In the fourth quarter, net exchange gains and losses amounted to SEK 1.8 M (-15.6), due to the fact that a large
proportion of the Group's receivables are denominated in USD and EUR, which strengthened against the SEK in the fourth quarter compared with the end of the third quarter. Adjusted for these currency translation effects, operating loss would have totaled SEK -18.6 M (profit: 1.0) in the fourth quarter and operating expenses would have increased 30.1 percent (19.4).
For full-year 2021, operating loss increased to SEK -53.5 M (-3.5), representing an operating margin of -8.3 percent (-0.5). The weaker result is largely due to lower license revenue, which was partly offset by higher support revenue, as well as increased selling expenses and costs related to the new office premises and increased amortization expense.
Currency effects
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 22 percent in the fourth quarter of 2021, compared with the yearearlier period. In addition, the Group's exchange gains on balance sheet items amounted to SEK 1.8 M (-15.5) in the fourth quarter. Currency effects therefore had a positive impact on net sales and operating profit in the fourth quarter 2021.
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 2.7 M in the fourth quarter of
2021, while a corresponding change in the EUR exchange rate would have impacted consolidated operating profit by approximately +/- SEK 1.8 M.
The Group follows the financial policy established by the Board, whereby exchange-rate fluctuations are not hedged.
Capitalization of development costs
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, 2021, some 211 employees (200) were engaged in research and development, corresponding to 50 percent (49) of the total number of employees.
| Capitalization of development costs | Q4-21 | Q3-21 | Q2-21 | Q1-21 | Q4-20 | Full-year 2021 |
Full-year 2020 |
|---|---|---|---|---|---|---|---|
| Research and development costs | 74.7 | 57.9 | 68.0 | 64.9 | 65.2 | 265.6 | 243.4 |
| Capitalization of development costs | -59.3 | -40.0 | -52.5 | -51.5 | -53.1 | -203.3 | -195.6 |
| Amortization of capitalized development costs | 44.1 | 43.2 | 40.1 | 39.2 | 36.8 | 166.7 | 137.2 |
| Research and development costs | 59.6 | 61.2 | 55.7 | 52.6 | 48.9 | 229.1 | 185.0 |
In 2021, RaySearch continued to invest in both existing products and future products. Overall, research and development costs rose 9.1 percent to SEK 265.6 M (243.4) in 2021, corresponding to 41 percent (37) of the Group's net sales. The increase was attributable to a higher number of employees in research and development.
Development costs of SEK 203.3 M (195.6) were capitalized, increase 3.9 percent, representing 72 percent (80) of total research and development costs.
Amortization of capitalized development costs rose 21.5 percent to SEK 166.7 M (137.2). The increase was attributable to an expansion of development activities, and that amortization periods had commenced for all products, including RayCommand and RayIntelligence.
Research and development costs (after adjustments for capitalization and amortization of development costs) rose 23.8 percent to SEK 229.1 M (185.0).
Amortization and depreciation
In the fourth quarter of 2021, total amortization and depreciation increased 24.6 percent to SEK 69.9 M (56.1), of which amortization of intangible fixed assets accounted for SEK 44.2 M (36.9), mainly related to capitalized development costs. Depreciation of tangible fixed assets amounted to SEK 25.7 M (19.2).
Total amortization and depreciation for the year amounted to SEK 250.2 M (213.8), of which amortization of intangible fixed assets totaled SEK 167.0 M (137.3), mainly related to capitalized development costs. Depreciation of tangible fixed assets amounted to SEK 83.1 M (76.5).
PROFIT AND EARNINGS PER SHARE
In the fourth quarter of 2021, loss after tax totaled SEK -16.0 M (-14.2), representing loss per share of SEK -0.47 (-0.41) before and after dilution. For full-year 2021, loss after tax totaled SEK -47.3 M (-9.1), representing loss per share of SEK -1.38 (-0.26) before and after dilution.
Tax expense for the year amounted to SEK 11.6 M (-2.6), corresponding to an effective tax rate of 19.6 percent (30.5).
CASH FLOW AND LIQUIDITY
In the fourth quarter of 2021, cash flow from operating activities was SEK 55.0 M (51.5) and the change was largely attributable to a decrease in working capital, which mainly comprises various types of receivables from customers, such as accounts receivable and current and long-term unbilled customer receivables where payment plans have been drawn up. In 2021, cash flow from operating activities was SEK 264.8 M (331.5).
At the end of the period, the company's total customer receivables amounted to 57 percent (50) of net sales over the past 12 months. Working capital amounted to 7 percent (12) of net sales over the past 12 months. The decline was attributable to increased payments from customers, including advance payments from customers.
During the fourth quarter, cash flow from investing activities was SEK -77.8 M (-64.1). Investments in intangible fixed assets amounted to SEK -59.3 M (-53.1) and consisted of capitalized development costs for the company's products – RayStation, RayCare, RayCommand and RayIntelligence. Investments in tangible fixed assets amounted to SEK -18.6 M (- 11.0), mainly related to investments in a new head office in Stockholm.
Cash flow from financing activities was SEK 2.1 M (-8.9) for the fourth quarter of 2021 and SEK -82.6 M (-44.0) for the fullyear. The change for the full-year was largely due to a repayment of SEK 50 M on the company's credit facility in the second quarter.
Cash flow for the period was SEK -20.7 M (-21.5) in the fourth quarter, and SEK -72.4 M (61.9) for the full-year. At December 31, 2021, consolidated cash and cash equivalents amounted to SEK 102.5 M (168.7).
FINANCIAL POSITION
At December 31, 2021, RaySearch's total assets amounted to SEK 1,752 M (1,285) and the equity/assets ratio was 37.1 percent (54.0). The change in total assets and the equity/assets ratio was largely attributable to an increase in right-of-use assets related to rented premises following the granting of access to the new head office premises.
Current receivables amounted to SEK 429 M (408). The receivables mainly comprise various types of customer receivables.
RaySearch's credit facilities comprise a revolving loan facility of up to SEK 300 M and an overdraft facility of SEK 50 M, both maturing in May 2022. RaySearch intends to refinance its existing credit facilities. Chattel mortgages amounted to SEK 100 M.
At December 31, 2021, a short-term loan of SEK 0 M (50) was raised under the company's revolving loan facility and SEK 21 M (0) of the credit facility had been drawn.
At December 31, 2021, the Group's net debt amounted to SEK 459.7 M (-22.4). The change was largely due to an increase in lease liabilities following the granting of access to the new head office premises during the fourth quarter.
EMPLOYEES
In 2021, the average number of employees in the Group was 419 (394). At the end of the fourth quarter, the Group had 418 (405) employees, of whom 308 (300) were based in Sweden and 110 (105) in foreign subsidiaries.
PARENT COMPANY
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 compared with if IFRS 16 had been applied.
The Parent Company's current receivables mainly comprise receivables from Group companies and external customers.
SIGNIFICANT EVENTS DURING THE FOURTH QUARTER
Order intake Lanzhou
RaySearch secured a large order for RayStation from Lanzhou Ion Therapy, a Chinese manufacturer of accelerator systems. The total order value was SEK 56 M including a five-year service agreement.
Expanded collaboration with IBA
In October, RaySearch and IBA decided to expand their existing collaboration in proton therapy around the areas of FLASH radiotherapy, proton arc management of uncertainty regarding the location of the tumor.
Expanded collaboration with Mevion
In October, RaySearch and Mevion Medical Systems decided to expand their existing collaboration on the development of treatment planning methods for FLASH radiotherapy with the Mevion S250i Proton Therapy System.
New versions of RayStation and RayCare released
New versions of RaySearch's treatment planning system and oncology information system were launched in December. RayStation 11B offers new features for adaptive workflows, brachytherapy and ion-radiation therapy. RayCare 5B allows clinics to configure and tailor their workflows for radiation therapy.
New head office premises increases total assets
During the fourth quarter, RaySearch relocated its head office to new premises, which increased total consolidated assets by SEK 482 M.
Management change
Torbjörn Wingårdh became CFO of RaySearch on November 15, 2021.
Agreement signed with Proton International Arkansas
In December, RaySearch signed an agreement with Proton International Arkansas to provide RayStation at the UAMS Radiation Oncology Center, which is scheduled to open in 2023. The center will use RayStation as its treatment planning system.
SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
No significant events after the end of the reporting period.
EFFECTS OF THE COVID-19 PANDEMIC
The COVID-19 pandemic is affecting people and companies all over the world and posing a challenge for all businesses. RaySearch is monitoring the situation and the effects of the pandemic closely and is prepared to take action and align the company's operations if needed.
Effects on RaySearch's operations in the fourth quarter of 2021
Sales. The ongoing COVID-19 pandemic had a negative impact on RaySearch's sales also in the fourth quarter due to continued restrictions and rising case numbers. As a result, many hospitals were forced to temporarily re-prioritize and freeze investments in order to handle the COVID-19 pandemic. Market conditions were particularly challenging in North America and some European countries, while the company noted a normalization in Asia.
Delivery capacity. As a software company, RaySearch is well equipped for remote collaboration and both our R&D and delivery capacity have remained relatively unscathed by the COVID-19 pandemic to date.
In the fourth quarter, COVID-19 did not have any major impact on the company's assessment items.
Expected future effects
It is still difficult to say how the ongoing pandemic will affect the coming quarters with any great certainty. The situation has stabilized and is beginning to normalize in many countries, but many countries have also registered an increase in new cases.
In addition, as soon as the vaccination program takes full effect, we expect sales to normalize again since underlying need and demand for effective software solutions for cancer care remain unchanged compared with pre-pandemic levels. Since sales activities have been restricted for some time, however, it may take time before the full sales effect is regained. We see no major challenges in terms of R&D or the company's delivery capacity.
Overall, the company expects that the negative effects of the COVID-19 pandemic on the company's sales and earnings will continue for some months to come. However, due to uncertainty surrounding how long the pandemic will last and the extent of the economic impacts, RaySearch will continue to focus on the company's cash flow and liquidity.
Major unmet need for RaySearch's software solutions unchanged.The underlying need for effective software solutions for cancer care remains unchanged since treatment for cancer patients is a high priority. The company's assessment is that the market and demand for the company's products will normalize and return to previous levels when the COVID-19 pandemic has subsided.
Continued focus on efficiencies and digitization. One effect of the pandemic could be a further acceleration of the ongoing rapid digital transformation. The pandemic has drastically highlighted the major potential and benefits of digital technology, which could be positive for RaySearch's operations in the long term because the company's software solutions enable cancer centers to improve their efficiency.
THE COMPANY'S SHARE
At December 31, 2021, 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 is SEK 0.50 and the company's share capital amounts 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. At December 31, 2021, the total number of voting rights in RaySearch was 110,377,548.
SHARE OWNERSHIP
At December 31, 2021, the number of shareholders in RaySearch was 6,878 according to Euroclear, and the largest shareholders were as follows:
| Class A | Class B | Share | |||
|---|---|---|---|---|---|
| Name | shares | shares | Total shares | capital, % | Votes, % |
| Johan Löf | 6,243,084 | 356,147 | 6,599,231 | 19.2 | 56.9 |
| Invesco fonder | 0 | 4,226,299 | 4,226,299 | 12.3 | 3.8 |
| La Financière de l'Echiquier | 0 | 2,652,567 | 2,652,567 | 7.7 | 2.4 |
| First AP Fund | 0 | 1,982,448 | 1,982,448 | 5.8 | 1.8 |
| Swedbank Robur Funds | 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 |
| Second AP Fund | 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 | 561,194 | 561,194 | 1.6 | 0.5 |
| C WorldWide Asset Management | 0 | 824,190 | 824,190 | 2.4 | 0.7 |
| Total, 10 largest shareholders | 8,454,822 | 13,963,707 | 22,418,529 | 65.4 | 89.2 |
| Others | 153 | 11,864,091 | 11,864,244 | 34.6 | 10.8 |
| Total | 8,454,975 | 25,827,798 | 34,282,773 | 100.0 | 100.0 |
Source: Euroclear
OTHER INFORMATION
2022 ANNUAL GENERAL MEETING
The Annual General Meeting (AGM) of RaySearch Laboratories AB (publ) will be held on Wednesday, May 25, 2022 at 6:00 p.m. at the company's head office premises at Eugeniavägen 18, Stockholm, Sweden. Shareholders wishing to have a matter addressed at the AGM must submit a written request thereof to the Board of Directors. The request should normally be received by the Board of Directors at least seven (7) weeks before the AGM is due to take place.
Proposed dividend
Since the company is in the midst of an expansive and capital-intensive phase, the Board of RaySearch proposes that no dividend be paid for the 2021 fiscal year.
RISKS AND UNCERTAINTIES
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 9-11 and 39-40 of RaySearch's 2020 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.
SEASONAL VARIATIONS
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.
ENVIRONMENT AND SUSTAINABILITY
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 centers improve and save the lives of cancer patients. With our innovative software solutions, we are continuously striving to improve and streamline workflows in clinical environments and to improve treatment outcomes for cancer patients. The customer value we create 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 62-68 of RaySearch's 2020 Annual Report.
REVIEW
This year-end report has not been reviewed by the company's auditors.
The Board of Directors and CEO give their assurance that this year-end 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 23, 2022 The Board of Directors of RaySearch Laboratories AB (publ)
Lars Wollung Chairman of the Board Johan Löf CEO and Board member Carl Filip Bergendal Board member
Britta Wallgren Board member Hans Wigzell Board member Johanna Öberg Board member
FOR FURTHER INFORMATION, PLEASE CONTACT:
Johan Löf, CEO Tel: +46 (0)8 510 530 00 E-mail: [email protected] Torbjörn Wingårdh, CFO Tel: +46 (0)70 00 394 76 E-mail: [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 23, 2022 at 7:45 a.m. CET.
WEBCAST
CEO Johan Löf and CFO Torbjörn Wingårdh will present RaySearch's year-end report for January-December 2021 at a webcast to be held in English on Wednesday, February 23, 2022 between 10:00-10:30 p.m. CET.
For login details to the webcast, please register on: https://raysearchlabs.creo.se/220223
FINANCIAL CALENDAR
| 2021 Annual Report (published on the website) | April 29, 2022 |
|---|---|
| Interim report for the first quarter, 2022 | May 18, 2022 |
| Annual General Meeting 2022 | May 25, 2022 |
| Interim report for the second quarter, 2022 | August 25, 2022 |
| Interim report for the third quarter, 2022 | November 17, 2022 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME IN SUMMARY
| AMOUNTS IN SEK 000s | OCT-DEC | JAN-DEC | ||||
|---|---|---|---|---|---|---|
| Note | 2021 | 2020 | 2021 | 2020 | ||
| Net sales 2.3 |
188,040 | 159,835 | 641,140 | 651,612 | ||
| Cost of goods sold1 | -9,994 | -9,554 | -49,458 | -43,374 | ||
| Gross profit | 178,046 | 150,281 | 591,682 | 608,238 | ||
| Other operating income | 5,269 | 11,900 | 32,456 | 18,283 | ||
| Selling expenses | -100,054 | -73,639 | -304,613 | -291,229 | ||
| Administrative expenses | -37,029 | -26,790 | -122,237 | -106,290 | ||
| Research and development costs | -59,566 | -48,868 | -229,088 | -185,041 | ||
| Other operating expenses | -3,428 | -27,476 | -21,725 | -47,427 | ||
| Operating loss | -16,762 | -14,592 | -53,525 | -3,466 | ||
| Profit/loss from financial items | -2,370 | 549 | -5,332 | -3,012 | ||
| Loss before tax | -19,132 | -14,043 | -58,857 | -6,478 | ||
| Tax | 3,177 | -121 | 11,555 | -2,602 | ||
| Loss for the period2 | -15,955 | -14,164 | -47,302 | -9,080 | ||
| Other comprehensive income | ||||||
| Items to be reclassified to profit or loss | ||||||
| Translation difference of foreign operations for the period | 884 | -1,351 | 2,274 | -2,038 | ||
| Comprehensive income for the period2 | -15,071 | -15,515 | -45,028 | -11,118 | ||
| Loss per share before and after dilution (SEK) | -0.47 | -0.41 | -1.38 | -0.26 |
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.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY IN SUMMARY
| AMOUNTS IN SEK 000s | OCT-DEC | JAN-DEC | ||
|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |
| Opening balance according to adopted Annual Report | 664,394 | 709,865 | 694,351 | 705,468 |
| Loss for the period | -15,955 | -14,164 | -47,302 | -9,080 |
| Translation difference for the period | 884 | -1,351 | 2,274 | -2,037 |
| Closing balance | 649,323 | 694,350 | 649,323 | 694,351 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION IN SUMMARY
| AMOUNTS IN SEK 000s Note |
Dec 31, 2021 |
Dec 31, 2020 |
|---|---|---|
| ASSETS | ||
| Intangible fixed assets | 523,109 | 486,817 |
| Tangible fixed assets | 666,820 | 186,768 |
| Deferred tax assets | 22,825 | 7,226 |
| Other long-term receivables | 7,856 | 26,928 |
| Total fixed assets | 1,220,610 | 707,739 |
| Inventories | 31,571 | 9,110 |
| Current receivables | 397,440 | 399,309 |
| Cash and cash equivalents | 102,535 | 168,746 |
| Total current assets | 531,546 | 577,165 |
| TOTAL ASSETS | 1,752,156 | 1,284,904 |
| EQUITY AND LIABILITIES | ||
| Equity | 649,323 | 694,351 |
| Deferred tax liabilities | 107,784 | 108,749 |
| Long-term interest-bearing liabilities | 491,896 | 53,788 |
| Total long-term liabilities | 599,680 | 162,537 |
| Accounts payable | 48,774 | 19,864 |
| Current interest-bearing liabilities | 70,381 | 92,519 |
| Other current liabilities | 383,998 | 315,633 |
| Total current liabilities | 503,153 | 428,016 |
| TOTAL EQUITY AND LIABILITIES | 1,752,156 | 1,284,904 |
CONSOLIDATED STATEMENT OF CASH FLOW IN SUMMARY
| AMOUNTS IN SEK 000s | OCT-DEC | JAN-DEC | ||
|---|---|---|---|---|
| Note | 2021 | 2020 | 2021 | 2020 |
| Loss before tax | -19,132 | -14,043 | -58,857 | -6,478 |
| Adjusted for non-cash items1) | 64,390 | 68,565 | 227,217 | 234,223 |
| Taxes paid | 23,164 | -7,061 | 13,335 | -28,212 |
| Cash flow from operating activities before changes in working capital | 68,422 | 47,461 | 181,695 | 199,533 |
| Cash flow from changes in operating receivables | -103,835 | -88,943 | 27,054 | 52,152 |
| Cash flow from changes in operating liabilities | 90,401 | 92,987 | 56,004 | 79,823 |
| Cash flow from operating activities | 54,988 | 51,505 | 264,753 | 331,508 |
| Cash flow from investing activities | -77,843 | -64,094 | -254,530 | -225,593 |
| Cash flow from financing activities | 2,116 | -8,909 | -82,600 | -44,025 |
| Cash flow for the period | -20,739 | -21,498 | -72,377 | 61,890 |
| Cash and cash equivalents at the beginning of the period | 120,589 | 194,140 | 168,746 | 113,858 |
| Exchange-rate difference in cash and cash equivalents | 2,685 | -3,896 | 6,166 | -7,002 |
| Cash and cash equivalents at the end of the period2) | 102,535 | 168,746 | 102,535 | 168,746 |
1 These amounts mainly include amortization of capitalized development costs, right-of-use assets and unrealized currency effects.
PARENT COMPANY INCOME STATEMENT IN SUMMARY
| AMOUNTS IN SEK 000s | OCT-DEC JAN-DEC |
|||
|---|---|---|---|---|
| Note | 2021 | 2020 | 2021 | 2020 |
| Net sales | 138,553 | 126,235 | 470,496 | 489,623 |
| Cost of goods sold1) | -10,554 | -4,446 | -25,847 | -24,095 |
| Gross profit | 127,999 | 121,789 | 444,649 | 465,528 |
| Other operating income | 5,198 | 11,007 | 31,904 | 9,163 |
| Selling expenses Administrative expenses |
-56,086 -38,854 |
-43,125 -26,848 |
-177,336 -124,241 |
-167,012 -106,702 |
| Research and development costs | -79,523 | -65,302 | -270,868 | -243,950 |
| Other operating expenses | -3,249 | -27,113 | -20,704 | -38,713 |
| Operating loss | -44,515 | -29,592 | -116,596 | -81,686 |
| Profit/loss from financial items | -536 | -377 | -1,618 | 17 |
| Loss after financial items | -45,051 | -29,969 | -118,214 | -81,669 |
| Appropriations | 32,615 | 82,306 | 32,615 | 82,306 |
| Profit/loss before tax | -12,436 | 52,337 | -85,599 | 637 |
| Tax on profit/loss for the period | 1,610 | -12,426 | 15,953 | -4,136 |
| Profit/loss for the period | -10,826 | 39,911 | -69,646 | -3,499 |
1 Comprises costs for hardware and royalties but not amortization of capitalized development costs, which is included in research and development costs.
PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME
| AMOUNTS IN SEK 000s | OCT-DEC | JAN-DEC | ||
|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |
| Profit/loss for the period | -10,826 | 39,911 | -69,646 | -3,499 |
| Other comprehensive income | - | - | - | - |
| Comprehensive income for the period | -10,826 | 39,911 | -69,646 | -3,499 |
PARENT COMPANY BALANCE SHEET IN SUMMARY
| AMOUNTS IN SEK 000s Note |
Dec 31, 2021 |
Dec 31, 2020 |
|---|---|---|
| ASSETS | ||
| Intangible fixed assets | 575 | 808 |
| Tangible fixed assets | 69,225 | 43,863 |
| Shares and participations | 3,958 | 1,911 |
| Deferred tax assets | 22,573 | 5,879 |
| Long-term receivables from Group companies | - | 25,426 |
| Other long-term receivables | 7,650 | 9,411 |
| Total fixed assets | 103,981 | 87,298 |
| Inventories | 6,642 | 176 |
| Current receivables | 364,531 | 356,270 |
| Cash and bank balances | 11,165 | 107,711 |
| Total current assets | 382,338 | 464,157 |
| TOTAL ASSETS | 486,319 | 551,455 |
| 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 | 202,699 | 206,198 |
| Loss for the year | -69,646 | -3,499 |
| Total non-restricted equity | 133,053 | 202,699 |
| Total equity | 193,824 | 263,470 |
| Untaxed reserves | - | 32,615 |
| Long-term liabilities | 6,447 | 879 |
| Accounts payable1) | 49,215 | 30,156 |
| Current interest-bearing liabilities | 21,268 | 49,649 |
| Other current liabilities1) | 215,565 | 174,686 |
| Total current liabilities | 286,048 | 254,491 |
| TOTAL EQUITY AND LIABILITIES | 486,319 | 551,455 |
1 The reclassification of comparative figures is based on other current liabilities to accounts payable pertaining to intra-Group accounts payable of SEK 11.1 M.
NOTES, GROUP
NOTE 1 ACCOUNTING POLICIES
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 2020 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.
NOTE 2 REVENUE FROM CONTRACTS WITH CUSTOMERS
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 | OCT-DEC | ||||
|---|---|---|---|---|---|
| 2021 | 2020 | Change | Full-year 2021 |
Full-year 2020 |
|
| Revenue by type | |||||
| Licenses | 104,970 | 81,078 | 29.5% | 306,605 | 340,802 |
| Support | 71,782 | 63,897 | 12.3% | 268,526 | 243,913 |
| Hardware | 9,195 | 10,232 | -10.1% | 51,496 | 48,026 |
| Training and other | 2,093 | 4,628 | -54.8% | 14,513 | 18,871 |
| Total revenue from contracts with customers | 188,040 | 159,835 | 17.6% | 641,140 | 651,612 |
| Revenue by geographic market | |||||
| North America | 60,247 | 43,079 | 39.9% | 224,178 | 241,476 |
| APAC | 62,289 | 53,793 | 15.8% | 173,121 | 162,078 |
| Europe and rest of the world | 65,504 | 62,963 | 4.0% | 243,841 | 248,058 |
| Total revenue from contracts with customers | 188,040 | 159,835 | 17.6% | 641,140 | 651,612 |
| Revenue by date for revenue recognition | |||||
| Goods/services transferred at a point in time | 114,165 | 91,310 | 25.0% | 358,101 | 388,828 |
| Services transferred over time | 73,875 | 68,525 | 7.8% | 283,039 | 262,784 |
| Total revenue from contracts with customers | 188,040 | 159,835 | 17.6% | 641,140 | 651,612 |
YEAR-END REPORT 2021
| AMOUNTS IN SEK 000s | JAN-DEC | ||||
|---|---|---|---|---|---|
| 2021 | 2020 Change | Full-year 2021 |
Full-year 2020 |
||
| Revenue by type | |||||
| Licenses | 306,605 | 340,802 | -10.0% | 306,605 | 340,802 |
| Support | 268,526 | 243,913 | 10.1% | 268,526 | 243,913 |
| Hardware | 51,496 | 48,026 | 7.2% | 51,496 | 48,026 |
| Training and other | 14,513 | 18,871 | -23.1% | 14,513 | 18,871 |
| Total revenue from contracts with customers | 641,140 | 651,612 | -1.6% | 641,140 | 651,612 |
| Revenue by geographic market | |||||
| North America | 224,178 | 241,476 | -7.2% | 224,178 | 241,476 |
| APAC | 173,121 | 162,078 | 6.8% | 173,121 | 162,078 |
| Europe and rest of the world | 243,841 | 248,058 | -1.7% | 243,841 | 248,058 |
| Total revenue from contracts with customers | 641,140 | 651,612 | -1.6% | 641,140 | 651,612 |
| Revenue by date for revenue recognition | |||||
| Goods/services transferred at a point in time | 358,101 | 388,828 | -7.9% | 358,101 | 388,828 |
| Services transferred over time | 283,039 | 262,784 | 7.7% | 283,039 | 262,784 |
| Total revenue from contracts with customers | 641,140 | 651,612 | -1.6% | 641,140 | 651,612 |
NOTE 3 ESTIMATES
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.
NOTE 4 FINANCIAL INSTRUMENTS
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 2021, the credit loss provision amounted to SEK 39.1 M (23.6), corresponding to 11 percent (7) of total customer receivables. The increased credit loss provision despite lower total receivables was mainly related to a customer in the US. While the Group's credit losses have historically been limited, incurred credit losses have increased over the past five years to about 1.1 percent of the company's average customer receivables.
NOTE 5 RELATED-PARTY TRANSACTIONS
In March, the Parent Company issued a short-term loan of SEK 200,000 to Vinstandelsstiftelsen RayFoundation on market terms. The short-term loan was repaid in full to the Parent Company in the second quarter.
In 2021, in addition to his Board assignment, Chairman of the Board Lars Wollung has also served as senior advisor to the company on a consultancy basis. The consultancy engagement is remunerated on market terms with a fixed fee of SEK 250,000 per quarter.
NOTE 6 PLEDGED ASSETS IN THE GROUP AND PARENT COMPANY
| AMOUNTS IN SEK 000s | Dec 31, 2021 | Dec 31, 2020 |
|---|---|---|
| Chattel mortgages | 100,000 | 100,000 |
| Guarantees | 31,046 | 14,340 |
The year-on-year increase was largely attributable to bank guarantees issued for the new office premises.
GROUP QUARTERLY OVERVIEW
| 2021 | 2020 | |||||||
|---|---|---|---|---|---|---|---|---|
| AMOUNTS IN SEK 000s | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Order intake | ||||||||
| Total order intake | 345,028 | 127,853 | 189,750 | 145,131 | 239,125 | 138,480 | 177,133 | 300,018 |
| Income statement | ||||||||
| Net sales | 188,040 | 136,419 | 154,579 | 162,102 | 159,835 | 119,130 | 163,758 | 208,889 |
| Change in sales, % | 17.6 | 14.5 | -5.6 | -22.4 | -31.8 | -17.5 | -13.7 | 20.7 |
| Operating profit/loss | -16,762 | -26,561 | -22,463 | 12,261 | -14,592 | -29,477 | -10,954 | 51,557 |
| Operating margin, % | -8.9 | -19.5 | -14.5 | 7.6 | -9.1 | -24.7 | -6.7 | 24.7 |
| Profit/loss for the period | -15,955 | -21,990 | -16,467 | 7,110 | -14,164 | -26,182 | -9,196 | 40,462 |
| Net margin, % | -8.5 | -16.1 | -10.7 | 4.4 | -8.9 | -22.0 | -5.6 | 19.4 |
| Cash flow | ||||||||
| Operating activities | 54,988 | 47,356 | 58,077 | 104,332 | 51,505 | 78,486 | 135,443 | 66,074 |
| Investing activities | -77,843 | -45,569 | -70,843 | -60,275 | -64,094 | -45,372 | -55,913 | -60,214 |
| Financing activities | 2,116 | -11,875 | -61,624 | -11,217 | -8,909 | -11,394 | -13,618 | -10,104 |
| Cash flow for the period | -20,739 | -10,088 | -74,390 | 32,840 | -21,498 | 21,720 | 65,912 | -4,244 |
| Capital structure | ||||||||
| Equity/assets ratio, % | 37.1 | 56.7 | 57.8 | 52.7 | 54.0 | 57.0 | 56.2 | 55.8 |
| Net debt | 459,742 | -52,983 | -50,385 | -65,952 | -22,439 | -31,476 | 206 | 73,231 |
| Debt/equity ratio | 0.7 | -0.1 | -0.1 | -0.1 | 0.0 | 0.0 | 0.0 | 0.1 |
| Net debt/EBITDA | 2.3 | -0.3 | -0.3 | -0.4 | -0.1 | -0.1 | 0.0 | 0.3 |
| Per share data, SEK | ||||||||
| Earnings/loss per share before dilution | -0.47 | -0.64 | -0.48 | 0.21 | -0.41 | -0.76 | -0.27 | 1.18 |
| Earnings/loss per share after dilution | -0.47 | -0.64 | -0.48 | 0.21 | -0.41 | -0.76 | -0.27 | 1.18 |
| Equity per share | 18.94 | 19.38 | 20.00 | 20.49 | 20.25 | 20.71 | 21.48 | 21.79 |
| Share price at the end of the period | 56.5 | 61.50 | 87.40 | 89.50 | 82.70 | 87.50 | 86.50 | 57.60 |
| 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 | 419 | 418 | 414 | 412 | 404 | 399 | 391 | 386 |
GROUP, ROLLING 12 MONTHS
| AMOUNTS IN SEK 000s | Jan 2021- | Oct 2020- | Jul 2020- | Apr 2020- | Jan 2020- | Oct 2019- | Jul 2019- | Apr 2019- |
|---|---|---|---|---|---|---|---|---|
| Dec 2021 | Sep 2021 | Jun 2021 | Mar 2021 | Dec 2020 | Sep 2020 | Jun 2020 | Mar 2020 | |
| Order intake | ||||||||
| Total order intake | 807,762 | 701,859 | 712,486 | 699,868 | 854,755 | 892,846 | 951,160 | 1,144,639 |
| Income statement | ||||||||
| Net sales | 641,140 | 612,935 | 595,646 | 604,825 | 651,612 | 726,276 | 751,495 | 777,395 |
| Operating profit/loss | -53,525 | -51,355 | -54,271 | -42,762 | -3,466 | 33,594 | 56,726 | 96,489 |
| Operating margin, % | -8.3 | -8.4 | -9.1 | -7.1 | -0.5 | 4.6 | 7.5 | 12.4 |
| Cash flow | ||||||||
| Cash flow | -72,380 | -73,136 | -41,328 | 98,972 | 61,890 | 91,165 | 55,970 | -5,811 |
| Cash flow adjusted for repayment of bank loans |
-22,380 | -23,136 | 8,672 | 98,972 | 61,890 | 91,165 | 55,970 | 69,189 |
DEFINITIONS OF KEY RATIOS
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, | Sales, operating profit or other results measured over the past 12- | This measure is used to more clearly illustrate the trends for sales, |
| operating profit or other | month period | 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 |
CALCULATION OF FINANCIAL MEASURES NOT INCLUDED IN THE IFRS FRAMEWORK
| AMOUNTS IN SEK 000s | Dec 31, 2021 | Dec 31, 2020 |
|---|---|---|
| Working capital | ||
| Accounts receivable (current billed customer receivables) | 156,811 | |
| Current unbilled customer receivables | 143,941 | |
| Long-term unbilled customer receivables | 26,928 | |
| Inventories | 31,571 | 9,110 |
| Other current receivables (excl. tax) | 74,980 | |
| Accounts payable | -19,864 | |
| Other current liabilities (excl. tax) | -380,475 | -312,791 |
| Working capital | 43,896 | 79,115 |
| AMOUNTS IN SEK 000s | Dec 31, 2021 | Dec 31, 2020 |
| Net debt | ||
| Current interest-bearing liabilities | 70,381 | 92,519 |
| Long-term interest-bearing liabilities | 491,896 | 53,788 |
| Cash and cash equivalents | -102,535 | -168,746 |
| Net debt | 459,742 | -22,439 |
| AMOUNTS IN SEK 000s | Full-year 2021 |
Full-year 2020 |
| EBITDA | ||
| Operating loss | -53,525 | -3,466 |
| Amortization and depreciation | 250,184 | 213,293 |
| EBITDA | 196,659 | 209,827 |
| CHANGE IN SALES AT UNCHANGED CURRENCIES | Full-year 2021 |
Full-year 2020 |
| Net sales for the year | 651,612 | |
| Currency adjustment | 13,805 | |
| Adjusted Net sales | 665,417 | |
| Net sales, preceding year | 741,584 | |
| Organic growth | 1.6% | -10.3% |
YEAR-END REPORT 2021
HEAD OFFICE
RaySearch Laboratories AB (publ) Box 3297 SE-103 65 Stockholm, Sweden
STREET ADDRESS
Eugeniavägen 18 SE-113 68 Stockholm, Sweden Tel: +46 (0)8 510 530 00 raysearchlabs.com Corp. Reg. No. 556322-6157
ABOUT RAYSEARCH
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 now used by more than 2,600 centers in more than 65 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.
VISION AND MISSION
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.
STRATEGY
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.
BUSINESS MODEL
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.
