Elekta

Annual Report • Jun 2, 2015

Year-end report May – April 2014/15

• Results for the fourth quarter and the full year were significantly below expectations. A comprehensive action program has been initiated with the objectives to return to growth, improve profitability, reduce costs and continue to focus on cash flow.
• Order bookings decreased 3 percent to SEK 11,907 M (12,253), equivalent to a decrease of 13 percent based on constant exchange rates. This was primarily due to weak performance in the US.
• Net sales increased 1 percent to SEK 10,839 M (10,694), equivalent to a decrease of 8 percent based on constant exchange rates.
• EBITA before non-recurring items amounted to SEK 1,306 M (2,183) and SEK 1,472 M adjusted for realized and anticipated bad debt losses of SEK 166 M. Currency effects were neutral.
• Net income amounted to SEK 558 M (1,152). Earnings per share amounted to SEK 1.45 (3.01) before dilution and SEK 1.45 (3.00) after dilution.
• Cash flow after continuous investments amounted to SEK 867 M (494), representing a cash conversion of 81 percent (32).
• In accordance with the dividend policy, the Board of Directors proposes a dividend of SEK 0.50 (2.00) per share for 2014/15.
• Niklas Savander stepped down as CEO on May 13. Tomas Puusepp was appointed as new CEO on the same date.
• A new organization and changes in the Executive Management team were announced on June 2.

Outlook

A comprehensive action program has been initiated with the objectives to return to growth, improve profitability, reduce costs and continue to focus on cash flow. We expect negative growth in net sales to continue during the first half of 2015/16, while growth is expected to return during the second half of 2015/16.

Group summary	3 months	3 months	12 months	12 months
	Feb - Apr	Feb - Apr	May - Apr	May - Apr	Change
SEK M	2014/15	2013/14	2014/15	2013/14
Order bookings	3,856	3,901	11,907	12,253	-13% *
Net sales	3,855	3,954	10,839	10,694	-8% *
EBITA before non-recurring items	601	1,288	1,306	2,183
Operating result	499	1,117	937	1,727
Net income	343	819	558	1,152
Cash flow after continuous investments	1,408	1,044	867	494
Earnings per share after dilution, SEK	0.90	2.13	1.45	3.00

* Compared to last fiscal year based on constant exchange rates.

This report includes forward-looking statements including, but not limited to, statements relating to operational and financial performance, market conditions, and other similar matters. These forward-looking statements are based on current expectations about future events. Although the expectations described in these statements are assumed to be reasonable, there is no guarantee that such forward-looking statements will materialize or are accurate. Since these statements involve assumptions and estimates that are subject to risks and uncertainties, results could differ materially from those set out in the statement. Some of these risks and uncertainties are described further in the section "Risks and uncertainties". Elekta undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law or stock exchange regulations.

President and CEO comments

Our financial performance in fiscal year 2014/15 was significantly below expectations. We have initiated a comprehensive action program with the objectives to return to growth, improve profitability, reduce costs and continue to focus on cash flow. Our performance in the US was weak and actions have been initiated to address both growth and profitability. Results were also below expectations in some emerging markets due to weak market conditions, political developments, war and civil unrest.

The overall demand and underlying medical need for radiation therapy remain healthy, although market growth has been lower the last couple of years, compared to historical levels. Business risks have increased in some emerging markets, particularly the Middle East and North Africa, where Elekta has a significant footprint. The current global market growth is at low- to mid-single digit levels.

Order bookings

In 2014/15 order bookings declined 3 percent in SEK and 13 percent based on constant exchange rates. This includes one-off cancellations of SEK 700 M. Adjusted for these cancellations, order bookings decreased by 8 percent based on constant exchange rates.

Regional development in order bookings was mixed and the overall share of large orders declined compared with last year. In the US order bookings declined 25 percent based on constant exchange rates. In Western Europe order bookings in most countries showed growth in low- to mid-single digits, except in the UK. In the Middle East and Northern Africa order bookings declined due to civil unrest and war. Asia Pacific ended the year with strong order bookings, mainly driven by very strong performance in China and Australia. The Japanese market as a whole declined. Our order bookings in Japan were stable, with increased market share as a result. Our global service and support organization showed good development.

Net sales and EBITA

Net sales increased 1 percent in SEK but declined 8 percent based on constant exchange rates. EBITA before non-recurring items amounted to SEK 1,306 M (2,183). EBITA was SEK 1,472 M adjusted for realized bad debt losses and higher bad debt provisions primarily from projects in Iraq and Libya.

Cash flow

Cash flow after continuous investments improved significantly compared with last year and amounted to SEK 867 M (494). The improvement is primarily driven by reduced net working capital. Net working capital in relation to net sales improved to 8 (14) percent. Our efforts to reduce working capital and focus on cash flow will continue. Cash conversion was 81 percent (32).

New organization and comprehensive action program

We have initiated a comprehensive action program with the objectives to return to growth, improve profitability, reduce costs and continue to focus on cash flow. As part of this program, we are making the following changes to the organization:

Our global sales, marketing, service and customer support activities will be brought together under Ian Alexander as Chief Commercial Officer (CCO). The new commercial organization will focus on improving customer service and support activities as well as strengthen Elekta's global reach and brand.

All products and solutions will be managed by our Chief Operating Officer (COO), Johan Sedihn, who will be responsible for competitiveness of products and solutions, for research and development, manufacturing and supply chain management, as well as for improving effectiveness and cost efficiency in our operations.

In addition to these changes we have also speeded up the implementation of our strategic agenda. We will announce further details of our cost reduction program during our Capital Markets Day.

Product development

One of our major strategic development projects has successfully been completed with the launch of Leksell Gamma Knife® Icon™. Icon is the most precise radiosurgery device on the market and the only one with ultra-precise micro-radiosurgery capabilities. The system introduces a number of new innovations, such as integrated imaging and software to continuously control the dose delivery. It also makes it possible to treat patients with or without a frame, while assuring the highest level of precision. Addressing the growing radiosurgery market, Icon makes Gamma Knife radiosurgery more flexible with unparalleled throughput, allowing more clinics to implement a cranial radiosurgery program. The introduction of Icon completes Elekta's industry-leading offering of the most advanced and effective solutions for stereotactic radiosurgery and radiation therapy.

Long-term fundamentals remain

While markets currently are growing at a lower rate than historic average, the long-term market fundamentals, with an underlying medical need for cancer care and radiation therapy, offer favorable long-term growth prospects. We remain confident that our substantial investments in R&D will bring improved clinical outcomes to patients, as well as improved growth and profitability for the company.

Tomas Puusepp, President and CEO Presented amounts refer to the fiscal year 2014/15 and amounts within parentheses indicate comparative values for the previous fiscal year (2013/14) unless otherwise stated.

Order bookings and order backlog

Order bookings decreased 3 percent to SEK 11,907 M (12,253) and decreased 13 percent based on constant exchange rates. This includes one-off cancellations of SEK 700 M. These are related to projects in North America where hospital consolidation has led to order cancellations, as well as projects in Latin America and India that are not making sufficient progress and are not expected to be completed in a reasonable time frame, primarily due to customers' financing difficulties.

Order backlog was SEK 17,087 M, compared to SEK 13,609 M on April 30, 2014. Order backlog is converted at closing exchange rates. The translation of the backlog at exchange rates on April 30, 2015 compared to exchange rates on April 30, 2014 resulted in a positive translation difference of SEK 2,397 M.

Order bookings	3 months	3 months		12 months	12 months
	Feb - Apr	Feb - Apr	Change	May - Apr	May - Apr	Change	Change *
SEK M	2014/15	2013/14		2014/15	2013/14
North and South America	1,397	1,543	-9%	3,952	4,491	-12%	-25%
Europe, Middle East and Africa	1,235	1,539	-20%	4,470	4,620	-3%	-9%
Asia Pacific	1,224	819	49%	3,485	3,142	11%	-1%
Group	3,856	3,901	-1%	11,907	12,253	-3%	-13%

* Compared to last fiscal year based on constant exchange rates.

Regional development

North and South America

The US market is mainly a replacement market with growth primarily in services and software. Hospital consolidation continues and is driving the market towards more comprehensive solutions and larger projects resulting in greater volatility.

Elekta's order bookings decreased 12 percent during the period, corresponding to a 25 percent decrease based on constant exchange rates. Order bookings in the US was significantly down mainly due to fewer large orders. Elekta's performance in Latin America was strong in the fourth quarter resulting in doubledigit growth in order bookings for the full fiscal year.

Elekta's contribution margin in the region amounted to 30 percent (33) in the period. The decline is due to lower net sales and unfavorable product mix mainly related to less software sales.

Europe, Middle East and Africa

Western European markets are growing in line with general economic development. Emerging markets are growing at a slower rate than historical levels due to factors such as political instability and weak economic development.

Elekta's order bookings decreased by 3 percent during the period, corresponding to a 9 percent decrease based on constant exchange rates. This is partly due to difficult comparisons with large orders booked in Algeria and Iraq in the previous fiscal year.

For Elekta, most markets in Western Europe, except the UK, were stable. In Emerging Markets, order intake was mixed. Russia showed strong growth in the fourth quarter. Elekta's order bookings in Sub-Sahara Africa grew with high single digits for the year. The Middle East and most of Northern Africa declined significantly due to civil unrest and war. During the year, Elekta won a significant order from Turkey's Ministry of Health.

Elekta's contribution margin in the region amounted to 27 percent (34) in the period. The decline is due to negative growth as well as price pressure in Emerging Markets on linear accelerators.

Asia Pacific

Markets in Asia Pacific have had mixed development. Demand in China increased, while the markets in Japan and India declined during the year. Development in other markets in Asia Pacific was varied, but has generally been affected by weaker economic development and the strengthening of the US dollar.

Order bookings increased 11 percent during the period, corresponding to a 1 percent decrease based on constant exchange rates. In the fourth quarter, order bookings in Asia Pacific grew 23 percent, based on constant exchange rates. Growth was particularly strong in China and Australia. For the full year, Elekta recorded mid-single digit growth in China. In Japan, Elekta showed stable development and expanded its market share. Order bookings in Far East Asia was weak. During the period, Versa HD® was cleared for sale and marketing in both Japan and China.

Elekta's contribution margin in the region amounted to 23 percent (27) in the period. The margin decrease is related to the lower net sales, unfavorable product mix and price pressure. Margins in China improved slightly.

Net sales	3 months	3 months		12 months	12 months
	Feb - Apr	Feb - Apr	Change	May - Apr	May - Apr		Change Change *
SEK M	2014/15	2013/14		2014/15	2013/14
North and South America	1,348	1,132	19%	3,651	3,328	10%	-4%
Europe, Middle East and Africa	1,276	1,722	-26%	3,829	4,220	-9%	-14%
Asia Pacific	1,231	1,100	12%	3,359	3,146	7%	-3%
Group	3,855	3,954	-3%	10,839	10,694	1%	-8%

Net sales and earnings

* Compared to last fiscal year based on constant exchange rates.

Net sales increased 1 percent to SEK 10,839 M (10,694), equivalent to a decrease of 8 percent based on constant exchange rates.

Gross margin was 40 percent (43). The margin decrease is mainly a result of lower sales volumes and an unfavorable product mix.

Operating expenses increased by approximately 3 percent over the previous year based on constant exchange rates.

R&D expenditure, before capitalization of development costs, continue to be high in accordance with ongoing investment programs and amounted to SEK 1,421 M (1,202), equal to 13 percent (11) of net sales. Capitalization and amortization of development costs in the R&D function amounted to a net of SEK 469 M (335). Selling and administrative expenses amounted to SEK 2,383 M (1,974) corresponding to 22 percent (18) of net sales.

EBITA before non-recurring items amounted to SEK 1,306 M (2,183). The effect from changes in exchange rates were neutral, including hedges. EBITA before non-recurring items was SEK 1,472 M adjusted for realized and anticipated bad debt losses of SEK 166 M, predominantly from projects in Iraq and Libya, and higher bad debt provisions due to increased risk.

Operating result was SEK 937 M (1,727). Operating margin amounted to 9 percent (16).

Net financial items amounted to SEK -221 M (-225).

Profit before tax amounted to SEK 716 M (1,502). Tax amounted to SEK -158 M (-350). Net income amounted to SEK 558 M (1,152). Earnings per share amounted to SEK 1.45 (3.01) before dilution and SEK 1.45 (3.00) after dilution. Return on shareholders' equity amounted to 9 percent (21) and return on capital employed amounted to 9 percent (17).

Investments and depreciation

Continuous investments increased to SEK 956 M (781) with investments in intangible assets increasing to SEK 679 M (492). Investments in intangible assets are mainly related to ongoing R&D programs. Amortization of intangible assets and depreciation of tangible fixed assets amounted to a total of SEK 512 M (414).

Capitalized development costs	3 months	3 months	12 months	12 months
	Feb - Apr	Feb - Apr	May - Apr	May - Apr
SEK M	2014/15	2013/14	2014/15	2013/14
Capitalization of development costs	198	132	683	489
of which R&D	197	131	680	484
Amortization of capitalized development costs	-69	-41	-236	-172
of which R&D	-62	-36	-211	-149
Capitalized development costs, net	129	91	447	317
of which R&D	135	95	469	335

Working capital

Net working capital decreased to SEK 881 M (1,449) corresponding to 8 (14) percent of net sales. The reduction in working capital came primarily from changes in Days Sales Outstanding (DSO) which improved by 27 days to 76 days during the year. The improvement came mainly from North America. The lower than expected sales led to an increased inventory of finished goods.

* Days Sales Outstanding (DSO) is calculated as (Accounts receivable + Accrued income - Advances from customers - Prepaid income)/(12 months rolling net sales/365).

Working capital	Apr 30,	Apr 30,
SEK M	2015	2014
Working capital assets
Inventories	1,297	1,078
Accounts receivable	4,207	4,197
Accrued income	1,895	1,699
Other operating receivables	695	566
Sum working capital assets	8,094	7,540
Working capital liabilities
Accounts payable	1,262	1,295
Advances from customers	2,165	1,686
Prepaid income	1,673	1,200
Accrued expenses	1,789	1,526
Other operating liabilities	324	384
Sum working capital liabilities	7,213	6,091
Net working capital	881	1,449
% of 12 months net sales	8%	14%

Cash flow

Cash flow after continuous investments increased by SEK 373 M to SEK 867 M (494) including a negative effect of SEK 100 M from payments related to the restructuring program. Cash flow from operating activities improved to SEK 1,823 M (1,275) mainly as an effect of reduced working capital of SEK 524 M.

The high level of investment continues and has affected cash flow negatively by SEK 175 M compared to last year.

Cash flow (extract)	3 months		3 months 12 months 12 months
	Feb - Apr	Feb - Apr	May - Apr	May - Apr
SEK M	2014/15	2013/14	2014/15	2013/14
Operating cash flow	748	1,271	1,299	1,692
Change in working capital	917	-40	524	-417
Cash flow from operating activities	1,665	1,231	1,823	1,275
Continuous investments	-256	-187	-956	-781
Cashflow after continuous investments	1,408	1,044	867	494
Cash conversion*			81%	32%

* Cash conversion is calculated as cash flow after continuous investments divided by net income adjusted by depreciation and amortization.

Financial position

Cash and cash equivalents amounted to SEK 3,265 M (2,247) and interest-bearing liabilities amounted to SEK 6,033 M (4,486). Thus, net debt amounted to SEK 2,768 M (2,239). Net debt/equity ratio was 0.42 (0.36).

The balance sheet has been significantly affected by changes in exchange rates. The exchange rate effect from the translation of cash and cash equivalents amounted to SEK 153 M (70). The translation difference in long-term interest-bearing liabilities amounted to SEK 548 M (3). Shareholder's equity was affected by exchange rate differences amounting to SEK 746 M (360).

The change in unrealized exchange rate effects from cash flow hedges amounted to SEK -182 M (-9) and is reported in other comprehensive income. Closing balance of unrealized exchange rate effects from cash flow hedges amounted to SEK -118 M (62) exclusive of tax.

Restructuring program

The restructuring program which was launched at the end of last year has progressed according to plan. This has been finalized and the restructuring provision of SEK 100 M has been fully utilized during the year.

Acquisitions

Acquisition of Turkish distributor

On July 24, 2014, Elekta acquired 100 percent of the shares in Mesi Medikal (Mesi), a leading distributor of radiation oncology solutions in Turkey. The acquisition significantly strengthens Elekta's market position in a country with a shortage of radiotherapy devices and software and a growing incidence of cancer. The acquisition price consists of a fixed amount of approximately SEK 65 M and a maximum variable amount of approximately SEK 25 M. According to a preliminary purchase price allocation goodwill and intangible assets amount to approximately SEK 70 M based on the full variable amount of the acquisition price. Elekta has consolidated Mesi from the date of acquisition, contributing with net sales of approximately SEK 45 M. The acquisition of Mesi is expected to add approximately 0.3 percent to Elekta's net sales on an annual basis. The transaction is expected to be EPS accretive on an annual basis. Transaction costs amount to approximately SEK 2 M and are reported as non-recurring items in the consolidated income statement.

Acquisition of Polish distributor

On March 17, 2015, Elekta completed its acquisition of 100 percent of the shares in the leading distributor in Poland, RTA. The intention to acquire RTA was announced on August 25, 2014. RTA is specializing in cutting-edge radiation therapy technologies and the acquisition will allow Elekta to leverage RTA's existing customer relationships in order to strengthen Elekta's position in Poland's private and public health care sectors. The acquisition price consists of a fixed amount of approximately SEK 90 M and a maximum variable amount of approximately SEK 70 M. According to a preliminary purchase price allocation, goodwill and intangible assets amount to approximately SEK 120 M based on an estimated outcome of the acquisition price. Elekta has consolidated RTA from the date of acquisition, contributing with net sales of approximately SEK 6 M in 2014/15. The acquisition of RTA is expected to add approximately 0.3 percent to Elekta's net sales on an annual basis and is expected to be EPS accretive. Transaction costs amount to less than SEK 1 M and are reported as non-recurring items in the consolidated income statement.

Acquisition of Mexican distributor

On April 1, 2015, Elekta announced the acquisition of the service business as well as personnel of Mexican distributor, Asesores Electrónicos Especializados S.A. de C.V. (AEESA). The acquisition will bring Elekta closer to its Mexican customers, facilitating growth in a market with strong potential. The transaction is structured as an asset acquisition and Elekta will assume all service contract revenue from AEESA starting on April 1, 2015. The acquisition price consists of a fixed amount of approximately SEK 82 M and a maximum variable amount of approximately SEK 42 M. According to a preliminary purchase price allocation, goodwill and intangible assets amount to approximately SEK 123 M based on the full variable amount of the acquisition price. Elekta has consolidated the AEESA business from April 1, contributing with a negligible amount to net sales in 2014/15. The asset acquisition is expected to add approximately 0.4 percent to Elekta's net sales on an annual basis and is expected to be accretive to Elekta earnings per share (EPS) during Elekta's fiscal year 2015/16. Transaction costs amount to less than SEK 1 M and are reported as non-recurring items in the consolidated income statement.

Outlook

A comprehensive action program has been initiated with the objectives to return to growth, improve profitability, reduce costs and continue to focus on cash flow. We expect negative growth in net sales to continue during the first half of 2015/16, while growth is expected to return during the second half of 2015/16.

Significant events during the reporting period

Financing

On November 11, 2014, the loan of SEK 400 M with the Swedish Export Corporation was replaced by a new loan of EUR 50 M with a four year tenor.

On March 26, 2015, Elekta issued a SEK 1 billion bond with five year maturity under its existing Medium Term Note Program with a total limit of SEK 5 billion. The bond is divided in two tranches, one fixed and one floating. The first tranche of SEK 300 million has a fixed coupon rate of 1.58 percent to be paid annually and the second tranche of SEK 700 million has a floating interest rate of 3 months STIBOR plus an interest margin of 1.20 percent to be paid quarterly.

Legal dispute

On December 2, 2014 Elekta announced that humediQ GmbH has initiated legal proceedings against two companies in the Elekta group. The dispute relates to an agreement from October 2011 for exclusive supply of Identify™ under the Elekta label. Identify is a patient identification and setup verification product. In 2014, a dispute arose between Elekta and humediQ relating to certain terms of the agreement and humediQ is claiming damages from Elekta for an amount of approximately EUR 16 M. Elekta believes that the claims have no merit and intends to defend them vigorously and assert counterclaims against humediQ.

Significant events after the reporting period

Change of President and CEO of Elekta

On May 13, 2015, Elekta announced that Niklas Savander had, with immediate effect, stepped down from his position as President and CEO of Elekta AB (publ). The Board of Directors had appointed Tomas Puusepp as President and CEO as of May 13, 2015. Tomas Puusepp has, during the past year, been an Executive Director of the Elekta Board and served as President and CEO of Elekta during fiscal years 2005/06 to 2013/14.

Changes to the Executive Management team

On June 2, Elekta announced a reorganization of the Company as well as changes in its Executive Management team. The new organization will be effective as of July 7, 2015.

All global sales, marketing, service and customer support activities will be brought together under Ian Alexander as Chief Commercial Officer (CCO). The new commercial organization will focus on improving customer service and support activities as well as strengthen Elekta's global reach and brand.

All products and solutions will be managed under Chief Operating Officer (COO), Johan Sedihn, with responsibility for the competitiveness of products and solutions, for research and development, manufacturing and supply chain management, as well as for improving effectiveness and cost efficiency in our operations.

During Elekta's Capital Markets Day on June 11 in Stockholm, management will comment in more detail on the reorganization plan and its objectives.

Per July 7, 2015, Elekta's Executive Management team will consist of:

• Tomas Puusepp, President and CEO
• Håkan Bergström, CFO
• Ian Alexander, CCO, responsible for global sales, service, marketing and support
• Johan Sedihn, COO, responsible for products and solutions
• Bill Yaeger, EVP Region North America
• Todd Powell, EVP Comprehensive Oncology Solutions, responsible for both Oncology and Software
• John Lapre, EVP Research and Innovation
• Maurits Wolleswinkel, EVP Marketing and Strategy
• Jonas Bolander, EVP Legal and Compliance
• Valerie Binner, EVP Human Resources, starting Aug 1.

Gilbert Wai, EVP Asia Pacific and Jay Hoey, EVP North America, have resigned as members of the Executive Management team. Jay Hoey will assume a new position as head of External Relations for Elekta.

Employees

The average number of employees during the year was 3,679 (3,631). The number of employees on April 30, 2015 totaled 3,844 (3,775). The increase is mainly related to the expansion of product development and the acquisitions in Turkey, Poland and Mexico.

The average number of employees in the Parent Company was 33 (32).

Shares

During the period 191 new B-shares were subscribed through conversion of convertibles. Total number of registered shares on April 30, 2015 was 382,828,775 divided between 14,250,000 A-shares and 368,578,775 B-shares. Fully diluted shares amounted to 400,696,012 including dilution related to the Elekta 2012/17 convertible bond.

Dividend and proposal to repurchase shares

For 2014/15 the Board of Directors proposes a dividend of SEK 0.50 (2.00) per share, all in accordance with the Company's dividend policy to distribute at least 30 percent of net profit. The proposed dividend represents approximately SEK 191 M and 35 percent of net profit for the year.

The Board intends to propose to the annual general meeting to renew the authorization for the Board to repurchase a maximum of 5 percent of the number of shares outstanding in Elekta AB.

Risks and uncertainties

Elekta's presence in a large number of geographical markets exposes the Group to political and economic risks on a global scale and/or in individual countries.

The competitive landscape for Elekta is continuously changing. The medical equipment industry is characterized by technological developments and continuous improvements of industrial know-how, resulting in companies launching new products and improved methods for treatment. Elekta strives to be the leader in innovation and offer the most competitive product portfolio, developed in close collaboration with key research leaders in the field. To secure the proceeds of research investments, it is of importance that such new products and new technology are protected from the risk of improper use by competitors. When possible and deemed appropriate, Elekta protects its intellectual property rights by way of patents, copyrights and trademark registrations.

Elekta sells solutions through its direct sales force and through an external network of agents and distributors. The Company's continued success is dependent on the ability to establish and maintain successful relationships with customers. Elekta is continuously evaluating how to enter new markets considering both the opportunities and the risks involved. There are regulatory registration requirements with each new market that potentially could delay product introductions and certifications. The stability of the political system in certain countries and the security situation for employees traveling to exposed areas are constantly evaluated. Corruption is a risk and an obstacle for development and growth in some countries. Elekta has implemented a specific anti-corruption policy to guide the business by aiming to be in line with national and international regulations and best practices against corruption.

Elekta's operations comprise several markets that expose the Group to a vast number of laws, regulations, policies and guidelines regarding, for example, health, security, environmental matters, trade restrictions, competition and delivery of products. Elekta's quality systems describes these requirements, which are reviewed and certified by external supervisory bodies and are regularly inspected by authorities in applicable countries, for example the US FDA. Non-compliance of, for example, safety regulations can result in delayed or stopped deliveries of products. Changes in regulations and rules might also increase Elekta's costs and delay the development and introduction of new products.

Elekta depends also on the capability of producing advanced medical equipment, which requires highly qualified personnel. The Company's ability to attract and retain qualified personnel and management has a significant impact on the future success of the Group.

Weak economic development and high levels of public debt might, in some markets, mean less availability of financing for private customers and reduced future health care spending by governments. Political decisions that could impact the healthcare reimbursement systems also constitute a risk factor. Elekta's ability to commercialize products is dependent on the reimbursement level that hospitals and clinics can obtain for different types of treatments. Alterations in the existing reimbursement systems related to medical products, or implementation of new regulations, might impact future product mix in specific markets.

Elekta's delivery of treatment equipment relies largely on customers' readiness to receive the delivery at site. Depending on contractual payment terms a delay can result in postponed invoicing and also affect timing of revenue recognition. The Group's credit risks are normally limited since customer operations are, to a large extent, financed either directly or indirectly by public funds.

Elekta depends on a number of suppliers for components. There is a risk that delivery difficulties might occur due to circumstances beyond Elekta's control. Critical suppliers are regularly followed up regarding delivery precision and quality of components.

In its operations, Elekta is subject to a number of financial risks primarily related to exchange rate fluctuations. In the short-term, the effect of currency movements is reduced through forward contracts. Hedging is conducted on the basis of expected net sales over a period of up to 24 months. The scope of the hedging is determined by the Company's assessment of currency risks. Risk exposure is regulated through a financial policy established by the Board of Directors. The overall responsibility for handling the Group's financial risks, and developing methods and guidelines for dealing with financial risks, rests with the executive management and the finance function. For more detailed information regarding these risks, please see Note 2 in the annual report 2013/14.

Stockholm, June 2, 2015

The Board of Directors and CEO declare that the undersigned interim report provides a fair overview of the parent company's and Group's operations, their financial position and performance, and describes material risks and uncertainties facing the parent company and other companies in the Group.

Laurent Leksell Hans Barella Luciano Cattani Chairman of the Board Member of the Board Member of the Board

Siaou-Sze Lien Wolfgang Reim Birgitta Stymne Göransson Member of the Board Member of the Board Member of the Board

Member of the Board President and CEO

Jan Secher Tomas Puusepp

This report has not been reviewed by the Company's auditors.

Conference call

Elekta will host a telephone conference at 10:00 – 11:00 CET on June 2, with President and CEO Tomas Puusepp and CFO Håkan Bergström.

To take part in the conference call, please dial in about 5-10 minutes in advance.

Sweden: +46 (0)8 566 427 00, UK: +44 (0)20 342 814 08, US: +1 855 831 59 45

The telephone conference will also be broadcasted over the internet (listen only). Please use the link: http://event.onlineseminarsolutions.com/r.htm?e=994449&s=1&k=6F73AE6166C5244401C9930352E38734

Financial information

Annual report 2014/15 August 11, 2015 Interim report May – July 2015/16 September 1, 2015 Annual General Meeting 2015 September 1, 2015 Interim report May – October 2015/16 December 4, 2015

For further information, please contact:

Håkan Bergström, CFO, Elekta AB (publ) +46 8 587 25 547, hakan.bergstrom@elekta.com

Johan Andersson, Director and Head of Investor Relations, Elekta AB (publ) +46 702 100 451, johan.andersson@elekta.com

Tobias Bülow, Director Financial Communication, Elekta AB (publ) +46 722 215 017, tobias.bulow@elekta.com

Elekta AB (publ)

Corporate registration number 556170-4015 Kungstensgatan 18, Box 7593, SE 103 93 Stockholm, Sweden

The above information is such that Elekta AB (publ) shall make public in accordance with the Securities Market Act and/or the Financial Instruments Trading Act. The information was published at 07:30 CET on June 2, 2015.

Accounting principles

This interim report is prepared, with regard to the Group, according to IAS 34 and the Swedish Annual Accounts Act and, with regard to the Parent Company, according to the Swedish Annual Accounts Act and RFR 2. The accounting principles applied correspond to those presented in Note 1 of the Annual Report 2013/14.

Exchange rates

Country	Currency	Average rate				Closing rate
		May - Apr	May - Apr	Change	Apr 30,	Apr 30,	Change
		2014/15	2013/14		2015	2014
Euroland	1 EUR	9.252	8.791	5%	9.267	9.067	2%
Great Britain	1 GBP	11.928	10.454	14%	12.769	11.043	16%
Japan	1 JPY	0.067	0.065	3%	0.070	0.064	9%
United States	1 USD	7.495	6.527	15%	8.252	6.569	26%

Regarding foreign Group companies, order bookings and income statements are translated at average exchange rates for the reporting period while order backlog and balance sheets are translated at closing exchange rates.

CONSOLIDATED INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME

SEK M	3 months	3 months	12 months	12 months
	Feb - Apr	Feb - Apr	May - Apr	May - Apr
INCOME STATEMENT	2014/15	2013/14	2014/15	2013/14
Net sales	3,855	3,954	10,839	10,694
Cost of products sold	-2,251	-2,115	-6,533	-6,047
Gross income	1,604	1,839	4,306	4,647
Selling expenses	-487	-264	-1,335	-1,056
Administrative expenses	-289	-226	-1,048	-918
R&D expenses	-249	-201	-952	-866
Exchange rate differences	-79	69	-31	81
Operating result before non-recurring items	500	1,217	940	1,888
Transaction and restructuring costs	- 1	-100	- 3	-100
Other non-recurring items	―	0	―	-61
Operating result	499	1,117	937	1,727
Result from participations in associates	2	- 3	0	-15
Interest income	6	5	25	23
Interest expenses and similar items	-71	-59	-259	-231
Exchange rate differences	5	4	13	- 2
Profit before tax	441	1,064	716	1,502
Income taxes	-98	-245	-158	-350
Net income	343	819	558	1,152
Net income attributable to: Parent Company shareholders	341	818	552	1,148
Non-controlling interests	2	1	6	4
Earnings per share before dilution, SEK	0.90	2.14	1.45	3.01
Earnings per share after dilution, SEK	0.90	2.13	1.45	3.00
STATEMENT OF COMPREHENSIVE INCOME
Net income	343	819	558	1,152
Other comprehensive income:
Items that will not be reclassified to the income statement
Remeasurements of defined benefit pension plans	- 6	- 3	- 6	- 3
Tax	2	1	2	1
Total items that will not be reclassified to the income statement	- 4	- 2	- 4	- 2
Items that subsequently may be reclassified to the income statement
Revaluation of cash flow hedges	49	-71	-182	- 9
Translation differences from foreign operations	40	196	746	360
Tax	- 9	13	39	- 1
Total items that subsequently may be reclassified to the income statement	80	138	603	350
Other comprehensive income for the period	76	136	599	348
Comprehensive income for the period	419	955	1,157	1,500
Comprehensive income attributable to:
Parent Company shareholders	417	953	1,151	1,498
Non-controlling interests	2	2	6	2
RESULT OVERVIEW
	3 months	3 months	12 months	12 months
	Feb - Apr	Feb - Apr	May - Apr	May - Apr
SEK M	2014/15	2013/14	2014/15	2013/14
Operating result/EBIT before non-recurring items	500	1,217	940	1,888

CONSOLIDATED BALANCE SHEET

SEK M	Apr 30, 2015	Apr 30, 2014
Non-current assets
Intangible assets	8,174	6,845
Tangible fixed assets	881	624
Financial assets	371	359
Deferred tax assets	224	143
Total non-current assets	9,650	7,971
Current assets
Inventories	1,297	1,078
Accounts receivable	4,207	4,197
Accrued income	1,895	1,699
Current tax assets	92	31
Derivative financial instruments	83	103
Other current receivables	695	566
Cash and cash equivalents	3,265	2,247
Total current assets	11,534	9,921
Total assets	21,184	17,892
Elekta's owners' equity	6,638	6,249
Non-controlling interests	8	8
Total equity	6,646	6,257
Non-current liabilities
Long-term interest-bearing liabilities	4,958	4,361
Deferred tax liabilities	732	687
Other long-term liabilities	279	139
Total non-current liabilities	5,969	5,187
Current liabilities
Short-term interest-bearing liabilities	1,075	125
Accounts payable	1,262	1,295
Advances from customers	2,165	1,686
Prepaid income	1,673	1,200
Accrued expenses	1,789	1,526
Current tax liabilities	119	219
Derivative financial instruments	162	13
Other current liabilities	324	384
Total current liabilities	8,569	6,448
Total equity and liabilities	21,184	17,892
Assets pledged	18	9
Contingent liabilities	59	55

CASH FLOW	3 months		3 months 12 months 12 months
	Feb - Apr	Feb - Apr	May - Apr	May - Apr
SEK M	2014/15	2013/14	2014/15	2013/14
Profit before tax	441	1,064	716	1,502
Amortization & Depreciation	142	104	512	414
Interest net	49	47	192	180
Other non-cash items	203	81	411	111
Interest received and paid	-23	-21	-170	-162
Income taxes paid	-64	-4	-362	-353
Operating cash flow	748	1,271	1,299	1,692
Increase (-)/decrease (+) in inventories	214	301	27	-189
Increase (-)/decrease (+) in operating receivables	379	-957	532	-843
Increase (-)/decrease (+) in operating liabilities	324	616	-35	615
Change in working capital	917	-40	524	-417
Cash flow from operating activities	1,665	1,231	1,823	1,275
Investments intangible assets	-193	-133	-679	-492
Investments other assets	-63	-54	-277	-289
Continuous investments	-256	-187	-956	-781
Cash flow after continuous investments	1,408	1,044	867	494
Business combinations and investments in associates	-142	4	-188	4
Cash flow after investments	1,267	1,048	679	498
Cash flow from financing activities	992	-29	186	-888
Cash flow for the period	2,259	1,019	865	-390
Exchange rate differences	-5	29	153	70
Change in cash and cash equivalents for the period	2,254	1,048	1,018	-320

CHANGES IN EQUITY	12 months	12 months
	May - Apr	May - Apr
SEK M	2014/15	2013/14
Attributable to Elekta's owners
Opening balance	6,249	5,547
Comprehensive income for the period	1,151	1,498
Conversion of convertible loan	0	0
Acquisition of non-controlling interest	0	-33
Dividend	-763	-763
Total	6,638	6,249
Attributable to non-controlling interests
Opening balance	8	13
Comprehensive income for the period	6	2
Acquisition of non-controlling interest	―	0
Dividend	- 6	- 7
Total	8	8
Closing balance	6,646	6,257

Financial instruments

The table below shows the Group's financial instruments for which fair value is different than carrying value. The fair value of all other financial instruments is assumed to correspond to the carrying value.

	Apr 30, 2015		Apr 30, 2014
	Carrying		Carrying
SEK M	amount	Fair value	amount	Fair value
Long-term interest-bearing liabilities	4,958	5,252	4,361	4,614
Short-term interest-bearing liabilities	1,075	1,093	125	125

The Group's financial assets and financial liabilities, which have been measured at fair value, have been categorized in the fair value hierarchy. The different levels are defined as follows:

• Level 1: Quoted prices on an active market for identical assets or liabilities
• Level 2: Other observable data than quoted prices included in Level 1, either directly (that is, price quotations) or indirectly (that is, obtained from price quotations)
• Level 3: Data not based on observable market data

		Apr 30,	Apr 30,
SEK M	Level	2015	2014
FINANCIAL ASSETS
Financial assets measured at fair value through profit or loss:
Derivative financial instruments – non-hedging	2	70	40
Derivatives used for hedging purposes:
Derivative financial instruments – hedging	2	15	67
Total financial assets		85	107
FINANCIAL LIABILITIES
Financial liabilities at fair value through profit or loss:
Derivative financial instruments – non-hedging	2	44	9
Contingent consideration	3	152	2
Derivatives used for hedging purposes:
Derivative financial instruments – hedging	2	133	5
Total financial liabilities		329	16

Financial instruments measured at fair value

KEY FIGURES	12 months	12 months	12 months	12 months	12 months	12 months
	May - Apr	May - Apr	May - Apr	May - Apr	May - Apr	May - Apr
	2009/10	2010/11	2011/12	2012/13	2013/14	2014/15
Order bookings, SEK M	8,757	9,061	10,815	12,117	12,253	11,907
Net sales, SEK M	7,392	7,904	9,048	10,339	10,694	10,839
Operating result, SEK M	1,232	1,502	1,849	2,012	1,727	937
Operating margin before non
recurring items, %	17	19	20	20	18	9
Operating margin, %	17	19	20	19	16	9
Profit margin, %	16	19	19	17	14	7
Shareholders' equity, SEK M	3,244	3,833	5,010	5,560	6,257	6,646
Capital employed, SEK M	4,283	4,714	9,540	10,112	10,743	12,678
Equity/assets ratio, %	38	43	33	34	35	31
Net debt/equity ratio	-0.04	-0.13	0.53	0.36	0.36	0.42
Return on shareholders' equity, %	30	30	29	27	21	9
Return on capital employed, %	30	35	28	21	17	9

DATA PER SHARE	12 months	12 months	12 months	12 months	12 months	12 months
	May - Apr	May - Apr	May - Apr	May - Apr	May - Apr	May - Apr
	2009/10	2010/11	2011/12	2012/13	2013/14	2014/15
Earnings per share
before dilution, SEK	2.27	2.76	3.26	3.52	3.01	1.45
after dilution, SEK	2.25	2.73	3.23	3.52	3.00	1.45
Cash flow per share
before dilution, SEK	2.63	1.31	-7.07	3.17	1.31	1.78
after dilution, SEK	2.60	1.30	-7.01	3.17	1.24	1.78
Shareholders' equity per share
before dilution, SEK	8.74	10.22	13.19	14.55	16.39	17.41
after dilution, SEK	9.38	10.61	13.31	14.55	20.32	17.41
Average number of shares
before dilution, 000s	368,832	373,364	376,431	380,672	381,277	381,287
after dilution, 000s	371,780	378,028	380,125	380,672	400,686	381,287
Number of shares at closing
before dilution, 000s	371,181	374,951 *)	378,991 *)	381,270 *)	381,287 *)	381,287 *)
after dilution, 000s	383,580	383,618	384,284	381,270	400,696	381,287

In September 2012 a 4:1 share split was conducted. The data per share and number of shares has been restated pro forma.

*) Number of registered shares at closing excluding treasury shares (1,541,368 per April 30, 2015).

Data per quarter	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
SEK M					2012/13 2012/13 2012/13 2012/13 2013/14 2013/14 2013/14 2013/14 2014/15 2014/15 2014/15 2014/15
Order bookings	2,252	2,972	2,856	4,037	2,027	3,101	3,224	3,901	2,341	2,876	2,834	3,856
Net sales	1,695	2,485	2,428	3,731	1,912	2,443	2,385	3,954	1,865	2,567	2,552	3,855
EBITA before non-recurring items	131	468	453	1,244	148	407	340	1,288	-38	397	345	601
Operating result	63	400	386	1,163	46	304	260	1,117	-122	310	250	499
Cash flow from
operating activities	-88	525	258	1,175	-391	282	153	1,231	-478	436	200	1,665

Order bookings growth based on
unchanged exchange rates	Q1 **)	Q2 **)	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
			2012/13 2012/13 2012/13 2012/13 2013/14			2013/14	2013/14	2013/14	2014/15	2014/15	2014/15	2014/15
North and South America, %	28	13	-11	9	-26	8	40	-4	11	-2	-53	-31
Europe, Middle East and Africa, %	-3	4	-5	29	18	32	15	13	31	-33	14	-27
Asia Pacific, %	11	17	53	9	8	-7	-9	-23	-5	2	-23	23
Group, %	13	11	6	15	-2	10	15	-3	12	-13	-22	-18

**) excluding Brachytherapy

Segment reporting

Elekta applies geographical segmentation. Order bookings, net sales and contribution margin for respective region are reported to Elekta's CFO and CEO (chief operating decision makers). In the regions' operating expenses cost of products sold and expenses are directly attributable to the respective region reported. Global costs for R&D, marketing, management of product supply centers and Parent Company are not allocated per region. Currency exposure is concentrated to product supply centers. The majority of exchange differences in operations are reported in global costs.

Segment reporting

May - Apr 2014/15		Europe,
	North and	Middle East			% of
SEK M	South America	and Africa	Asia Pacific	Group total	net sales
Net sales	3,651	3,829	3,359	10,839
Operating expenses	-2,573	-2,790	-2,579	-7,942	73%
Contribution margin	1,078	1,039	779	2,897	27%
Contribution margin, %	30%	27%	23%
Global costs				-1,957	18%
Operating result before non-recurring items				940	9%
Non-recurring items				- 3
Operating result				937	9%
Net financial items				-221
Income before tax				716

May - Apr 2013/14		Europe,
	North and	Middle East			% of
SEK M	South America	and Africa	Asia Pacific	Group total	net sales
Net sales	3,328	4,220	3,146	10,694
Operating expenses	-2,246	-2,785	-2,308	-7,339	69%
Contribution margin	1,082	1,435	838	3,355	31%
Contribution margin, %	33%	34%	27%
Global costs				-1,467	14%
Operating result before non-recurring items				1,888	18%
Non-recurring items				-161
Operating result				1,727	16%
Net financial items				-225
Income before tax				1,502

Elekta's operations are characterized by significant quarterly variations in delivery volumes and product mix, which have a direct impact on net sales and profits. This is accentuated when the operation is split into segments as is the impact of currency fluctuations between the years.

PARENT COMPANY

INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME

	12 months	12 months
	May - Apr	May - Apr
SEK M	2014/15	2013/14
Operating expenses	-92	-56
Financial net	775	648
Income after financial items	683	592
Appropriations	-16	1
Tax	-9	-9
Net income	658	584
Statement of comprehensive income
Net income	658	584
Other comprehensive income	9	6
Total comprehensive income	667	590

BALANCE SHEET

	Apr 30,	Apr 30,
SEK M	2015	2014
Non-current assets
Shares in subsidiaries	2 142	1 877
Receivables from subsidaries	2 663	2 755
Other financial assets	96	81
Deferred tax assets	11	9
Total non-current assets	4 912	4 722
Current assets
Receivables from subsidaries	3 804	3 110
Other current receivables	46	48
Cash and cash equivalents	2 630	1 793
Total current assets	6 480	4 951
Total assets	11 392	9 673
Shareholders' equity	2 319	2 414
Untaxed reserves	43	26
Non-current liabilities
Long-term interest-bearing liabilities	4 958	4 360
Long-term liabilities to Group companies	39	38
Long-term provisions	97	30
Total non-current liabilities	5 093	4 428
Current liabilities
Short-term interest-bearing liabilities	1 031	―
Short-term liabilities to Group companies	2 700	2 688
Accounts payable	8	9
Other current liabilities	198	108
Total current liabilities	3 937	2 805
Total shareholders' equity and liabilities	11 392	9 673
Assets pledged	―	―
Contingent liabilities	1 213	1 004