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RaySearch Laboratories
Interim / Quarterly Report • Aug 25, 2023
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Interim / Quarterly Report
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"In the second quarter of 2023, net sales rose by 49 percent. Revenue from support rose by 39 percent. Operating profit amounted to SEK 18.2 M (-19.5) in the second quarter and to SEK 41.9 M (10.0) for the first half-year."
Johan Löf, CEO of RaySearch
SECOND QUARTER (APRIL-JUNE 2023) HALF-YEAR (JANUARY-JUNE 2023)
- Order intake SEK 239.2 M (212.5) Order intake SEK 445.8 M (485.0)
- Net sales SEK 239.5 M (160.2) Net sales SEK 469.6 M (368.4)
- Operating profit SEK 18.2 M (-19.5) Operating profit SEK 41.9 M (10.0)
- Profit after tax SEK 10.9 M (-19.7) Profit after tax SEK 28.5 M (-0.4)
- Earnings per share before/after dilution SEK 0.32 (-0.58) Earnings per share before/after dilution SEK 0.83
- Cash flow SEK -3.3 M (16.7) Cash flow SEK 81.2 M (52.0)
• Order backlog SEK 1,954.9 M (1,540.3) at the end of the period
SIGNIFICANT EVENTS DURING THE SECOND QUARTER
- Yonsei Cancer Center, South Korea, treated its first patient using RayStation and RayCare for carbon ion radiation therapy.
- New York University Langone Hospital, USA, placed an order for RayStation, which will replace its current treatment planning system.
- RaySearch's strategic partnership with BEBIG Medical, Germany, was extended through a new agreement.
- RayCare is interoperable with Varians TrueBeam.
- Shinva, a Chinese radiation therapy machine manufacturer, placed an order for 15 RayPlan systems for onwards sales to customers in China.
- Australian Bragg Center for Proton Therapy and Research placed an order for RayCare.
- SouthWest Florida Protono, USA, placed an order for RayStation.
- In June, 800,000 Class A shares were converted to Class B shares. The total number of votes in RaySearch subsequently amounts to 103,177,548. The total number of registered shares in RaySearch amounts to 34,282,773 of which 7,654,975 are Class A shares and 26,627,798 are Class B shares.
SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
- Henrik Bergentoft left the position as CFO. Annika Blondeau Henriksson was appointed interim CFO.
- University Medical Center Groningen, the Netherlands, placed an order for Micro-RayStation for pre-clinical research.
- RayCare is in clinical use with CyberKnife at Lausanne University Hospital, Switzerland.
FINANCIAL SUMMARY1
| AMOUNTS IN SEK '000 | APR-JUN | JAN-JUN | JUL 2022 - | FULL YEAR |
||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | JUN 2023 | 2022 | |
| Net sales | 239,467 | 160,235 | 469,636 | 368,384 | 944,900 | 843,648 |
| Operating profit/loss | 18,226 | -19,527 | 41,902 | 10,037 | 74,609 | 42,744 |
| Operating margin, % | 7.6 | -12.2 | 8.9 | 2.7 | 7.9 | 5.1 |
| Profit/loss for the period | 10,918 | -19,731 | 28,481 | -433 | 52,692 | 23,778 |
| Earnings/loss per share before/after diluation, SEK | 0.32 | -0.58 | 0.83 | -0.01 | 1.54 | 0.69 |
| Cash flow from operating activities | 67,214 | 79,778 | 220,897 | 206,605 | 371,069 | 356,777 |
| Cash flow from the period | -3,285 | 16,685 | 81,187 | 52,005 | 75,966 | 46,784 |
| Return on equity, % | 1.6 | -3.1 | 4.2 | -0.1 | 8.0 | 3.7 |
| Equity/assets ratio, % at the end of the period | 36.3 | 35.2 | 36.3 | 35.2 | 36.3 | 35.0 |
| Share price at the end of the period, SEK | 63.3 | 54.4 | 63.3 | 54.4 | 63.3 | 68.0 |
| 1 For definitions of key ratios, see page 19. |
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CEO COMMENTS
YET ANOTHER STRONG QUARTER
It is gratifying to note that the positive trend is continuing. Sales in the April-June period were our highest ever for a second quarter and amounted to SEK 239 M, up 49 percent (41 percent at unchanged exchange rates) compared with the year-on-year period. In addition, net sales were the second-highest ever for a quarter. Cash flow was SEK -3 M and EBIT was SEK 18 M, representing an operating margin of 7.6 percent. The operating margin is still considerably lower than our long-term target and once again, the quarter was negatively impacted by currency translation effects, increased rental costs due to inflation and higher costs for external services. The sharp increase in sales that we have noted in recent quarters is clearly linked to the reopening
of the market. Since this momentum seems to be holding up, and opportunities for continued growth are therefore favorable, our offensive marketing strategy will continue.
As in the first quarter of the year, sales for the second quarter were not derived from any major orders (the largest single revenue item was SEK 11 M), but mainly comprise a combination of revenues from many small and normalsized orders as well as support revenue. RaySearch has a strong financial position with cash and cash equivalents of SEK 246 M. The company's financing solution with the bank has been renegotiated, meaning that the previously unutilized revolving credit of SEK 150 M was terminated and replaced with an increased overdraft facility of SEK 75 M. Overall, the company has a stable financial position for continued growth.
NEW COLLABORATION AGREEMENTS FOR RAYSTATION AND RAYCARE
In early May, New York University Langone Hospital – Long Island placed an order for RayStation to replace the center's existing treatment planning system. The center is currently equipped with Varian's linear accelerators and Accuray's CyberKnife and Radixact systems, and because RayStation is compatible with all of these, the center will receive a unified solution for treatment planning across all modalities, which the center considers an efficiency improvement.
An additional order in the US worth mentioning is Southwest Florida Proton's order for RayStation at the end of June. RayStation will be installed in the new facility that the center is establishing on Florida's west coast, which will be the first cancer treatment center in the region to offer proton therapy.
In June, RaySearch received an additional order from Shinva, a Chinese manufacturer of radiation therapy machines. We have been delivering RayStation to Shinva for many years, which Shinva has sold together with its radiation therapy machines in China. The new order, for 15 RayPlan systems, will be sold in the same manner. The Chinese market has huge potential and I am looking forward to continuing this rewarding collaboration with Shinva.
The Australian Bragg Centre for Proton Therapy and Research, which is currently under construction and will be the first proton therapy center in Australia, and thereby the first of its kind in the southern hemisphere, placed an order for RayCare in June. The center is also planning to purchase RayStation at a later stage.
The quarter's largest order (approximately SEK 21 M) came from SHI Industrial Equipment in Taiwan (SIET) and was for RayStation, which SIET intends to install in Taichung Veterans General Hospital. SIET is a subsidiary of Sumitomo Heavy Industries, which manufactures proton therapy machines. The order did not generate any net sales in the quarter.
In June, RaySearch entered into a strategic collaboration agreement with the Japanese company B dot Medical. The aim is to advance the field of proton therapy by development and validation of integrations between RayStation, RayCare and B dot Medical's ultra-compact proton therapy system.
RAYCARE INTEROPERABLE WITH TRUEBEAM
As previously communicated, achieving interoperability between RayCare and TrueBeam has taken longer than originally planned, but after an extensive joint program, Varian has now certified that RayCare is interoperable with the TrueBeam platform. TrueBeam is Varian's most prevalent treatment delivery platform and has been installed in thousands of radiation therapy centers all over the world since its launch, and I am therefore expecting that this will significantly increase the addressable market for RayCare in 2024.
RAYCARE IN CLINICAL USE IN ASIA
Yonsei Cancer Center has been using the RayStation treatment planning system for photon and carbon ion planning for a long time, and was the first center in the Asia-Pacific region to purchase RayCare. At the end of April, the center treated its first patient using both RayStation and RayCare for carbon ion therapy. The center thereby became first in Asia to start clinical operations with RayCare.
EXPANSION OF UniteRT
UniteRT, a new and unique group that was initiated during the spring and is a collaboration of leading radiation therapy technology vendors, continued to grow and now has 17 members. During our participation at the AAPM (American Association of Physicists in Medicine) Annual Meeting & Exhibition at the end of July, we continued to spread the message about the collaboration and noted a major interest from both companies and centers.
CONTINUED POSITIVE TREND
Sales for the second quarter confirm that market conditions are improving and if we summarize the first two quarters, the first half-year was our strongest ever. I also expect a positive trend for the remainder of the year, where our focus will lie on improving the operating margin. The target is a minimum of 20 percent within three years. On behalf of senior management, I would like to welcome Annika Blondeau Henriksson as Interim CFO and wish Henrik Bergentoft the best of luck. I would also like to thank our employees for their continued commitment and I am pleased that we can all work together now at our offices.
Stockholm, August 25, 2023
Johan Löf CEO and founder
FINANCIAL INFORMATION
RaySearch operates in a market with uneven order flows where large individual orders can have a substantial impact on revenue recognition between the quarters and, because the company has limited (less than 10 percent) variable costs for license revenue, operating profit is affected by an amount that is nearly as high. For this reason, a longer perspective than a few quarters should be taken.
ORDER INTAKE AND ORDER BACKLOG
In the second quarter of 2023, order intake amounted to SEK 239.2 M (212.5), an increase by 12.5 percent year-onyear. License order intake amounted to SEK 94.4 M (66.9), an increase of 41.1 percent, while order intake for support was SEK 119.7 M (118.7), an increase of 0.8 percent.
| Order intake (amounts in SEK M) | Q2-23 | Q1-23 | Q4-22 | Q3-22 | Q2-22 | Rolling 12 months | Full-year 2022 |
|---|---|---|---|---|---|---|---|
| Licenses | 94.4 | 94.8 | 284.9 | 86.1 | 66.9 | 560.1 | 569.3 |
| Support (incl. warranty support) | 119.7 | 59.2 | 173.4 | 97.7 | 118.7 | 450.0 | 501.0 |
| Hardware | 17.5 | 41.8 | 21.4 | 25.9 | 21.2 | 106.6 | 92.7 |
| Training and other | 7.6 | 10.8 | 34.7 | 9.4 | 5.7 | 62.6 | 55.5 |
| Total order intake | 239.2 | 206.6 | 514.4 | 219.1 | 212.5 | 1,179.3 | 1,218.5 |
| Order backlog (amounts in SEK M) | Q2-23 | Q1-23 | Q4-22 | Q3-22 | Q2-22 | ||
| Licenses | 425.0 | 397.1 | 395.3 | 237.3 | 213.3 | ||
| Support (incl. warranty support) | 1,350.7 | 1,324.2 | 1,380.0 | 1,320.5 | 1,169.9 | ||
| Hardware | 74.4 | 80.0 | 64.7 | 81.8 | 82.4 | ||
| Training and other | 104.8 | 102.0 | 100.1 | 75.6 | 74.7 | ||
| Total order backlog at the end of the period | 1,954.9 | 1,903.3 | 1,940.1 | 1,715.2 | 1,540.3 |
In the first half of 2023, order intake amounted to SEK 445.8 M (485.0), a decrease of 8.1 percent compared to the same period last year. Order intake of licenses amounted to SEK 189.1 M (198.3), a decreased of 4.6 percent, while order intake for support amounted to SEK 178.9 M (229.9), a decrease of 22.2 percent.
At June 30, 2023, the total order backlog was SEK 1,954.9 M (1,540.3), of which SEK 614.5 M is expected to generate revenue over the next 12 months. The remaining amount in the order backlog mainly pertains to support commitments that are primarily expected to generate revenue during a subsequent four-year period.
REVENUE
In the second quarter of 2023, net sales amounted to SEK 239.5 M (160.2), an increase of 49.4 percent compared to the same period last year. The change in sales at unchanged currencies was 41.2 percent (-5.5).
License revenue amounted to SEK 100.7 M (68.4), an increase of 47.2 percent compared to last year. Support revenue amounted to SEK 101.8 M (73.1), an increase of 39.1 percent, accounting for 42 percent (46) of net sales in the second quarter. Support revenue includes a number of customer contracts renegotiated during the quarter, which are to be considered one-off effects amounting to SEK 6 M.
Hardware sales, which have a weaker profit margin, amounted to SEK 27.0 M (14.8). Excluding hardware sales, net sales increased 46.0 percent compared the same period last year.
| Revenue (amounts in SEK M) | Q2-23 | Q1-23 | Q4-22 | Q3-22 | Q2-22 | Rolling 12 months |
Full-year 2022 |
|---|---|---|---|---|---|---|---|
| License revenue | 100.7 | 104.3 | 131.9 | 76.4 | 68.4 | 413.3 | 388.5 |
| Support revenue (incl. warranty support) | 101.8 | 86.8 | 85.9 | 87.4 | 73.1 | 361.9 | 323.1 |
| Hardware revenue | 27.0 | 29.3 | 40.5 | 33.9 | 14.8 | 130.7 | 105.8 |
| Training and other revenue | 10.0 | 9.8 | 6.1 | 13.1 | 3.9 | 39.0 | 26.3 |
| Net sales | 239.5 | 230.2 | 264.4 | 210.9 | 160.2 | 944.9 | 843.6 |
| Change in sales, corresp. period, % | 49.4 | 10.6 | 40.2 | 54.6 | 3.7 | 36.3 | 31.5 |
| Change in sales at unchanged exchange rates, corresp. period, % | 41.2 | 3.7 | 41.3 | 33.9 | -5.5 | 26.1 | 23.2 |
In the first half of 2023, net sales amounted to 469.6 M (368.4) an increase of 27.5 percent. License revenue amounted to SEK 205.0 M (180.2), support revenue increased to SEK 188.5 M (149.8), hardware revenue increased to SEK 56.3 M (31.4) and training and other revenue increased to SEK 19.8 M (7.1).
In the first half of 2023, net sales had the following geographic distribution: North America, 41 percent (41); Asia, 20 percent (23); Europe and the rest of the world, 39 percent (36).
OPERATING PROFIT
In the second quarter of 2023, operating profit increased to SEK 18.2 M (-19.5), representing an operating margin of 7.6 percent (-12.2). Operating expenses amounted to SEK 221.2 M (179.8) due to higher selling expenses as a result of more normalized activity levels post-covid, higher administrative expenses driven by a high share of external consultants and a general increase due to inflation.
In the second quarter, the net of exchange-rate gains and losses amounted to SEK -0.1 M (4.8) since a large proportion of the Group's receivables are denominated in USD and EUR. Adjusted for the effects of these currency translations, operating profit for the second quarter would have amounted to SEK 18.3 M (-24.3).
In the first half-year, operating profit increased to SEK 41.9 M (10.0), representing an operating margin of 8.9 percent (2.7).
Currency effects
The company's net 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.
Based on the year's revenue, cost and currency structure (transaction exposure), a general change of one percentage point in the SEK against the USD exchange rate against it would have impacted consolidated operating profit by approximately +/- SEK 0.6 M in the second quarter of 2023, while a corresponding change in the EUR exchange rate would have impacted consolidated operating profit by approximately +/- SEK 0.6 M.
The Group follows the financial policy established by the Board, whereby exchange-rate fluctuations are not hedged.
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 June 30, 2023, 189 employees (188) were engaged in research and development, corresponding to 50 percent (50) of the total number of employees.
| Capitalization of development costs | Q2-23 | Q1-23 | Q4-22 | Q3-22 | Q2-22 | Rolling 12 months |
Full-year 2022 |
|---|---|---|---|---|---|---|---|
| Research and development costs | 63.1 | 58.2 | 58.5 | 51.8 | 59.9 | 231.7 | 234.6 |
| Capitalization of development costs | -45.9 | -48.2 | -49.4 | -40.2 | -46.0 | -183.7 | -188.0 |
| Amortization of capitalized development costs | 40.5 | 40.0 | 50.9 | 50.9 | 45.4 | 182.3 | 192.2 |
| Research and development costs after | |||||||
| adjustments for capitalization and amortization of | 57.7 | 50.1 | 60.1 | 62.5 | 59.2 | 230.4 | 238.8 |
| development costs |
In 2023, RaySearch continued to invest in both existing products and future products. During the first six months of 2023, research and development costs amounted to SEK 121.3 M (124.2), a decrease of 2.3 percent compared to the same period last year. The total costs amounted to to 26 percent (34) of the company's net sales.
Capitalized development costs amounted to SEK 94.1 M (98.4) for the first six months, which is a reduction of 4.4 percent compared to the same period last year. Accordingly, capitalized development costs amounted to 78 percent (79) of the total research and development costs for the first half of 2023.
Amortization of capitalized development costs amounted to SEK 80.5 M (90.4) for the first six months of the year, which is a reduction of 10.9 percent compared to the same period last year. This reduction is attributable to the fact that some development projects were fully amortized at the end of 2022.
Total research and development costs (after adjustments for capitalization and amortization of development costs) amounted to SEK 107.8 M (116.2) during the first six months of the year, a reduction of 7.2 percent compared to the same period last year.
Amortization and depreciation
In the second quarter of 2023, total amortization and depreciation decreased to SEK 68.3 M (71.0), a reduction of 3.9 percent compared to the same period last year. Amortization of intangible fixed assets amounted to SEK 40.6 M (45.5), of which amortization of capitalized development costs amounted to SEK 40.5 M (45.4).
Depreciation of tangible fixed assets amounted to SEK 27.7 M (25.6).
Total amortization and depreciation for the first six months amounted to SEK 136.0 M (141.1), of which amortization of intangible fixed assets amounted to SEK 80.7 M (90.5), mainly related to capitalized development costs. Depreciation of tangible fixed assets amounted to SEK 55.3 M (50.6).
PROFIT AND EARNINGS PER SHARE
In the second quarter of 2023, profit after tax amounted to SEK 10.9 M (-19.7), corresponding to earnings per share of SEK 0.32 (-0.58) before and after dilution.
For the first half of 2023, profit after tax totaled SEK 28.5 M (-0.4), representing earnings per share of SEK 0.83 (- 0.01) before and after dilution.
In the second quarter of 2023, the tax cost amounted SEK -5.9 M (2.0), corrsponding to an effective tax rate of 35 percent (9). For the first half of 2023, the tax cost amounted to SEK 9.9 M (4.9), corresponding to an effective tax rate of 25.9 percent (109.7). In 2022, the company's american subsidiary, reported a higher deferred tax cost related to temporary differences.
CASH FLOW AND LIQUIDITY
In the second quarter of 2023, cash flow from operating activities was SEK 67.2 M (79.8). The change is primarily attributable to improved profit and the change in working capital. In the first half-year, cash flow from operating activities was SEK 220.9 M (206.6).
In the second quarter, cash flow from investing activities was SEK -56.5 M (-67.6). Investments in intangible fixed assets amounted to SEK -45.9 M (-46.0) and mainly comprised capitalized development costs for the company's products – RayStation, RayCare, RayCommand and RayIntelligence. Investments in tangible fixed assets amounted to SEK -10.5 M (-21.5), and is attributable to investments in IT equipment. In the first half of the year, cash flow from investing activities amounted to SEK -108.5 M (129.2).
In the second quarter of 2023, cash flow from financing activities amounted to SEK -14.0 M (4.5), and to SEK -31.2 M (-25.4) in the half-year period and comprised primarily the repayment of lease liabilities.
Cash flow for the period was SEK -3.3 M (16.7) in the second quarter, and SEK 81.2 M (52.0) in the first half of the year.
At June 30, consolidated cash and cash equivalents amounted to SEK 246.2 M compared to SEK 160.3 M at December 31, 2022.
FINANCIAL POSITION
At June 30, 2023, RaySearch's total assets amounted to SEK 1,897.8 M compared to SEK 1,876.0 M at December 31, 2022. At June 30, the equity/assets ratio was 36.3 percent compared to 35.0 percent at fiscal year-end.
In June 2023, the company's credit facility was renegotiated with the bank. Accordingly, in addition to cash and cash equivalents of SEK 246.2 M, RaySearch has an overdraft facility of SEK 75.0 M (50.0) of which SEK 0 M (0) had been drawn at the end of the period. The previous unutilized revolving loan facility of SEK 150.0 M has been terminated in conjuntion with the increase of the overdraft facility from SEK 50 M to SEK 75 M.
At June 30, the Group's net debt amounted to SEK 280.3 M compared to SEK 395.9 M at December 31, 2022, a reduction that is mainly due to an increase in cash and cash equivalents compared to the preceding year.
EMPLOYEES
In the January-June period of 2023, the average number of employees in the Group was 372 (383). At the end of the second quarter, the Group had 375 employees (376), of whom 272 (271) were based in Sweden, and 103 (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.
THE COMPANY'S SHARE
In June 2023, 800,000 Class A shares were converted to Class B shares, at the request of a shareholder. At June 30, the total number of registered shares in RaySearch was 34,282,773, of which 7,654,975 were Class A and 26,627,798 Class B shares. The quotient value is SEK 0.50 and the company's share capital amounts to SEK 17,141,386.50. Holders of Class A shares are entitled to 10 votes per share, and holders of Class B shares are entitled to one vote per share, at General Meetings. At June 30, 2023, the total number of votes in RaySearch was 103,177,548.
SHARE OWNERSHIP
At June 30, 2023, the number of shareholders in RaySearch was 7,629, according to Euroclear, and the largest shareholders were as follows:
| Name | Class A shares | Class B shares | Total shares | Share capital, % |
Votes, % |
|---|---|---|---|---|---|
| Johan Löf | 5,443,084 | 218,393 | 5,661,477 | 16.5 | 53.0 |
| State Street Bank and Trust Co, W9 | - | 4,246,156 | 4,246,156 | 12.4 | 4.1 |
| BNP Paribas SA Paris, W8IMY (GC) | - | 2,361,307 | 2,361,307 | 6.9 | 2.3 |
| Swedbank Robur NY Teknik BTI | - | 1,800,000 | 1,800,000 | 5.3 | 1.7 |
| Anders Brahme | 1,150,161 | 200,000 | 1,350,161 | 3.9 | 11.3 |
| Andra AP-Fonden | - | 1,220,942 | 1,220,942 | 3.6 | 1.2 |
| The bank of New York Mellon SA/NV. W8IMY | - | 1,218,036 | 1,218,036 | 3.6 | 1.2 |
| Carl Filip Bergendal | 1,061,577 | 139,920 | 1,201,497 | 3.5 | 10.4 |
| Tredje AP-Fonden | - | 825,845 | 825,845 | 2.4 | 0.8 |
| JP Morgan Chase Bank NA, W8 | - | 768,326 | 768,326 | 2.2 | 0.7 |
| Total, 10 largest shareholders | 7,654,822 | 12,998,925 | 20,653,747 | 60.2 | 86.8 |
| Others | 153 | 13,628,873 | 13,629,026 | 39.8 | 13.2 |
| Total | 7,654,975 | 26,627,798 | 34,282,773 | 100 | 100 |
Source: Euroclear
OTHER INFORMATION
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 30-32 of RaySearch's 2022 Annual Report. There have been no significant changes with any impact on the risks reported.
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 clinics improve and save the lives of cancer patients. Through innovative software solutions, the company is continuously striving to improve and streamline workflows in clinical environments and to improve treatment outcomes for cancer patients. The customer value created presents business opportunities for RaySearch, but also major social benefit and economic gains.
The negative environmental impact of the company's products is limited. The company's environmental impact is mainly related to the purchase of goods and services, energy use and transportation. RaySearch aims to contribute to sustainable development and therefore works actively to improve the company's environmental performance wherever this is economically viable. More information about the company's environmental and sustainability initiatives is available in the company's Sustainability Report on pages 10-20 of RaySearch's 2022 Annual Report.
REVIEW
This interim report has not been reviewed by the company's auditors.
The Board of Directors and CEO give their assurance that this interim report gives a true and fair view of the Group's and the Parent Company's operations, position and earnings, and describes the significant risks and uncertainties facing the Parent Company and the companies included in the Group.
Stockholm, August 25, 2023 RaySearch Laboratories AB (publ)
Hans Wigzell Chairman of the Board Johan Löf CEO and Board member Carl Filip Bergendal Board member
Britta Wallgren Board member
Günther Mårder Board member
FOR FURTHER INFORMATION, PLEASE CONTACT:
Johan Löf, CEO Tel: +46 (0)8 510 530 00 Email: [email protected] Annika Blondeau Henriksson, interim CFO Telefon: +46 8 510 530 00 Email: [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 August 25, 2023 at 7:45 a.m. CEST.
WEBCAST
CEO Johan Löf and interim CFO Annika Blondeau Henriksson will present RaySearch's interim report for January -June 2023 at a webcast to be held in English on Friday, August 25, 2023 at 10:00-10:30 a.m. CEST.
Link to webcast: https://raysearchlabs.creo.se/230825/
You can also join the webcast by phone: Sweden +46 (0) 8 505 100 31 UK: +44 (0) 207 107 06 13 US: +1 (1) 631 570 56 13
FINANCIAL CALENDAR
Interim report third quarter, 2023 Year-end report, 2023 Interim report first quarter, 2024 Annual Report, 2023 Annual General Meeting, 2024
November 17, 2023 February 23, 2024 May 17, 2024 April 26, 2024 May 24, 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME IN SUMMARY
| AMOUNTS IN SEK 000s | APR-JUN | JAN-JUN | JUL 2022- | FULL-YEAR | ||
|---|---|---|---|---|---|---|
| Note | 2023 | 2022 | 2023 | 2022 | JUN-23 | 2022 |
| Net sales 2,3 |
239,467 | 160,235 | 469,636 | 368,384 | 944,900 | 843,648 |
| Cost of goods sold1 | -22,025 | -13,393 | -45,943 | -28,045 | -112,889 | -94,991 |
| Gross profit | 217,442 | 146,842 | 423,693 | 340,339 | 832,011 | 748,657 |
| Other operating income | 4,429 | 8,770 | 9,868 | 23,222 | 36,150 | 49,504 |
| Selling expenses | -90,910 | -70,646 | -170,621 | -141,108 | -338,937 | -309,424 |
| Administrative expenses | -51,657 | -41,646 | -100,970 | -83,007 | -189,682 | -171,719 |
| Research and development costs | -57,677 | -59,202 | -107,755 | -116,174 | -230,350 | -238,769 |
| Other operating expenses | -3,401 | -3,645 | -12,313 | -13,235 | -34,583 | -35,505 |
| Operating profit/loss | 18,226 | -19,527 | 41,902 | 10,037 | 74,609 | 42,744 |
| Loss from financial items | -1,447 | -2,167 | -3,490 | -5,570 | -8,289 | -10,369 |
| Profit/loss before tax | 16,779 | -21,694 | 38,412 | 4,467 | 66,320 | 32,375 |
| Tax | -5,861 | 1,963 | -9,931 | -4,900 | -13,628 | -8,597 |
| Profit/loss for the period2 | 10,918 | -19,731 | 28,481 | -433 | 52,692 | 23,778 |
| Other comprehensive income | ||||||
| Items to be reclassified to profit or loss | ||||||
| Translation difference of foreign operations for the period | 2,827 | 3,071 | 2,492 | 3,708 | 3,850 | 5,066 |
| Comprehensive income for the period2 | 13,745 | -16,660 | 30,973 | 3,275 | 56,542 | 28,844 |
| Earnings/loss per share before and after dilution (SEK) | 0.32 | -0.58 | 0.83 | -0.01 | 1.54 | 0.69 |
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 FINANCIAL POSITION IN SUMMARY
| AMOUNTS IN SEK 000s Note |
Jun 30, 2023 | Jun 30, 2022 | Dec 31, 2022 |
|---|---|---|---|
| ASSETS | |||
| Intangible fixed assets | 532,123 | 531,020 | 518,663 |
| Tangible fixed assets | 608,169 | 652,844 | 649,070 |
| Deferred tax assets | 21,461 | 27,659 | 25,598 |
| Other long-term receivables | 51,517 | 9,704 | 54,697 |
| Total fixed assets | 1,213,270 | 1,221,227 | 1,248,028 |
| Inventories | 26,641 | 43,934 | 14,091 |
| Billed customer receivables | 188,903 | 157,434 | 246,742 |
| Unbilled customer receivables | 142,436 | 130,492 | 123,827 |
| Other current receivables | 80,291 | 81,660 | 82,994 |
| Cash and cash equivalents | 246,228 | 162,068 | 160,268 |
| Total current assets | 684,499 | 575,588 | 627,922 |
| TOTAL ASSETS | 1,897,769 | 1,796,815 | 1,875,950 |
| EQUITY AND LIABILITIES | |||
| Equity | 688,129 | 631,587 | 657,156 |
| Deferred tax liabilities | 109,571 | 109,141 | 106,874 |
| Long-term lease liabilities | 465,634 | 494,748 | 497,079 |
| Other long-term liabilities | 2,298 | 878 | 743 |
| Total long-term liabilities | 577,503 | 604,767 | 604,696 |
| Accounts payable | 27,978 | 43,549 | 24,030 |
| Current lease liabilities | 58,581 | 52,678 | 58,307 |
| Other current liabilities | 545,578 | 464,234 | 531,761 |
| Total current liabilities | 632,137 | 560,461 | 614,098 |
| TOTAL EQUITY AND LIABILITIES | 1,897,769 | 1,796,815 | 1,875,950 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY IN SUMMARY
| AMOUNTS IN SEK 000s | APR-JUN | JAN-JUN | FULL-YEAR | ||
|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | |
| Opening balance | 674,384 | 648,247 | 657,156 | 628,312 | 628,312 |
| Profit/loss for the period | 10,918 | -19,731 | 28,481 | -433 | 23,778 |
| Translation difference for the period | 2,827 | 3,071 | 2,492 | 3,708 | 5,066 |
| Comprehensive income for the year | 13,745 | -16,660 | 30,973 | 3,275 | 28,844 |
| Closing balance | 688,129 | 631,587 | 688,129 | 631,587 | 657,156 |
CONSOLIDATED STATEMENT OF CASH FLOW IN SUMMARY
| BELOPP i KSEK | APR-JUN JAN-JUN |
JUL 2022 - | FULL YEAR |
|||
|---|---|---|---|---|---|---|
| Note | 2023 | 2022 | 2023 | 2022 | JUN 2023 | 2022 |
| Profit/loss before tax | 16,779 | -21,694 | 38,412 | 4,467 | 66,320 | 32,375 |
| Adjusted for non-cash items2 | 64,973 | 71,092 | 130,821 | 141,551 | 285,373 | 296,103 |
| Taxes paid | -10,432 | -4,740 | -6,367 | -8,196 | -11,987 | -13,816 |
| Cash flow from operating activities before changes in working capital |
71,320 | 44,658 | 162,866 | 137,822 | 339,706 | 314,662 |
| Cash flow from changes in operating receivables | -19,531 | -40,704 | 32,083 | 5,521 | -39,474 | -66,036 |
| Cash flow from changes in operating liabilities | 15,425 | 75,824 | 25,948 | 63,262 | 70,837 | 108,151 |
| Cash flow from operating activities | 67,214 | 79,778 | 220,897 | 206,605 | 371,069 | 356,777 |
| Investments in capitalized development costs | -45,915 | -46,046 | -94,079 | -98,400 | -183,665 | -187,986 |
| Acquisition of tangible fixed assets | -10,543 | -21,547 | -14,460 | -30,784 | -27,191 | -43,515 |
| Cash flow from investing activities | -56,458 | -67,593 | -108,539 | -129,184 | -210,856 | -231,501 |
| Repayment of lease liabilities | -14,041 | 4,500 | -31,171 | -4,148 | -84,247 | -57,224 |
| Change in overdraft facility | 0 | 0 | 0 | -21,268 | 0 | -21,268 |
| Cash flow from financing activities | -14,041 | 4,500 | -31,171 | -25,416 | -84,247 | -78,492 |
| Cash flow for the period | -3,285 | 16,685 | 81,187 | 52,005 | 75,966 | 46,784 |
| Cash and cash equivalents at the beginning of the period | 243,719 | 139,816 | 160,268 | 102,535 | 162,068 | 102,535 |
| Exchange-rate difference in cash and cash equivalents | 5,794 | 5,567 | 4,773 | 7,528 | 8,194 | 10,949 |
| Cash and cash equivalents at the end of the period | 246,228 | 162,068 | 246,228 | 162,068 | 246,228 | 160,268 |
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 | APR-JUN | JAN-JUN | FULL-YEAR | ||
|---|---|---|---|---|---|
| Note | 2023 | 2022 | 2023 | 2022 | 2022 |
| Net sales 2,3 |
185,459 | 120,017 | 358,545 | 281,881 | 620,315 |
| Cost of goods sold1 | -8,781 | -6,469 | -13,139 | -9,435 | -28,688 |
| Gross profit | 176,678 | 113,548 | 345,406 | 272,446 | 591,627 |
| Other operating income | 4,367 | 8,585 | 9,770 | 22,939 | 47,917 |
| Selling expenses | -53,061 | -37,070 | -96,866 | -79,542 | -169,489 |
| Administrative expenses | -64,347 | -66,895 | -126,338 | -108,423 | -217,833 |
| Research and development costs | -54,487 | -44,015 | -104,136 | -108,941 | -203,678 |
| Other operating expenses | -3,283 | -3,274 | -11,444 | -13,029 | -34,882 |
| Operating profit/loss | 5,867 | -29,121 | 16,392 | -14,550 | 13,662 |
| Profit/loss from financial items | 826 | 91 | 1,115 | -1,073 | -1,265 |
| Profit/loss after financial items | 6,693 | -29,030 | 17,507 | -15,623 | 12,397 |
| Appropriations | - | - | - | - | - |
| Profit/loss before tax | 6,693 | -29,030 | 17,507 | -15,623 | 12,397 |
| Tax on profit/loss for the period | -2,919 | 3,132 | -5,230 | 394 | -3,775 |
| Profit/loss for the period | 3,774 | -25,898 | 12,277 | -15,229 | 8,622 |
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 | APR-JUN | JAN-JUN | FULL-YEAR | ||
|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | |
| Profit/loss for the period | 3,774 | -25,898 | 12,277 | -15,229 | 8,622 |
| Other comprehensive income | - | - | - | - | - |
| Comprehensive income for the period | 3,774 | -25,898 | 12,277 | -15,229 | 8,622 |
PARENT COMPANY BALANCE SHEET IN SUMMARY
| AMOUNTS IN SEK 000s Note |
Jun 30, 2023 | Jun 30, 2022 | Dec 31, 2022 |
|---|---|---|---|
| ASSETS | |||
| Intangible fixed assets | 227 | 459 | 342 |
| Tangible fixed assets | 51,307 | 62,942 | 56,525 |
| Shares and participations | 3,958 | 3,958 | 3,958 |
| Deferred tax assets | 17,942 | 28,229 | 23,992 |
| Other long-term receivables | 7,089 | 15,572 | 8,510 |
| Total fixed assets | 80,523 | 111,160 | 93,327 |
| Inventories | 9,768 | 5,335 | 3,758 |
| Billed customer receivables | 117,127 | 56,190 | 121,956 |
| Unbilled customer receivables | 64,172 | 43,670 | 47,504 |
| Receivables Group companies | 140,115 | 129,094 | 148,959 |
| Other current receivables | 57,285 | 57,087 | 67,367 |
| Cash and bank balances | 134,824 | 85,040 | 79,903 |
| Total current assets | 523,291 | 376,416 | 469,447 |
| TOTAL ASSETS | 603,814 | 487,576 | 562,774 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Restricted equity | |||
| Share capital | 17,141 | 17,141 | 17,141 |
| Statutory reserve | 43,630 | 43,630 | 43,630 |
| Total restricted equity | 60,771 | 60,771 | 60,771 |
| Unrestricted equity | |||
| Retained earnings | 126,859 | 118,235 | 118,237 |
| Profit/loss for the year | 12,277 | -15,229 | 8,622 |
| Total non-restricted equity | 139,136 | 103,006 | 126,859 |
| Total equity | 199,907 | 163,777 | 187,630 |
| Long-term liabilities | 21,594 | 17,563 | 22,824 |
| Total long-term liabilities | 21,594 | 17,563 | 22,824 |
| Accounts payable | 17,496 | 24,508 | 18,957 |
| Liabilities Group companies | 19,387 | 18,656 | 18,989 |
| Other current liabilities | 345,430 | 263,072 | 314,374 |
| Total current liabilities | 382,313 | 306,236 | 352,320 |
| TOTAL EQUITY AND LIABILITIES | 603,814 | 487,576 | 562,774 |
NOTES, GROUP
NOTE 1 ACCOUNTING POLICIES
This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The accounting policies applied are consistent with those described in the 2022 Annual Report for RaySearch Laboratories AB (publ), which is available at raysearchlabs.com. RaySearch Laboratories AB (publ) is the Parent Company of the RaySearch Group.
The Parent Company applies the Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities. The Parent Company's operations are consistent with the Group's operations in all material respects. Differences in profitability between the Parent Company and the Group are attributable to the Parent Company accounting for a relatively high proportion of operating expenses, and to the capitalization of development costs being recognized in the Group but not in the Parent Company. The Parent Company'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 | APR-JUN | ||||||
|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change | JUL 2022- JUN 2023 |
Full-year 2022 |
|||
| Revenue by type | |||||||
| Licenses | 100,749 | 68,443 | 47.2% | 413,336 | 388,456 | ||
| Support (incl. warranty support) | 101,748 | 73,125 | 39.1% | 361,859 | 323,104 | ||
| Hardware | 27,011 | 14,754 | 83.1% | 130,700 | 105,760 | ||
| Training and other | 9,959 | 3,913 | 154.5% | 39,005 | 26,328 | ||
| Total revenue by type | 239,467 | 160,235 | 49.4% | 944,900 | 843,648 | ||
| Revenue by geographic market | |||||||
| Americas | 99,879 | 72,872 | 37.1% | 436,573 | 397,919 | ||
| APAC, Pacific Ocean and Middle East | 47,862 | 24,489 | 95.4% | 193,565 | 183,420 | ||
| Europe and Africa | 91,726 | 62,874 | 45.9% | 314,762 | 262,309 | ||
| Total revenue by geographic market | 239,467 | 160 235 | 49.4% | 944,900 | 843,648 | ||
| Revenue recognized at various points in time | |||||||
| Goods/services transferred at a point in time | 127,760 | 83,197 | 53.6% | 544,036 | 494,216 | ||
| Services transferred over time | 111,707 | 77,038 | 45.0% | 400,864 | 349,432 | ||
| Total revenue recognized at various points in time | 239,467 | 160,235 | 49.4% | 944,900 | 843,648 |
| AMOUNTS IN SEK 000s | JAN-JUN | ||||
|---|---|---|---|---|---|
| 2023 | 2022 | Change | JUL 2022- JUN 2023 |
Helår 2022 |
|
| Revenue by type | |||||
| Licenses | 205,034 | 180,154 | 13.8% | 413,336 | 388,456 |
| Support (incl. warranty support) | 188,524 | 149,769 | 25.9% | 361,859 | 323,104 |
| Hardware | 56,291 | 31,351 | 79.6% | 130,700 | 105,760 |
| Training and other | 19,787 | 7,110 | 178.3% | 39,005 | 26,328 |
| Total revenue from contracts with customers | 469,636 | 368,384 | 27.5% | 944,900 | 843,648 |
| Revenue by geographic market | |||||
| Americas | 191,519 | 152,865 | 25.3% | 436,573 | 397,919 |
| APAC, Pacific Ocean and Middle East | 95,671 | 85,526 | 11.9% | 193,565 | 183,420 |
| Europe and Africa | 182,446 | 129,993 | 40.4% | 314,762 | 262,309 |
| Total revenue by geographic market | 469,636 | 368,384 | 27.5% | 944,900 | 843,648 |
| Revenue recognized at various points in time | |||||
| Goods/services transferred at a point in time | 261,325 | 211,505 | 23.6% | 544,036 | 494,216 |
| Services transferred over time | 208,311 | 156,879 | 32.8% | 400,864 | 349,432 |
| Total revenue recognized at various points in time | 469,636 | 368,384 | 27.5% | 944,900 | 843,648 |
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 June 2023, the credit loss provision amounted to SEK 47.4 M (37.9), corresponding to 13 percent (11) of total customer receivables.
NOTE 5 RELATED-PARTY TRANSACTIONS
There were no transactions between RaySearch and related parties with any material impact on the company's position and earnings during the period.
NOTE 6 PLEDGED ASSETS IN THE GROUP AND PARENT COMPANY
| AMOUNTS IN SEK 000s | Jun 30, 2023 | Jun 30, 2022 | Dec 31, 2022 |
|---|---|---|---|
| Chattel mortgages | 100,00 | 100,000 | 100,000 |
| Guarantees | 32,887 | 32,634 | 33,007 |
GROUP QUARTERLY OVERVIEW
| 2023 | 2022 | 2021 | ||||||
|---|---|---|---|---|---|---|---|---|
| AMOUNTS IN SEK 000s | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 |
| Order intake | ||||||||
| Total order intake | 239,163 | 206,631 | 514,424 | 219,091 | 212,511 | 272,442 | 345,028 | 127,853 |
| Income statement | ||||||||
| Net sales | 239,467 | 230,169 | 264,383 | 210,811 | 160,235 | 208,149 | 188,573 | 136,419 |
| Change in sales, % | 49.4 | 10.6 | 40.2 | 54.6 | 3.7 | 28.4 | 18.5 | 15.2 |
| Operating profit/loss | 18,226 | 23,676 | 20,700 | 12,007 | -19,527 | 29,564 | -16,578 | -26,561 |
| Operating margin, % | 7.6 | 10.3 | 7.8 | 5.7 | -12.2 | 14.2 | -8.8 | -19.5 |
| Profit/loss for the period | 10,918 | 17,563 | 14,138 | 10,984 | -19,731 | 19,298 | -15,968 | -21,990 |
| Net margin, % | 4.6 | 7.6 | 5.3 | 5.2 | -12.3 | 9.3 | -8.5 | -16.1 |
| Cash flow | ||||||||
| Operating activities | 67,214 | 151,177 | 158,326 | 8,613 | 79,778 | 125,787 | 28,397 | 47,356 |
| Investing activities | -56,458 | -50,555 | -95,641 | -52,209 | -67,593 | -60,551 | -60,944 | -45,569 |
| Financing activities | -14,041 | -16,150 | -19,919 | -4,394 | 4,500 | -29,916 | 12,482 | -11,875 |
| Cash flow for the period | -3,285 | 84,472 | 42,769 | -47,990 | 16,685 | 35,320 | -20,065 | -10,088 |
| Capital structure | ||||||||
| Equity/assets ratio, % | 36.3 | 35.8 | 35.0 | 37.6 | 35.2 | 37.5 | 36.0 | 54.6 |
| Net debt | 280,285 | 296,260 | 395,861 | 414,273 | 386,236 | 397,045 | 459,742 | -52,983 |
| Debt/equity ratio | 0.4 | 0.4 | 0.6 | 0.6 | 0.6 | 0.6 | 0.7 | -0.1 |
| Net debt/EBITDA | 0.8 | 0.9 | 1.2 | 1.4 | 1.6 | 1.8 | 2.3 | -0.3 |
| Per share data, SEK | ||||||||
| Earnings/loss per share before | ||||||||
| 34,282.8 | 34,282.8 | 34,282.8 | 34,282.8 | 34,282.8 | 34,282.8 | 34,282.8 | 34,282.8 | |
| dilution Earnings/loss per share after dilution Equity per share Share price at the end of the period Other No. of shares before/after dilution, 000s Average no. of employees |
0.32 0.32 20.07 63.30 371 |
0.51 0.51 19.67 77.10 374 |
0.41 0.41 19.17 68.00 382 |
0.29 0.29 18.81 47.60 386 |
-0.58 -0.58 18.42 54.40 383 |
0.56 0.56 18.91 51.70 399 |
-0.47 -0.47 18.33 56.50 419 |
-0.64 -0.64 18.77 61.50 418 |
GROUP, ROLLING 12 MONTHS
| Jul 2022- | Apr 2022- | Jan 2022- | Oct 2021- | Jul 2021- | Apr 2021- | Jan 2021- | Oct 2020- | |
|---|---|---|---|---|---|---|---|---|
| AMOUNTS IN SEK 000s | Jun 2023 | Mar 2023 | Dec 2022 | Sep 2022 | Jun 2022 | Mar 2022 | Dec 2021 | Sep 2021 |
| Order intake | ||||||||
| Total order intake | 1,179,309 | 1,152,657 | 1,218,468 | 1,049,070 | 957,845 | 935,073 | 807,762 | 701,859 |
| Income statement | ||||||||
| Net sales | 944,900 | 865,668 | 843,648 | 767,838 | 693,376 | 687,720 | 641,673 | 612,935 |
| Operating profit/loss | 74,609 | 36,856 | 42,744 | 5,466 | -33,102 | -36,038 | -53,341 | -52,052 |
| Operating margin, % | 7.9 | 4.3 | 5.1 | 0.7 | -4.8 | -5.2 | -8.3 | -8.5 |
| Cash flow | ||||||||
| Cash flow | 75,966 | 95,936 | 46,784 | -16,050 | 21,852 | -69,223 | -72,380 | -73,136 |
| Cash flow adjusted for repayment of bank loans |
75,966 | 95,936 | 68,052 | 5,218 | 43,120 | -47,955 | -22,380 | -23,136 |
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 | Order intake is an indicator of future revenue and thus a key |
| changes to existing orders during the current period. | figure for the management of RaySearch's operations. | |
| Order backlog | The value of orders at the end of the period that the | The order backlog shows the value of orders already booked |
| company has yet to deliver and recognize as revenue, | by RaySearch that will be converted to revenue in the | |
| meaning remaining performance obligations. | future. | |
| Net sales/Order intake | Recognized net sales in relation to total order intake during | The measurement is used to monitor the recognized |
| the corresponding period. | revenue in relation to sales, which is part of the reason for | |
| the change in order backlog. | ||
| Change in sales | The change in net sales compared with the year-earlier | The measure is used to track the performance of the |
| period expressed as a percentage. | company's operations between periods. | |
| Change in sales at | Change in sales at unchanged exchange rates, i.e. excluding | This measure is used to monitor underlying change in sales |
| unchanged currencies | currency effects. | driven by alterations in volume, pricing and mix for |
| (organic growth) | comparable units between different periods. | |
| Gross profit | Net sales minus cost of goods sold. | Gross profit is used to measure the margin before sales, |
| research, development and administrative expenses | ||
| Operating profit/loss | Calculated as profit for the period before financial items and | Operating profit/loss provides an overall picture of the total |
| tax. | generation of earnings in operating activities. | |
| Operating profit adjusted | Calculated as operating profit less other operating | Operating profit provides an overall picture of the total |
| for currency translation | income/expenses. | generation of earnings in operating activities excluding |
| effects | currency translation effects for balance sheet items. | |
| Operating margin | Operating profit expressed as a percentage of net sales. | Together with sales growth, the operating margin is a key |
| element for monitoring value creation. | ||
| Net margin | Profit for the period as a percentage of net sales for the 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 | The measurement shows the underlying cash flow before |
| changes in bank loans | loans. | financing activities, but including amortization of lease |
| liabilities. | ||
| Equity per share | Equity divided by number of shares at the end of the period. | The measurement shows the return generated on the |
| owners' invested capital per share. | ||
| Rolling 12 months' sales, | Sales, operating profit or other results measured over the | This measure is used to more clearly illustrate the trends for |
| operating profit or other | past 12-month period. | sales, operating profit and other results, which is relevant |
| results | because RaySearch's revenue is subject to monthly | |
| variations. | ||
| Working capital | Working capital comprises inventories, operating receivables | This measure shows how much working capital is tied up in |
| and operating liabilities, and is obtained from the statement | operations and can be shown in relation to net sales to | |
| of financial position. Operating receivables comprise | demonstrate the efficiency with which working capital has | |
| accounts receivable, other current/long-term receivables | been used. | |
| and non-interest bearing prepaid expenses and accrued | ||
| income. Operating liabilities include other non-interest | ||
| bearing long-term liabilities, advance payments from | ||
| customers, accounts payable, other current liabilities and | ||
| non-interest bearing accrued expenses and deferred | ||
| income. | ||
| Return on equity | Calculated as profit/loss for the period as a percentage of average equity. Average equity is calculated as the sum of |
Shows the return generated on the owners' invested capital from a shareholder perspective. |
| equity at the end of the period plus equity at the end of the | ||
| year-earlier period, divided by two. | ||
| Equity/assets ratio | Equity expressed as a percentage of total assets at the end | This is a standard measure to show financial risk, and is |
| of the period. | expressed as the percentage of the total restricted equity | |
| 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 |
| depreciation/amortization and impairment. | taking into consideration financial decisions or taxes. | |
| Net debt/EBITDA | Net debt at the end of the period in relation to operating | A relevant measure from a credit perspective that shows the |
| profit before depreciation and amortization over the past | company's ability to handle its debt. | |
| 12-month period. |
CALCULATION OF FINANCIAL MEASURES NOT INCLUDED IN THE IFRS FRAMEWORK
| AMOUNTS IN SEK 000s | Jun 30, 2023 | Jun 30, 2022 | Dec 31, 2022 |
|---|---|---|---|
| Working capital | |||
| Accounts receivable (current billed customer receivables) | 188,903 | 195,364 | 246,742 |
| Current unbilled customer receivables | 142,436 | 130,492 | 123,827 |
| Long-term unbilled customer receivables | 51,517 | 9,704 | 54,697 |
| Inventories | 26,641 | 43,934 | 14,091 |
| Other current receivables (excl. tax) | 72,366 | 75,213 | 71,712 |
| Accounts payable | -27,978 | -43,549 | -24,030 |
| Other current liabilities (excl. tax) | -540,995 | -462,373 | -526,781 |
| Working capital | -87,110 | -51,215 | -39,743 |
| AMOUNTS IN SEK 000s | Jun 30, 2023 | Jun 30, 2022 | Dec 31, 2022 |
| Net debt | |||
| Current interest-bearing liabilities | 58,581 | 52,678 | 58,307 |
| Long-term interest-bearing liabilities | 467,932 | 495,626 | 497,822 |
| Cash and cash equivalents | -246,228 | -162,068 | -160,268 |
| Net debt | 280,285 | 386,236 | 395,861 |
| JUL 2022 - | JUL 2021 - | ||
| AMOUNTS IN SEK 000s | JUN 2023 | JUN 2022 | Full-year 2022 |
| EBITDA | |||
| Operating profit/loss | 74,609 | -33,102 | 42,744 |
| Amortization and depreciation | 291,882 | 273,135 | 296,994 |
| EBITDA | 366,491 | 240,033 | 339,738 |
| AMOUNTS IN SEK 000s | JUL 2022 - | JUL 2021 - | Full-year 2022 |
| JUN 2023 | JUN 2022 | ||
| Change in sales at unchanged currencies (organic growth) | |||
| Net sales for the year, rolling 12 months | 944,900 | 693,376 | 843,648 |
| Currency adjustment | -54,352 | -27,761 | -52,793 |
| Adjusted net sales | 890,548 | 665,615 | 790,855 |
| Net sales, preceding year | 706,117 | 595,646 | 641,673 |
| Change in sales at unchanged currencies (organic growth) | 26.1% | 11.7% | 23.2% |
HEAD OFFICE
RaySearch Laboratories AB (publ) Box 45169 SE-104 30 Stockholm, Sweden
STREET ADDRESS
Eugeniavägen 18 C 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 (TPS) and RayCare oncology information system (OIS) to cancer centers all over the world and distributes the products through licensing agreements with leading medical technology companies.The latest additions to the RaySearch product line are RayIntelligence and RayCommand. RayIntelligence is a cloud-based oncology analytics system that cancer clinics can use to collect, structure and analyze data. The Treatment Control System (TCS) RayCommand is designed as a link between the treatment machine and the dose planning and oncology information systems.
RaySearch's software is currently used by over 900 clinics in more than 40 countries. The company was founded in 2000 as a spin-off from the Karolinska Institute in Stockholm and the share has been listed on Nasdaq Stockholm since 2003.
More information about RaySearch is available at raysearchlabs.com
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 worldleading 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.
