Quarterly Report • Nov 18, 2016
Quarterly Report
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| AMOUNTS IN SEK 000S | JUL-SEP JAN-SEP |
OCT 2015- | FULL YEAR | |||
|---|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | SEP 2016 | 2015 | |
| Net sales | 125.730 | 100.570 | 340.113 | 265.643 | 472.070 | 397,600 |
| Operating profit | 38,465 | 20.085 | 99.310 | 51.042 | 143,612 | 95,344 |
| Operating margin, % | 30.6 | 20.0 | 29.2 | 19.2 | 30.4 | 24.0 |
| Profit for the period | 28.887 | 14.480 | 75.484 | 36.898 | 108.795 | 70.209 |
| Earnings per share before/after dilution, SEK | 0.84 | 0.42 | 2.20 | 1.08 | 3.17 | 2.05 |
| Cash flow from operating activities | 10,211 | 13.093 | 46.982 | 70.202 | 88.206 | 111,426 |
| Cash flow before financing activities | 13,109 | $-5,486$ | $-28,760$ | $-6.089$ | $-15.100$ | 7,571 |
| Return on equity, % | 8.6 | 5.8 | 22.5 | 14.8 | 32.4 | 24.6 |
| Equity/assets ratio, %, at the end of the period | 65.8 | 62.3 | 65.8 | 62.3 | 65.8 | 65.9 |
| Share price at the end of the period, SEK | 198.50 | 119.00 | 198.50 | 119.00 | 198.50 | 122.50 |
Our favorable trend continued in the third quarter, in terms of both sales and earnings. In the third quarter, order intake for RayStation rose 2 percent to SEK 91 M [90]. This is positive, considering the strong year-on-year order intake, which included winning major orders from MD Anderson and the University of Florida in the US, as well as Gustave Roussy in France.
During the first nine months, order intake for RayStation rose 33 percent to SEK 285 M (214), mainly driven by a strong order intake in Europe.
RayStation is now firmly established in all major markets worldwide as the most advanced treatment planning system for radiation therapy in the market, with support for adaptive radiation therapy, automated workflows and unique multi-criteria optimization. Another advantage for RayStation is that the system supports such a wide range of radiation therapy devices, more than any other treatment planning system. RayStation helps to improve the radiation therapy process and to extend the lifetime of therapy devices, which means they can be used more efficiently. This means that clinics that want to improve and develop their care are no longer dependent on buying the latest hardware, instead they can achieve similar, positive outcomes by choosing RayStation as their treatment planning system.
We are continuing to expand our global marketing organization and now have subsidiaries in the US, Canada, Germany, France, Belgium, the UK, Singapore, South Korea and Japan, while several other subsidiaries are currently being established.
During the quarter, revenues from RayStation rose 52 percent to SEK 113 M [74], while sales via partners declined to SEK 13 M (26). Overall, revenues rose 25 percent to SEK 126 M (101) in the third quarter, and operating profit increased sharply to SEK 38 M (20). In the first nine months, revenues rose 28 percent to SEK 340 M (266) and operating profit rose to SEK 99 M (51), representing an operating margin of 29 percent (19). These were our highest sales and best earnings by far for the first nine months.
RayCare is the next-generation oncology information system. When the system is launched in 2017, cancer clinics worldwide will gain access to a comprehensive information system covering the most important methods for cancer treatment radiation therapy, chemotherapy and surgery. RayCare will be able to manage workflows and store information about a cancer patient's entire treatment plan, which offers new opportunities for data analysis and the evaluation of treatment outcomes. To ensure that we meet the needs of these clinics, our development activities are taking place in close collaboration with leading cancer clinics. We are currently collaborating with the University of California, San Francisco in the US, the University Medical Center Groningen in the Netherlands and the radiation therapy department of Iridium Kankernetwerk in Belgium, and within short we will sign additional long-term collaboration agreements with world-leading cancer clinics regarding RayCare. Solving the coordination, safety and efficiency needs of the world's largest cancer care providers is one of the most exciting challenges for us to date. Our partnership model provides excellent conditions for success, based on the vast clinical knowledge and resources of our partners combined with RaySearch's ability to develop innovative software solutions.
The great interest in RayCare and RayStation was clear at the 2016 Annual General Meeting of the American Society for Radiation Oncology (ASTRO) in Boston at the end of September, where our booth was one of the most well-attended in the entire Exhibit Hall, and our demo stations were almost fully booked.
Our sales and earnings will continue to vary by quarter, since order intake and deliveries remain subject to relatively large fluctuations. However, I take great pleasure in confirming that our sales have now reached record year-on-year levels for twelve consecutive quarters. We also expect this growth to continue and that our recurring support revenues from RayStation will grow steadily. This provides a stable base for continued focus on both RayStation and RayCare.
To date, 347 cancer clinics in 25 countries have purchased RayStation. At the same time, there are more than 8,000 radiation therapy clinics worldwide and that number will undoubtedly grow over the next decade. The driving forces include rising cancer rates, growing awareness of the benefits of radiation therapy and major investments in cancer care in Asia. Consequently, the market is growing steadily, however, we will continue to grow considerably faster than the market. We aim to achieve a global market share of at least 30 percent in the not too distant future.
It is a privilege to lead a company like RaySearch. The drive and innovative spirit in this company is exceptional, and we have excellent prospects for succeeding with our joint mission - to continue the advancement of cancer care by developing innovative software solutions that save lives and improve the quality of life for cancer patients.
Stockholm, November 18, 2016
Johan Löf President and CEO of RaySearch Laboratories AB (publ)
In the third quarter of 2016, order intake, excluding service agreements, declined 7.2 percent to SEK 101.1 M [109.0], of which order intake for RayStation rose 1.8 percent to SEK 91.2 M [89.6]. Order intake in Europe remained strong, while order intake in both North America and Asia was lower than the corresponding period in 2015.
| Rolling | Full-year | ||||||
|---|---|---|---|---|---|---|---|
| Order intake (amounts in SEK M) | 03-15 | 04-15 | 01-16 | 02-16 | $03-16$ | 12 months | 2015 |
| License order intake - RayStation | 89.6 | 102.9 | 72.6 | 120.8 | 91.2 | 387.5 | 316.9 |
| License order intake - Partners | 19.4 | 15.0 | 9.3 | 8.3 | 9.8 | 42.4 | 68.3 |
| Total order intake | 109.0 | 117.9 | 81.9 | 129.1 | 101.1 | 430.0 | 385.2 |
| Order backlog for RayStation, at the end of the period | 59.3 | 49.1 | 47.1 | 65.2 | 55.5 | 55.5 | 49.1 |
In the first nine months of 2016, order intake, excluding service agreements, increased 16.8 percent to SEK 312.1 M (267.3), of which order intake for RayStation rose 33.0 percent to SEK 284.6 M (214.0). At September 30, 2016, the order backlog for RayStation was SEK 55.5 M [59.3].
In the third quarter of 2016, sales rose 25.0 percent and amounted to SEK 125.7 M (100.6). Sales consist of license revenues from sales of the RayStation treatment planning system, sales of software modules via partners, and support revenues. The sales increase was largely a result of sharply increased revenues from RayStation, which rose 52.4 percent and amounted to SEK 112.6 M [73.9]. In the third quarter, sales the following geographic distribution: North America, 30 percent (63); Asia, 5 percent (19); Europe and the rest of the world, 65 percent (18).
| Rolling | Full-year | ||||||
|---|---|---|---|---|---|---|---|
| Revenues (amounts in SEK M) | 03-15 | 04-15 | 01-16 | 02-16 | 03-16 | 12 months | 2015 |
| License revenues - RayStation | 70.5 | 105.0 | 74.0 | 100.7 | 104.5 | 384.1 | 285.0 |
| License revenues - Partners | 19.4 | 15.0 | 9.3 | 8.3 | 9.8 | 42.4 | 68.3 |
| Support revenues - RayStation | 3.1 | 4.1 | 6.7 | 6.9 | 8.0 | 25.6 | 12.6 |
| Support revenues - Partners | 6.9 | 7.5 | 5.4 | 2.8 | 3.3 | 19.0 | 28.9 |
| Training and other revenues - RayStation | 0.6 | 0.4 | 0.1 | 0.3 | 0.1 | 0.9 | 2.8 |
| Total sales | 100.6 | 132.0 | 95.4 | 119.0 | 125.7 | 472.1 | 397.6 |
| Growth in net sales, %, corresp. period Organic growth in sales, %, corresp. period |
40.5% 18.6% |
22.4% 14.5% |
8.7% 8.7% |
53.6% 55.4% |
25.0% 24.0% |
26.4% 24.2% |
39.5% 32.9% |
In the first nine months of 2016, sales increased 28.0 percent to SEK 340.1 M [265.6], of which revenues from RayStation rose 57.8 percent to SEK 301.2 M [190.9]. During the first nine months of the year, sales had the following geographic distribution: North America, 37 percent (50); Asia, 10 percent (17); Europe and the rest of the world, 53 percent (33).
In the third quarter of 2016, operating profit increased to SEK 38.5 M (20.1), representing an operating margin of 30.6 percent [20.0]. The earnings increase was mainly due to sharply increased sales of RayStation.
Other operating income and expenses refers to exchange-rate gains and losses, with the net of these amounting to income of SEK 2.2 M [1.9] in the third quarter of 2016. This was mainly because the major portion of accounts receivable was denominated in USD and EUR, which both strengthened in the third quarter compared with the end of the second quarter.
During the first nine months of the year, operating profit increased to SEK 99.3 M (51.0), representing an operating margin of 29.2 percent (19.2). RaySearch is continuing to expand its global marketing organization, which has led to higher costs for marketing and for personnel in sales, service and administration, however this cost increase has been more than offset by increased sales in 2016.
The company is dependent on exchange-rate trends in the USD and EUR against the SEK, since invoicing is mainly denominated in USD and EUR, while most of the costs are in SEK.
At unchanged exchange rates, sales would have increased 24.0 percent in the third quarter and 28.0 percent during the first nine months of the year, compared with the year-on-year period. Currency effects have therefore had a positive impact on sales in 2016.
A sensitivity analysis of currency exposure indicates that the impact of a +/-10 percent change in the average USD exchange rate on operating profit for the first nine months of 2016 would be +/- SEK 28.1 M, and that the corresponding effect of a +/-10 percent change in the average EUR exchange rate would be about +/- SEK 11.1 M. The company pursues the financial policy established by the Board of Directors, whereby exchange-rate changes are not hedged.
At September 30, 2016, some 107 [101] employees were engaged in research and development. Research and development expenditure include payroll costs, consulting fees, computer equipment and premises. As of 2016, costs related to the quality department, patents, internal IT support and so forth, have been reallocated from the development department to central administration. Increased capitalization of development expenditure pertained mainly to RayCare, which is planned to be launched in 2017.
| 2015 |
|---|
| 132.5 |
| $-81.0$ |
| 50.0 |
| 101.5 |
During the first nine months of the year, research and development expenditure before capitalization and amortization of development expenditure amounted to SEK 99.0 M [95.6]. Capitalized development expenditure amounted to SEK 73.4 M [52.4] and during the nine-month period, amortization of capitalized development expenditure amounted to SEK 42.6 M [37.9]. After adjustments for capitalization and amortization of development expenditure, research and development expenditure amounted to SEK 68.2 M [81.1].
In the third quarter of 2016, total amortization and depreciation was SEK 16.8 M [14.5], of which amortization of intangible fixed assets amounted to SEK 14.0 M (12.6), primarily related to capitalized development expenditure, and depreciation of tangible fixed assets amounted to SEK 2.8 M [1.9].
Total amortization and depreciation during the first nine months of the year was SEK 50.8 M (42.2), of which amortization of intangible fixed assets totaled SEK 42.6 M (37.9), primarily attributable to capitalized development expenditure, and depreciation of tangible fixed assets totaled SEK 8.3 M (4.3).
In the third quarter of 2016, profit after tax totaled SEK 28.9 M (14.5), representing earnings per share before and after dilution of SEK 0.84 (0.42). In the first nine months of 2016, profit after tax was SEK 75.5 M (36.9), representing earnings per share before and after dilution of SEK 2.20 [1.08]
Tax expense for the first nine months of the year amounted to SEK 22.4 M (expense: 12.5), corresponding to an effective tax rate of 22.9 percent (25.3).
In the third quarter of 2016, cash flow from operating activities amounted to SEK 10.2 M [13.1]. Improved earnings were offset by an increase in working capital. The working capital has increased primarily due to an increase in accounts receivable and accrued income following the high sales growth during the quarter, but the share of overdue invoices has also increased slightly. During the first nine months of the year, cash flow from operating operations was SEK 46.9 M [70.2].
In the third quarter, cash flow from investing activities was a negative SEK 23.3 M (neg: 18.6). Investments in intangible fixed assets amounted to SEK 22.8 M [17.4], and comprised capitalized development expenditure attributable to RayStation and RayCare. Investments in tangible fixed assets amounted to SEK 0.5 M (1.2), and a finance lease agreement was also used to finance an additional SEK 1.4 M.
During the first nine months of the year, cash flow from investing activities was a negative SEK 75.7 M (neg: 76.3). Investments in intangible fixed assets amounted to SEK 73.4 M (52.4), and comprised capitalized development expenditure. Investments in tangible fixed assets amounted to SEK 2.3 M [36.7], and a finance lease agreement was also used to finance an additional SEK 1.4 M. In the third quarter of 2016, cash flow before financing activities was a negative SEK 13.1 M [neg: 5.5], and a negative SEK 28.7 M [neg: 6.1] in the first nine months of the year.
In the third quarter of 2016, cash flow from financing activities was SEK 8.9 M (neg: 1.0) and included an increased revolving credit facility of SEK 10 M. In the first nine months of 2016, cash flow from financing activities was a negative SEK 1.6 M (neg. 2.7).
Cash flow for the first nine months of 2016 was a negative SEK 30.4 M (neg: 8.8) and at September 30, 2016, consolidated cash and cash equivalents amounted to SEK 29.8 M [47.6].
RaySearch's total assets amounted to SEK 586 M (460) at September 30, 2016, and the equity/assets ratio was 65.8 percent (62.3).
At September 30, 2016, current receivables totaled SEK 289.6 M [188.3]. The receivables mainly comprised accounts receivable and the increase was largely due to sharply increased sales growth. The size of accounts receivable in relation to sales increased slightly during the third quarter due to the major portion of sales conducted at the end of the period.
In September 2016, the company's credit facility was increased from SEK 50 M to SEK 100 M, whereby chattel mortgages increased to SEK 100 M. The credit facility matures in September 2019, and consists of an overdraft facility of SEK 25 M and a revolving credit facility of up to SEK 75 M. At September 30, 2016, SEK 35 M had been utilized under the terms of the revolving loan. Of the company's overdraft facility of SEK 25 M, SEK 4,0 M has been blocked as collateral for bank guarantees.
The provision pertaining to the settlement with Prowess was reclassified as a liability during 2014, as a result of the signed settlement agreement. The remaining liability of USD 1.6 M is in USD and discounted, since the amount does not carry any interest until final payment falls due in October 2016. During the year, currency and discounting effects have had a negative impact of SEK 0.3 M on profit from financial items.
RaySearch's financial assets and liabilities comprise accounts receivable, cash and cash equivalents, accrued income, accrued expenses, bank loans, accounts payable and a liability attributable to the settlement agreement signed with Prowess in April 2014. The liability pertaining to the settlement is discounted, while other financial assets and liabilities have short terms. Accordingly, the fair values of all financial instruments are deemed to correspond approximately to their carrying amounts. RaySearch has not applied net accounting to any financial assets or liabilities, and has no agreements that permit offsetting.
At the end of the third quarter, the Group had 191 (171) employees, of whom 159 were based in Sweden, and 32 in foreign subsidiaries. The average number of employees during the January-September period of 2016 was 185 (164).
RaySearch Laboratories AB (publ) is the Parent Company of the RaySearch Group. Since the Parent Company's operations match the Group's operations in all material respects, the comments for the Group are also largely relevant for the Parent Company. However, the capitalization of development expenditure and adjustments related to finance leases are recognized in the Group, but not in the Parent Company. The Parent Company's current receivables mainly comprise receivables from Group companies and accounts receivable.
On January 4, 2016, the Class B RaySearch share (RAY B) was transferred from the Small Cap to the Mid Cap segment of Nasdag Stockholm, following Nasdag's annual review of Nordic market capitalization segments.
In February, it was announced that version 5 of the RayStation treatment planning system had been launched for clinical use in the UK, Australia and New Zealand, and will be launched in most major markets during the first half of 2016. At present, RayStation 5 is the only commercially available treatment planning system that offers support for carbon-ion therapy - the most advanced form of radiation therapy. RayStation 5 also offers several new features, such as robust optimization based on 4D-CT scans, and Plan Explorer - a treatment planning tool that combines automated treatment planning and high-performance algorithms with the ability to generate a range of delivery techniques in a manner that presents totally new opportunities for determining the most effective treatment for each patient.
In February, it was announced that RaySearch had signed a long-term collaboration agreement with the University of California, San Francisco (UCSF) regarding the RayCare oncology information system that RaySearch is developing. "UCSF is the perfect partner for this development. The university is a world-leading institution for cancer treatment, and also offers an extensive and diverse set of treatment devices and other systems, offering a challenging and ideal environment for the development of RayCare," says Johan Löf.
In 2016, some of the largest and most respected cancer clinics in the world has selected RaySearch as their treatment planning system, including
In September, it was announced that IBA and RaySearch, global leaders in proton therapy solutions and software for treatment planning, had signed a long-term strategic alliance to combine each of their technologies, and take adaptive radiation therapy using protons to the next level. As part of this partnership, the RayCare oncology information system, which is currently under development by RaySearch, will be adapted for optimal use together with IBA's proton therapy devices. In both RayStation and RayCare, as well as in IBA's proton therapy system, joint features, custom software interfaces and modified graphical user interfaces will enable seamless workflow integration for maximum performance. The result will be a complete, turnkey solution for all hardware and software needed to deliver a highly efficient and adaptive proton therapy treatment.
In September, it was announced that RaySearch and Mevion would be expanding their collaboration to include the RayCare oncology information system, as well as the development of algorithms in order to fully benefit from the advanced functionality of the Mevion S250i proton therapy system with Adaptive Aperture technology.
In September, an agreement was signed to increase the company's credit facility from SEK 50 M to SEK 100 M, whereby chattel mortgages increased to SEK 100 M. The credit facility matures in September 2019, and consists of an overdraft facility of SEK 25 M and a revolving credit facility of up to SEK 75 M.
Victoria Sörving, General Counsel, decided to leave the company in September. The recruitment of her successor is ongoing.
In November, it was announced that Erik Hedlund resigned as Chairman and resigned from the Board on 17 November 2016. Carl Filip Bergendal was appointed new Chairman until the Annual General Meeting, which will be held on 24 May, 2017.
In March 2016, 750 Class A shares were converted to Class B shares at the request of shareholders. At September 30, 2016, the total number of registered shares in RaySearch was 34,282,773, of which 10,262,064 were Class A and 24,020,709 Class B shares. The quotient value is SEK 0.50 and the company's share capital is SEK 17,141,386.50. Each Class A share carries 10 votes, and each Class B share carries one vote, at a general meeting. At June 30, 2016, the total number of voting rights in RaySearch was 126,641,349.
At September 30, 2016, the number of shareholders in RaySearch was 5,651 and, according to Euroclear, the largest shareholders were as follows: $\ddot{\phantom{0}}$
| Share | |||||
|---|---|---|---|---|---|
| Class A | Class B | Total | capital. | ||
| Name | shares | shares | shareholding | % | Votes, % |
| Johan Löf | 6,243,084 | 618,393 | 6,861,477 | 20.0 | 49.8 |
| Lannebo Funds | 0 | 4.774.466 | 4.774.466 | 13.9 | 3.8 |
| Montanaro funds | 0 | 2.880.000 | 2.880.000 | 8.4 | 2.3 |
| Second AP Fund | 0 | 1,891,775 | 1,891,775 | 5.5 | 1.5 |
| Erik Hedlund | 1,567,089 | 128,699 | 1,695,788 | 5.0 | 12.5 |
| Anders Brahme | 1,390,161 | 20.000 | 1,410,161 | 4.1 | 11.0 |
| First AP Fund | 0 | 1.409.118 | 1,409,118 | 4.1 | 1.1 |
| Swedbank Robur Funds | 0 | 1,390,557 | 1,390,557 | 4.1 | 1.1 |
| Carl Filip Bergendal | 1,061,577 | 144,920 | 1,206,497 | 3.5 | 8.5 |
| JPMorgan Chase [UK] | 0 | 1,036,115 | 1,036,115 | 3.0 | 0.8 |
| Total, 10 largest | |||||
| shareholders | 10,261,911 | 14,294,043 | 24,555,954 | 71.6 | 92.3 |
| Others | 153 | 9,726,666 | 9,726,819 | 28.4 | 7.7 |
| Total | 10.262.064 | 24.020.709 | 34.282.773 | 100 | 100 |
This condensed interim report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting and the applicable provisions of the Swedish Annual Accounts Act. The Parent Company's financial statements have been prepared pursuant to Chapter 9 of the Swedish Annual Accounts Act, Interim Financial Reporting. The same accounting policies and measurement bases applied in the most recent Annual Report have been used to prepare the Group and Parent Company accounts. New or revised IFRS reporting requirements for 2016 have not impacted RaySearch during the period.
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, liquidity and financing opportunities. Risk management at RaySearch aims to identify, measure and reduce risks related to the Group's transactions and operations. No significant changes have been made to the risk assessment compared with the 2015 Annual Report. For a more detailed description of RaySearch's risks and risk management, refer to pages 31-32 of the 2015 Annual Report.
Revenues from RaySearch are subject to seasonal variations that are typical of the industry, whereby the fourth quarter is normally the strongest, while the second quarter is usually slightly weaker.
RaySearch works actively to reduce its negative environmental impact and to become a sustainable company. The company's products, comprising software to improve radiation therapy for cancer treatment, have a limited negative impact on the environment. 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 financially viable. RaySearch has an established environmental policy, and promotes social responsibility and long-term sustainable development based on sound ethical, social and environmental principles.
No transactions between RaySearch and related parties materially affected the company's position and earnings during the period.
Preparation of the interim report requires that company management makes estimates affecting the carrying amounts of assets, liabilities, revenues and expenses. 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.
Stockholm, November 18, 2016 The Board of Directors of RaySearch Laboratories AB (publ)
Johan Löf President/CEO and Board member
RaySearch Laboratories AB (publ), corporate identity number 556322-6157
We have reviewed the condensed interim report for RaySearch Laboratories AB (publ) as at September 30, 2016 and for the nine months period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Statements Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group, and in accordance with the Swedish Annual Accounts Act regarding the Parent Company.
Stockholm, November 18, 2016
Ernst & Young AB
Per Hedström Authorized Public Accountant
Johan Löf, President and CEO Peter Thysell, CFO
Tel: +46 8 510 530 00 E-mail: [email protected] Tel: +46 70 661 05 59 E-mail: [email protected]
The information contained in the interim report is such that RaySearch Laboratories AB (publ) is obliged to disclose under the EU's Market Abuse Regulation and the Securities Market Act. The information was submitted for publication on November 18, 2016 at 7:45 a.m CET.
| Year-end report, 2016 | February 17, 2017 |
|---|---|
| Interim report for the first quarter, 2017 | May 12, 2017 |
| 2017 Annual General Meeting | May 24, 2017 |
| Interim report for the first six months of 2017 | August 25, 2017 |
| Interim report for the third quarter, 2017 | November 24, 2017 |
| AMOUNTS IN SEK 000S | JUL-SEP | JAN-SEP OCT 2015- |
FULL-YEAR | |||
|---|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | SEP 2016 | 2015 | |
| Net sales | 125,730 | 100,570 | 340,113 | 265,643 | 472,070 | 397,600 |
| Cost of goods sold 1) | $-2,240$ | $-5,740$ | $-13,147$ | $-12,446$ | $-24,391$ | $-23,690$ |
| Gross profit | 123,490 | 94,830 | 326,966 | 253,197 | 447,679 | 373,910 |
| Other operating income | 2,348 | 1,983 | 8,754 | 13,682 | 8,754 | 13,682 |
| Selling expenses | $-42,233$ | $-38,704$ | $-113,623$ | -96,792 | $-155,191$ | $-138,360$ |
| Administrative expenses | $-20,856$ | $-10,147$ | $-49,244$ | $-30,014$ | $-62,470$ | $-43,240$ |
| Research and development expenditure | $-24,106$ | $-27,877$ | $-68,160$ | $-81,105$ | $-88,569$ | $-101,514$ |
| Other operating expenses | $-178$ | $-5,383$ | $-7,926$ | $-6,591$ | $-9,134$ | |
| Operating profit | 38,465 | 20,085 | 99,310 | 51,042 | 143,612 | 95,344 |
| Result from financial items | $-394$ | $-585$ | $-1,380$ | $-1,680$ | $-1,554$ | $-1,854$ |
| Profit before tax | 38,071 | 19,500 | 97,930 | 49,362 | 142,058 | 93,490 |
| Tax | $-9,184$ | $-5,020$ | $-22,446$ | $-12,464$ | $-33,263$ | $-23,281$ |
| Profit for the period 2) | 28,887 | 14,480 | 75,484 | 36,898 | 108,795 | 70,209 |
| Other comprehensive income | ||||||
| Items to be reclassified to profit or loss Translation difference of foreign operations for the period |
411 | $-446$ | $-495$ | $-2,001$ | $-734$ | $-2,240$ |
| Comprehensive income for the period 2) | 29,298 | 14,034 | 74,989 | 34,897 | 108,061 | 67,969 |
| Earnings per share before and after dilution (SEK) | 0.84 | 0.42 | 2.20 | 1.08 | 3.17 | 2.05 |
$^{11}$ Does not include amortization of capitalized development expenditure, which is included in research and development expenditure.
2) 100 percent attributable to Parent Company shareholders.
| AMOUNTS IN SEK 000S | JUL-SEP | JAN-SEP | FULL-YEAR | ||
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Opening balance | 356,638 | 272,411 | 319,517 | 251.548 | 251,548 |
| Profit for the period | 28,887 | 14.480 | 75.484 | 36.898 | 70,209 |
| Translation difference for the period | 411 | $-446$ | $-495$ | $-2.001$ | $-2,240$ |
| Dividend paid | $\blacksquare$ | $-8,570$ | $\overline{\phantom{a}}$ | ||
| Closing balance | 385,936 | 286,445 | 385,936 | 286.445 | 319,517 |
| AMOUNTS IN SEK 000S | SEP 30, 2016 | SEP 30, 2015 | DEC 31, 2015 |
|---|---|---|---|
| ASSETS | |||
| Intangible fixed assets | 225,911 | 178,551 | 195,114 |
| Tangible fixed assets | 37,407 | 45,072 | 41,760 |
| Deferred tax assets | 57 | 57 | |
| Other long-term receivables | 3,302 | ||
| Total fixed assets | 266,677 | 223,623 | 236,931 |
| Current receivables | 289,596 | 188,319 | 187,854 |
| Cash and cash equivalents | 29,837 | 47,577 | 59,705 |
| Total current assets | 319,433 | 235,896 | 247,559 |
| TOTAL ASSETS | 586,110 | 459,519 | 484,490 |
| EQUITY AND LIABILITIES | |||
| Equity | 385,936 | 286,445 | 319,517 |
| Deferred tax liabilities | 58,125 | 43,908 | 51,349 |
| Long-term liabilities | 46,531 | 52,393 | 38,164 |
| Accounts payable | 12,497 | 17,732 | 9,514 |
| Other current liabilities | 83,021 | 59,041 | 65,946 |
| TOTAL EQUITY AND LIABILITIES | 586,110 | 459,519 | 484,490 |
| Pledged assets | 104,000 | 53,800 | 54,000 |
| AMOUNTS IN SEK 000S | JUL-SEP | JAN-SEP | FULL-YEAR | ||
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Profit before tax | 38,071 | 19,500 | 97,930 | 49,362 | 93,490 |
| Adjusted for | |||||
| non-cash items 1) | 21,111 | 16,308 | 55,458 | 42,052 | 46,857 |
| Taxes paid | $-3,581$ | $-5,344$ | $-15,155$ | $-10,671$ | $-13,595$ |
| Cash flow from operating activities before changes in | |||||
| working capital | 55,601 | 30,464 | 138,233 | 80,743 | 126,752 |
| Cash flow from changes in working capital | $-45,390$ | $-17,371$ | $-91,251$ | $-10,541$ | $-15,326$ |
| Cash flow from operating activities | 10,211 | 13,093 | 46,982 | 70,202 | 111,426 |
| Cash flow from investing activities | $-23,320$ | $-18,579$ | $-75,742$ | -76,291 | $-103,855$ |
| Cash flow from financing activities | 8,955 | $-1,012$ | $-1,649$ | $-2,712$ | $-3,946$ |
| Cash flow for the period | $-4,154$ | $-6,498$ | $-30,409$ | $-8,801$ | 3,625 |
| Cash and cash equivalents at the beginning of the period | 33,526 | 53,906 | 59,705 | 56,085 | 56,085 |
| Exchange-rate difference in cash and cash equivalents | 465 | 169 | 541 | 293 | -5 |
| Cash and cash equivalents at the end of the period | 29,837 | 47,577 | 29,837 | 47,577 | 59,705 |
1) These amounts primarily include amortization of capitalized development expenditure.
| AMOUNTS IN SEK 000S | JUL-SEP | JAN-SEP | FULL-YEAR | |||
|---|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | ||
| Net sales | 111,865 | 85,714 | 294,165 | 224,620 | 337,060 | |
| Cost of goods sold 1) | $-846$ | $-3,825$ | $-6,073$ | $-7,909$ | $-12,040$ | |
| Gross profit | 111,019 | 81,889 | 288,092 | 216,711 | 325,020 | |
| Other operating income | 2,348 | 1,983 | 8,754 | 13,682 | 13,682 | |
| Selling expenses | $-31,516$ | $-27,782$ | $-80,792$ | $-64,565$ | -94,992 | |
| Administrative expenses | $-21,039$ | $-10,397$ | $-49,915$ | $-30,695$ | $-44,166$ | |
| Research and development expenditure | $-32,890$ | $-32,627$ | $-98,957$ | $-95,575$ | $-132,547$ | |
| Other operating expenses | $-178$ | $-5,383$ | $-7,926$ | $-9,134$ | ||
| Operating profit | 27,744 | 13,066 | 61,799 | 31,632 | 57,863 | |
| Result from financial items | $-251$ | $-435$ | $-943$ | $-1,230$ | 1,470 | |
| Profit after financial items | 27,493 | 12,631 | 60,856 | 30,402 | 59,333 | |
| Appropriations | $-16,521$ | |||||
| Profit before tax | 27,493 | 12,631 | 60,856 | 30,402 | 42.812 | |
| Tax | $-7,237$ | $-2,951$ | $-15,162$ | $-7,287$ | $-10,217$ | |
| Profit for the period | 20,256 | 9,680 | 45,694 | 23,115 | 32,595 |
$^{1)}$ Does not include amortization of capitalized development expenditure, which is included in research and development expenditure.
| AMOUNTS IN SEK 000S | JUL-SEP | JAN-SEP | FULL-YEAR | ||
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Profit for the period | 20.256 | 9.680 | 45,694 | 23.115 | 32.595 |
| Other comprehensive income | $\blacksquare$ | $\blacksquare$ | $\overline{\phantom{a}}$ | ||
| Comprehensive income for the period | 20,256 | 9,680 | 45,694 | 23.115 | 32.595 |
| AMOUNTS IN SEK 000S | SEP 30, 2016 | SEP 30, 2015 | DEC 31, 2015 |
|---|---|---|---|
| ASSETS | |||
| Tangible fixed assets | 23,115 | 27,900 | 26,272 |
| Financial fixed assets | 640 | 484 | 485 |
| Deferred tax assets | 57 | 57 | |
| Other long-term receivables | 3,302 | ||
| Total fixed assets | 27,114 | 28,384 | 26,814 |
| Current receivables | 303,131 | 225,138 | 241,528 |
| Cash and cash equivalents | 16,507 | 32,456 | 25,831 |
| Total current assets | 319,638 | 257,594 | 267,359 |
| TOTAL ASSETS | 346,752 | 285,978 | 294,173 |
| EQUITY AND LIABILITIES | |||
| Equity | 206,427 | 159,823 | 169,302 |
| Untaxed reserves | 37,551 | 21,029 | 37,551 |
| Deferred tax liabilities | 163 | 163 | |
| Long-term liabilities | 35,000 | 37,995 | 25,000 |
| Accounts payable | 16,443 | 19,974 | 9,929 |
| Other current liabilities | 51,168 | 47,157 | 52,228 |
| TOTAL EQUITY AND LIABILITIES | 346,752 | 285,978 | 294,173 |
| Pledged assets | 104,000 | 53,800 | 54,000 |
| 2016 | 2015 | 2014 | ||||||
|---|---|---|---|---|---|---|---|---|
| AMOUNTS IN SEK 000s | 03 | 02 | 01 | 04 | 03 | 02 | 01 | 04 |
| Income statement | ||||||||
| Net sales | 125,730 | 118,982 | 95,401 | 131,957 | 100,570 | 77,342 | 95,401 | 107,782 |
| Operating profit | 38,465 | 37,493 | 23,352 | 44,302 | 20,085 | $-2,114$ | 23,352 | 52,767 |
| Operating margin, % | 30.6 | 31.5 | 24.5 | 33.6 | 20.0 | $-2.7$ | 24.5 | 49.0 |
| Profit/loss for the period | 28,887 | 28,837 | 17,760 | 33,311 | 14,480 | $-2,605$ | 17,760 | 40,696 |
| Net margin, % | 23.0 | 24.2 | 18.6 | 25.2 | 14.4 | $-3.4$ | 18.6 | 37.8 |
| Cash flow | ||||||||
| Operating activities | 10,211 | 14,908 | 21,863 | 41,224 | 13,093 | 18,458 | 21,863 | 22,478 |
| Investing activities | $-23,320$ | $-26,347$ | $-26,075$ | $-27,564$ | $-18,579$ | $-27,546$ | $-26,075$ | $-16,071$ |
| Cash flow before financing activities | $-13,109$ | $-11,439$ | $-4,212$ | 13,660 | $-5,486$ | $-9,088$ | $-4.212$ | 6,407 |
| Financing activities | 8,955 | $-9,591$ | $-1,013$ | $-1,234$ | $-1,012$ | $-1,004$ | $-1,013$ | 24,345 |
| Cash flow for the period | $-4,154$ | $-21,030$ | $-5,225$ | 12,426 | $-6,498$ | $-10,092$ | $-5,225$ | 30,752 |
| Capital structure | ||||||||
| Equity/assets ratio, % | 65.8 | 64.3 | 66.5 | 65.9 | 62.3 | 63.4 | 66.5 | 64.5 |
| Per share data, SEK | ||||||||
| Earnings/loss per share before dilution | 0.84 | 0.83 | 0.52 | 0.97 | 0.42 | $-0.08$ | 0.52 | 1.19 |
| Earnings/loss per share after dilution | 0.84 | 0.83 | 0.52 | 0.97 | 0.42 | $-0.08$ | 0.52 | 1.19 |
| Equity per share | 11.26 | 10.40 | 9.85 | 9.32 | 8.36 | 7.95 | 9.85 | 7.34 |
| Cash flow from operating activities | 0.30 | 0.43 | 0.64 | 1.20 | 0.38 | 0.54 | 0.64 | 0.66 |
| Closing share price | 198.50 | 119.00 | 120.50 | 122.50 | 119.00 | 108.00 | 120.50 | 53.00 |
| Other | ||||||||
| Earnings per share before and after | ||||||||
| dilution, 000s | 34,282.8 | 34,282.8 | 34,282.8 | 34,282.8 | 34,282.8 | 34,282.8 | 34,282.8 | 34,282.8 |
| Average no. of employees | 185 | 181 | 177 | 175 | 164 | 150 | 177 | 136 |
| AMOUNTS IN SEK 000s | Oct 2015- Sep 2016 |
Jul 2015- Jun 2016 |
Apr 2015- Mar 2016 |
Jan 2015- Dec 2015 |
Oct 2014- Sep 2015 |
Jul 2014- Jun 2015 |
Apr 2014- Mar 2015 |
Jan 2014- Dec 2014 |
|---|---|---|---|---|---|---|---|---|
| Income statement | ||||||||
| Net sales | 472,070 | 446.909 | 405.268 | 397.600 | 373.423 | 344.455 | 318.971 | 285,217 |
| Operating profit | 143,612 | 125,232 | 85.625 | 95.344 | 103.809 | 101,949 | 106,205 | 79,360 |
| Operating margin, % | 30.4 | 28.0 | 21.1 | 24.0 | 27.8 | 29.6 | 33.3 | 27.8 |
The interim report refers to a number of non-IFRS performance measures, which are used to assist investors and management with analysis of RaySearch's operations. Below is a description of the various non-IFRS performance measures that are used to complement the financial information reported in accordance with IFRS.
| Non-IFRS performance | Definition | Motivation for using the measure | ||
|---|---|---|---|---|
| measure | ||||
| Order intake excluding service | The value of orders received and changes to | Order intake is an indicator of future revenues and, thus | ||
| agreements | existing orders during the current period | comprises a key performance measure for the management of | ||
| excluding the value of service agreements. | Raysearch's operations. | |||
| Order backlog | The value of orders at the end of the period | The order backlog shows the value of orders already booked by | ||
| that the company has yet to deliver and | RaySearch under operating activities that will be converted to | |||
| recognize as revenue. | revenues in the future. | |||
| Organic sales growth | Sales growth excluding currency effects. | This measure is used to monitor underlying sales growth driven | ||
| by changes in volume, pricing and mix for comparable units | ||||
| between different periods. | ||||
| Gross profit | Net sales minus cost of goods sold. | Gross profit is used to illustrate the margin before sales, research, | ||
| development and administration expenses. | ||||
| Operating profit/loss | Calculated as earnings before financial | Operating profit/loss provides an overall picture of the total | ||
| items and tax. | generation of earnings in operating activities. | |||
| Operating margin | Operating profit/loss expressed as a | Together with sales growth, the operating margin is a key element | ||
| percentage of net sales. | for monitoring value creation. | |||
| Net margin | Profit for the period as a percentage of net | The net margin illustrates the percentage of net sales remaining | ||
| sales for the period. | after the company's expenses have been deducted. | |||
| Rolling 12 months sales, | Sales, operating profit/loss or other results | This measure is used to more clearly illustrate the trends for sales, | ||
| operating profit/loss or other | measured over the last 12 month period. | operating profit/loss and other results, which is relevant because | ||
| results | RaySearch's revenues are subject to monthly variations. | |||
| Working capital | The Group's working capital is calculated as | This measure shows how much working capital is tied up in | ||
| current operating receivables less current | operations and can be shown in relation to net sales to | |||
| operating liabilities. | demonstrate the efficiency with which working capital has been | |||
| used. | ||||
| Return on equity | Calculated as profit/loss for the period as a | This illustrates from a shareholder perspective the return | ||
| percentage of average equity. Average | generated on the owners' invested capital. | |||
| equity is calculated as the sum of 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 | This is a standard measure to show financial risk, and is | ||
| assets. | expressed as the percentage of the total restricted equity | |||
| financed by the owners. |
| Other performance measures | Definition |
|---|---|
| Earnings per share | Net earnings divided by the average number of shares during year. |
| Cash flow from operating | Cash flow from operating activities divided by average number of shares. |
| activities per share | |
| Equity per share | Equity divided by number of shares at year-end. |
| AMOUNTS IN SEK 000s | Sep 30, 2016 | Sep 30, 2015 | Dec 31, 2015 |
|---|---|---|---|
| Working capital | |||
| Accounts receivable | 212,244 | 167.077 | 168,973 |
| Other current receivables | 80,654 | 21,242 | 18,881 |
| Accounts payable | $-12,497$ | $-17,732$ | $-9,514$ |
| Other current liabilities | $-83,022$ | -59,042 | $-65,946$ |
| Working capital | 197,379 | 111.545 | 112.394 |
RaySearch Laboratories AB (publ) Box 3297 SE-103 65 Stockholm, Sweden
Sveavägen 44, Floor 7 SE-103 34 Stockholm, Sweden
Tel: +46 8 510 530 00 www.raysearchlabs.com Corporate Registration Number: 556322-6157
RaySearch Laboratories is a medical technology company that develops advanced software solutions for improved radiation therapy of cancer. RaySearch develops and markets the RayStation treatment planning system to clinics all over the world and distributes the products through licensing agreements with leading medical technology companies. The company is also developing the next-generation oncology information system, RayCare, which comprises a new product area for RaySearch, and will be launched in 2017. RaySearch's software is currently used by over 2,600 clinics in more than 65 countries. The company was founded in 2000 as a spin-off from the Karolinska Institute in Stockholm and the share has been listed on Nasdaq Stockholm since November 2003. More information about RaySearch is available at www.raysearchlabs.com.
RaySearch's vision is to contribute to the advancement of cancer care by developing innovative software solutions that improve quality of life for cancer patients and save lives.
RaySearch's revenues are generated when customers pay an initial license fee for the right to use RaySearch's software and an annual service fee for access to updates and support. The RayStation treatment planning system is being developed at RauSearch's head office in Stockholm, and is distributed and supported by the company's global marketing organization.
RaySearch's strategy is to offer advanced software solutions for improved radiation therapy of cancer. Essentially, a radiation therapy clinic needs two software platforms for its operations: an information system and a treatment planning system. Through RayStation and the planned launch of RayCare in 2017, RaySearch will further strengthen its position and continue to grow with high profitability. The strategy rests on a strong focus on software development, leading functionality, broad support for many different types of treatment techniques and radiation therapy devices, as well as extensive investments in research and development.
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