Quarterly Report • Nov 15, 2018
Quarterly Report
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"In the third quarter of 2018, order intake rose 31 percent to SEK 176 M (134), the highest-ever order intake for the third quarter. Net sales rose 35 percent to SEK 150 M (112) and the operating margin to 8 percent (1), despite changes in accounting policies that are deferring our revenue recognition. Without application of the new accounting policies, net sales would have risen 47 percent to SEK 164 M and the operating margin would have been 15 percent. We have confidence in our long-term strategy, and our expansion will continue," says Johan Löf, CEO of RaySearch.
• IFRS 15 Revenue from Contracts with Customers came into effect on January 1, 2018, and reduced the company's license revenue from RayStation and RayCare by 18 percent in the third quarter and 17 percent during the first nine months of 2018 compared with the previously applied accounting policy (IAS 18), see Notes 1-2. The accounting policy changes also had a negative impact on net sales and earnings over the past 12 months.
| AMOUNTS IN SEK 000s | JUL-SEP | JAN-SEP | OCT 2017- | FULL-YEAR | ||
|---|---|---|---|---|---|---|
| 20181 | 20172 | 20181 | 20172 | SEP 20183 | 20172 | |
| Net sales | 150,479 | 111,703 | 407,775 | 380,125 | 612,736 | 585,086 |
| Operating profit | 12,421 | 666 | 52,787 | 60,971 | 151,485 | 159,669 |
| Operating margin, % | 8.3 | 0.6 | 12.9 | 16 | 24.7 | 27.3 |
| Profit/loss for the period | 13,500 | -1,028 | 45,874 | 45,338 | 118,163 | 117,627 |
| Earnings/loss per share before/after dilution, SEK | 0.39 | -0.03 | 1.34 | 1.32 | 3.45 | 3.43 |
| Cash flow from operating activities | -12,883 | 35,669 | 57,858 | 100,696 | 104,643 | 147,481 |
| Cash flow before financing activities | -56,181 | 2,257 | -92,509 | -1,229 | -91,931 | -651 |
| Return on equity, % | 2.4 | -0.2 | 8.1 | 10.1 | 20.9 | 22.6 |
| Equity/assets ratio at the end of the period, % | 59.9 | 67.2 | 59.9 | 67.2 | 59.9 | 63.4 |
| Share price at the end of the period, SEK | 122.3 | 173.5 | 122.3 | 173.5 | 122.3 | 171 |
* Regulatory approval is required in some markets.
1 IFRS 15 compliance, refer to Notes 1-2. 2 IAS 18 compliance. 3 IFRS 15 compliance in 2018 and IAS 18 compliance in the remaining quarters.
In the third quarter of 2018, our order intake rose 31 percent to SEK 176 M (134), the highest-ever order intake for the third quarter. Sales were strong in Europe and North America, but weak in Asia. Net sales rose 35 percent to SEK 150 M (112), despite changes in accounting policies (IFRS 15) that are deferring our revenue recognition. Without application of the new accounting policies, net sales would have risen 47 percent.
Operating profit rose to SEK 12 M (1), representing an operating margin of 8 percent (1), and the increase was mainly derived from sharply increased sales. Without application of the new accounting policies, operating profit would have increased to SEK 25 M, representing an operating margin of 15 percent.
In the third quarter, we concluded more strategic partnerships. I July, Princess Margaret Cancer Center in Toronto became our eighth partner for the development of RayCare. Princess Margaret Cancer Center is one of the world's most important cancer clinics and their experience and clinical insights are priceless for the continued development of RayCare. In October, we also signed a collaborative agreement with Canon Medical to enable a smooth integration between our systems and Canon Medical's imaging systems and advanced visualization
solutions. The aim of this partnership is to create a more efficient workflow for virtual simulation.
RayCare, our innovative oncology information system, is developing fast, and in September we released the latest version, RayCare 2B, which introduces several new features, including activity and rule-based scheduling for all clinical resources, clinical document management, support for full treatment delivery, workflow management and offline activity-based image analysis, and additional features for care administration and the management of external contacts.
On October 8, 2018, we also announced that Provision CARES Proton Therapy Center in Nashville in the US had begun using RayCare together with RayStation to plan and manage the treatment of patients. The radiation therapy department of Iridium Kankernetwerk in Belgium already uses RayCare in its clinical operations to manage treatment planning workflows. However, Provision CARES Proton Therapy Center in Nashville is the first center to connect RayCare directly to a therapy system (ProNova SC360) to register and verify the treatments. This is a hugely important milestone, and in combination with our fourth commercial order for RayCare from Advanced Oncotherapy in the UK, this is fantastic recognition of the RayCare system's qualifications.
Over the summer, we also released a new version of RayStation, version 8A, as planned, with a range of new and innovative features, including support for the TomoDirectTM treatment method with Accuray's TomoTherapy and Radixact systems.
We have confidence in our long-term strategy and will continue to expand our global marketing organization in order to address the entire market systematically, to accelerate sales of both RayStation and RayCare, and to ensure the best-possible customer service. This has decreased the company's operating margin in the short term, but will lead to high growth with healthy margins moving forward. In the second and third quarters, we saw signs that our investments have begun to yield results in terms of higher order intake.
In 2018, we have entered new geographic markets and had a stronger focus on smaller cancer centers around the world. Our solutions are well-suited to helping small and mid-sized centers provide high quality patient care, increase their efficiency and maximize the use of their resources.
Our sales and earnings will continue to vary by quarter, since the order intake remains subject to relatively large fluctuations. However, our recurring support revenue is steadily growing and now accounts for 21 percent of net sales. Combined with a strong financial position and a clear strategic plan, this provides a stable base for continued investment in both RayStation and RayCare.
To date, 524 cancer centers in 32 countries have purchased RayStation. At the same time, there are more than 8,000 radiation therapy centers worldwide, and that number is expected to increase sharply over the next decade. The driving forces include rising cancer rates, growing awareness of the advantages of radiation therapy and major investment in cancer therapies in Asia. The market is therefore growing steadily and we will continue to grow considerably faster than the market. Our aim is that at least 3,000 cancer centers will have purchased RayStation within eight to ten years, corresponding to a market share of about 30 percent.
This is an exciting time. We have made great progress so far and, above all, created a platform for further expansion and new strategic opportunities. Through collaboration, openness and innovation, we will continue to work towards our vision of a world where cancer is defeated.
Stockholm, November 15, 2018
Johan Löf CEO of RaySearch Laboratories AB (publ)
In the third quarter of 2018, order intake rose 31.5 percent to SEK 175.7 M (133.8), of which order intake for RayStation/RayCare rose 33.5 percent to SEK 165.0 M (123.6).
| Rolling | Full-year | ||||||
|---|---|---|---|---|---|---|---|
| Order intake (amounts in SEK M) | Q3-18 | Q2-18 | Q1-18 | Q4-17 | Q3-17 | 12 months | 2017 |
| Licenses | 105.6 | 122.3 | 82.8 | 164.8 | 95.7 | 475.5 | 455.5 |
| Hardware | 19.6 | 15.4 | 11.1 | 20.8 | 4.6 | 66.9 | 41.4 |
| Support (incl. warranty support) | 45.9 | 62.4 | 31.8 | 46.6 | 31.7 | 186.7 | 166.3 |
| Training and other | 4.6 | 6.1 | 2.8 | 6.9 | 1.7 | 20.3 | 11.3 |
| Total order intake | 175.7 | 206.2 | 128.4 | 239.1 | 133.8 | 749.4 | 674.6 |
| Order backlog (amounts in SEK M) | Q3-18 | Q2-18 | Q1-18 | Q4-17 | Q3-17 | ||
| Licenses | 30.8 | 25.8 | 12.1 | 11.8 | 18.7 | ||
| Hardware | 34.7 | 32.6 | 22.5 | 25.9 | 14.6 | ||
| Support (incl. warranty support) | 652.8 | 644.5 | 593.7 | 531.2 | 532.2 | ||
| Training and other | 22.1 | 20.7 | 14.1 | 12.3 | 5.8 | ||
| Total order backlog at the end of the period | 740.4 | 723.5 | 642.5 | 581.2 | 571.3 |
During the first nine months of 2018, order intake rose 17.2 percent to SEK 510.3 M (435.4), of which order intake for RayStation and RayCare rose 19.4 percent to SEK 479.3 M (401.2).
IFRS 15 – Revenue from Contracts with Customers applied from January 1, 2018, which is deferring the company's revenue recognition and increasing the order backlog by the corresponding amount. At September 30, 2018, the total order backlog amounted to SEK 740.4 M (571.3), which is expected to generate revenue of SEK 201 M over the next 12 months.
In the third quarter of 2018, sales rose 34.7 percent to SEK 150.5 M (111.7). The increase was largely due to a sharp increase in sales of RayStation.
The application of IFRS 15 – Revenue from Contracts with Customers from January 1, 2018, has deferred revenue recognition and reduced the company's license revenue from RayStation and RayCare by 18.4 percent, and net sales by 8.5 percent, during the third quarter of 2018 compared with the accounting policy previously applied (IAS 18), see Notes 1-2. Without application of the new accounting policies, net sales would have risen 46.8 percent.
| Revenues (amounts in SEK M) | Q3-181 | Q2-181 | Q1-181 | Q4-172 | Q3-172 | Rolling 12 mån3 |
Full-year 20171 |
|---|---|---|---|---|---|---|---|
| License revenue – RayStation/RayCare | 89.4 | 99.8 | 75.0 | 162.1 | 81.8 | 426.3 | 438.5 |
| License revenue – Partners | 9.8 | 9.2 | 9.2 | 9.4 | 9.3 | 37.6 | 40.5 |
| Hardware revenue | 16.7 | 7.3 | 11.0 | 11.2 | 3.9 | 46.2 | 36.2 |
| Support revenue – RayStation | 28.9 | 21.3 | 16.8 | 18.9 | 13.1 | 85.9 | 54.6 |
| Support revenue – Partners | 2.8 | 2.6 | 2.9 | 2.9 | 3.3 | 11.2 | 12.8 |
| Training and other revenue – RayStation | 2.9 | 0.8 | 1.4 | 0.5 | 0.3 | 5.6 | 2.3 |
| Net sales | 150.5 | 141.0 | 116.3 | 205.0 | 111.7 | 612.8 | 584.9 |
| Sales growth, corresp. period, % | 34.7% | -0.4% | -8.3% | 7.1% | -11.2% | 7.2% | 10.1% |
| Organic sales growth, corresp. period, % | 27.5% | -0.7% | -3.2% | 9.4% | -8.9% | 7.7% | 10.2% |
1 IFRS 15 compliance, see Notes 1-2.
2 IAS 18 compliance.
3 IFRS 15 compliance in 2018, and IAS 18 compliance in the remaining quarters.
During the first nine months of 2018, sales rose 7.3 percent to SEK 407.8 M (380.1), of which revenue from RayStation and RayCare rose 9.5 percent to SEK 371.3 M (339.1). Without application of the new accounting policies, net sales would have risen 19.4 percent, see Notes 1-2.
During the first nine months, net sales had the following geographic distribution: North America, 44 percent (42); Asia, 12 percent (17); Europe and the rest of the world, 44 percent (41).
Recurring support revenue from RayStation rose 87 percent to SEK 66.9 M (35.8), representing 16 percent (9) of net sales during the nine-month period.
Revenue from sales of software modules via partners declined 9 percent to SEK 36.5 M (41.0), representing 8.9 percent (10.8) of net sales.
In the third quarter of 2018, operating profit increased to SEK 12.4 M (0.7), representing an operating margin of 8.3 percent (0.6). The earnings improvement was attributable to sharply increased sales and positive currency effects on net sales.
IFRS 15 came into effect on January 1, 2018, which has deferred the company's revenue recognition and reduced operating profit by SEK 13.1 M in the third quarter of 2018, see Notes 1-2. Without application of the new accounting policies, operating profit would have increased to SEK 25.5 M in the third quarter, representing an operating margin of 15.3 percent.
Operating expenses rose 28.9 percent to SEK 121.4 M (94.3), mainly because the company has increased its employees by 16 percent since the third quarter of 2017, primarily in the global marketing organization and in research and development. In addition, the company's amortization/depreciation expenses have increased, mainly due to the launch of RayCare.
Other operating income and expenses relate to exchange-rate gains and losses, which amounted to SEK -6.0 M (-10.7) net in the third quarter of 2018 due to the large proportion of accounts receivable in USD and EUR, which weakened compared with the Swedish SEK in the third quarter, compared with the end of the second quarter.
During the first nine months, operating profit declined to SEK 52.8 M (61.0), representing an operating margin of 12.9 percent (16.0). The weaker earnings were largely attributable to the application of IFRS 15.
Without application of the new accounting policies, operating profit would have increased to SEK 94.1 M in the first nine months, representing an operating margin of 21.1 percent, see Notes 1-2.
The company is impacted by USD and EUR to SEK exchange-rate trends, since most sales are invoiced in USD and EUR, while most costs are in SEK. At unchanged exchange rates, organic sales growth was 27.5 percent in the third quarter of 2018, compared with the year-earlier period. Currency effects therefore had a clearly positive impact on the company's net sales and operating profit in the third quarter of 2018, despite exchange-rate losses of SEK 6.0 M (10.7) on balance sheet items.
A sensitivity analysis of the company's currency exposure shows that a 1-percentage point change in the USD exchange rate against the SEK would have impacted consolidated operating profit by approximately +/- SEK 4.7 M in the third quarter of 2018, while a corresponding change in the EUR exchange rate would have impacted consolidated operating profit by approximately +/- SEK 2.4 M.
The company follows the financial policy established by the Board, whereby exchange-rate fluctuations are not hedged.
At September 30, 2018, some 149 (141) employees were engaged in research and development.
| Capitalization of development costs | Q3-18 | Q2-18 | Q1-18 | Q4-17 | Q3-17 | Rolling 12 months |
Full-year 2017 |
|---|---|---|---|---|---|---|---|
| Research and development costs | 42.8 | 53.4 | 50.4 | 59.7 | 41.7 | 206.3 | 183.7 |
| Capitalization of development costs | -31.5 | -39.2 | -38.7 | -46.2 | -30.7 | -155.6 | -137.8 |
| Amortization of capitalized development costs | 25.0 | 22.0 | 23.1 | 13.7 | 14.8 | 83.8 | 58.4 |
| Research and development costs after adjustments for capitalization and |
36.3 | 36.2 | 34.8 | 27.2 | 25.8 | 134.5 | 104.3 |
amortization of development costs
During the first nine months, research and development costs rose 18.2 percent to SEK 146.6 M (124.0), of which development costs of SEK 109.4 M (91.6) were capitalized. The increase was mainly due to higher development costs for RayCare. In the first nine months, amortization of capitalized development costs amounted to SEK 70.1 M (44.7). After adjustments for capitalization and amortization of development costs, research and development costs rose 39.1 percent to SEK 107.3 M (77.1).
In the third quarter of 2018, total amortization and depreciation amounted to SEK 29.8 M (18.0), of which the amortization of intangible fixed assets accounted for SEK 25.1 M (14.8), mainly related to capitalized development costs. Depreciation of tangible fixed assets amounted to SEK 4.7 M (3.2).
During the first nine months, total amortization and depreciation amounted to SEK 82.8 M (54.3), of which the amortization of intangible fixed assets accounted for SEK 70.1 M (44.7), mainly related to capitalized development costs. Depreciation of tangible fixed assets amounted to SEK 12.7 M (9.6).
In the third quarter of 2018, profit after tax totaled SEK 13.5 M (-1.0), representing earnings per share of SEK 0.39 (-0.03) before and after dilution. In the first nine months, profit after tax totaled SEK 45.9 M (45.3), representing earnings per share of SEK 1.34 (1.32) before and after dilution.
Tax expense for the first nine months of the year amounted to SEK 5.2 M (13.1), corresponding to an effective tax rate of 10.1 percent (22.4). The low tax expense was partly attributable to a remeasured and dissolved tax reserve in the North American subsidiary, and a lower tax rate in the US due to the US Tax Reform, which took effect on January 1, 2018. The new corporate tax rates introduced in Sweden in June 2018 also impacted the effective tax rate and reduced the Group's tax expense by SEK 4.0 M.
Cash flow from operating activities declined to SEK -12.9 M (35.7) in the third quarter of 2018, mainly due to an increase in working capital. Working capital primarily comprises accounts receivable and accrued income. At the end of the period, accounts receivable accounted for 38 percent (42) of net sales over the past 12 months, and accrued income for 43 percent (17) of net sales over the same period.
RaySearch has agreements with customers whereby deliveries have long payment terms, which is standard in the industry. The company recognizes accounts receivable when there is an unconditional right to consideration, and accrued income when delivery has occurred but an invoice has not been issued, such as when a payment plan exists. The subsequent effect is that the Group's accounts receivable and accrued income, respectively, add up to relatively high amounts compared with net sales. Over the past 12 months, accounts receivable have declined in relation to net sales, while accrued income has risen sharply because the company has signed more agreements in North America with payment plans. The company expects its credit risk to remain low since the counterparties are institutions with high credit ratings.
In the third quarter, cash flow from investing activities was SEK -43.2 M (-33.4). Investments in intangible fixed assets amounted to SEK -31.5 M (-30.7), comprising capitalized development costs for RayStation and RayCare. Investments in tangible fixed assets amounted to SEK -11.7 M (-2.7), mainly related to investments in two new offices in North America, and one expanded office in Stockholm.
During the first nine months, cash flow from investing activities was SEK -150.4 M (-101.9). Investments in intangible fixed assets amounted to SEK -109.4 M (-91.6), comprising capitalized development costs. Investments in tangible fixed assets amounted to SEK -41.0 M (-11.8).
Cash flow before financing activities was SEK -56.2 M (2.3) in the third quarter of 2018, and SEK -92.5 M (-1.2) in the first nine months of 2018.
Cash flow from financing activities was SEK 39.2 M (-1.0) in the third quarter of 2018. During the first nine months of 2018, cash flow from financing activities was SEK 37.6 M (-14.3).
Cash flow for the period totaled SEK -55.0 M (-15.5) for the first nine months of 2018, and at September 30, 2018, the Group's cash and cash equivalents amounted to SEK 52.9 M (69.6).
At September 30, 2018, RaySearch's total assets amounted to SEK 1,043 M (756) and the equity/assets ratio was 59.9 percent (67.2).
Current receivables amounted to SEK 547.1 M (349.7). The receivables mainly comprised accounts receivable and accrued income, and the increase was primarily due to more agreements with long payment terms.
In the fourth quarter of 2017, the company signed a six-year lease for a new office space in San Francisco with commencement in the second quarter of 2018, and a ten-year lease for a new office space in New York with commencement in the third quarter of 2018 due to renovations. In 2018, the company also signed a three-year lease for additional office space in Stockholm with commencement in the third quarter of 2018.
In 2017, the company's line of credit was increased from SEK 100 M to SEK 350 M. The credit line expires in May 2021 and comprises a revolving loan facility of up to SEK 300 M and an overdraft facility of SEK 50 M. Chattel mortgages amount to SEK 100 M. At September 30, 2018, a short-term loan of SEK 74 M (40) was raised under the company's revolving loan facility and SEK 39.9 M (0) of the credit facility had been drawn.
At September 30, 2018, the Group's net debt amounted to SEK 69.1 M (-20.1).
The average number of employees in the Group was 286 (240) in the third quarter, and 278 (220) in the January-September period of 2018. At the end of the third quarter, the Group had 290 (251) employees, of whom 222 (199) were based in Sweden, and 68 (52) in foreign subsidiaries.
RaySearch Laboratories AB (publ) is the Parent Company of the RaySearch Group. Since the Parent Company's operations are consistent with the Group's operations in all material respects, the comments for the Group are also largely relevant for the Parent Company. However, the capitalization of development costs and items related to finance leases are recognized in the Group, but not in 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 weaker earnings for the Parent Company are partly due to the application of IFRS 15 as of January 1, 2018, which has deferred the company's revenue recognition and reduced the company's operating profit by approximately SEK 6.7 M in the third quarter of 2018, and SEK 20.7 M in the first nine months.
The Parent Company's current receivables mainly comprise receivables from Group companies and accounts receivable.
In February 2018, it was announced that the University of Texas MD Anderson Cancer Center and RaySearch had entered into a strategic partnership to improve cancer radiation therapy. The aim is to achieve greater precision when treating tumors and to improve and increase access to an existing radiation therapy approach – adaptive radiation therapy (ART) – which, at present, is largely limited to highly specialized cancer centers.
In 2018, some of the largest and most respected cancer centers in the world selected RayStation as their treatment planning system, including the Georgia Proton Treatment Center, Mission Health SECU Cancer Center and the Swedish Cancer Institute in the US, CHU de Québec-Université Laval and Centre intégré universitaire de santé et de service sociaux de l'Estrie-Centre hospitalier universitaire de Sherbrooke and Centre intégré de cancérologie de Laval in Canada, the Heidelberg Ion Beam Therapy Center (HIT) and Marburg Ion Beam Therapy Center (MIT) in Germany, and Leeds Center and Advanced Oncotherapy (AVO) in the UK. In addition, the University Medical Center Groningen in the Netherlands and the University of California, San Francisco in the US expanded their existing RayStation installations.
In the third quarter, Advanced Oncotherapy (AVO) in the UK selected RayCare as its oncology information system (OIS), bringing the total number of commercial orders for RayCare in 2018 to three.
In March 2018, 200,000 Class A shares were converted to Class B at the request of a shareholder. The total number of votes in RaySearch was thereafter 110,377,548. The total number of registered shares in RaySearch is 34,282,773, of which 8,454,975 are Class A and 25,827,798 Class B.
In April 2018, it was announced that RaySearch had entered into a long-term collaborative agreement for RayCare with Heidelberg University Hospital in Germany. The collaboration will also involve the two affiliated sites, Heidelberg Ion Beam Therapy Center (HIT) and Marburg Ion Beam Therapy Center (MIT).
RaySearch and Eckert & Ziegler BEBIG, a leading European manufacturer of brachytherapy products, have entered into a collaborative agreement to integrate RayStation and RayCare with Eckert & Ziegler BEBIG's brachytherapy system.
Research collaboration and a long-term licensing agreement for carbon-ion therapy have been concluded with the National Institute of Radiological Sciences (NIRS) and the National Institutes for Quantum and Radiological Science and Technology (QST) in Japan, which will lead to the integration of NIRS's microdosimetric kinetic model (MKM) in RayStation.
In June, it was announced that RaySearch had released RayStation 8A, the latest version of the innovative treatment planning system. The new version includes, for example, support for the TomoDirectTM treatment method with Accuray's TomoTherapy and Radixact systems. In addition, the functionality for proton and carbonion therapy has been developed, and the integration with RayCare expanded.
In the third quarter, RaySearch released RayCare 2A and RayCare 2B, the latest versions of this groundbreaking oncology information system (OIS). RayCare is undergoing rapid development based on clinical feedback from some of the world's leading cancer centers. The new versions introduce a range of new features, including activity and rule-based scheduling for all clinical resources, clinical document management, support for full treatment delivery, workflow management and offline activity-based image analysis, and additional features for care administration and the management of external contacts.
In July, it was announced that RaySearch had entered into a long-term collaborative agreement for RayCare with the Princess Margaret Cancer Center, part of the University Hospital Network in Toronto, Canada. "The Princess Margaret Cancer Center is one of the leading cancer centers in the world, and their experience and insights are invaluable for the continued development of RayCare. Our collaboration has been ongoing for more than ten years and forms one of the pillars for all of RaySearch's efforts to achieve better cancer care. We are working together to take cancer care to a higher level and make patient-centered care real," says Johan Löf, President and CEO of RaySearch.
Since October 8, 2018, RayCare and RayStation have been used to plan and manage the treatment of patients at Provision CARES Proton Therapy Center in Nashville in the US. In February, it was announced that the radiation therapy department of Iridium Kankernetwerk in Belgium uses RayCare in its clinical operations to manage treatment planning workflows. However, Provision CARES Proton Therapy Center in Nashville is the first center to connect RayCare directly to a therapy system (ProNova SC360) to register and verify the treatments.
RaySearch and Canon Medical Systems Corporation entered into a collaborative agreement to enable a seamless integration between RaySearch's advanced treatment planning system and oncology information system, and Canon Medical's imaging systems and advanced visualization solutions. The goal is to create a more efficient workflow for virtual simulation.
At September 30, 2018, the total number of registered shares in RaySearch was 34,282,773, of which 8,454,975 were Class A and 25,827,798 Class B shares. The quotient value is SEK 0.50 and the company's share capital amounts to SEK 17,141,386.50. Each Class A share entitles the holder to ten votes, and each Class B share to one vote, at a general meeting. At September 30, 2018, the total number of votes in RaySearch was 110,377,548.
At September 28, 2018, the total number of shareholders in RaySearch was 7,244 and the largest shareholders, according to Euroclear, were as follows:
| Share | |||||
|---|---|---|---|---|---|
| Class A | Class B | capital, | |||
| Name | shares | shares | Total shares | % | Votes, % |
| Johan Löf | 6,243,084 | 618,393 | 6,861,477 | 20.0 | 57.1 |
| Swedbank Robur Funds | 0 | 3,211,839 | 3,211,839 | 9.4 | 2.9 |
| First AP Fund | 0 | 2,864,138 | 2,864,138 | 8.4 | 2.6 |
| Second AP Fund | 0 | 1,929,651 | 1,929,651 | 5.6 | 1.8 |
| Montanaro Funds | 0 | 1,527,436 | 1,527,436 | 4.5 | 1.4 |
| Lannebo Funds | 0 | 1,490,545 | 1,490,545 | 4.4 | 1.4 |
| Anders Brahme | 1,150,161 | 200,000 | 1,350,161 | 3.9 | 10.6 |
| Carl Filip Bergendal | 1,061,577 | 144,920 | 1,206,497 | 3.5 | 9.8 |
| JP Morgan (UK) | 0 | 1,182,157 | 1,182,157 | 3.5 | 1.1 |
| State Street Bank & Trust | 0 | 855,687 | 855,687 | 2.5 | 0.8 |
| Total, 10 largest shareholders | 8,454,822 14,024,766 | 22,479,588 | 65.6 | 89.3 | |
| Others | 153 | 11,803,032 | 11,803,185 | 34.4 | 10.7 |
| Total | 8,454,975 25,827,798 | 34,282,773 | 100.0 | 100.0 |
RaySearch's 2019 Annual General Meeting will be held on May 28, 2019 at 6:00 p.m. at the company's office on Sveavägen 44, Stockholm, Sweden. Shareholders wishing to have a matter addressed at the AGM must submit a written request to the Board of Directors. Such a request must normally have been received by the Board of Directors not later than seven (7) weeks prior to the AGM.
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 risk and financial risk. RaySearch's risk management 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 2017 Annual Report. For more information about risks and risk management, refer to pages 8-10 and 33-34 of RaySearch's 2017 Annual Report.
RaySearch'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 – and the second quarter is normally the weakest.
RaySearch works actively to reduce the company's negative environmental impact and to become a sustainable enterprise. The company's products, comprising software to improve radiation therapy for cancer, have a limited negative environmental impact. 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.
Stockholm, November 15, 2018
Johan Löf President and Board member
We have conducted a review of the interim financial information (interim report) for RaySearch Laboratories AB (publ) at September 30, 2018 and for the nine-month period that ended on that date. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express an opinion on this interim report based on our review.
We have conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical audit and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing standards.
The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the opinion expressed on the basis of a review does not give the same assurance as an opinion expressed on the basis of an audit.
Based on our review, nothing has come to our attention that causes us to believe that the interim 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 for the Parent Company.
Stockholm, November 15, 2018 Ernst & Young AB
Per Hedström Authorized Public Accountant
Johan Löf, CEO Tel: +46 (0)8 510 530 00 E-mail:[email protected] Peter Thysell, CFO Tel: +46 (0)70 661 05 59 E-mail: [email protected]
The information contained in this interim report is such that RaySearch Laboratories AB (publ) is obliged to disclose under the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication on November 15, 2018 at 7:45 a.m. CET.
Year-end report, 2018 February 20, 2019 Interim report for the first quarter, 2019 May 9, 2019 Annual General Meeting 2019 May 28, 2019
| AMOUNTS IN SEK 000s | JUL-SEP | JAN-SEP | OCT 2017- | FULL-YEAR | ||
|---|---|---|---|---|---|---|
| Note | 20181 | 20172 | 20181 | 20172 | SEP 20183 | 20172 |
| Net sales 2.3 |
150,479 | 111,703 | 407,775 | 380,125 | 612,736 | 585,086 |
| Cost of goods sold4 | -10,674 | -5,969 | -31,702 | -26,877 | -41,475 | -36,650 |
| Gross profit | 139,805 | 105,734 | 376,073 | 353,248 | 571,261 | 548,436 |
| Other operating income | 0 | - | 26,583 | - | 33,595 | 7,012 |
| Selling expenses | -67,204 | -56,886 | -178,218 | -148,799 | -234,271 | -204,852 |
| Administrative expenses | -17,872 | -11,667 | -59,021 | -43,049 | -79,219 | -63,247 |
| Research and development costs | -36,339 | -25,770 | -107,325 | -77,053 | -134,576 | -104,304 |
| Other operating expenses | -5,970 | -10,745 | -5,306 | -23,376 | -5,306 | -23,376 |
| Operating profit | 12,421 | 666 | 52,787 | 60,971 | 151,485 | 159,669 |
| Result from financial items | -914 | -1,277 | -1,738 | -2,536 | -2,970 | -3,768 |
| Profit before tax | 11,506 | -611 | 51,048 | 58,435 | 148,514 | 155,901 |
| Tax | 1,994 | -417 | -5,174 | -13,097 | -30,351 | -38,274 |
| Profit/loss for the period5 | 13,500 | -1,028 | 45,874 | 45,338 | 118,163 | 117,627 |
| OTHER COMPREHENSIVE INCOME | ||||||
| Items to be reclassified to profit or loss | ||||||
| Translation difference of foreign operations for the period | 22 | 905 | -1,339 | 2,601 | -1,330 | 2,610 |
| Comprehensive income for the period5 | 13,522 | -123 | 44,535 | 47,939 | 116,833 | 120,237 |
| Earnings/loss per share before and after dilution (SEK) | 0.39 | -0.03 | 1.34 | 1.32 | 3.45 | 3.43 |
1 IFRS 15 compliance, see Notes 1-2.
2 IAS 18 compliance.
3 IFRS 15 compliance in 2018, and IAS 18 compliance in the remaining two quarters.
4Does not include amortization of capitalized development costs, which is included in research and development costs.
5 Wholly (100%) attributable to Parent Company shareholders.
| AMOUNTS IN SEK 000s | JUL-SEP | JAN-SEP | FULL-YEAR | ||
|---|---|---|---|---|---|
| 2018 | 2017 | 2018 | 2017 | 2017 | |
| Opening balance | 611,438 | 508,250 | 580,425 | 460,188 | 460,188 |
| Profit/loss for the period | 13,500 | -1,028 | 45,874 | 45,338 | 117,627 |
| Translation difference for the period | 22 | 905 | -1,339 | 2,601 | 2,610 |
| Closing balance | 624,960 | 508,127 | 624,960 | 508,127 | 580,425 |
| AMOUNTS IN SEK 000s | Note | Sep 30, 2018 |
Sep 30, 2017 |
Dec 31, 2017 |
|---|---|---|---|---|
| ASSETS | ||||
| Intangible fixed assets | 361,875 | 290,201 | 322,598 | |
| Tangible fixed assets | 65,833 | 38,417 | 36,114 | |
| Deferred tax assets | 2,530 | 455 | 780 | |
| Other long-term receivables | 12,555 | 7,203 | 11,684 | |
| Total fixed assets | 442,793 | 336,276 | 371,176 | |
| Inventories | 226 | 722 | 33 | |
| Current receivables | 547,103 | 349,680 | 439,699 | |
| Cash and cash equivalents | 52,893 | 69,591 | 104,156 | |
| Total current assets | 600,222 | 419,993 | 543,888 | |
| TOTAL ASSETS | 1,043,015 | 756,269 | 915,064 | |
| EQUITY AND LIABILITIES | ||||
| Equity | 2 | 624,960 | 508,127 | 580,425 |
| Deferred tax liabilities | 98,215 | 80,937 | 92,424 | |
| Long-term liabilities to credit institutions | 7,943 | 10,596 | 9,751 | |
| Accounts payable | 21,537 | 28,427 | 27,403 | |
| Current liabilities to credit institutions | 114,055 | 38,933 | 74,033 | |
| Other current liabilities | 2 | 176,305 | 89,249 | 131,028 |
| TOTAL EQUITY AND LIABILITIES | 1,043,015 | 756,269 | 915,064 |
| AMOUNTS IN SEK 000s | JUL-SEP | JAN-SEP | FULL-YEAR | ||
|---|---|---|---|---|---|
| Note | 2018 | 2017 | 2018 | 2017 | 2017 |
| Profit/loss before tax | 11,506 | -611 | 51,048 | 58,435 | 155,901 |
| Adjusted for non-cash items1) | 37,087 | 12,832 | 62,615 | 31,875 | 56,181 |
| Taxes paid | -10,091 | -5,308 | -37,399 | -13,193 | -11,724 |
| Cash flow from operating activities before changes in working capital |
38,502 | 6,913 | 76,264 | 77,117 | 200,358 |
| Cash flow from changes in working capital | -51,385 | 28,756 | -18,406 | 23,579 | -52,877 |
| Cash flow from operating activities | -12,883 | 35,669 | 57,858 | 100,696 | 147,481 |
| Cash flow from investing activities | -43,298 | -33,412 | -150,367 | -101,925 | -148,132 |
| Cash flow from financing activities | 39,150 | -1,025 | 37,557 | -14,255 | 19,773 |
| Cash flow for the period | -17,031 | 1,232 | -54,952 | -15,484 | 19,122 |
| Cash and cash equivalents at the beginning of the period |
69,153 | 70,165 | 104,156 | 87,720 | 87,720 |
| Exchange-rate difference in cash and cash equivalents |
771 | -1,806 | 3,689 | -2,645 | -2,686 |
| Cash and cash equivalents at the end of the period |
52,893 | 69,591 | 52,893 | 69,591 | 104,156 |
1) These amounts mainly include amortization of capitalized development costs.
| AMOUNTS IN SEK 000s | JUL-SEP JAN-SEP |
FULL-YEAR | |||
|---|---|---|---|---|---|
| Note | 20181 | 20172 | 20181 | 20172 | 20172 |
| Net sales | 111,789 | 91,753 | 305,643 | 308,697 | 480,774 |
| Cost of goods sold3) | -4,759 | -4,261 | -14,563 | -12,868 | -19,548 |
| Gross profit | 107,030 | 87,492 | 291,080 | 295,829 | 461,226 |
| Other operating income | - | - | 26,583 | - | 7,012 |
| Selling expenses | -38,915 | -40,765 | -104,834 | -101,067 | -133,066 |
| Administrative expenses | -17,745 | -11,903 | -58,685 | -43,623 | -64,065 |
| Research and development costs | -42,761 | -41,737 | -146,602 | -124,035 | -183,683 |
| Other operating expenses | -5 970 | -10,745 | -5,318 | -23,376 | -23,376 |
| Operating profit | 1,639 | -17,658 | 2,224 | 3,728 | 64,048 |
| Result from financial items | -784 | -1,115 | -1369 | -2,085 | 2,887 |
| Profit/loss after financial items | 855 | -18,773 | 855 | 1,643 | 66,935 |
| Appropriations | - | - | - | - | -19,815 |
| Profit/loss before tax | 855 | -18,773 | 855 | 1,643 | 47,120 |
| Tax | -1,793 | 3,146 | -1,793 | -2,241 | -13,227 |
| Profit/loss for the period | -938 | -15,627 | -938 | -598 | 33,893 |
| AMOUNTS IN SEK 000s | JUL-SEP | JAN-SEP | FULL-YEAR | ||
|---|---|---|---|---|---|
| 20181 | 20172 | 20181 | 20172 | 20172 | |
| Profit/loss for the period | -938 | -15,627 | -938 | -598 | 33,893 |
| Other comprehensive income | - | - | - | - | - |
| Comprehensive income for the period | -938 | -15,627 | -938 | -598 | 33,893 |
1 IFRS 15 compliance, see Notes 1-2.
2 IAS 18 compliance.
3Does not include amortization of capitalized development costs, which is included in research and development costs.
| AMOUNTS IN SEK 000s | Note | Sep 30, 2018 |
Sep 30, 2017 |
Dec 31, 2017 |
|---|---|---|---|---|
| ASSETS | ||||
| Tangible fixed assets | 27,704 | 25,251 | 23,686 | |
| Shares and participations | 1,772 | 1,046 | 1,046 | |
| Deferred tax assets | 742 | 455 | 780 | |
| Other long-term receivables | 12,373 | 3,844 | 10,405 | |
| Total fixed assets | 42,591 | 30,596 | 35,917 | |
| Inventories | 226 | 722 | 33 | |
| Current receivables | 539,299 | 363,866 | 458,270 | |
| Cash and cash equivalents | 5,549 | 35,582 | 42,857 | |
| Total current assets | 545,074 | 400,170 | 501,160 | |
| TOTAL ASSETS | 587,665 | 430,766 | 537,077 | |
| EQUITY AND LIABILITIES | ||||
| Equity | 271,117 | 237,563 | 272,054 | |
| Untaxed reserves | 97,510 | 77,695 | 97,510 | |
| Accounts payable | 19,860 | 32,064 | 30,168 | |
| Current liabilities to credit institutions | 114,055 | 38,933 | 74,033 | |
| Other current liabilities | 85,123 | 44,511 | 63,312 | |
| TOTAL EQUITY AND LIABILITIES | 587,665 | 430,766 | 537,077 |
The RaySearch Group applies International Financial Reporting Standards (IFRS) as adopted by the EU. The accounting policies applied are consistent with those described in the 2017 Annual Report for RaySearch Laboratories AB (publ), which is available on www.raysearchlabs.com This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The Parent Company applies the Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities. The interim report for the Parent Company has been prepared in accordance with the Swedish Annual Accounts Act, Chapter 9, Interim report.
New or revised accounting standards applicable to annual reporting periods beginning on or after January 1, 2018. As of January 1, 2018, RaySearch has applied IFRS 9 Financial Instruments, and IFRS 15 Revenue from Contracts with Customers. RaySearch otherwise applies the same accounting policies as those set out in the 2017 Annual Report.
IFRS 9 Financial Instruments has replaced IAS 39 Financial Instruments: Recognition and Measurement. The new policies for the classification and measurement of financial assets had no impact on the Group's earnings and position. The new model for calculating credit losses impacts the impairment process, but had no significant impact on the Group's earnings and position. The company follows the financial policy established by the Board, whereby exchange-rate fluctuations are not hedged, and are not therefore impacted by the new policies for hedge accounting.
IFRS 15 Revenue from Contracts with Customers has replaced previously issued revenue standards and interpretations. Under IFRS 15, revenue is recognized when a promised good or service is transferred to the customer, which may occur over time, or at a point in time. Revenue is the amount the company expects to receive as payment for the transfer of goods or services.
IFRS 15 will be applied as of January 1, 2018. Transition to the standard was achieved by using a forwardlooking retroactive transitional method, whereby any transition effects were recognized against equity on January 1, 2018, and by presenting the income statement in accordance with IFRS 15 as of 2018. As no significant agreements were in effect at the end of the year, according to the previously applied accounting policies, no transition effect arose at January 1, 2018.
The IFRS 15 transition impacts license and support revenues from RayStation and RayCare, mainly attributable to the warranty period and the training courses offered by the company. Under IFRS 15, the license revenue recognized is reduced by an amount equal to the value of the support provided during the agreed warranty period, and this amount is then recognized over time during the warranty period. The transition to IFRS 15 will reduce the company's license revenue from RayStation and RayCare, while the company's support revenue will increase by the same amount, with an average deferral period of about nine months.
IFRS 16 Leases will come into effect on January 1, 2019. RaySearch has begun evaluating the effects of the new standard and the assessment is that the company will be impacted by the new standard by having to recognize leases for premises and other sizable assets on the balance sheet.
The following tables summarize the impact of the transition to IFRS 15 on the consolidated income statement for the third quarter and the first nine months of 2018, and on the consolidated balance sheet at September 30, 2018. The transition to IFRS 15 has no material effect on consolidated cash flow.
| AMOUNTS IN SEK 000s | JUL-SEP 2018 | JAN-SEP 2018 | |||||
|---|---|---|---|---|---|---|---|
| Recognized in accordance with IFRS 15 |
Adjustments | Amounts according to previous standard (IAS 18) |
Recognized in accordance with IFRS 15 |
Adjustments | Amounts according to previous standard (IAS 18) |
||
| Revenue | |||||||
| License revenue – RayStation/RayCare | 89,445 | 20,211 | 109,656 | 264,240 | 53,892 | 318,132 | |
| Hardware revenue – RayStation/RayCare | 16,659 | 0 | 16,659 | 34,956 | 0 | 34,956 | |
| License revenue – Partners | 9,729 | 0 | 9,729 | 28,206 | 0 | 28,206 | |
| Support revenue – RayStation | 28,818 | -4,729 | 24,089 | 66,872 | -5,650 | 61,222 | |
| Support revenue – Partners | 2,846 | 0 | 2,846 | 8,276 | 0 | 8,276 | |
| Training and other revenue – RayStation | 2,983 | -1,559 | 1,424 | 5,226 | -2,307 | 2,919 | |
| Net sales | 150,479 | 13,924 | 164,403 | 407,775 | 45,936 | 453,711 | |
| Operating expenses | -138,058 | -873 | -138,931 | -354,988 | -2,875 | -357,863 | |
| Operating profit | 12,421 | 13,051 | 25,472 | 52,787 | 43,061 | 95,848 | |
| Profit before tax | 11,506 | 13,051 | 24,558 | 51,048 | 43,061 | 94,109 | |
| Tax | 1,994 | -2,612 | -619 | -5,174 | -9,215 | -14,389 | |
| Profit for the period | 13,500 | 10,439 | 23,940 | 45,875 | 33,846 | 79,721 | |
| Comprehensive income for the period | 13,522 | 10,439 | 23,961 | 44,535 | 33,846 | 78,381 |
| AMOUNTS IN SEK 000s | Sep 30, 2018 | ||
|---|---|---|---|
| Recognized in accordance with IFRS 15 |
Adjustments | Amounts according to previous standard (IAS 18) |
|
| Equity and liabilities | |||
| Equity | 624,960 | 33,846 | 658,806 |
| Deferred tax liabilities | 98,215 | 0 | 98,215 |
| Long-term interest-bearing liabilities | 7,943 | 0 | 7,943 |
| Accounts payable | 21,537 | 0 | 21,537 |
| Current liabilities to credit institutions | 114,055 | 0 | 114,055 |
| Contractual liabilities | 121,591 | -45,936 | 75,655 |
| Other current liabilities | 54,714 | 12,090 | 66,804 |
| Total liabilities and equity | 1,043,015 | 0 | 1,043,015 |
RaySearch conducts sales of goods and services in various regions. Revenue from sales of licenses and hardware is recognized in profit or loss at a point in time, while revenue from sales of training and support is recognized over time.
| AMOUNTS IN SEK 000s | JUL-SEP 2018 | JAN-SEP 2018 | |||||
|---|---|---|---|---|---|---|---|
| RayStation/RayCare | Partner | Total | RayStation/RayCare | Partner | Total | ||
| Revenue by type | |||||||
| Licenses | 89,445 | 9,729 | 99,174 | 264,240 | 28,206 | 292,446 | |
| Support | 28,818 | 2,846 | 31,664 | 66,872 | 8,276 | 75,148 | |
| Hardware | 16,659 | 0 | 16,659 | 34,956 | 0 | 34,956 | |
| Training and other | 2,983 | 0 | 2,983 | 5,226 | 0 | 5,226 | |
| Total revenue from contracts with customers | 137,904 | 12,575 | 150,479 | 371,293 | 36,482 | 407,775 | |
| Revenue by geographic market | |||||||
| North America | 67,617 | 6,215 | 73,832 | 170,308 | 16,734 | 187,042 | |
| APAC | 15,609 | 1,417 | 17,026 | 43,616 | 4,286 | 47,902 | |
| Europe and rest of the world | 54,678 | 4,944 | 59,622 | 157,369 | 15,463 | 172,832 | |
| Total revenue from contracts with customers | 137,904 | 12,575 | 150,479 | 371,293 | 36,482 | 407,775 | |
| Revenue by date for revenue recognition | |||||||
| Goods/services transferred at a point in time1 | 106,104 | 9,729 | 115,833 | 299,196 | 28,206 | 327,402 | |
| Services transferred over time2 | 31,801 | 2,846 | 34,646 | 72,098 | 8,276 | 80,373 | |
| Total revenue from contracts with customers | 137,904 | 12,575 | 150,479 | 371,293 | 36,482 | 407,775 |
1 Licenses and hardware
2 Support, training and other
Preparation of the interim report requires that company management makes estimates that affect the carrying amounts. The actual outcome could deviate from these estimates. The critical sources of uncertainty in the estimates are the same as those in the most recent Annual Report.
RaySearch's financial assets and liabilities comprise accounts receivable, cash and cash equivalents, accrued income, accrued expenses, accounts payable, bank loans and finance leases. Accrued income and receivables 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. RaySearch has not applied net accounting to any financial assets or liabilities, and has no agreements that permit offsetting.
No transactions were conducted between RaySearch and related parties with any material impact on the company's position and earnings during the period.
| AMOUNTS IN SEK 000s | SEP 30, 2018 | SEP 30, 2017 |
|---|---|---|
| Chattel mortgages | 100,000 | 100,000 |
| Guarantees | 8,001 | 4,079 |
| 2018 | 2017 | 2016 | ||||||
|---|---|---|---|---|---|---|---|---|
| AMOUNTS IN SEK 000s | Q31 | Q21 | Q11 | Q42 | Q32 | Q22 | Q12 | Q42 |
| Income statement | ||||||||
| Net sales | 150,479 | 141,039 | 116,257 | 204,961 | 111,703 | 141,634 | 126,788 | 191,355 |
| Sales growth, % | 34.7 | -0.4 | -8.3 | 7.1 | -11.2 | 19.0 | 32.9 | 45.0 |
| Operating profit | 12,421 | 26,258 | 14,108 | 98,698 | 666 | 26,839 | 33,466 | 100,249 |
| Operating margin, % | 8.3 | 18.6 | 12.1 | 48.2 | 0.6 | 18.9 | 26.4 | 52.4 |
| Profit/loss for the period | 13,500 | 20,595 | 11,779 | 72,289 | -1,028 | 20,092 | 26,274 | 75,924 |
| Net margin, % | 9.0 | 14.6 | 10.1 | 35.3 | -0.9 | 14.2 | 20.7 | 39.7 |
| Cash flow | ||||||||
| Operating activities | -12,883 | 14,720 | 56,021 | 46,785 | 35,669 | 25,640 | 39,387 | 73,866 |
| Investing activities | -43,298 | -64,003 | -43,066 | -46,207 | -33,412 | -37,111 | -31,402 | -31,207 |
| Cash flow before financing activities | -56,181 | -49,283 | 12,955 | 578 | 2,257 | -11,471 | 7,985 | 42,659 |
| Financing activities | 39,150 | -979 | -614 | 34,028 | -1,025 | -2,239 | -10,991 | 13,940 |
| Cash flow for the period | -17,031 | -50,262 | 12,341 | 34,606 | 1,232 | -13,710 | -3,006 | 56,599 |
| Capital structure | ||||||||
| Equity/assets ratio, % | 59.9 | 61.4 | 63.5 | 63.4 | 67.2 | 67.1 | 66.2 | 64.2 |
| Net debt | 69,105 | 13,595 | -34,701 | -20,372 | -20,062 | -20,841 | -32,869 | -26,193 |
| Debt/equity ratio | 0.1 | 0.0 | -0.1 | 0.0 | 0.0 | -0.0 | -0.1 | -0.1 |
| Net debt/EBITDA | 0.3 | 0.1 | -0.2 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 |
| Per share data, SEK | ||||||||
| Earnings per share before dilution | 0.39 | 0.60 | 0.34 | 2.11 | -0.03 | 0.59 | 0.77 | 2.21 |
| Earnings per share after dilution | 0.39 | 0.60 | 0.34 | 2.11 | -0.03 | 0.59 | 0.77 | 2.21 |
| Equity per share | 18.23 | 17.84 | 17.28 | 16.93 | 14.82 | 14.83 | 14.20 | 13.42 |
| Share price at the end of the period | 122.3 | 105.0 | 123.0 | 171.0 | 173.5 | 235.5 | 235.0 | 184.5 |
| Other | ||||||||
| No. of shares 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 | 286 | 280 | 267 | 253 | 240 | 219 | 201 | 192 |
| AMOUNTS IN SEK 000s | Oct 2017- Sep 20183 |
Jul 2017- Jun 20183 |
Apr 2017- Mar 20182 |
Jan 2017- Dec 20172 |
Oct 2016- Sep 20172 |
Jul 2016- Jun 20172 |
Apr 2016- Mar 20172 |
Jan 2016- Dec 20162 |
|---|---|---|---|---|---|---|---|---|
| Income statement | ||||||||
| Net sales | 612,735 | 573,960 | 574,555 | 585,086 | 571,480 | 585,507 | 562,855 | 531,468 |
| Operating profit | 151,485 | 139,730 | 140,311 | 159,669 | 161,220 | 199,019 | 209,673 | 199,559 |
| Operating margin, % | 24.7 | 24.3 | 24.4 | 27.3 | 28.2 | 34.0 | 37.3 | 37.5 |
1 IFRS 15 compliance, see Notes 1-2.
2 IAS 18 compliance.
3 IFRS 15 compliance in 2018, and IAS 18 compliance in the remaining two quarters.
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 of all orders received and changes to | Order intake is an indicator of future revenue and thus a |
| existing orders during the current period | key figure for the management of RaySearch's | |
| operations | ||
| Order backlog | The value of orders at the end of the period that | The order backlog shows the value of orders already |
| the company has yet to deliver and recognize as | booked by RaySearch that will be converted to revenues | |
| revenue | in the future. | |
| Sales growth | The change in net sales compared with the year | The measure is used to track the performance of the |
| earlier period expressed as a percentage | company's operations between periods | |
| 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 measure the margin before sales, |
| Operating profit | Calculated as earnings before financial items and | research, development and administrative expenses Operating profit/loss provides an overall picture of the |
| tax | total generation of earnings in operating activities | |
| Operating margin | Operating profit/loss expressed as a percentage of | Together with sales growth, the operating margin is a |
| net sales | key element for monitoring value creation | |
| Net margin | Profit for the period as a percentage of net sales for | The net margin shows the percentage of net sales |
| the period | remaining after the company's expenses have been | |
| deducted | ||
| Equity per share | Equity divided by number of shares at the end of | Shows the return generated on the owners' invested |
| the period | capital per share from a shareholder perspective | |
| Rolling 12 months' sales, | Sales, operating profit/loss or other results | This measure is used to more clearly illustrate the trends |
| operating profit/loss or | measured over the last 12-month period | for sales, operating profit/loss and other results, which |
| other results | is relevant because RaySearch's revenue is subject to | |
| monthly variations | ||
| Working capital | Working capital comprises inventories, operating | This measure shows how much working capital is tied up |
| receivables and operating liabilities, and is obtained | in operations and can be shown in relation to net sales | |
| from the statement of financial position. Operating | to demonstrate the efficiency with which working | |
| receivables comprise accounts receivable, other | capital has been used | |
| receivables 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 | Shows the return generated on the owners' invested |
| percentage of average equity Average equity is | capital from a shareholder perspective | |
| 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 assets | This is a standard measure to show financial risk, and is |
| expressed as the percentage of the total restricted | ||
| equity financed by the owners | ||
| Net debt | Interest-bearing liabilities less cash and cash | This measure shows the Group's total indebtedness |
| equivalents | ||
| 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 | ||
| Net debt/EBITDA | Net debt in relation to operating profit before | A relevant measure from a credit perspective that shows |
| depreciation over the past 12-month period | the company's | |
| ability to repay its debts |
| AMOUNTS IN SEK 000s | Sep 30, 2018 | Sep 30, 2017 | Dec 31, 2017 |
|---|---|---|---|
| Working capital | |||
| Accounts receivable | 234,260 | 237,992 | 335,125 |
| Inventories | 226 | 722 | 33 |
| Accrued income – non-current | 12,220 | 7,203 | 11,468 |
| Accrued income – current | 249,577 | 89,750 | 78,482 |
| Other current receivables (excl. tax) | 38,207 | 20,581 | 25,742 |
| Accounts payable | -21,537 | -28,427 | -27,403 |
| Other current liabilities (excl. tax) | -174,105 | -127,430 | -115,084 |
| Working capital | 338,848 | 200,391 | 308,363 |
| AMOUNTS IN SEK 000s | Sep 30, 2018 | Sep 30, 2017 | Dec 31, 2017 |
|---|---|---|---|
| Net debt | |||
| Current interest-bearing liabilities | 114,055 | 38,933 | 74,033 |
| Non-current interest-bearing liabilities | 7,943 | 10,596 | 9,751 |
| Cash and cash equivalents | -52,893 | -69,591 | -104,156 |
| Interest-bearing receivables | - | - | - |
| Net debt | 69,105 | -20,062 | -20,372 |
| AMOUNTS IN SEK 000s | Oct 2017-Sep 20181 |
Oct 2016-Sep 20171 |
20172 |
|---|---|---|---|
| EBITDA | |||
| Operating profit | 151,485 | 161,220 | 159,669 |
| Amortization and depreciation | 99,693 | 70,380 | 70,790 |
| EBITDA | 251,178 | 231,600 | 230,459 |
1 IFRS 15 compliance in 2018, and IAS 18 compliance in the remaining two quarters.
2 IAS 18 compliance.
RaySearch Laboratories AB (publ) Box 3297 SE-103 65 Stockholm, Sweden
Sveavägen 44, Floor 7 SE-111 34 Stockholm, Sweden
Tel: +46 (0)8 510 530 00 www.raysearchlabs.com Corporate Registration Number: 556322-6157
RaySearch Laboratories AB (publ) is a medical technology company that develops innovative software solutions for improved cancer treatment. The company develops and markets the RayStation treatment planning system and RayCare oncology information system to cancer centers all over the world and distributes the products through licensing agreements with leading medical technology companies. RaySearch's software is currently used by over 2,600 centers in more than 65 countries. The company was founded in 2000 as a spin-off from the Karolinska Institute in Stockholm and the share has been listed on Nasdaq Stockholm since 2003. More information about RaySearch is available at www.raysearchlabs.com
RaySearch's mission 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 and the RayCare oncology information system are developed at RaySearch's head office in Stockholm, and distributed and supported by the company's global marketing organization.
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 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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