Interim report May – July 2016/17

First quarter

  · Gross order intake increased by 4 percent to SEK 2,662 M (2,569) and 4
percent based on constant exchange rates.
  · Net sales decreased 16 percent to SEK 1,882 M (2,239) and 15 percent based
on constant exchange rates.
  · EBITA* amounted to SEK 166 M (68). Items affecting comparability was SEK -89
M (-30) and bad debt losses was SEK -6 M (-27). The effect from changes in
exchange rates was SEK 115 M (-20) including hedges.
  · Operating result was SEK -34 M (-93).
  · Net income amounted to SEK -64 M (-129). Earnings per share was SEK -0.17 (
-0.34) before and after dilution.
  · Cash flow after continuous investments improved by SEK 256 M to SEK -308 M (
-564).
  · The Board of Directors appointed Richard Hausmann as new President and CEO
effective June 10, 2016.

* Adjusted for items affecting comparability and bad debt losses.


President and CEO comments

As outlined during the capital markets day in June, we are making progress on
our way to excellence, reducing costs and capitalizing on our innovation
leadership in best-in-class treatment solutions and oncology information
software.

Our gross order intake increased by 4* percent in the quarter. We had a number
of major strategic wins, including the Vienna Hospital Association in Austria
and gross orders in region Europe, Middle East and Africa grew by 14* percent.
Overall, we had strong performance in our emerging markets and I am particularly
pleased with China, where we reported order growth of 30* percent. Order intake
in North and South America declined 16* percent. This was from a challenging
comparison last year, but it was also below our expectations and we have taken
measures for improved performance.

The new produce-to-order process has now been implemented. As previously
announced, this will improve cash flow and lower working capital, but have a
negative one-off impact of some SEK 500 M on net sales in the first half of this
year. In line with this, we saw lower net sales in the quarter. However, on the
positive side we have improved the underlying cash flow** by over SEK 400 M and
maintained the net working capital to sales ratio at 5 percent.

Efficiency improvements and cost reductions are being realized as planned. Our
target is to reduce the cost base with SEK 700 M compared with 2014/15 and we
are half way through the process. We are lowering administrative spending and
increasing efficiency in marketing, sales and product development. This, in
combination with an improved product mix and favorable currency movements,
improved our gross margins and EBITA margins in the first quarter.

Elekta is truly an outstanding company, which I feel proud and privileged to
lead. Every year, our treatment solutions and oncology information software
improve or save the lives of over one million cancer patients. They allow
therapy departments to perform better – this has enabled our historical growth
and will allow us to create value going forward. For future growth and improved
profitability, I have outlined a number of priorities for the coming years:

We will continue to strengthen our position as the industry’s innovation leader
and prioritize our investments in R&D both in treatment solutions and oncology
information software. This will help us to improve cancer care and strengthen
our future growth. We have been committed to enhanced imaging and adaptive
treatment for many years, which is why we are focusing on the development of our
MR-linac. The system is attracting considerable attention ahead of its launch in
the second half of calendar year 2017. In addition, I am convinced that our
leading oncology information software platform, MOSAIQ®, is a unique asset. We
will further capitalize on and invest in it in order to support our customers in
a treatment and vendor-agnostic way. Enhancements include big data and analytics
as modules.

While visiting cancer centers around the world, I have realized how close and
strong our customer relationships are. It’s essential that we work continuously
to strengthen the customer experience and our commercial activities. It is also
clear that there are a number of areas where we can improve by working more
efficiently, setting the right priorities and by creating the optimal conditions
for our employees to shape the future of cancer care. In short – we shall pursue
our drive towards excellence in all we do as one company.

We will complete our transformation program and deliver on our margin target.
Thereafter, continuous productivity improvements will become part of our daily
business. I am confident that we will continue to be the leader and pioneer in
radiation therapy and brain diseases and help our customers to improve or save
the lives of their patients.

Richard Hausmann, President and CEO

*Based on constant exchange rates
**Adjusted for one-off cash outflow related to legal processes, including
HumediQ, and the transformation program, totaling SEK 170 M (see page 5).


Shareholder information

Conference call

Elekta will host a telephone conference at 10:00-11:00 CET on September 1, with
president and CEO Richard Hausmann and CFO Håkan Bergström.

To take part in the conference call, please dial in about five minutes in
advance.

Swedish dial-in number: +46 (0)8 566 427 01
UK dial-in number: +44 (0) 203 428 14 02
US dial-in number: +1 866 388 19 25

The telephone conference will also be broadcasted over the internet (listen
only). Please use the link:
event.onlineseminarsolutions.com/r.htm?e=1223067&s=1&k=81A32C0632664A47038D55D25
D 
D31548


The above information is such that Elekta AB (publ) shall make public in
accordance with the Securities Market Act and/or the Financial Instruments
Trading Act. The information was published at 07:30 CET on September 1, 2016.


For further information, please contact:

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

Johan Andersson
Director Investor Relations, Elekta AB (publ)
+46 8 587 25 415
johan.andersson@elekta.com

Tobias Bülow
Director Financial Communication, Elekta AB (publ)
+46 8 587 25 734
tobias.bulow@elekta.com