Interim report May – July 2014/15

  · Order bookings increased 12* percent to SEK 2,341 M (2,027).
  · Net sales decreased 4* percent to SEK 1,865 M (1,912).
  · EBITA amounted to SEK -38 M (148) before non-recurring items. Currency
effects were neutral.
  · Net income amounted to SEK -137 M (-8). Earnings per share amounted to SEK
-0.36 (-0.01) before dilution and SEK -0.36 (-0.01) after dilution.
  · Cash flow after continuous investments amounted to SEK -670 M (-584). Cash
conversion is targeted to return to around 70 percent for the fiscal year.

Outlook

  · There are strong drivers for growth in radiation therapy. Elekta’s ambition
is to continue to grow faster than the market. The financial objective is an
annual net sales growth exceeding 10 percent in local currency.
  · Due to temporary lower growth and higher execution risks in some emerging
markets and a focus on tighter management of working capital, net sales is
expected to grow by 7-9 percent in local currency for the fiscal year 2014/15.
Currently 2014/15 is expected to finish in the lower range of the interval.
  · EBITA is expected to grow by approximately 10 percent (changed from “10
percent or more”) in local currency for the fiscal year 2014/15, compared with
last year. Exchange rate movements are expected to have a neutral impact on
EBITA growth in SEK.

President and CEO comments
During the first quarter of the fiscal year 2014/15 we continued to see mixed
development in our markets. We are pleased that order momentum recovered and
order bookings grew by 12* percent compared to the first quarter last year. Net
sales and cash flow were weak. Based on current market conditions and our order
backlog we reiterate our net sales guidance for the year with a growth of 7-9
percent in local currency, but we currently expect the result to be in the lower
range of the interval. EBITA is expected to grow approximately 10 percent.

Mixed market environment
We estimate that demand in the first quarter grew by low single-digits over the
previous year. In the first quarter we saw a mixed market environment across our
geographic areas. There was slower than expected growth in mature markets,
especially in the US. In Asia, and other emerging markets, the market
development was mixed in the first quarter but we are expecting a return to
growth for the full year.  Due to macroeconomic and geopolitical circumstances
there are increased risks in the full year plan. We remain cautiously
optimistic, but are monitoring the situation closely.

Strong order bookings
Elekta’s order bookings increased by 12* percent in the first quarter,
reflecting good demand for Elekta’s leading portfolio of cancer care solutions.
Performance was good in Europe and North America. In Asia, the trend was mixed.
India showed good growth. In Japan, orders were unchanged while the market and
orders in China were seasonally lower than last year but full-year prospects are
good.

After the relatively weak order intake last year, our global order volumes for
Leksell Gamma Knife® continue to improve according to plan.

Weak delivery volumes
The first quarter is normally Elekta’s weakest. Net sales decreased by 4*
percent. Deliveries in region EMEA were strong and we noticed a slight increase
in Asia. North America had a weak quarter mainly due to delays in planned
software installations. Software revenues are expected to recover during this
fiscal year. Gross margin decreased to 34 percent (42). The decline is due to
low software revenues and unfavorable project mix effects in the first quarter.
EBITA before non-recurring items amounted to SEK -38 M (148). The lower result
is an effect of the lower gross profit combined with cost increases according to
plan.

Cash flow
Cash flow after continuous investments for the first quarter amounted to SEK
-670 M (-584). Cash flow was impacted by the result from operations and
inventory build-up for scheduled deliveries for the quarter and the remainder of
the year. Compared with the fourth quarter, accounts receivable declined
according to plan. Actions are in place to gradually improve cash flow during
the year, with the ambition to return to a cash generation of around 70 percent
for the year.

Supporting future growth
In the fourth quarter, and in line with the strategic agenda, we announced
measures to enhance the efficiency of the organization to support continued
growth. The activities in the program have, to a large extent, been executed and
the related cash outflow amounted to SEK 33 M in the first quarter. The total
program amounted to SEK 100 M. We have completed efficiency measures leading to
staff reductions in our North American and Asian regional organizations. In
addition, we announced our intent to close our office in Freiburg, Germany, and
transfer the functions to Crawley, UK.

Continued progress in product development
We are in a high-investment phase within research and development. Our MRI
-guided radiation therapy project is our largest research and development
project to date. Recently, the Christie Hospital in the UK joined our research
consortium for MRI-guided radiation therapy and Uppsala University Hospital has
announced that it will be conducting research with MRI-guided radiation therapy
via a bilateral research agreement with Elekta.

Outlook
The long-term underlying market growth remains strong. However, for this fiscal
year, we see continued mixed development in our markets including higher
execution risks in certain emerging markets. We reiterate our outlook for the
full fiscal year of a net sales growth of 7-9 percent, in local currency, where
we currently see 2014/15 finishing in the lower range of the interval.

EBITA is expected to increase approximately 10 percent in local currency
compared with last year. Exchange rate movements are expected to have a neutral
impact on EBITA growth in SEK.

Niklas Savander - President and CEO

* Compared with last fiscal year, based on unchanged exchange rates.

Conference call
Elekta will host a telephone conference at 13:45 – 14:30 CET on August 28, with
President and CEO Niklas Savander and CFO Håkan Bergström.

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

Swedish dial-in number: +46 (0)8 519 993 50, UK dial-in number: +44
(0)20 319 405 47, US dial-in number: +1 877 788 90 23.

The telephone conference will also be broadcasted over the internet (listen
only). Please use the link:
http://event.onlineseminarsolutions.com/r.htm?e=835942&s=1&k=EAA8B50F1C78794463B
D 
4A565734355A

Financial information
Interim report May – October 2014/15
November 27, 2014

Interim report May – January 2014/15
March 4, 2015

Year-end report May – April 2014/15
June 2, 2015

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)
+46 702 100 451, johan.andersson@elekta.com (johan.anderssonmelbi@elekta.com)

Elekta AB (publ)
Corporate registration number 556170-4015
Kungstensgatan 18, ­Box 7593, SE 103 93 Stockholm, Sweden

The above information is such that Elekta AB (publ) shall make public in
accordance with the Securities Market Act and/or the Financial Instruments
Trading Act. The information was published at 13:00 CET on August 28, 2014.