Interim report May – October 2014/15

  · Long-term growth strategies remain unchanged. Delayed orders in EMEA and
slower than expected market growth impacted first half-year results. Responsive
action plan implemented.
  · Order bookings increased 2 percent to SEK 5,217 M (5,128), equivalent to a
decrease of 3 percent based on constant exchange rates.
  · Net sales increased 2 percent to SEK 4,432 M (4,355), equivalent to a
decrease of 3 percent based on constant exchange rates.
  · EBITA amounted to SEK 359 M (555) before non-recurring items. Currency
effects were neutral.
  · Net income amounted to SEK 63 M (183). Earnings per share amounted to SEK
0.16 (0.48) before dilution and SEK 0.16 (0.48) after dilution.
  · Cash flow after continuous investments amounted to SEK -497 M (-523).

Outlook for fiscal year 2014/15

  · Based on the current market conditions net sales is expected to grow
4 percent (changed from 7‑9 percent) based on constant exchange rates. EBITA is
expected to increase approximately 6 percent (changed from approximately 10
percent) based on constant exchange rates.
  · Currency is expected to have a positive effect of approximately 7 percentage
points on growth of net sales and approximately 2 percentage points on EBITA
growth, including hedging effects.
  · Cash flow after continuous investments is targeted to exceed SEK 1.1 bn,
representing a cash conversion exceeding 60 percent.

* Compared to last fiscal year based on constant exchange rates.

President and CEO comments

We are currently not meeting our own performance targets due to delayed orders
in EMEA and lower than expected overall market growth. Our strategic agenda has
clear priorities and actions to strengthen cash flow, drive the top line and
improve the efficiency and effectiveness of the organization. The performance in
the second half of the fiscal year will improve but this will not be enough to
fully compensate for a disappointing first half. Therefore, we have revised our
outlook for the full fiscal year and implemented a responsive action plan.

Market
The long-term growth perspective in cancer care is attractive and unchanged. We
are uniquely positioned with superior solutions to support the unmet need in
emerging markets. In mature markets we notice an increasing demand for software
solutions that lead to better outcomes for patients and answer the need for more
efficiency in health care systems. The market for new equipment however is
currently growing at a slower pace than we anticipated coming in to the year,
impacted by the global economy, political uncertainties and health care
consolidation leading to larger orders which increases volatility.

Order bookings
The first half-year order intake was down 3 percent based on constant exchange
rates.

In Europe, Middle East and Africa order intake was below Q2 last year, affected
by slower market growth and delayed orders, the majority of which we expect will
materialize in the second half of the fiscal year. Comparison with last fiscal
year is difficult because of the large order in Algeria booked in the second
quarter.

Versa HDTMhas been approved for sale in both China and Japan, which offers good
growth opportunities. We are encouraged to see how order bookings have improved
in the Asia Pacific region.

In North America we signed a large collaboration partnership with Avera Health
to deploy MOSAIQ’s electronic medical record (EMR), treatment planning systems
and cancer registry software – as well as Elekta hardware – throughout the six
regional centers of the Avera Cancer Institute. The pipeline for large orders in
the US is strong.

Net sales and EBITA
Net sales for the first half of the year was down 3 percent based on constant
exchange rates.

Asia Pacific showed growth, mainly driven by India and China. North America
improved and recorded strong growth for the second quarter. As expected, US
software revenues started to improve and we forecast this to continue through
the remainder of the year. Net sales in EMEA was below expectations due to
project delays.

EBITA and gross margin improved compared to the first quarter. We are taking
measures to control the growth of our expenses in order to deliver stronger
EBITA in the second half of the fiscal year.

Cash flow
Cash flow after continuous investments improved to SEK 173 M (61) in the second
quarter implying a cash conversion of 54 percent. This is a result of higher
operating cash flow in combination with a positive effect from reducing net
working capital. Measures to further improve cash flow are also expected to
continue to show effect in the second half of the year.

Product development
Elekta is the innovation leader in the radiation therapy and radiosurgery
market. Our commitment to innovation, as described in the strategic agenda, is
robust. Innovation is the main driver for future growth. In the first half of
the year we invested SEK 689 M in research and development. The key projects
including Atlantic (MRI guided radiation therapy) are progressing according to
plan.
The reaction from the market, on the introduction of our Information-guided
cancer care™ solutions, was very positive. A key cornerstone of Information
-guided cancer care is Elekta’s Knowledge Management platform, an oncology
analytics solution that provides real-time dashboards and reports to help
improve the quality of cancer care.

Responsive action plan
To address the current slower market growth, we have implemented additional
measures to control expenses, while we continue to implement our strategic
agenda priorities. We are reducing the cost base by removing duplication and
capturing synergies across our operations. We will timely communicate the
results and benefits of these actions in the coming quarters.

Outlook for FY 2014/15
We expect a better second half of the fiscal year based on our confidence in
getting most of the delayed orders from EMEA, the approval to sell Versa HD™ in
China and Japan, and increase of Leksell Gamma Knife® volumes. However this will
not be enough to reach the growth levels we guided for in Q1.

Therefore we have changed our guidance for the full year to a net sales growth
of 4 percent (changed from 7-9 percent), based on constant exchange rates. We
have adjusted our expense growth accordingly. We expect EBITA to increase
approximately 6 percent (changed from approximately 10 percent) based on
constant exchange rates.

Currency is expected to have a positive effect of approximately 7 percentage
points on growth of net sales and approximately 2 percentage points on EBITA
growth, including hedging effects.

Our target is to reach cash flow after continuous investments exceeding SEK 1.1
bn, representing a cash conversion exceeding 60 percent (changed from 70
percent). The main reason for the change is increased uncertainties in some
emerging markets.

Niklas Savander - President and CEO

Conference call
Elekta will host a telephone conference at 10:00 – 11:00 CET on November 27,
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 99 030, UK dial-in number: +44 (0)20 766
02077, US dial-in number: +1 855 716 1592.

The telephone conference will also be broadcasted over the internet (listen
only). Please use the link:
http://event.onlineseminarsolutions.com/r.htm?e=884167&s=1&k=DAD0804CEF34CCB8EB5
8 
38290FD20DDB

Financial information
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 07:30 CET on November 27, 2014.