Sectra’s year-end report 2014/2015: Strong order bookings and favorable earnings

The IT and medical technology company Sectra (http://www.sectra.com/) (STO: SECT
B) increased its order bookings 67.5% to SEK 1,550.4 million for 2014/2015. The
company’s order bookings included a large number of long-term agreements with
major customers. Although the agreements will generate stable revenues over many
years, these customer projects will have an adverse impact on cash flow during
the installation phase. Including nonrecurring items, the Group’s operating
profit rose 17.3% to SEK 150.3 million, corresponding to an operating margin of
15.6% (15.0). Sectra’s financial focus during 2014/2015 was on boosting
operating profit, while maintaining its operating margin, and the company has
now fulfilled all of its financial goals. Taking into consideration Sectra’s
strong financial position and performance, the Board has decided to propose to
the Annual General Meeting (AGM) that SEK 4.50 per share – the same amount as in
the preceding year – be distributed to the shareholders through a share
redemption program.
Fiscal year in figures

  · The Sectra Group’s order bookings increased 67.5% to SEK 1,550.4 million
(925.7).
  · Net sales rose 12.6% to SEK 961.4 million (853.8). Excluding nonrecurring
items (refer to page 4 of the year-end report), net sales increased 10.7% to SEK
945.1 million (853.8).
  · Operating profit rose 17.3% to SEK 150.3 million (128.1), corresponding to
an operating margin of 15.6% (15.0). Excluding nonrecurring items, operating
profit increased 7.0% to SEK 140.0 million (130.9), corresponding to an
operating margin of 14.8% (15.3).
  · Cash flow after changes in working capital amounted to SEK 85.0 million
(123.6). Several major long-term customer projects are in the installation
phase, which is having a particularly adverse impact on cash flow.

Torbjörn Kronander, President and CEO of Sectra AB, comments

Sectra’s successes are growing as a result of the close relationships we have
with our customers. . We always put our customers first and involve them in the
ongoing development of our product offering. Therefore, there are few things
more gratifying than the top rankings we received in customer satisfaction
surveys this year, both in the US and globally. This level of customer
confidence in Sectra was reflected in our order bookings, which continued to
increase during the fourth quarter – partly as a result of an extensive
agreement signed with the Karolinska University Hospital, one of Sectra’s long
-standing customers. We know that what customers appreciate most – even more
than our stable and user-friendly products – is Sectra’s employees. I am proud
of the efforts of our employees, which contributed significantly to our ability
to deliver customer value, thereby enabling us to report a favorable earnings
trend.

Several of Sectra’s major markets are displaying strong growth. Our sales in the
US, where we are beginning to see the effects of our top ranking in the two most
recent KLAS surveys, and in the UK and Norway, increased more than 20% during
the fiscal year. Sales in Sweden declined as a result of a weak market for
encryption systems, and our favorable sales of medical systems were not
sufficient to fully offset this downturn. The trend with respect to encryption
systems in Sweden has major impact on the overall performance of the Secure
Communications business area. However, the business area is reporting somewhat
stronger earnings in the past two quarters as a result of increased revenues
from customers outside Sweden.

We remain focused on controlled growth and on being a leader in the areas and
regions where the company already operates, supplemented by operations in a few
carefully selected markets that we believe offer significant growth potential
for Sectra. In line with this strategy, we strengthened our presence in Denmark
during the quarter through the acquisition of our partner it-mark ApS, which
offers online services for medical imaging management. We also established a new
subsidiary of Secure Communications in Finland, where we are working to boost
our sales of security products and services, as well as another subsidiary in
France linked to the activities being carried out in Business Innovation.

For further comments and information, see the attached interim report.

Presentation of Sectra’s year-end report

with President Torbjörn Kronander, CFO Simo Pykälistö and President of Imaging
IT Solutions Marie Ekström Trägårdh

  · Time: June 3, 2015, at 12:00 noon
  · Location: Operaterrassen in Stockholm

Register to participate here: www.financialhearings.com/

Follow online via: http://media.fronto.com/cloud/sectra/150603/

The presentation will be held in English. A recorded version will be available
on Sectra’s website after the conference via: www.sectra.se/irwebcast.

The information in this report is such that Sectra AB (publ) is obligated to
disclose in compliance with the Securities and Clearing Operations Act and/or
the Financial Instruments Trading Act. The information was submitted to the
media for publication on May 3, 2015 at 8:00 a.m. (CET).
For further information, please contact:
Dr. Torbjörn Kronander, CEO and President Sectra  AB, 46 (0) 705 23 52 27
Pictures: http://flickr.com/photos/sectramedicalsystems
About the Sectra Group
Sectra was founded in 1978 and has its roots in Linköping University in Sweden.
The company’s business operation includes cutting-edge products and services
within the niche segments of medical IT and secure communication. Sectra has
offices in 12 countries and operates through partners worldwide. Sales in
the 2014/2015 fiscal year totaled SEK 961 million. The Sectra share is quoted on
the NASDAQ OMX Stockholm exchange. For more information, visit www.sectra.com