Sectra’s interim report for the May-July 2015 period: Strong operational growth and earnings trend

Press release - Linköping, Sweden, September 7, 2015 - The Swedish IT and
medical technology company Sectra (http://www.sectra.com/) (STO: SECT B)
presents its results for the first quarter of the 2015/2016 fiscal year. The
company’s business areas – Imaging IT Solutions and Secure Communications –
reported increased sales and earnings. Excluding a nonrecurring item pertaining
to patent sales in the comparative quarter, the Sectra Group’s operating profit
rose 29.8% and net sales increased 14.7%.
The quarter in figures

  · The Sectra Group’s order bookings amounted to SEK 299.9 million (388.1).
  · Net sales totaled SEK 224.9 million (212.4), up 5.9%. Excluding the
nonrecurring item of SEK 16.3 million for the sale of patents in the comparative
quarter, net sales increased 14.7%.
  · Operating profit totaled SEK 31.4 million (40.5), corresponding to an
operating margin of 14.0% (19.0). Excluding the nonrecurring item in the
comparative quarter, operating profit rose 29.8%.
  · Cash flow after changes in working capital amounted to SEK 6.6 million
(28.0). Several major long-term customer projects are in the installation phase,
which is having an adverse impact on cash flow.

Torbjörn Kronander, President and CEO of Sectra AB, comments

“During the first quarter of the preceding year, Sectra reported a relatively
large nonrecurring item pertaining to the sale of patent rights. If we compare
our performance excluding this nonrecurring item, the Group’s operating profit
increased 29.8% and sales rose 14.7%. This is a trend that we are proud of. This
improvement during the quarter is partly attributable to the large number of
long-term contracts we have signed in recent years, which are now helping to
counterbalance seasonal variations in the Group’s net sales.

“Both of our business areas – Imaging IT Solutions and Secure Communications –
reported increased sales and earnings for the most recent 12-month period.
Within Secure Communications, we achieved international sales success with our
concept for a secure ecosystem for spoken communication, which integrates
various phone models and several security classes into a single security
solution.

“The trend noted in Sectra’s largest business area – Imaging IT Solutions – is
not simply the result of a growing market. We are also receiving more requests
for tenders as healthcare providers across the world increasingly become aware
of our stable products and high level of customer satisfaction. The positive
news for the quarter is that both new and additional sales contributed to
increased order bookings in several markets, including the US, where we are
intensifying our growth initiatives and beginning to see the effects of our top
ranking in the market’s most important customer satisfaction surveys in the past
two years. For example, we received an order during the quarter from the major
US healthcare chain Carilion Clinic, which is a new customer for Sectra.

“While order bookings remained favorable and well above our net sales, we
experienced a decline compared with the year-earlier period. As anticipated,
order bookings were not as high in the UK, the market in which Sectra’s order
bookings increased most in the preceding fiscal year. While the variation in
sales between quarters has declined somewhat as a result of long-term managed
-services agreements, the variation in order bookings has increased. When we
sign a five-year managed-services agreement, for example, the entire order
amount is recognized when the agreement is signed, while sales are distributed
over the duration of the agreement as the systems are put into operation at the
customer’s facilities.”

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

Presentation of the interim report

Sectra will present its interim report during a teleconference with President
Torbjörn Kronander and CFO Simo Pykälistö.

Time: September 7, 2015 at 2:00 p.m. (CET)

To participate, call:

  · SE: +46 8 566 427 00
  · UK: +44 20 342 814 08
  · US: +1 855 753 22 36

or follow online via: http://media.fronto.com/cloud/sectra/150907/

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 September 7, 2015, at 1:00 p.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 subsidiaries in 14 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 Stockholm exchange. For more information, visit www.sectra.com