Fourth quarter October – December 2022
- Order intake increased 63% to 216.6 (132.9) MSEK (49% in constant currencies).
- Order backlog amounted to 616.0 (425.3) MSEK.
- Revenue increased 28% to 98.8 (77.4) MSEK (15% in constant currencies).
- Operating income amounted to 6.2 (14.9) MSEK, corresponding to a margin of 6.3 (19.3) %.
- Excluding non-recurring expenses relating to a change of management operating income amounted to 10.5 (14.9) MSEK, corresponding to a margin of 10.6 (19.3) %.
- Net results after tax amounted to 4.2 (11.4) MSEK.
- Earnings per share amounted to 0.12 (0.34) SEK.
Full year January – December 2022
- Order intake increased 37% to 484.6 (353.5) MSEK (26% in constant currencies).
- Revenue increased 15% to 301.3 (261.2) MSEK (8% in constant currencies).
- Operating income amounted to 21.8 (36.0) MSEK, corresponding to a margin of 7.2 (13.8) %.
- Excluding non-recurring expenses relating to a change of management operating income for the year amounted to 26.1 (36.0) MSEK, corresponding to a margin of 8.6 (13.8) %.
- Net results after tax amounted to 7.5 (25.1) MSEK.
- Earnings per share amounted to 0.22 (0.74) SEK
Significant events during the fourth quarter
- In a major tender in Italy in October, C-RAD was selected as the principal supplier of SGRT, Surface Guided Radiation Therapy.
- Cecilia de Leeuw was appointed CEO of C-RAD in December. She succeeded Tim Thurn, who left after almost ten years at the helm.
- Henrik Bergentoft left his position as CFO in November. Lars Levin was then appointed interim CFO.
Significant events after the quarter
- Christoffer Herou was named new CFO in January. He takes up his post at the end of Q2 2023.
- The Board’s proposal to the Annual General Meeting 2023 is that no dividend be paid for the financial year 2022.
CEO Cecilia de Leeuw comments on the Year-end report:
”Despite a challenging environment, C-RAD has continued to invest in its product portfolio and sales organisation. This helped us to achieve a record-high order intake in the fourth quarter, as well as strong sales and good cash flow.
The forward-looking investments made did lead to increased costs. This had a negative impact on both the quarter's and the full year's results, while the underlying profitability remained good.
The order intake for the fourth quarter was 216.6 MSEK, which is our highest ever. Following an extensive tendering process, we were awarded a large order from Italy during the quarter worth 46 MSEK, but the quarter was already 28 percent better than the corresponding quarter of 2021 even without this. The total order backlog at the end of the quarter was 616 MSEK. Sales increased in all regions – EMEA, the Americas and APAC – in the fourth quarter, with total revenues of 98.8 MSEK.
The gross profit margin remained stable at 65 percent, which demonstrates our strong underlying profitability. Operating income amounted to 6.2 (14.9) MSEK in the fourth quarter. Excluding non-recurring expenses relating to the change of management, operating income amounted to 10.5 (14.9) MSEK, corresponding to a margin of 10.6 (19.3) percent. The decrease compared to the previous year is explained by the forward-looking investments in sales (communicated in Q1), product development and research collaborations, which increased costs in the quarter.
There was a high level of activity in the EMEA region. Alongside our successes in Italy, we also won business in Spain through the EU-funded framework agreement for INVEAT (Plan de Inversiones el altas tecnologías). Together with our new partner, Palex Medical SA, we are well positioned in Spain. In North America, hospitals and clinics are facing rising costs, which may delay the introduction of new technology. Despite the slowdown, sales increased 28 percent compared with the same period last year and interest in SGRT (Surface Guided Radiation Therapy) remains strong. Order intake in the APAC region fell slightly in the quarter, mainly explained by the covid shutdowns in China. For the full year, however, order intake in the region increased. In addition to India, where we entered into a partner agreement with Renova Oncology Group in November, business in South Korea is also beginning to take off. We are also seeing positive development in China, after the country eased its Covid restrictions.
It is pleasing to see the steady increase of service contracts as a proportion of total revenues, which provides us with stability. Service and training are a key part of our offering in terms of ensuring the best possible use of our technology. We have strengthened our teams in Europe, the USA and Australia and we are investing in tools to improve and digitize our customer support in the field. Service contracts now account for around 16 percent of our revenues.
SGRT is the leading technology for greater precision and safety as well as process efficiency when the care team is providing radiation therapy. As the new CEO, it is clear to me that C-RAD has a key role to play in ensuring that SGRT becomes the standard of care. This is particularly important for improving the quality of life of cancer patients, where it ensures that the tumour is subjected to radiation while also minimising the radiation that falls on healthy tissue. It also makes the whole process easier for hospital staff and patients alike. Another benefit to patients is that it dispenses with the need for tattoos. In recent years, SGRT has already developed towards becoming the standard of care for some forms of cancer, such as breast cancer. We are also finding that several standards organizations* have begun issuing guidelines that prescribe SGRT. It is therefore encouraging to see that, despite the challenging environment, both private and public healthcare facilities are continuing to invest in radiation therapy. Ultimately, it is the cancer patients who benefit.
The global environment may be challenging, but 2022 as a whole has been a strong year for C-RAD in many ways. We achieved a higher order intake and sales than ever before. Order intake increased for the whole year by 26 percent in constant currencies and the year's sales increased in constant currencies by 8 percent, to 301,3 MSEK. However, the operating income excluding non-recurring costs was lower than the previous year, 26.1 MSEK, with a margin of 8.6 (13.8) percent. The decrease compared to the previous year is, as for the quarter, largely explained by costs linked to our forward-looking investments.
Our high order backlog of 616 MSEK provides us with a stable foundation for 2023. The order backlog is of good quality, although the timing of actual installation can be hard to predict. We are also continuing to strengthen our product portfolio. Together with LINAC-manufacturer Accuray, we held a launch at ASTRO (American Society for Radiation Oncology) in October for the breast cancer treatment solution we have developed together. We also recruited many new colleagues all over the world during the year – within sales, service, as well as development.
Finally, I would like to add that I have had a flying start to my time as CEO. I have devoted this initial period to meeting employees, partners and customers and I have been struck by the commitment of everyone I have met. This means working closely with our research-intensive customers all around the world and continuously developing our products and solutions. C-RAD has a strong base for continuing our important work to ensure that SGRT is available to all cancer patients. I would like to take this opportunity to thank everyone for the warm welcome I have received and I am looking forward to working with our skilled and passionate global team. We have an important job to do: with the help of C-RAD’s cutting-edge technologies to continue to improve the lives of cancer patients all over the world.”
Presentation of the Year-end report
CEO Cecilia de Leeuw and CFO Lars Levin will present the year-end report by webcast on Thursday, January 26 at 11:00 CET. After the presentation, there will be time for questions. The presentation will be held in English. To participate in the presentation, please register using the link below:
https://us06web.zoom.us/webinar/register/WN_9BzqY9Z3TjGWRNcI8mxvHg