Sectra's year-end report 2023/2024: Cloud recurring revenue up more than 50%--unchanged dividend proposed

USA - English

• USA - English

LINKÖPING, Sweden, June 5, 2024 /PRNewswire/ -- International medical imaging IT and cybersecurity company Sectra (STO: SECT-B) reports that all operating areas are growing, and the Group's sales for the fourth quarter surpassed earlier record-breaking levels. Cloud recurring revenue (CRR) is growing the fastest, which shows that the transition to delivering services is progressing at a rapid rate. It is proposed that the 2024 Annual General Meeting (AGM) resolve that SEK 1.10 per share be distributed to the shareholders through a share redemption program.

2023/2024 fiscal year

• Contracted order bookings rose 34.3% to SEK 6,223.5 million (4,635.7), of which SEK 3,219.4 million (2,606.5) pertained to guaranteed order bookings.
• Net sales increased 26.1% to SEK 2,963.6 million (2,350.8). Based on unadjusted exchange rates, the increase was 23.0%. Recurring revenue accounted for SEK 1,724.9 million (1,359.9) of net sales, up 26.8%. Based on unadjusted exchange rates, the increase was 23.7%. CRR increased 55.9% to SEK 396.9 million (254.6).
• Operating profit rose 13.6% to SEK 517.8 million (455.7), corresponding to an operating margin of 17.5% (19.4). Based on unadjusted exchange rates, operating profit increased 8.0%.
• Profit for the period amounted to SEK 428.4 million (375.0).
• Cash flow from operations amounted to SEK 326.3 million (440.5).
• The Board of Directors and President have proposed that the 2024 AGM resolve to transfer SEK 1.10 (1.10) per share to the shareholders through a share redemption program.

Fourth quarter: February–April 2024

• Contracted order bookings decreased 24.4% to SEK 896.9 million (1,186.9), of which SEK 762.3 million (811.6) pertained to guaranteed order bookings. Of the guaranteed order bookings, 26% were recognized during the quarter and a further 27–37% are deemed to pertain to revenue within 12 months after the end of the quarter.
• Net sales increased 23.9% to SEK 898.1 million (724.7). Based on unadjusted exchange rates, the increase was 21.0%. Recurring revenue accounted for SEK 463.5 million (376.6) of net sales, up 23.1%. Based on unadjusted exchange rates, the increase was 20.0%. CRR increased 56.1% to SEK 113.8 million (72.9).
• Operating profit rose 0.3% to SEK 197.4 million (196.8), corresponding to an operating margin of 22.0% (27.2). Based on unadjusted exchange rates, operating profit decreased 4.7%. The outcome includes impairment of goodwill and capitalized development expenditures. Excluding these items, operating profit amounted to SEK 203.5 million (196.8).
• Profit for the period amounted to SEK 158.5 million (154.6).
• Cash flow from operations amounted to SEK 133.7 million (382.2).

Comments from Torbjörn Kronander, President and CEO of Sectra AB

"At Sectra, we prioritize long-term earnings performance over short-term margin increases. The long-term perspective and close customer relationships have resulted in a solid performance throughout the years, and 2023/2024 is no exception. Among other achievements, we won several long-term, major customer contracts in both secure communications and medical IT.

Sectra is in the middle of a major transition of the business model in its largest operating area, Imaging IT Solutions. We are moving from license sales to service sales, which means that revenue will be spread out over a longer period of time. In the short term, this will affect growth in both sales and profit. Despite this, the outcome for the year was good, driven largely by our success in the US and the UK and by major improvements in Secure Communications. All business areas are growing, with positive earnings.

I'm proud of what we've accomplished so far and would like to express my appreciation to all of our customers, employees, partners and shareholders for the confidence and support you are giving Sectra. Together, we are creating value both for individual patients and for government officials as well as for society as a whole."

Read the attached year-end report for further CEO comments and information. 

Presentation of the year-end report 
Torbjörn Kronander, President and CEO of Sectra AB, and Jessica Holmquist, CFO of Sectra AB, will present the financial report and answer questions. The presentation will be held in English.

Time: June 5, 2024, at 10:00 a.m. CEST

Follow live or listen to the recording afterward: https://investor.sectra.com/q4report2324

This information constitutes information that Sectra AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and/or the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out below, at 8:15 a.m. CEST on June 5, 2024.

For further information, please contact:
Dr. Torbjörn Kronander, President and CEO, Sectra AB, +46 (0) 705 23 52 27

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SOURCE Sectra