Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- C-Rad AB (FRA:24C, Financial) achieved an 11% growth in order intake in constant currencies, driven by strong performance in the Americas and EMEA regions.
- The company secured significant deals in both the US and EMEA, including a strategic multi-site contract in France and a large product order in Texas.
- C-Rad AB has a strong order backlog of SEK735 million, providing a solid foundation for future revenue.
- The company has successfully reduced operating expenses by 10% compared to the previous year, demonstrating improved operational efficiency.
- Service revenue showed solid growth, with order intake for services increasing by 86% in constant currencies compared to the previous year.
Negative Points
- Revenue declined by 13% year-on-year in constant currencies, primarily due to a softer order intake in 2024 and the absence of a SEK20 million boost from China deliveries.
- The EBIT margin for the quarter was 8%, impacted by the weaker top line performance.
- APAC region experienced a 15% decline in order intake and a 34% decline in revenue, affected by strong China deliveries in the previous year.
- Gross profit decreased to SEK70 million from SEK88 million a year ago, reflecting the decline in revenue.
- Cash flow from working capital was negative at SEK8 million, although it showed improvement from the previous year.
Q & A Highlights
Q: Can you elaborate on the main value propositions of surface scanning and whether your selling activities are dependent on cyclical buying patterns?
A: The value proposition includes targeting only healthy tissue, which benefits both society and patients, and improving clinic efficiency. It's a minor investment for clinics, typically around 5% of their total investment. While there isn't a strict buying cycle, purchases can increase towards the end of the year depending on hospital budgets. The market is highly regulated, making it difficult for new competitors to enter.
Q: How does C-RAD typically compete in the market, on pricing or functionality?
A: We aim to compete on functionality, leveraging our unique offerings. However, market prices sometimes necessitate a combination of pricing and functionality strategies.
Q: What percentage of machines are equipped with your technology, and how do you expect this to change in the next five years?
A: SGRT is becoming standard care, with higher attachment rates in advanced markets like Germany and the US, where it's over 40%. Developing markets vary, with some having no SGRT. The standards introduced at the end of 2022 are supporting this trend.
Q: Do you expect the strong order intake in EMEA to continue, and what are your chances of winning significant product orders in the US?
A: EMEA is showing positive momentum, but it's too early to predict future performance. In the US, while service contracts are currently more favorable due to faster decision-making on OpEx investments, we see opportunities for product orders, especially in retrofitting existing linacs.
Q: Did tariffs negatively impact your results this quarter, and do you expect any impact in the third quarter?
A: There was no negative impact from tariffs this quarter. We don't anticipate major effects in the near term, as our terms allow us to pass tariff costs to customers, and current assessments suggest only hardware might be affected.
Q: Given the 13% decrease in organic sales in Q2, are you confident about achieving your 10% growth target for the full year?
A: Our growth target is a midterm goal. We focus on order intake as the first step towards revenue, with a typical six to eight-month lead time from order to delivery, indicating progress in the right direction.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
