Q1 2027 Elekta AB (publ) Earnings Call Transcript
Key Points
- Elekta AB (EKTAF) reported a significant improvement in adjusted gross margin, reaching 42.6% in Q1, up from 37% in the prior year, driven by favorable mix, price increases, and lower costs.
- The company's adjusted EBIT margin improved to 11.2%, with an even stronger EBITC margin of 12.6% on a rolling 12-month basis, reflecting successful execution of its profitability-focused turnaround plan.
- Elekta AB (EKTAF) exceeded its cost-saving target from the new operating model, realizing savings of more than SEK500 million, which contributed to a leaner organization of under 4,000 employees.
- Order intake grew by 3% with a healthy book-to-bill ratio of 1.11, supported by strong demand for the Elekta Evo system, particularly in the US market.
- Free cash flow improved by SEK154 million year-over-year, and the company continues to reduce its net debt, signaling stronger financial health and operational efficiency.
- The company's new regional reporting structure provides greater transparency and accountability, with all regions except TIMEA achieving gross margins above 40%.
- Elekta AB (EKTAF) experienced a 2% decline in net sales in constant currency, falling short of its full-year guidance and highlighting ongoing challenges in achieving top-line growth.
- Sales in China declined significantly due to weak order intake from previous years, which depleted the order backlog and impacted Q1 installations.
- The APJ region underperformed expectations due to constrained healthcare budgets and capital investment, with specific headwinds in Indonesia, Vietnam, and a slower-than-expected recovery in Japan.
- TIMEA region saw a 4% decrease in sales due to installation delays in neighboring countries of Iran, which stalled revenue recognition despite a solid underlying outlook.
- The company faced a negative currency impact on net sales and margins due to the strengthening of the Swedish krona against major revenue currencies like the US dollar and euro.
- Elekta AB (EKTAF) continues to face headwinds from higher COGS inflation, including elevated tungsten prices, and a more prudent accounting approach for R&D expenses negatively impacted reported EBIT by 190 basis points year-over-year.
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Good morning, everyone, and welcome to Elekta's Q1 for the fiscal year of '26-'27. With me here in the studio in Stockholm, I have our CEO, Jakob Just-Bomholt, and our CFO, Klara Eiritz. As usual, we will start off with Jakob bringing in the highlights from the quarter and some strategic updates. And then Klara will bring you more details around the financials. And after the presentation, we will, as usual, have time for Q&A.
But before we start, I want to remind you that some of the information discussed in this call contains forward-looking statements. This can include projections regarding revenue, operating results, cash flow, as well as products and product development. These statements involve risks and uncertainties that may cause actual results to differ materially from those set up in these statements.
With that said, I would like to hand over to you, Jakob. So please, Jakob.
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