Elekta AB (publ)

Hi and good morning everyone. My name is Peter Nyqvist, Head of Investor Relations here at Elekta. With me here in Stockholm I have our CEO Gustav Salford and our CFO Tobias Hägglöf who will then present the result later on. Today's agenda starts off with Gustav presenting some highlights of the development during the second quarter as well as the strategic achievements in this quarter. Then Tobias will give you details on the financials and the presentation ends with Gustav's view on Elekta's outlook. And as usual after the presentation there will be time for questions and answers. 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 revenues, 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 forth in the statements. With that said, I would like to hand over to Gustav.

Thank you, Peter, and thank you all for attending our call. And now I would like to focus on the key takeaways for the second quarter of our fiscal year 24-25. So net sales decreased by 4% in constant currencies, mainly due to Europe and Latin America, while US showed growth. Grossmordians came in at 35.7%, a decline year over year, mainly attributed to the reduced net sales and change in market mix with increased volumes in Ukraine, where we have delivered the major part of the order won last year. But we also saw a major impact from foreign exchange rates. The adjusted EBIT margin declined year over year, mainly impacted by the gross margin development and, as expected, higher amortization costs following recent product launches. The cost reduction initiative announced in Q1 has progressed rapidly with reductions visible in the second quarters. Tobias will provide much more detail in his part of the presentation. The book-to-bill ratio came in at 0.99 in the second quarter. There was no really major tenders in the market in the quarter. However, China showed improved order development compared to last year's low level. And we are seeing an increasing public procurement activity in the Chinese market. So all in all, the rolling 12 months book-to-bill ratio is at 1.09, a ratio that is well above 1, implying a solid foundation for future sales growth. Electa Evo, our latest AI-powered adaptive CT Linux and Electa One planning has been launched at Astro and in the quarter also at Astro in Washington. Customer feedback has been very encouraging and we see great interest. And currently we have a handful of installations ongoing of Evos in Europe. And in September, Electric Evo was submitted to the US FDA for pre-market approval. And we now look forward to providing the US market with the most versatile and adaptive CT Linux. I'm also very happy and proud to be able to communicate that we have now reached our target to providing radiation therapy access to 300 million people in underserved market, six months ahead of our target. It does not only mean that we provide best-in-class solutions to people worldwide. It also means that we extend our footprint and will continue to deliver on the installed base and service growth going forward. And moving to the next slide, I will give you more details regarding the sales and market development during the quarter. In constant exchange rates, group sales were down 4% year over year. In the Americas, growth in the US was fully offset by decreased sales in Latin America. And it's also encouraging to see that the installations in the US are showing a positive development. APEC sales was in line with last year, and despite the negative impact of the anti-corruption campaign, China's decline was limited to 1%. And we have continued to see the sequential improvements, which are visible in this quarter as well. In region Europe, Middle East and Africa sales declined by 5% compared to last year when the region grew by 16% driven by large installations in Spain, Italy and the UK. So the geographical mix in EMEA has been more skewed towards emerging markets, particularly Ukraine, where we have delivered on our commitment to support Ukrainian cancer patients. Most markets in Middle East and Africa also showed growth. Our installed base year-over-year grew by around 4%. If we then move towards our product portfolio, you can see that since we launched Access 2025, we have been accelerating innovation and recently we launched our CT-Linux, Electa Evo and the treatment planning software Electa One Planning. And today we have the leading and most comprehensive portfolio in the industry with our MR-Linux Unity, our Electa Bracket Studio, Electa Evo and Electa Harmony on the CT-Linux side, Electa One Software Suite and of course the Lexell Gamma Knife Esprit. And looking across our portfolio, we can now proudly say that we enable online adaptive treatments in all our product lines, Neuro, Brachy, Linac, and software solutions. Where our Unity has unique MR imaging and comprehensive motion management technology, the Elekta Evo now complements our Linac portfolio with a high versatility in terms of personalization and productivity. we will leverage our leading product portfolio to drive profitable growth going forward. So if we look a bit closer at Elekta Evo and at Elekta One. Elekta Evo comes with online adaptive treatments or it can easily be upgraded over time if that's the customer preferences. It has the best-in-class image quality due to the AI-enhanced Iris technology and it leverages our new treatment planning system, Elekta One Planning, powered by MIM. This new software offers AI-driven autocontouring, faster dose calculation and planning, and it is vendor agnostic to ensure it supports not only Lecta devices, but also other products in the market. Electa Evo has been very well received among our customers relating to the clinical needs and elevating personalized care as well as increased productivity. We have received C-marking during September 2024 and we have sent for FDA submission during the second quarter and we look forward to delivering the new solution to our customers in the coming quarters and years. I would also like to give you an update on MR-Linac Unity, and I'm really happy to report great momentum towards our new adaptive standard of care. And I recently had the pleasure of attending our latest MR-Linac Consortium meeting in Singapore, the first one in the APAC region. Some of the highlights include further clinical evidence that our comprehensive motion management technology with Unity offers more precise patient treatments than ever before. For example, Professor Dan Heyer at the University of Iowa Health Care is now treating lung cancers as their second most common indication after adopting comprehensive motion management. An indication that was previously challenging to treat during the movement of the tumor. Furthermore, Dr. Reinhold at the Memorial Sloan Kettering is drawing fantastic single fraction study to take patient treatments of liver metastasis for five visits or more down to one visit for the patient. What is hugely valuable for the patient and the clinic alike. Our constantly growing consortium with its members now passed 100 member sites and is progressing rapidly in superiority tries to generate further evidence that our MR Lin Act is providing the new standard of care in radiotherapy. With that, I would like to hand it over to Tobias for the financials.

Thank you Gustav and good morning everyone. Let's then look into the Q2 results in more detail. During the second quarter, net sales declined by 4% in constant exchange rates. We continue to increase our service business with a 4% growth year over year with growth in most business lines and regions. solution sales declined by 10 percent driven by europe and latin america just the gross margin amounted to 35.7 percent the decline versus last year is explained by lower sales change market mix with increased volumes in ukraine that you just heard justin said where we have delivered the major part of the order one last year increased cost for material mainly within our service operations And finally, changes in foreign exchange rates had a negative impact of 90 basis points in the quarter. The adjusted EBIT margin declined to 9.8%, mainly driven by lower sales and higher amortization costs following the recent product launches. Net income amounted to 250 million SEK and earnings per share to 0.55 SEK. in the second quarter we have continued to drive the cost reduction initiatives with the aim to lower structural cost and enhance productivity across the organization the target is to generate annual savings by around 250 million sec at the end of the fiscal year 2425 at an estimated implementation cost of 250 million sec The program runs according to plan and in the first half of 24-25 annual run rate savings of 150 million SEK were achieved with a 34 million SEK year-over-year savings in the first six months. The implementation cost amounted to 144 million SEK and are reported as items affecting comparability. The cost reduction initiative contributed to lower selling and admin cost in the quarter. Then looking into our cash flow. During the second quarter, cash flow after continuous investments amounted to 31 million SEC negative compared to 211 million SEC positive last year, impacted by lower earnings and higher investments. Rolling 12 months networking capital as a presenter of net sales improved from a minus 3% last year to minus 5%. In the second quarter, we have continued to make R&D investments in new product solutions and software amounting to 422 million SEC and tangible assets of 66 million SEC. Then, the rolling 12 months cash flow from operating activities amounted to 2.35 billion SEK, which is an increase of 63 million SEK year-over-year. Cash conversion amounted to 80%, which is above our targets of 70%. With that, I hand over to you, Gustav.