Elekta (EKTA) Q2 24/25 earnings summary

Executive summary

• Net sales declined by 4% in constant currencies (8% reported), mainly due to weaker performance in Europe and Latin America, while the U.S. showed growth and China saw strong order growth.

• Adjusted EBIT margin dropped to 9.8% from 11.5% year-over-year, impacted by lower gross margin and higher amortization from new product launches, though cost-reduction efforts are progressing.

• Cost reduction initiatives achieved SEK 150 million in annual run-rate savings in H1, targeting SEK 250 million by year-end.

• Product launches, including Elekta Evo and Elekta ONE Planning, received positive customer feedback, with Evo receiving CE mark and submitted for FDA approval; installations underway in Europe.

• Achieved the target of providing radiation therapy access to 300 million people in underserved markets, six months ahead of schedule.

Financial highlights

• Net sales for Q2 were SEK 4,341 million (4,732 prior year), with service business up 4% and solution sales down 10%.

• Adjusted gross margin was 35.7% (36.0%), mainly due to market mix, increased costs, and FX effects.

• Adjusted EBIT was SEK 423 million (542 prior year); adjusted EPS was SEK 0.63 (0.94 prior year); net income was SEK 215 million (344 prior year).

• Cash flow after capital investments was -SEK 31 million, down from SEK 211 million last year; operational cash conversion at 80% (65% in some reports), above the 70% target.

• Net debt increased to SEK 4,702 million (3,936 prior year), with net debt/EBITDA at 1.61 (1.21 prior year).

Outlook and guidance

• Sales and profitability expected to improve in H2, driven by new product launches and productivity measures.

• Full-year net sales expected to grow by mid-single digits, with EBIT margin expansion.

• EBIT margin targeted to reach 14% and higher beyond FY 2024-2025.

• Growth in APAC and EMEA expected to be more pronounced in H2.