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2020-10-20

Elos Medtech AB: Elos Medtech Interim Report January - September 2020

A QUARTER OF STRONG RECOVERY

July - September 2020

  • Net sales for the third quarter amounted to SEK 147.9 million (157.1), a decrease of 5.9 percent compared to the same period last year. Net sales in local currencies decreased by 1.7 percent.
  • Operating profit was SEK 17.9 (14.2) million, corresponding to an operating margin of 12.1 (9.0) percent.
  • Operating profit has been positively affected by SEK 4.4 million with respect to government support received owing to Covid-19.
  • The profit after financial items amounted to SEK 14.2 (11.4) million. In the quarter, net financial items were negatively affected by exchange rate differences of SEK -1.3 (0) million and totaled SEK -3.7 (-2.8) million.
  • The profit after tax was SEK 12.6 million (9.0).
  • The cash flow from operating activities was SEK 41.9 (30.6) million, amounting to SEK 32.2 (1.8) million after investments.
  • Earnings per share were SEK 1.56 (1.12).

CEO JAN WAHLSTRÖM COMMENTS ON Q3

We are pleased to see a faster recovery in many of our markets than what was previously predicted. After an especially second quarter, we have again reached a strong operating margin of 12 percent and our sales are up to almost the same level as before the outbreak of the virus. We are now well on our way back and are continuing to focus on achieving our long-term goal of 10 percent growth.

The Group is back to both full staffing and operations on all continents. Regional government support has gradually decreased as our production has resumed and is at SEK 4.4 million for the quarter. Covid-19 is still affecting the world around us and our organization. Adjustment in the organization is fast and is already regarded by many as the new normal.

The biggest recovery we see is within Dental, with a positive growth of 8 percent for the quarter. The market has returned to more normal operations and dental implant surgeries are now being performed again after the total shutdown last spring. Our own products account for the largest increase with a growth of 49 percent. This primarily applies to the digital workflow within the Elos Accurate[®] family. We feel that more and more of our customers are transitioning to a digital dental workflow. The high rate of digitization that has been accelerated by the pandemic is most likely the reason for some of the growth and we are confident that we will see further developments in the same direction.

Within Orthopedics there is a nice recovery and even though quarterly sales are affected by both Covid-19 and currency effects, growth in local currency compared to the previous quarter is in double digits. The level of activity is high and we are now starting to prepare for previously postponed projects for a start-up of production and deliveries at the end of the year.

The expansion of our site in Skara is proceeding according to plan and we are starting to prepare for occupancy at the end of the year. The entire expansion will be completed in the second quarter of 2021. Polymer operations within Life Science remain stable and we are seeing increased activity in the market where clean rooms are required. During the quarter, we have brought in two new customers with planned cleanroom production in the new hall in Skara. Several of our other customers in the business area are still affected by the virus outbreak, nevertheless, we are still seeing stabilization within this area.

Our cashflow remains strong thanks to the strict cost awareness that characterizes our organization, giving us good opportunities to invest for future growth within existing business. We also see that the opportunities for growth through acquisitions will be favorable onwards.

I would like to take this opportunity to thank our entire global team. Our employees are the backbone of Elos Medtech and have been a major factor in our ability to recover so quickly. Thanks to a proactive approach, we are now ready to meet the increasing needs of our partners. We are building for the future based on strong liquidity and a good operating profit!

Författare Elos Medtech AB

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