Elos Medtech – Year-end report, 1 January – 31 December, 2019

2020-02-18


YEAR ENDS ON A HIGH NOTE AS PROFITABILITY INCREASES

· Net sales for the full year increased to SEK 689.4 (644.7) million, which corresponds to organic growth of 6.9 percent. Taking into account currency translation, growth was 2.8 percent.
· Operating profit for the year amounted to SEK 65.3 (38.9) million, corresponding to an operating margin of 9.5 (6.0) percent.
· The profit after financial items was SEK 50.6 (28.5) million. Net financial items were positively affected by exchange rate differences of SEK 0.7 (0.5) million and totaled SEK -14.7 (-10.4) million.
· The profit after tax amounted to SEK 38.5 (20.9) million, which corresponds to SEK 4.77 (2.76) per share.
· Cash flow from operating activities was SEK 102.6 (66.1) million, and amounted to SEK 5.3 (-13.8) million after investments.

Dividend

· The Board of Directors proposes a dividend of SEK 1.50 per share for the financial year 2019.

COMMENTS ON Q4 FROM JAN WAHLSTRÖM, CEO

The sixth quarter in a row with increased profitability. Despite a slightly reduced volume, we succeeded in further raising profitability, largely thanks to adaptations to achieve cost efficiencies as well as improvements in our organization and production. Operating profit for the period were up by 28 percent, from SEK 11 million to SEK 14.1 million. On an annual basis, operating profit grew by impressive 68 percent, from SEK 38.9 million to SEK 65.3 million, making this the best result in the history of the Group. Excluding the transfer of non-strategic business to Bruel & Kjaer, we also achieved growth in the fourth quarter on a year-on-year basis. We are of course very proud of our positive results and of the solid financial and organizational foundation that we have built.

We have initiated several major new projects, which has had impact on set-up time and operations, as well as having a direct impact on earnings. These projects will have a positive impact on sales in the second half of 2020. Until then, we will continue to focus on improving our profitability.

Orthopedics has expanded rapidly over the past year. We are currently between two launches, and our quarterly growth is therefore not on a par with our annual growth rate of 15 percent. While the completion of our new site in Memphis and the validation of machines for new customer projects have required a significant input of labor, we expect to be fully operational in second half of 2020.

We have during and after the period received 510(k) clearance from the FDA (US Food and Drug Administration) to market Elos Accurate®. This means we are now able to fully market our products in the US market. This is of course a very positive development for our Dental business area, which will further consolidate its position in the market. Sales through new distributors have already been initiated and are expected to gather pace in 2020.

Market demand for our contract manufacturing services in Life Science is strong and our polymer business in the business area continues to grow. To meet this demand, we have initiated an expansion of our site in Skara.

Our site in China has been closed due to the virus outbreak, and at the time of writing the operations will be partly resumed. This will effect sales and earnings that will be slightly lower at the beginning of 2020. We are monitoring the situation closely, as this will have an impact on our business, but above all on the daily lives of our employees.

We will continue to place a strong emphasis on efficiencies in order to ensure that we are able to respond quickly to changes in our trading environment and the economy. Strengthened by our best earnings to date, we are entering 2020 with confidence and with a clear focus on further improving our profitability.
For further information, contact:
Jan Wahlström, President and CEO, +46 70-212 18 89, e-mail: jan.wahlstrom@elosmedtech.com
Ewa Linsäter, Group CFO, +46 76-33 32 33, e-mail: ewa.linsater@elosmedtech.com
This information is information that Elos Medtech AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above on February 18, 2020, at 14:00 (CET).

For additional information about the Elos Medtech Group, visit www.elosmedtech.com


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