C-RAD

Third quarter July - September 2023

• Order intake increased 108 percent to 168.6 (80.9) MSEK (87 percent in constant currencies).
• Order backlog amounted to 751.3 (493.3) MSEK.
• Revenue increased 33 percent to 111.2 (83.5) MSEK (16 percent in constant currencies).
• EBIT amounted to 18.9 (14.6) MSEK, corresponding to a margin of 17.0 (17.5) percent.
• Cash flow from operating activities amounted to 16.6 MSEK (-10.7 MSEK).
• Net earnings amounted to 10.9 (7.1) MSEK.
• Earnings per share amounted to 0.32 (0.21) SEK.

Interim Period January - September 2023

• Order intake increased 40 percent to 376.0 (268.1) MSEK (30 percent in constant currencies).
• Revenue increased 41 percent to 286.2 (202.5) MSEK (28 percent in constant currencies).
• EBIT amounted to 32.7 (15.5) MSEK, corresponding to a margin of 11.4 (7.7) percent.
• Cash flow from operating activities amounted to -17.4 (-22.1) MSEK.
• Net earnings amounted to 19.6 (3.0) MSEK.
• Earnings per share amounted to 0.58 (0.09) SEK.

Significant events during the third quarter

• C-RAD won an order to IBA (Ion Beam Applications S.A.) for proton SGRT systems in Spain, with an order value of 32 MSEK.
• C-RAD signed an agreement with a customer in North Rhine-Westphalia, Germany of 16 MSEK regarding both products and service contract.
• German customer Katholisches Klinikum Bochum gGmbH – St. Josef Hospital in Bochum, placed an order of 10 MSEK regarding both products and service contract.
• The Breast Solution VitalHold™ on the Radixact® System from Accuray, which includes our technology, is available in the United States and European Union as well as other regions.
• In the legal dispute with a former employee, both C-RAD and the former employee have appealed the decision from the Patent and Market Court of Appeal, to the Supreme Court.
• C-RAD repurchased 88 500 B-shares, to cover C-RAD’s obligations under previously resolved incentive program.

Significant events after the quarter

• After the quarter end, C-RAD received an order from another German customer in North Rhine-Westphalia, of 8 MSEK regarding both products and service contract.

CEO Cecilia de Leeuw comments on the interim report:

Despite challenging macro economics, the revenue increased 33 percent compared to third quarter last year and order intake had an impressive growth of 108 percent, which is strong even with the soft comparison from the same quarter last year. Our order backlog is now 751 MSEK. The underlying profitability remains stable, with a gross margin of 65 percent. We are continuing our journey towards profitable growth, with an EBIT in the quarter of 19 MSEK and the year-to-date comparison shows a 48 percent improvement of the EBIT margin compared to same period last year. We still have work to do to improve cash flow and we work on all fronts – short term with cash collection and long term on updating contracts terms and educating our sales force. Cash flow from operating activities for the quarter is 17 MSEK.

Our ambition to grow Services is demonstrated by a significant increase in the number of customers with active service contracts and the order intake for Services more than doubled in the quarter. This ensures a strong commitment to provide first-class services as well as an increase in recurring revenue.

EMEA had a strong quarter overall. The uptake for SGRT continues to be high. The 16 MSEK expansion order from North Rhine-Westphalia, Germany, displays trust in C-RAD and our technology. The 10 MSEK order from Katholisches Klinikum Bochum, Germany, is yet another example of how our technology plays an important role, not only for breast cancer, but also advanced cancer therapy including stereotactic radiation.
 
We ended the quarter on a high note, with a significant milestone in the field of particle therapy (proton) and the order from market leader IBA includes systems for multiple proton centers in Spain, with a total value of 32 MSEK, part of a public tender.
When a tumour grows in the brain, lung, eye, head and neck, or other locations radiation can pose a risk to critical tissue nearby. Particle therapy targets radiation of the tumour, leaving the areas around unharmed. The technology has been used clinically for more than 60 years and is effective for complex cancer cases as well as for young children and infants. I am proud to say that C-RAD is the market leader in SGRT for Particle Therapy.
 
Americas is starting to pick up again after a slow second quarter. I am pleased to see the important US West Coast gaining traction. Due to active and targeted sales and marketing activities, the interest in C-RAD’s technology is increasing with US Cancer Centres. Americas services attachment rate reached an all-time high during the third quarter, firmly establishing the US as the leading region regarding service contracts for the installed base.
 
The APAC region continue to have a high level of activity. We are starting to gain traction in India, with new orders to prominent corporate hospitals and medical colleges and are now present in most regions. The Chinese market is getting back from pre-covid levels, at the same time we are experiencing some slowdowns in the purchasing pattern. During the third quarter the first service contracts in China came into effect. We are starting from a low level, but Services is an excellent area for future for growth in the Chinese market.

I would like to take a moment to reflect on my first nine months as CEO. I am pleased to have a passionate and experienced leadership team, strengthened by a new Global Marketing Director and a VP Sales EMEA. Together, we are building an empowered and an even stronger organisation. With market leading products and services, we can capture the demand for our technology and create a solid base for profitable growth. The untapped potential in key markets around the world is addressed step by step. Even if we see many markets rapidly approaching SGRT becoming standard of care, we are only in the beginning. In addition, we are starting to deliver on the priority to grow services.

Together, our hardworking customers, knowledgeable partners and a dedicated C-RAD team are able to secure the precise targeting of the tumour while minimizing radiation exposure to healthy tissues, thus safeguarding the overall well-being of patients. I think there is a good reason for all stakeholders to feel proud of being part of this immensely important work.

Presentation of the Interim Report

CEO Cecilia de Leeuw and CFO Christoffer Herou will present the interim report for the third quarter by webcast on Friday, October 27 at 11:00 CET. After the presentation, there will be time for questions. The presentation will be held in English. To participate in the presentation, please register using the link below:

https://us06web.zoom.us/webinar/register/WN_QEq6Uv1PRZClL6yC9MJBvg