C-RAD AB – Consolidated Year-End report January-December 2019

Comments from Tim Thurn, CEO:

During 2019 C-RAD continued to strengthen its position in the market. We still see and expect the market to grow and it is clear thar our technology and solutions start to become standard of care. New partnerships at the beginning of the year as well as the extension of our strategic partnership with Elekta were two important milestones that will give us further growth opportunities in the coming years.

The full year of 2019 started somewhat slow in the first half year on order intake but picked up the last six months. Q3 and Q4 grew with 9 percent and 16 percent respectively. C-Rad has seen 14 consecutive quarters of increased order intake, if we exclude Q1 2019. This led to a record high order backlog of 267,1 MSEK at year end.

 In 2019 there were fewer large projects than in the previous year, but we succeeded to win two projects in Belgium with in total 26 MSEK for Sentinel 4DCT and Catalyst HD and a multi-year service contract. This was a great success for C-RAD. Orders of this magnitude have a significant impact on the order intake in one quarter and affect the volatility that we see in order intake but also in revenue. 
Sales of our service and positioning products grew to 25,3 MSEK (15,7) and 59,4 MSEK (50,0) respectively - a very healthy development. The rapid adoption of our service contracts shows the confidence our customers have in C-RAD as a partner and is a very good foundation for recurring revenues moving forward. After the wait-and-see momentum as a consequence of acquisitions and newly formed alliances between market players, that we noticed earlier this year, customers have started purchasing our technology again and order intake is picking up. On the full year we succeeded to grow order intake with 9% for the Group.

However, in the fourth quarter we saw a mixed picture in the Group. Strong order intake in especially Americas and EMEA supported a 16 percent growth. Consolidated revenues weakened by 12 percent due to a decline of 34 percent in EMEA.  The drop in EMEA was explained by lower order intake in the first half year and that the book and bill period has increased from 6 to 8 month.

Gross margin in the fourth quarter remained at 60 percent but given the lower revenue EBITDA adjusted for IFRS 16 was only 0.5 MSEK which was considerably lower than last year.

For the full year 2019 revenue for the group increased with 8 percent, gross margin improved from 58 percent to 59 percent and EBITDA adj for IFRS 16 increased with 18 percent to 8.7 MSEK. This is the second consecutive year with an underlying positive EBITDA result.
The GEMini project is not making progress at the speed we expected and timing to release a product and scale up sales is uncertain. At the same time, we see a huge opportunity for our positioning products. Therefore, we decided to write down the activated development efforts related to GEMini and for now focus our organization on the positioning products. The customer project in China is ongoing and we continue to support the efforts. The total amount of the write off is 11,6 MSEK for capitalized development and stock, and is booked in the 4^th quarter 2019.

New Products
C-RAD has been developing a new hard and software platform for the treatment room that is going to be launched under the name Catalyst+™. Catalyst+ offers higher application versatility and significantly higher performance to our customers. It is expected that the new platform will give a noticeable reduction of the production cost. Depending on us receiving regulatory clearance the product will be released to the market in spring 2020. Also, we are in the last steps to release the cAccessory module as an upgrade opportunity to our installed base, but for new customers. With this in place the C-RAD solution validates the patient prior to treatment, the correct setup and an accurate position prior and during treatment. This is a big step forward and provides a comprehensive solution to our customers.

Organization
To fully capitalize on the opportunities in North America C-RAD announced the recruitment of Brian Loar for the role President C-RAD North America. Brian is in charge of our business through our direct sales organization and newly established partnership with Elekta. Brian has a more than 20 years of experience within the radiation therapy business in North America. He is joining C-RAD from a position as Vice President Sales, North America at Varian Medical Systems.

We remain confident about our market opportunity and are convinced that C-RAD is in a good position to outgrow the market. We have a fantastic team, excited customers and great products that allow us to enable our customers to implement high precision radiation therapy to the benefit of their patients.

About C-RAD

C-RAD develops innovative solutions for use in advanced radiation therapy. The C-RAD group offers products and solutions for patient positioning, tumor localization and radiation treatment systems. All product development is conducted in three fully owned subsidiaries: C-RAD Positioning AB, C-RAD Imaging AB and C-RAD Innovation AB, all of which are located in Uppsala, Sweden. C-RAD has established three companies for direct sales: C-RAD Inc. in the US, C-RAD GmbH in Germany and C-RAD WOFE in China. Cyrpa International SPRL, a Franco-Belgian laser company, is a wholly owned subsidiary whose operations are integrated. C-RAD AB is listed on Nasdaq Stockholm.

For more information on C-RAD, please visit www.c-rad.com

For further information:

Tim Thurn, CEO C-RAD AB, Phone +46-18-666930, Email investors@c-rad.com

This information is information that C-RAD AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication at 08:30 CET on January 31, 2020.

Attachment

• C-RAD AB (publ) Consolidated Year-End report January-December 2019