Sectra: Sectra’s three-month interim report 2016/2017: Multiyear managed-services agreements contribute to Sectra’s positive performance

Regulatory News:

IT and medical technology company Sectra (http://www.sectra.com) (STO:SECTB) reported increased net sales, operating profit and cash flow compared with the year-earlier period. Multiyear managed-services agreement for medical IT systems contributed to the company’s positive performance. Order bookings were lower than in the comparative quarter, but exceeded net sales for the most recent 12-month period. Sectra’s financial focus is to increase its operating profit per share while maintaining its operating margin, and the company’s key figures for its financial goals remained above the target levels.

First quarter in figures

· The Sectra Group’s order bookings amounted to SEK 225.5 million (299.9). Order bookings for the rolling 12-month period totaled SEK 1,247.6 million.

· Net sales totaled SEK 230.5 million (224.9), up 2.5%. Adjusted for currency fluctuations, sales increased 5.6%.

· Operating profit rose 2.2% to SEK 32.1 million (31.4), corresponding to an operating margin of 13.9% (14.0). Adjusted for currency fluctuations, operating profit increased 5.7%.

· Cash flow after changes in working capital increased to SEK 17.6 million (6.6).

Torbjörn Kronander, President and CEO of Sectra AB, comments

"We reported a stable first quarter and the key figures for our financial goals remain above our target levels. Order bookings exceeded net sales on an annual basis, but were below the level recorded in the comparative quarter. Order volumes vary considerably between quarters, since individual multiyear customer contracts can be significant in size. Nevertheless, we must keep an eye on this trend. The Group’s sales, operating profit and cash flow increased during the quarter, despite unfavorable currency fluctuations.

"Within our largest business area – Imaging IT Solutions – sales and operating profit were lower than in the comparative period. During the early quarters of 2015/2016 and the preceding year, the business area experienced positive effects of an unusually high number of installations and deployments of medical IT solutions in the UK, where healthcare providers procured new systems as their previous contracts expired during this period. Consequently, the effect was of a nonrecurring nature. The increase in sales in the UK has resulted in a relatively large exposure to the British pound (GBP) for Sectra. The outcome of the UK Brexit referendum in June caused the GBP to fall, which had a negative impact on our earnings for the quarter.

"The Business Innovation and Sectra Customer Financing business segments, the latter of which handles customer financing for managed-services agreements, reported sales growth. The Secure Communications business area posted an operating profit for the quarter. To improve the business area’s performance, we are making long-term investments in international expansion and our new product area within IT security for critical infrastructure.

"We operate in niche markets where there is a growing need for the products and solutions offered by Sectra. Our order bookings are significantly higher than our net sales, and we have a growing number of customers with multiyear managed-services agreements, which provide long-term stability. The Group’s financial position is favorable, and we have several exciting initiatives in the pipeline that we hope will contribute to future growth.”

For further CEO comments and information, see the attached interim report.

Presentation of the interim report on September 5

Sectra will present its interim report during a teleconference with Torbjörn Kronander, President and CEO, and Simo Pykälistö, CFO Executive Vice President. The presentation will be held in English.

Time: September 5, 2016 at 10:00 a.m. (CET)

To participate, call one of the following numbers five to ten minutes before the conference begins:

· Sweden: +46 856642690

· UK: +44 2030089801

· US: +1 8557532235

or follow the report presentation online via: www.sectra.com/irwebcast. A recorded version will also be available via this link after the conference.

This information constitutes information that Sectra 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 below, at 08:00 a.m. CET on September 5, 2016.

About Sectra

The world needs more efficient healthcare and increased security in society’s communication and IT systems. Sectra plays a key role in meeting these needs. Sectra assists hospitals throughout the world to enhance the efficiency of care, and authorities and defense forces in Europe to protect society’s most sensitive information. The company was founded in 1978, has its head office in Linköping, Sweden, with subsidiaries in 14 countries, and operates through partners worldwide. Sales in the 2015/2016 fiscal year totaled SEK 1,073 million. The Sectra share is quoted on the Nasdaq Stockholm exchange. For more information, visit www.sectra.com.

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