RaySearch Laboratories AB (publ) (RAYB) Earnings Call Transcript & Summary

Hello, and welcome to the presentation of RaySearch year-end report for 2022. My name is Eva Nelson, and I will be the moderator here today. Joining us in today's call is, as always, Johan Lof, RaySearch Founder and CEO; and also Henrik Bergentoft, the still relatively new CFO, I would say. Johan and Henrik will give you a short summary of the quarter and then we'll look into the financials. And there will be some final remarks as well. And after that, we open up for the questions, which you can ask either orally in the call or submit in the text field here under the presentation. So remember, if you want to ask a question orally, you need to be in the call. Let me also remind you that this session is recorded, and you can find it through the same link as you used for this call and soon also on RaySearch website. And with that, I now hand over to you, Johan. Please go ahead.

Thank you, Eva. And I would also like to say welcome to everyone to today's webcast. So I'm very happy to be able to report that the order intake and net sales for the fourth quarter of 2022 were the highest ever, SEK 540 million and SEK 264 million, respectively. Compared to the same period last year, order intake increased by 49% and net sales by 40%. And when looking at the full year, order intake increased by 51% and net sales by 31% compared with 2021. Our operating profit for the quarter was SEK 21 million and cash flow was SEK 43 million. The same figures for the full year were SEK 43 million in operating profit and SEK 47 million in cash flow. The market has continued to open up and normalize, and we see a growing interest from clinics all over the world. To leverage these opportunities, we intensified our marketing activities. For example, in terms of more physical meetings with customers and potential customers. And as a consequence, our cost for marketing and travel in the quarter increased a little bit. Next slide, please. So in partnership with IBA, we won a major public tender in Spain at the end of the year in which Spanish Ministry of Health purchased 10 proton therapy systems for installation in 9 proton centers. The investment was financed by the Ortega Foundation, which donated EUR [ 250 ] million to the Ministry of Health. The order to research has a total value of EUR 17.3 million. And of these EUR 14.9 million related to software licenses for both RayStation and RayCare. The plan is to start delivering in 2024, and this will then continue for several years. And no revenues were booked in 2022 for this deal. Next, please. It's great to see that our installed base continues to grow. To date, more than 900 clinics have purchased RayStation. Most of these, over 250, are located in the U.S. In second place is Japan, which recently surpassed 200 clinics. And in third place is China where RayStation is available in about 80 clinics. As for RayCare, we now have 22 customers, and here we see a continued growing interest. So now let's take a closer look at the financials. Please, Henrik, go ahead.

This slide is summarizing our key metrics, order intake, net sales, and operating profit. And of course we're pleased to conclude that the fourth quarter means a record high, both in order intake and net sales. Order intake ended up at SEK 514 million, up 49% from SEK 345 million last year's quarter. Net sales ended up at SEK 264 million, an increase of 40% compared to the SEK 108 million last year. And combined, this generated an operating profit of a positive SEK 21 million as compared to negative SEK 17 million. Converting this into an operating margin, the quarter landed at close to 8% as compared to minus 9% last year. So clearly a turnaround in profitability. Also cash flow for the quarter was positive with SEK 43 million as compared to a negative cash flow of SEK 21 million last year. Looking at the same key metrics, but for the full year, we can conclude that total order intake for the year ended up at SEK 1.2 billion, up 51% from the SEK 808 million last year, 2021. Net sales of SEK 844 million represented a growth of 31% of the SEK 641 million last year, generating a positive operating profit of SEK 43 million as compared to a negative operating result of SEK 53 million last year. All in all, generating operating of 5% as compared to minus 8% last year. Cash flow for the year was positive with SEK 47 million as compared to SEK 72 million. So as we conclude that all key metrics, both for the quarter and for the full year, is certainly moving in the right direction. This slide is putting our order intake and net sales in a 12-month rolling perspective over a longer period of time. And as we all know, that follows RaySearch, the company was clearly affected by the pandemic, which started to kick in, in mid-'20 and really generating a downwards trend during late '20 and early '21 or mid-'21. But from end of '21, we could see that the trend has shifted in a positive direction and has continued throughout 2022. And all in all, if you look at order intake, that has produced an order backlog of almost SEK 2 billion, which is a very strong number compared to the SEK 1.4 billion last year. So I will hand over back to you, Johan, for some concluding remarks.

Thank you, Henrik. Yes. So to summarize, the improved market conditions, another quarter with strong figures and an order backlog that peaked, say, the largest ever at SEK 1,940 million. It means that we have a stable base for continued growth. And I always want to remind ourselves that our growth will not necessarily follow a straight line. We shouldn't extrapolate from a very strong quarter because as we have seen in the past, the results may vary from quarter-to-quarter. But within the long term, I think I'm very optimistic about the future of RaySearch. Thank you.

So thank you, Johan and Henrik, and we now open up for questions. Operator, over to you.

[Operator Instructions] It seems we have no questions at this time from the conference call.

No. And then reading questions either. So thanks for that then. Thank you. We can conclude the session now. And we look forward to continue talking to you next time, and that will be on the 17th of May, where we, RaySearch, presents the first quarter of 2023. So, thank you very much for your participation today. Goodbye.

Thank you. Bye-bye.