Sectra’s Interim Report for the May-July 2015 Period: Strong Operational Growth and Earnings Trend

Regulatory News:

The Swedish IT and medical technology company Sectra (http://www.sectra.com/) (STO:SECTB) presents its results for the first quarter of the 2015/2016 fiscal year. The company’s business areas – Imaging IT Solutions and Secure Communications – reported increased sales and earnings. Excluding a nonrecurring item pertaining to patent sales in the comparative quarter, the Sectra Group’s operating profit rose 29.8% and net sales increased 14.7%.

The quarter in figures

· The Sectra Group’s order bookings amounted to SEK 299.9 million (388.1).

· Net sales totaled SEK 224.9 million (212.4), up 5.9%. Excluding the nonrecurring item of SEK 16.3 million for the sale of patents in the comparative quarter, net sales increased 14.7%.

· Operating profit totaled SEK 31.4 million (40.5), corresponding to an operating margin of 14.0% (19.0). Excluding the nonrecurring item in the comparative quarter, operating profit rose 29.8%.

· Cash flow after changes in working capital amounted to SEK 6.6 million (28.0). Several major long-term customer projects are in the installation phase, which is having an adverse impact on cash flow.

Torbjörn Kronander, President and CEO of Sectra AB, comments

"During the first quarter of the preceding year, Sectra reported a relatively large nonrecurring item pertaining to the sale of patent rights. If we compare our performance excluding this nonrecurring item, the Group’s operating profit increased 29.8% and sales rose 14.7%. This is a trend that we are proud of. This improvement during the quarter is partly attributable to the large number of long-term contracts we have signed in recent years, which are now helping to counterbalance seasonal variations in the Group’s net sales.

"Both of our business areas – Imaging IT Solutions and Secure Communications – reported increased sales and earnings for the most recent 12-month period. Within Secure Communications, we achieved international sales success with our concept for a secure ecosystem for spoken communication, which integrates various phone models and several security classes into a single security solution.

"The trend noted in Sectra’s largest business area – Imaging IT Solutions – is not simply the result of a growing market. We are also receiving more requests for tenders as healthcare providers across the world increasingly become aware of our stable products and high level of customer satisfaction. The positive news for the quarter is that both new and additional sales contributed to increased order bookings in several markets, including the US, where we are intensifying our growth initiatives and beginning to see the effects of our top ranking in the market’s most important customer satisfaction surveys in the past two years. For example, we received an order during the quarter from the major US healthcare chain Carilion Clinic, which is a new customer for Sectra.

"While order bookings remained favorable and well above our net sales, we experienced a decline compared with the year-earlier period. As anticipated, order bookings were not as high in the UK, the market in which Sectra’s order bookings increased most in the preceding fiscal year. While the variation in sales between quarters has declined somewhat as a result of long-term managed-services agreements, the variation in order bookings has increased. When we sign a five-year managed-services agreement, for example, the entire order amount is recognized when the agreement is signed, while sales are distributed over the duration of the agreement as the systems are put into operation at the customer’s facilities.”

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

Presentation of the interim report

Sectra will present its interim report during a teleconference with President Torbjörn Kronander and CFO Simo Pykälistö.

Time: September 7, 2015 at 2:00 p.m. (CET)

To participate, call:

· SE: +46 8 566 427 00

· UK: +44 20 342 814 08

· US: +1 855 753 22 36

or follow online via: http://media.fronto.com/cloud/sectra/150907/

The presentation will be held in English. A recorded version will be available on Sectra’s website after the conference via: www.sectra.se/irwebcast.

The information in this report is such that Sectra AB (publ) is obligated to disclose in compliance with the Securities and Clearing Operations Act and/or the Financial Instruments Trading Act. The information was submitted to the media for publication on September 7, 2015, at 1:00 p.m. (CET).

Pictures: http://flickr.com/photos/sectramedicalsystems

About the Sectra Group

Sectra was founded in 1978 and has its roots in Linköping University in Sweden. The company’s business operation includes cutting-edge products and services within the niche segments of medical IT and secure communication. Sectra has subsidiaries in 14 countries and operates through partners worldwide. Sales in the 2014/2015 fiscal year totaled SEK 961 million. The Sectra share is quoted on the Nasdaq Stockholm exchange. For more information, visit www.sectra.com

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