SECTRA (SECT) Q4 23/24 earnings summary

Executive summary

• Net sales increased 26.1% to SEK 2,963.6 million, with all business areas showing growth and strong progress in transitioning to a cloud-based, as-a-service model, especially in Imaging IT and Secure Communications.

• Cloud recurring revenue grew 55.9% year-over-year to SEK 400 million, with total recurring revenue at SEK 1.7 billion.

• Order bookings rose 34.3% to SEK 6,223.5 million, and customer satisfaction remains high, with churn at 0.4% and multiple industry awards.

• Operating profit rose 13.6% to SEK 517.8 million, with a margin of 17.5%.

• The Board proposes a SEK 1.10 per share distribution via share redemption program.

Financial highlights

• Revenues increased by 26.1% year-over-year, reaching SEK 2,963.6 million.

• Operating profit rose 13.6% to SEK 517.8 million, with a margin of 17.5%.

• Earnings per share increased to SEK 2.22, up 14% year-over-year and 190% over five years.

• Cash flow from operations was SEK 326.3 million, and cash balance at period end was SEK 804.6 million.

• Cloud recurring revenues up 55.9% year-over-year; all business segments showed sales growth.

Outlook and guidance

• The transition to service and cloud-based sales is expected to temporarily dampen growth, but recurring revenue is becoming the majority of sales and long-term prospects remain strong.

• Secure Communications and Imaging IT positioned for continued high demand due to market trends and external factors.

• Full benefits of the business model transition are expected in a few years, especially as more customers outside North America adopt cloud services.

• Genomics IT module has strong interest, with reference sales expected before broader market adoption.