FIRST QUARTER 2022

• Order intake increased 23% to 81.5 (66.3) MSEK (17 % in constant currencies).
• Order backlog amounted to 451.6 (340.1) MSEK.
• Revenue decreased 6% to 56.3 (60.0) MSEK (10 % in constant currencies), related to weak performance in China due to the pandemic.
• Operating income amounted to 0.2 (6.2) MSEK, corresponding to a margin of 0.3 (10.4) %.
• Net results after tax amounted to -1.2 (3.2) MSEK.
• Result per share amounted to -0.04 (0.09) SEK.

Comments from Tim Thurn, CEO

We are starting the year with a strong momentum in order intake with measurable growth in all regions, totalling a growth of 23 percent in quarter. With regards to revenue, we had solid growth in US and Europe but due to a temporary pause in deliveries to China total revenue decreased compared to last year, as a direct consequence also operating profit decreased. The recurring revenue from our service business continues to show measurable growth rates.

The substantial unmet demand for cancer care in the APAC region creates an underlying demand for high precision radiation therapy equipment. This in combination with C-RAD’s strong presence and an excellent market position in the region creates a momentum reflected in order intake growth of 34 percent. In the US we were able to secure yet another order from MD Anderson, with multiple C-RAD systems to be installed in their newly build proton facility. Another larger order was won from a university hospital in Germany.

Revenue decreased compared to last year with 6 percent, due to the unfortunate return of the pandemic in China that has contributed to stalled installations. Strict lockdowns in major cities have affected customers and our long-time distributor in China, leading to delayed payments with the consequence of less deliveries as compared to previous quarters. The last two years certainly has taught us that both duration and consequences of the pandemic is difficult to predict. However, in the mid- and long-term perspective we are very positive about the potential in China. Americas continued the positive trend with a revenue growth of 64 percent and EMEA grew with 10 percent. APAC decreased with 45 percent, where China being the region significantly decreasing revenue compared to last year.

Since it is our firm believe that surface tracking is on its way to become standard of care, we are very positive about the potential for our technology. To capture that potential and accelerate growth, we have decided to in the coming quarters strengthen our commercial team in strategic markets by approximately one-third.

The life cycle business with primarily service contracts continues to grow rapidly in order intake and revenue by 195 percent and 47 percent respectively – constituting 18 percent of total revenue versus 12 percent in the previous year. This is an important driver behind the improved gross margin and again confirms our customers long term commitment to our solutions.

Operating income amounted to 0.2 MSEK for the quarter, a significant decrease compared to last year. Gross margin and operating expense are in line with recent quarterly levels whereas the lower revenue is the one factor explaining the decrease in operating income.

An important milestone on the journey to make surface tracking standard of care in advanced radiation therapy: The release of an independent report with guidelines for the clinical implementation and use of surface imaging. A dedicated task group formed by the AAPM (American Association of Physicist in Medicine) was assigned to provide technical guidelines within surface imaging. The conclusion of the report was that the clinical use of surface imaging has increased dramatically with demonstrated utility for initial patient positioning, real-time motion monitoring, and beam gating in a variety of anatomical sites. Similar workgroups on European and domestic level are working on similar guidelines to enable centres to adapt the technology seamlessly.

The year has certainly begun with turmoil on the world scene, where C-RAD has exposure to China but less to the tragic situation in Ukraine and Russia, with no local C-RAD employees and very limited business activities. Despite the turbulence we remain confident that surface tracking is on its way to become standard of care, our plan to increase our sales activities is a confirmation of our firm belief in our solutions and the potential it holds.

Tim Thurn, CEO