THIRD QUARTER 2021
JANUARY – SEPTEMBER 2021
Comments from Tim Thurn, CEO
We are reporting yet another successful quarter, featured by a solid revenue growth of 25 percent and an operating profit margin of 14 percent. As announced separately another linac vendor, Accuray, decided to develop an interface to our surface tracking solution Catalyst+. We see this step as another confirmation of the journey towards the goal to make surface tracking standard of care in advanced radiation therapy.
Except for our customers in the APAC region the burden of the pandemic is weighing less than the need to get C-RAD’s technology implemented in the clinical workflows. Order intake for the quarter grew with 8 percent compared to last year, with variation between the regions. We saw a significant growth in the Americas market of 84 percent, driven by a well progressing cooperation with Elekta in North America, and a market in need of sophisticated patient positioning systems to adapt high precision radiation therapy. Total revenue in Americas grew 168 percent in the quarter. Whereas APAC is delivering a stable revenue, order intake declined compared to a very strong third quarter in 2020 and with current market conditions still affected by the pandemic. Despite a forward-looking approach in securing the supply chain, C-RAD was somewhat affected by late incoming components during the last quarter, resulting in delivery limitations mainly for the HIT laser products affecting the APAC region adversely. Europe showed consistent growth both in terms of order intake and revenue compared to the same period last year.
Our positioning products shows continuous notable growth - underlining the increasing demand for our technology and the customers commitment to have their solutions serviced by C-RAD. Revenue in our service business (life-cycle business) grew with 49 percent over the third quarter last year and is reflecting 14 percent of the total revenue vs 11 percent in the previous year – a very encouraging development.
Even though marketing activities such as exhibitions and face to face customer meetings have resumed in large parts of the world, it is evident that the interaction between vendor and customer has changed and is conducted in a mainly digital form. As less traveling is required, we were able to reduce related cost during the pandemic and to keep them significantly below pre-pandemic levels. We can conduct product presentations from our studio in the office, customers can engage with various C-RAD experts during the sales process through web meetings and services are increasingly performed through remote-service-systems. Digital interactions are certainly becoming the new normal which enhances our global reach.
As a result of our active work with key suppliers and a favorable sales channel and product mix, we are closing the quarter with a close to 64 percent gross margin. Growing revenue, an improved gross margin in combination with well controlled expenses allowed C-RAD to deliver an operating profit of 8.8 MSEK. Looking at nine-month period 2021, we succeeded to grow revenue with 31 percent and generated an operating profit of 21 MSEK, corresponding to a margin of 12 percent.
I am proud of what we - the C-RAD team - together with partners and customers have achieved thus far 2021. While we are still operating in a strained environment, where external factors might have a short-term impact, I am confident about C-RAD’s opportunity also moving forward. We are motivated by the customers interest in cooperating with C-RAD and are looking forward to a fourth quarter with high level of activity.
Tim Thurn, CEO