Elekta (OTCPK:EKTA.Y) Update / briefing Transcript

Elekta Update Summary Company Overview - Company: Elekta (OTCPK:EKTA.Y) - Date of Update: January 30, 2026 - Key Speakers: Peter Nyquist (Head of Investor Relations), Jacob (CEO), Christopher Busch (Chief Product and Technology Officer), Anming Gong (Head of Region China), Ardie Ermers (Head of North America) Core Industry Insights - Industry: Radiation Therapy - Market Growth: The radiation therapy market has historically grown at a CAGR above the medtech average, with a current market growth rate of 6% while Elekta's growth is at 3% [11][12] - Market Dynamics: The market is not a zero-sum game; innovation in radiation therapy is creating opportunities for market expansion and substitution of traditional treatments like surgery [9][10] Strategic Priorities (Must-Win Battles) 1. Simplify, Empower, and Speed: A new operating model aimed at increasing organizational velocity and decision-making speed, with expected annual savings of SEK 500 million [2][23] 2. Focus Innovation: Emphasis on developing a strong product portfolio that meets customer needs, particularly through software innovations and workflow efficiencies [25][30] 3. Win in the U.S. and Expand in China: Strategies to enhance market share in the U.S. and capitalize on growth opportunities in China [2][39] 4. Continuous Cost of Goods Sold (COGS) Reduction: Aiming to improve gross margins, which have declined to around 37-38% from pre-COVID levels in the mid-forties [12][59] Financial Performance and Challenges - Gross Margin: Decline attributed to higher costs of materials and services, with a focus on reducing these costs through better sourcing and manufacturing practices [58][59] - Market Share: Elekta has been losing market share over the past decade, particularly in the U.S., where only about 20% of revenue is generated [16][48] - R&D Investment: Elekta invests approximately 12% of revenue in R&D, which is essential for maintaining competitive solutions [13][15] Regional Insights China - Market Leadership: Elekta is a market leader in China for LINAC, Brachytherapy, and Oncology Information Systems, with a focus on localization and partnerships to enhance competitiveness [41][42] - Market Recovery: Following a significant decline in the market, recovery is expected starting May 2025, driven by government initiatives to establish oncology departments [44][45] United States - Underperformance: Elekta has underperformed in the U.S. market, particularly in the CT Linac space, but has received clearance for the Evo platform, which is expected to drive market share gains [49][50] - Aging Install Base: The average age of LINACs in the U.S. is 12-14 years, presenting a significant replacement opportunity for Elekta [51] Innovation and Product Development - Focus on Software: Increasing emphasis on software-driven solutions and workflow integration to enhance treatment efficiency and patient outcomes [28][37] - Agile Innovation: Transitioning from long-term development cycles to faster, incremental innovation cycles to better meet customer needs [35][36] Conclusion and Future Outlook - Execution Focus: Elekta is committed to executing its strategic priorities and expects to establish a new operating model by the end of Q4 [63] - Capital Markets Day: A detailed financial outlook and new targets will be presented at the Capital Markets Day scheduled for June 17 [2][65]