C-RAD AB – Consolidated Year-End report January-December 2019 - Seite 2

Sales of our service and positioning products grew to 25,3 MSEK (15,7) and 59,4 MSEK (50,0) respectively - a very healthy development. The rapid adoption of our service contracts shows the confidence our customers have in C-RAD as a partner and is a very good foundation for recurring revenues moving forward. After the wait-and-see momentum as a consequence of acquisitions and newly formed alliances between market players, that we noticed earlier this year, customers have started purchasing our technology again and order intake is picking up. On the full year we succeeded to grow order intake with 9% for the Group.

However, in the fourth quarter we saw a mixed picture in the Group. Strong order intake in especially Americas and EMEA supported a 16 percent growth. Consolidated revenues weakened by 12 percent due to a decline of 34 percent in EMEA.  The drop in EMEA was explained by lower order intake in the first half year and that the book and bill period has increased from 6 to 8 month.

Gross margin in the fourth quarter remained at 60 percent but given the lower revenue EBITDA adjusted for IFRS 16 was only 0.5 MSEK which was considerably lower than last year.

For the full year 2019 revenue for the group increased with 8 percent, gross margin improved from 58 percent to 59 percent and EBITDA adj for IFRS 16 increased with 18 percent to 8.7 MSEK. This is the second consecutive year with an underlying positive EBITDA result.
The GEMini project is not making progress at the speed we expected and timing to release a product and scale up sales is uncertain. At the same time, we see a huge opportunity for our positioning products. Therefore, we decided to write down the activated development efforts related to GEMini and for now focus our organization on the positioning products. The customer project in China is ongoing and we continue to support the efforts. The total amount of the write off is 11,6 MSEK for capitalized development and stock, and is booked in the 4^th quarter 2019.

New Products
C-RAD has been developing a new hard and software platform for the treatment room that is going to be launched under the name Catalyst+. Catalyst+ offers higher application versatility and significantly higher performance to our customers. It is expected that the new platform will give a noticeable reduction of the production cost. Depending on us receiving regulatory clearance the product will be released to the market in spring 2020. Also, we are in the last steps to release the cAccessory module as an upgrade opportunity to our installed base, but for new customers. With this in place the C-RAD solution validates the patient prior to treatment, the correct setup and an accurate position prior and during treatment. This is a big step forward and provides a comprehensive solution to our customers.