The COVID-19 situation is causing increased uncertainty around the world. Given Sectra’s critical role in ensuring functioning health care and infrastructure, customer support and service are our top priorities. In addition, we must ensure the health and safety of our employees. Sectra is continuously reviewing the situation, adapting our operations to avoid disruptions and finding ways to add value for our customers during these turbulent times.
We can also see that our systems are helping to deliver the care needed under these extraordinary circumstances. Examples of this include our remote education systems and remote reading for doctors who are working from home. Furthermore, we are supporting our customers in all sectors to securely communicate sensitive information, even when people are working from home.
Below you find answers to frequently asked questions (FAQ) from customers, shareholders, employees and other stakeholders.
As we are a provider of medical imaging IT solutions for healthcare as well as cybersecurity services for government agencies and critical infrastructure, we have a decisive role to play in keeping our solutions, services and support available to our customers. They depend on our systems to function flawlessly so that they in turn can provide their services in this challenging situation. Accordingly, our number one priority is keeping our systems operational. Customer support and services are key and, if needed, every single Sectra employee may be required to provide assistance to ensure that these functions operate as intended, regardless of their normal job. We are in close contact with customers to ensure we are well-prepared to address their needs so that they can concentrate on helping their patients and safeguarding society.
We are taking the necessary steps to make sure we can continue assisting our customers, add value and protect the health and safety of our employees. These steps include:
- Keep our solutions, services and support available to customers so they can ensure functional health and medical care as well as infrastructure.
- Safeguard the health of employees (and their families), customers and visitors to Sectra’s offices.
- Act calmly, preserve stability and keep a high standard in contingency planning.
- Maintain cybersecurity internally and among our customers.
- Ensure that customers, employees and other stakeholders understand how we are handling the situation and what measures we are taking.
- Continually evaluate and develop our approach to working remotely, both internally and with customers.
- Continually monitor and review the situation in order to adapt operations and avoid disruptions.
Our business continuity plans are in effect to support our systems, enabling our customers to focus on patient care and cybersecurity while also endeavoring to slow the spread of the coronavirus. Secure remote support will remain unchanged for the foreseeable future. We have the infrastructure in place to run 100% of our support remotely. Even if Sectra offices were to be quarantined, this would not impact our service delivery model. Support and service teams work remotely to reduce the risk of infection and to comply with restrictions from government authorities.
When Sectra secures a contract, meeting our established timelines and honoring our commitments is of the utmost importance for the company. Go-lives are planned months in advance and involve multiple staff members. We will continue deliveries according to existing deployment schedules where possible. We are continuously evaluating and developing our way of working and some of the ongoing deployments are being implemented remotely.
That said, for many hospitals, preparing and installing, or acquiring, new IT systems is not a priority at this time. This may, in some instances and in some regions, lead to delivery delays due to customer demands or limitations.
We have implemented restrictions and recommendations for our employees. These include:
- First and foremost, we must follow local regulations. This means that Sectra’s handling of the situation will differ depending on the country or state
- If not enforced by law, we encourage employees to work from home, if possible
- Replacing face-to-face meetings with phone/online meetings when possible
- Restrictions to eliminate non-essential travel
In many Sectra offices around the world, a large portion of staff are now working from home. Our observations are that this is working well. It is vital to avail of digital tools, such as Microsoft Teams or equivalent software, to maintain a coordinated approach in projects and work groups. Regular meetings are thus held several times a day in work group or projects.
More than half of Sectra’s invoicing comprises recurring revenue, and as communicated in our financial reports, we see no reason to believe that this portion of the Group’s revenue would be affected more than marginally even if the situation were to worsen.
As per fiscal year 2019/2020, Sectra’s geographic markets as a share of Group net sales are as follows:
- USA 28%
- Sweden 23%
- United Kingdom 14%
- Netherlands 9%
- Rest of Europe 20%
- Rest of the world 6%
Sectra has a strong balance sheet with a positive net cash funds and a high level of creditworthiness. As of April 30, 2020, cash and cash equivalents and unutilized credit facilities totaled SEK 360.3 million and interest-bearing liabilities in the form of convertible debt instruments totaled SEK 6.5 million. Sectra routinely monitors the cash flow from operations, investments and financing to ensure that the Group has sufficient funds available to meet future anticipated and potential demands. For quarterly updates of our financial figures, see Financial reports.
The pandemic has promoted greater uncertainty than normal, which means that predicting what effects COVID-19 will have on Sectra’s financial performance going forward is more difficult than usual for management and the Board. Sectra are not unaffected, but we are well equipped to handle the situation with a strong balance sheet, positive cash funds and significant recurring revenue. Sectra has neither needed nor received any support related to COVID-19 such as reduced rent or business transition support. No need for impairment is deemed to exist owing to the pandemic.
In our Annual report and Sustainability report 2019/2020 we provide an update on risks related to the outbreak. Potential consequences for Sectra that could impact future financial outcomes include, but are not limited to:
- Delays in installation projects.
- Temporary pauses in procurements.
- Temporarily decreased demand for Sectra’s products.
- Significant variations between quarters as regards order bookings, earnings and cash flow.
For the country operations that have additional information on how the situation is handled locally, you can find it below.