Nucletron reports double digit growth in 2010

March 15 2011  |  Press Release 

Driven by a strong growth in North America and Asia Pacific, sales grew 14% to EUR 128.2 million 

2010 Highlights
• Strong sales growth of 14% to EUR 128.2 million
• All-time high EBITDA of EUR 25.4 million (+26%)
• Margin increase from EUR 76.6 million to EUR 86.1 million
• Sales growth in all geographic regions, especially in North America and Asia Pacific
• Strengthened position as market leader in brachytherapy
• Strengthened position as leading provider of independent external beam treatment planning software
• New offices opened in Dubai and Brazil

2011 Outlook
• Continued double digit growth in sales and profitability
• Further strengthened position in core global markets
• EBITDA as a percentage of sales of 20%

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Veenendaal, the Netherlands — Nucletron, a global leader in radiation oncology, today announced their full year results for 2010. Driven by a strong growth in North America and Asia Pacific, sales grew 14% to EUR 128.2 million. EBITDA increased by 26% to EUR 25.4 million. Nucletron expects double digit growth in sales and profitability in 2011 and to further improve its market position in all core markets.

Jos Lamers, CEO of Nucletron, comments: “2010 was a very successful year for Nucletron. Our decision to increase the focus on brachytherapy - by creating more awareness among practitioners and patients - has proven to be right, resulting in strong growth. We are especially pleased with the fact that our growth is coming from all our regions as well as all our key products groups. This indicates a strong foundation for further future growth. Thanks to our leading technology and our talented and dedicated people, Nucletron is now the fastest growing company in the radiation oncology industry. We will continue to enhance the position of brachytherapy as an effective and attractive form of cancer treatment. We will also continue to invest in R&D, as this has proven to create a strong and sustainable basis for continued growth. We expect 2011 to be another excellent year.“

Objectives and strategy
The key objective of Nucletron is to confirm and grow its position as the market leader in brachytherapy. The growth strategy is based on three pillars: increasing the availability and awareness of brachytherapy as an effective alternative to other modalities, product innovation to allow treatment of new body sites and geographical expansion into new markets.

Nucletron intends to realize this by:
• Communicating benefits of brachytherapy to other radiation oncologists, referring physicians (e.g. urologists, surgeons), and health care decision makers, gaining recognition of brachytherapy as a preferred treatment option and thereby increasing access for suitable patients;
• Supporting policy makers in shaping policies on reimbursement and access to brachytherapy;
• Innovation and development of new products and service solutions aimed at making brachytherapy widely available and easing treatment delivery;
• Expanding the geographical presence through new distribution models and opening Nucletron offices in key markets & regions; and
• Establishing more direct links with customers.

Operational Highlights 2010

Sales growth in all geographic regions
Nucletron strengthened its position as market leader in 2010 and is now the fastest growing company in the radiation oncology industry. Nucletron reported sales growth in all geographic regions. Sales in both the US and Asia Pacific grew by 22%, sales in Europe increased by 4% and Emerging Markets reported a growth of 5%.

Sales in North America and particularly in the US were supported by growth in the number of centers providing brachytherapy treatments and its increased use in different body sites. A restructuring of the US sales force had a positive impact on sales, driven by a greater focus on customer contacts and an interactive market approach. Nucletron expects sales in the US will continue to grow substantially in 2011.

Nucletron realized significant growth in China and strong growth in India following increased sales and marketing activities, with the teams in these two markets being reinforced with the addition of new highly-experienced and talented employees. Sales  in India were particularly strong and grew by 30%. The company’s presence in Russia, since 2009, resulted in an accelerated growth sales in this market.

New Nucletron offices were opened in Brazil and Dubai in 2010. These two new regional offices provide the basis for further expansion in Latin America and the Middle East/Africa respectively. Nucletron plans to continue to open new offices in the years ahead in a number of key markets in support of its growth ambitions, building on the established installed base in these markets.

Sustained investment in Research and Development
Nucletron invests more than 10% of its sales revenues on Research and Development (R&D). The R&D department currently employs around 20% of the total workforce, with new talent and expertise being added to the team on an ongoing basis. Nucletron strongly believes that continuous investment in R&D provides the best possible basis for sustainable growth.

Strong growth across core product areas
Nucletron achieved growth in its core product areas in 2010. The focus on brachytherapy resulted in a 35% growth in brachytherapy product sales versus 2009 with a significant increase in applicator sales. This growth reflected the ongoing efforts of Nucletron to increase awareness about brachytherapy among practitioners and patients. External beam product sales showed a 14% increase versus 2009.

A number of key product launches in 2010 provided the basis for current and future sales growth in a number of key business areas. Oncentra™, the company’s integrated treatment planning software for both brachytherapy and external beam treatment planning, has entered into a new stage with several new user-centered features. The launch of Oncentra 4.0 premiered a Graphics Processor Unit (GPU) calculation capability that can significantly reduce planning times. This latest version of Nucletron’s platform also incorporates a new Plan Manager module that simplifies routine tasks during treatment planning providing up to 70% time saving for more complex clinical cases. A new applicator-modeling feature for brachytherapy has been implemented, allowing users to further optimize efficiency in planning and treatment.

In 2010, Nucletron entered into an exclusive partnership with Velocity Medical Solutions. Nucletron will distribute Velocity Advanced Imaging (VelocityAI) products worldwide. VelocityAI is a proven technology that complements the Nucletron Oncentra platform for advanced visualization, automated multi-modality image registration and quantitative imaging information.

A new totally integrated brachytherapy prostate solution was also launched in 2010. The new system provides health care professionals with a single integrated solution incorporating ultrasound and planning software for the different prostate brachytherapy treatments (High Dose Rate and Low Dose Rate (or “Seeds”). 

A new addition to the range of innovative applicators in 2010, the Multi Channel Vaginal applicator, allows health care providers to tackle more complex or advanced vaginal and cervical cancers.  The new applicator features a structural design permitting precise “sculpting” of the radiation dose to the treatment area.
 
Growing interest in brachytherapy
Nucletron continues to focus on enhancing the role of brachytherapy as an effective and attractive form of cancer treatment. Brachytherapy is currently most frequently used in the treatment of gynecological cancers, such as cervical cancer. Application in other types of cancer, including breast and prostate is growing. Nucletron is effectively responding to these clinical developments, and is positioning and developing brachytherapy as an effective treatment method for patients.

As the global market leader in brachytherapy, Nucletron is aware of its special responsibility to support the increase in the use of brachytherapy. One of the ways to achieve this is to support training of Radiation Oncologists and Medical Physicists in clinics worldwide. A leading example is the Nucletron India Training Academy (NITA), which was opened in November 2010. Jointly funded by Nucletron and the Dutch government, NITA provides professional training to Radiation Oncologists and Medical Physicists in the region. These new opportunities for education and enhancing expertise in the latest technology for radiation oncology treatment are expected to result in improved care for cancer patients.

Furthermore, the company has been highly active in supporting the awareness of brachytherapy as a clinically and cost-effective cancer treatment. In addition to launching a website with specific content for health care providers and patients (http://www.aboutbrachytherapy.com/), the company has also developed a range of educational materials and support for use by health care providers themselves. Nucletron has also partnered with a number of key societies and academic centers in support of research initiatives providing further insights into the optimal application of brachytherapy in terms of driving patient benefits. 2010 also saw the start of company programs addressing access and reimbursement for brachytherapy – these will be further broadened in 2011.

New appointment
The management team of Nucletron was strengthened in September 2010 by the appointment of Peter Kingma as Executive Vice President, Global Sales and Service. Kingma manages the rapidly growing global service and
sales activities around Nucletron’s precision cancer treatment solutions. Kingma also joined the executive management team. Prior to joining Nucletron, he held various positions of increasing responsibility at Siemens
Medical Solutions.
 

Financial Highlights

Sales
Nucletron sales amounted to EUR 128.2 million in 2010, compared to EUR 112.9 million in 2009. EBITDA increased from EUR 20.1 million in 2009 to a record of EUR 25.4 million in 2010.
 
Sales from services accounted for 41% of total sales, products represented 59% of sales. Brachytherapy is Nucletron’s main activity, accounting for 63% of total sales. Brachytherapy includes the afterloading platforms that contain the radioactive source, the applicators that are connected to the afterloaders and applied in or close to the tumor, seeds that are used for LDR brachytherapy, and the supporting treatment planning software solutions.
 
External beam radiotherapy accounted for 14% of sales and imaging for 12%. External beam radiation therapy is primarily focused on software products that are used to plan the treatment of a tumor. Nucletron’s products in the imaging area help identify the shape and size of the tumor, and the relationship between the tumor and the surrounding tissue and organs. Nucletron successfully operates in the external beam market as an independent treatment planning software supplier and is recognized for its state-of-the-art product offering and innovation. Third party products accounted for 11% of sales.

In 2010 Nucletron generated 37% of sales in Europe, with North America accounting for 30% of total sales, Asia Pacific for 24% and Emerging Markets for 9%. This geographical breakdown indicates that Nucletron is perfectly positioned to capitalize on the global growth of the market for cancer treatment.
 
Cash Flow and Debt
The strong cash generation for 2010 allowed Nucletron to further reduce its net debt. Nucletron redeemed EUR 5 million on its outstanding loans on a voluntary basis in 2010. By strengthening the balance sheet the company is providing a solid foundation for further growth.

Profit
Nucletron’s EBITDA for 2010 was EUR 25.4 million, up 26% from 2009. The strong result was facilitated by strong sales and margin growth in combination with effective cost management.  The net result amounted to EUR 10.5 million (2009: EUR 2.9 million) and was added to the company’s equity after deduction of the minority interest. 

Outlook

2011
Nucletron’s strategy based on increasing the availability and awareness of brachytherapy, extending the applications of brachytherapy to other body sites and expanding into new geographic markets has proven to be successful. The management of Nucletron strongly believes this is a strong basis for sustainable growth in the future.
 
For 2011 Nucletron anticipates a double digit growth in revenues and profitability and expects to further increase its market position in key global markets. Nucletron expects EBITDA as percentage of sales of 20% in 2011. Strong cash-flow generation will enable continued reduction in debt in 2011.
 
In 2011 Nucletron will further expand the distribution network by opening offices in selected countries, and focus on launching its newest products in these markets.
 
Medium term
For the medium term Nucletron targets a sustained double digit sales growth and a profitability level exceeding 20% (EBITDA as % of sales).

About Nucletron
Nucletron provides state of the art radiotherapy solutions for cancer treatment that meet the evolving needs of patients, their carers and healthcare professionals around the world. Nucletron has unmatched global leadership in brachytherapy, a very precise, highly effective and well-tolerated treatment option for healthcare providers, tailored to the needs of individual patients. We work with clinical teams to constantly improve and develop an innovative portfolio of integrated products, software and services that assures excellent patient outcomes. Headquartered in Veenendaal, The Netherlands, Nucletron employs more than 500 employees, with offices in 18 countries, and products available in more than 100 countries around the world.