Louvain-La-Neuve, Belgium, July 5, 2017 - IBA (Ion Beam Applications S.A., EURONEXT), the world’s leading provider of proton therapy solutions for the treatment of cancer, today provides a trading update ahead of the Company’s half year results on 24th August 2017.
IBA has been at the forefront of the significant growth experienced in the proton therapy market, driven largely by smaller, less expensive compact systems like Proteus®ONE* and an expansion of the range of indications being treated with this more precise modality. This has led to a surge in the volume of systems being purchased globally and IBA is installing or constructing a record 26 systems of which 16 are Proteus®ONE solutions.
The prospects for the market remain strong, the Company has a combined backlog of future project revenues in service and equipment worth almost EUR 1 billion, a significant pipeline and IBA is confident that the Company will retain its leading position in the market going forward. However, a number of factors are impacting revenue recognition and lead the Company to review its guidance.
As outlined at the time of the Company’s first quarter results, delays in project execution by several of its customers have continued and are now being experienced in approximately half of the ongoing proton therapy projects. In addition, a number of productivity initiatives aimed at reducing product costs have not been realized as quickly as anticipated. The Company has also had to incur one-off costs related to project management issues in emerging markets.
With so much of its revenue recognition reliant on commencing installation, which is dependent on customer progress and the impact this has on operational leverage and profitability, the Company now expects to report 5-10% revenue growth and a low to mid-single digit operating margin for the first half of 2017 as well as for the full year 2017. IBA is still assessing the impact of the delays on 2018/2019 and an update will be given at the time of the Company’s half year results on August 24th 2017, however IBA remains confident on its previous target of 13 to 15% REBIT in the mid-term. The Company’s dividend policy remains unchanged.
Olivier Legrain, Chief Executive Officer of IBA SA commented: “We are confident in the growth prospects for IBA, due to our combined equipment and service backlog worth almost EUR 1 billion, our strong pipeline, the significant market potential in proton therapy and our focus on maintaining the world’s leading offering. Our growth continues, as demonstrated by the approximately $60 million contract with Inova in Virginia, USA for a Proteus®PLUS* system announced today, taking IBA’s share of the 2017 year to date market to three of the four systems sold worldwide.
“Action has been taken internally to ensure careful cost control while maintaining growth momentum. The Company prudently continues to maintain investments in its growth and in particular in its R&D and its Proteus®ONE production expansion, which is on track and will continue as planned.”
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