A POSITIVE START TO THE YEAR
CEO JAN WAHLSTRÖM COMMENTS ON Q1
What a great start to the new year! We are once again a fully functioning business despite the ongoing pandemic. Net sales grew in the quarter and were up by 7.7 percent. In local currencies the growth was up by 14 percent.
In addition, earnings were also strong with an operating margin of 14.6 percent, which is a year-on-year increase of 110 percent. All business areas improved their profitability, partly thanks to a well balanced product mix and partly thanks to successful margin improvement measures.
The strongest growth was in Orthopedics, which grew 25 percent in the quarter. As predicted, our new robotic-assisted surgery businesses have given us a good foundation for 2021. Robotic surgery is a fast growing area and is on the agenda of all major orthopedic companies. This, and our results, show clearly that we have made the right strategic choice.
In Dental, net sales increased by nearly SEK 3 million on the previous quarter. The comparative period in 2020 was the best quarter in the company's history and this has an impact on year-on-year growth, which came in at -3 percent. Sales of our proprietary products are positive. Net sales of proprietary products grew 5.4 percent in the first quarter, despite a strong comparative period in 2020. Proprietary products still account for 14 percent of the Group's total net sales, which is above our long-term strategic goal for the second quarter in a row. Sales are mainly driven by our digital product range, Elos Accurate®.
Life Science reported growth of 6 percent. Here our focus has been on our new diagnostics business that we gained last fall and the new products that will go into production this year.
To ensure that we are able to grow with our partners, we are investing in our Skara site and in new machinery in Memphis. The expansion of our Skara site is proceeding at a good pace and we expect to be able to keep the timetable and take the new premises into use in the summer. We realize, however, that the relocation of machinery will be a complex operation that may result in brief shutdowns of production. In Memphis, our first new machines are being installed and validated, and our focus in the near future will therefore be on increasing staff levels.
A challenge that we face now in April is that it still uncertain what course the pandemic will take. Vaccine availability and vaccination rates will probably be crucial in stopping the pandemic, but until then the situation remains hard to predict. We attach great importance to ensuring access to raw materials to avoid disruptions in production, as the pandemic has created certain logistical challenges in the global market.
We got a positive start in 2021 - an important year dominated by two major investments that will be launched in both Skara and Memphis. It is challenging from several perspectives, but I look forward to the future with confidence.
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