Presentation

Surgical Science focuses on the creation of virtual reality simulators for evidence-based laparoscopic and endoscopic training. With the help of these simulations, students, novice surgeons as well as medical doctors can improve their psychomotor skills, instrument handling and confidence required to perform advanced medical and surgical interventions. Besides its own products, Surgical Science also develops and sells simulation software to its industrial partners who embed the software into their own products. The software is mainly used as a training tool for surgeons within robotic-assisted surgery (RAS).

Recent highlights
In Q1, net sales increased by 328% y/y and amounted to SEK 159.1m (37.2) (with contributions by Simbionix of SEK 115.2m). Of the total contribution, was SEK 77.1m related to the Educational Product segment and SEK 38.1m to the Industry/OEM segment. The Industry/OEM segment was negatively affected by supply issues for customers in robotic surgery and license revenues were low, ultimately leading to a weaker gross margin of 65%. Adjusted EBIT margin increased to 16% (11).
In July, Invesco Global Opportunities acquired 800,000 shares in SuS and became one of the largest shareholders (No 13). We believe this will provide a solid foundation for further growth.

Outlook
We see indications of increased license revenue in the coming quarters and expect deliveries to rise when supply issues are eased, ultimately leveling the two business areas. We forecast Industry/OEM to reach 44% of total sales in Q4, thus supporting a gross margin improvement to 70% at the end of 2022. However, since opex was 11% higher than we projected, we have made a downward revision to our 2022 adjusted EBIT forecast of 18% but still expect Sus to reach its financial target of EBIT margin 40% by 2026.