September 27, 2018 / 12:46 PM / a year ago

UPDATE 1-Sweden's Elekta targets 8-10 pct annual sales growth over 5 years

(Adds detail, share price, background)

STOCKHOLM, Sept 27 (Reuters) - Radiation therapy equipment company Elekta is targeting annual sales growth of 8-10 percent based on constant exchange rates through to its 2022/2023 financial year, while improving its operating margin.

Elekta’s shares have spiked by more than 80 percent this year as restructuring has started to take effect after three years of falling profits.

The company, whose main rival is U.S. firm Varian Medical Systems, aims to improve its profit margin before amortisation by up to 200 basis points from the 20 percent it achieved in the rolling 12-month period through July.

Its previous financial targets were for organic sales growth above 10 percent in local currencies and for operating profit to grow faster than sales.

In a statement issued ahead of Thursday’s capital markets day in Stockholm, Elekta repeated a forecast for sales growth of about 7 percent and an EBITA margin of about 20 percent for the 2018/19 financial year.

Its new radiation therapy system, Unity, is seen as an important future growth driver, having won approval in Europe in June, with U.S. approval expected by the end of the year.

“We expect it to become the standard care within precision radiation medicine and see an addressable market of 3,000 to 4,000 systems,” Elekta Chief Executive Richard Hausmann told investors.

Elekta’s shares fell 0.4 percent to 123.10 crowns at 1202 GMT.

The company last month posted an unexpected drop in first-quarter operating profit but stood by its full-year outlook after sales and order intake grew more than expected.

Reporting by Helena Soderpalm Editing by Anna Ringstrom and David Goodman

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