Elekta CEO Gustaf Salford to Step Down Amid Profitability Concerns

Elekta, a leading manufacturer of radiotherapy machines, announced on Wednesday that CEO Gustaf Salford will be leaving the company on March 6. The decision comes as the board of directors seeks new leadership to address profitability challenges and strengthen growth in the competitive radiotherapy market.

Board Calls for New Leadership to Improve Performance

Laurent Leksell, Elekta's chairman of the board, emphasized the need for a change in leadership, stating, "Elekta now needs a new leadership that can further intensify the focus on improving profitability and strengthen growth, by leveraging the most competitive and advanced offering in the industry." The company has initiated an international search for Salford's successor.

The announcement follows Elekta's recent report of weak fiscal third-quarter sales, which fell short of expectations due to lower installations in the United States and challenges in China. These factors have contributed to the board's decision to seek new leadership to navigate the company through its current challenges.

Challenges in Key Markets Impact Financial Performance

Elekta's recent financial performance has been marred by difficulties in two crucial markets: the United States and China. In the U.S., the company experienced slower installation volumes, which Salford attributed to customers waiting for regulatory clearance of the new Elekta Evo device. The timeline for FDA approval remains uncertain, with Salford noting, "We are in the FDA process right now. We get questions, we answer questions, but we cannot really say a specific date when we get clearance."

In China, despite reporting "strong order growth compared to last year's low level" and "increasing public procurement activity," sales fell by 8% in the quarter. Salford warned of lower volumes in both China and the U.S. in the near term, citing increasing global uncertainty.

Future Outlook and Industry Competition

As Elekta prepares for a leadership transition, the company faces stiff competition in the radiotherapy market, particularly from Siemens Healthineers' Varian. Both companies specialize in machines that combine imaging and radiation therapy for targeted cancer treatment.

Elekta's board of directors is betting on future product and software launches, enabled by recent years' substantial investments in R&D, to fuel growth and improve profitability. The incoming CEO will be tasked with leveraging these innovations to strengthen Elekta's position in the market and address the financial challenges highlighted in recent reports.