Advanced Medical Solutions Group Plc · LSE:AMS
Advanced Medical Solutions — FY2019 Earnings Presentation
28 slides from Advanced Medical Solutions's earnings presentation, Mar 11, 2020
Slide 1: Preliminary results for the year ended 31 December 2019
Advanced Medical Solutions Group plc Preliminary results for the year ended 31 December 2019 Chris Meredith Chief Executive Officer Eddie Johnson Chief Financial Officer 11 March 2020
Slide 2: FY 2019 Highlights (incl. post period end)
Advanced Medical Solutions Group plc 1 FY 2019 Highlights (incl. post period end) • Despite significant challenges in 2019, growth was achieved across multiple categories, but was offset by the downturn in US LiquiBand® • Group revenue of £102.4 million was flat on 2018 • Investment in acquisitions
Slide 3: Business Units
Advanced Medical Solutions Group plc 2 Business Units Surgical Woundcare • Selling, marketing and innovation of all surgical • Selling, marketing and innovation of all devices woundcare devices • Sold directly and through distributors • Sold directly in UK and through partners ROW • R&D centres in U
Slide 4: Market
Advanced Medical Solutions Group plc 3 Market • Favourable global healthcare and demographic trends are likely to continue to drive long term growth in our large global surgical and advanced woundcare markets, both of which provide significant future opportunities • Lower growth rates reported in th
Slide 5: Strategic Growth Opportunities - Surgical
Advanced Medical Solutions Group plc 4 Strategic Growth Opportunities - Surgical Acquisitions Base business US LiquiBand® & ROW Surgical Internal Sealants Business LiquiBand® Fix8™ US & ROW Unit Synthetic bone substitutes Collagen Pouch Vancocoll Gentacoll
Slide 6: Strategic Growth Opportunities - Woundcare
Advanced Medical Solutions Group plc 5 Strategic Growth Opportunities - Woundcare Acquisitions Base business ActivHeal overseas Woundcare Moisture Wicking Fabric Business Silver Post Operative Dressing Unit Atraumatic PHMB foam Silver High Performance Dressing
Slide 7: Short-term US LiquiBand challenges overcome
Advanced Medical Solutions Group plc 6 Short-term US LiquiBand® challenges overcome US LiquiBand® impacted in 2019 by a combination of factors: • Destocking due to lost business with two large GPOs and slowdown in new evaluations as a result of not having a combined glue and tape device for large wo
Slide 8: Licensing & acquisitions strategy
Advanced Medical Solutions Group plc 7 Licensing & acquisitions strategy Net cash of £64.8m and debt facility of £80m at 31 December 2019 • Successful acquisitions of Sealantis and Biomatlante during 2019 • Demonstrates strategy of acquiring businesses in adjacent areas with significant commercial s
Slide 9: Acquisition of Sealantis
Advanced Medical Solutions Group plc 8 Acquisition of Sealantis • Unique product platform to access the $1 billion internal sealants market. We are navigating the regulatory environment and making product design enhancements and expect: • Soft launch to key opinion leaders in H2 2020 • 150 patient s
Slide 10: Acquisition of Biomatlante
Advanced Medical Solutions Group plc 9 Acquisition of Biomatlante • Acquisition in December 2019 for €8m (c. £7m) • Integration progressing well with further commercial opportunities identified • Strong pipeline of products complementary to AMS’s surgical product portfolio, strengthening R&D pipelin
Slide 11: Biomatlante
Advanced Medical Solutions Group plc 10 Biomatlante • Revenue generating, innovative biomaterial products including MBCP®, a biphasic calcium phosphate synthetic bone substitute which has a unique micro and macroporous structure that closely resembles the architecture of natural human bone • Technol
Slide 12: R&D Progress - Surgical
Advanced Medical Solutions Group plc 11 R&D Progress - Surgical • Continued development of the LiquiBand product range • LiquiBand® Rapid™ and LiquiBand® XL • US approval process for LiquiBand® laparoscopic Fix8™ underway • Patient recruitment started August 2019 • Very positive surgeon feedback in
Slide 13: R&D Progress - Woundcare
Advanced Medical Solutions Group plc 12 R&D Progress - Woundcare • New approvals to support Woundcare growth: • US approval of atraumatic PHMB foam in H2 2019. Enters the growing antimicrobial foam market which exceeds £100 million and demonstrates accelerated microbial activity and improved eradica
Slide 14: Regulatory
Advanced Medical Solutions Group plc 13 Regulatory • European Medical Devices Regulation (MDR) timeline: • 2020-2024: Expiring MDD certificates must be renewed under MDR • May 2024: Any remaining MDD certificates will be void • In the past 18 months, we have successfully completed MDD recertificatio
Slide 15: Investing in Growth
Advanced Medical Solutions Group plc 14 Investing in Growth 2018 2019 2020 2021 2022 2023 2024 2025 LiquiBand Fix8 US PMA £100m US laparoscopic mesh fixation market £100m US open surgery mesh fixation market Investment £3m Market opportunity £200m Sealantis $1bn market for internal sealants Investme
Slide 16: Financial Summary
Advanced Medical Solutions Group plc Financial Summary
Slide 17: Surgical: 2019 Progress
Advanced Medical Solutions Group plc 16 Surgical: 2019 Progress Revenue down 2% to £56.5m (2018: £57.1m) LiquiBand® Revenue 40 • Advanced Closure - LiquiBand® 30 Revenue down 11% to £28.5m (2018: £31.7m) 20 • US sales down 25% to £17.3m (2018: £23m) 10 • UK & Germany up 24% to £6.9m (2018: £5.6m) 0
Slide 18: Surgical: 2019 Progress (continued)
Advanced Medical Solutions Group plc 17 Surgical: 2019 Progress (continued) Collagen Revenue 15 • RESORBA® Biosurgical (Collagen) Revenue up 10% to £9.4m (2018: £8.6 million) 10 • Predominately driven by growth in Europe and Latin 5 America 0 • New customers in the Far East 2018 2019 £m • Biomatlant
Slide 19: Woundcare: 2019 Progress
Advanced Medical Solutions Group plc 18 Woundcare: 2019 Progress Revenue up 1% at £45.8m (2018: £45.5m) Woundcare Revenue 50 45 Sales predominately driven by increased partner 40 demand for antimicrobial dressings 35 • Infection Management (Antimicrobial dressings) up 4% to £20.6m (2018: £19.7m) 30
Slide 20: Revenue by product
Advanced Medical Solutions Group plc 19 Revenue by product £m
Slide 21: Robust Finances; Investing for Growth
Advanced Medical Solutions Group plc 20 Robust Finances; Investing for Growth • Continuing to increase our investment in major R&D and regulatory projects despite flat sales • US LiquiBand® performance has impacted gross margins • As previously guided, to maximise the potential of the Sealantis port
Slide 22: 2019 Financial Highlights
Advanced Medical Solutions Group plc 21 2019 Financial Highlights Reported Constant 2019 2018 growth growth1 Group revenue (£m) 102.4 102.6 0% -1% Adjusted2 operating margin (%) 26.4 28.2 -180bps - Adjusted profit before tax (£m) 26.6 28.8 -7% - Group Effective Tax Rate (%) 22.0 20.3 +170bps - Adjus
Slide 23: 2019 Operating Margins
Advanced Medical Solutions Group plc 22 2019 Operating Margins £M Surgical Business Unit 80.0 31.9% 35.0% 70.0 28.4% 30.0% 60.0 25.0% 50.0 20.0% 40.0 15.0% 30.0 57.1 56.5 20.0 10.0% 10.0 18.2 5.0% 16.1 0.0 0.0% 2018 2019 Sales £ M Op profit £ M (adj) Op mgn (adj) % £M Woundcare Business Unit 60.0 30
Slide 24: Cash Flow Summary
Advanced Medical Solutions Group plc 23 Cash Flow Summary 2019 2018 £ million £ million Profit from operations 24.2 28.5 Depreciation and Amortisation 5.8 4.1 Working capital movements (4.3) (8.8) Share-based payments expense 1.9 1.7 Taxation (5.9) (3.8) Net cash inflow from operating activities 22.
Slide 25: Summary and Outlook
Advanced Medical Solutions Group plc Summary and Outlook
Slide 26: Summary and outlook
Advanced Medical Solutions Group plc 25 Summary and outlook • Revenues in line with 2018 despite challenges • Two acquisitions successfully executed and integrating well, bolstering product portfolio and increasing size of addressable markets • Improved outlook for US LiquiBand® in 2020 • First step
Slide 27: Appendix
Advanced Medical Solutions Group plc Appendix
Slide 28: Currency and Hedging
Advanced Medical Solutions Group plc 27 Currency and Hedging 70,000 2019 Currency Flows - GBP 000 equivalent 60,000 50,000 40,000 30,000 GBP 20,000 GBP USD EUR EUR USD GBP 10,000 EUR USD EUR GBP USD EUR 0 (10,000) GBP USD (20,000) (30,000) Sales Costs, capital spend Net cash flow (pre fx Contracts i
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