Surgical Innovations Group Plc · LSE:SUN
Surgical Innovations — FY2019 Earnings Presentation
17 slides from Surgical Innovations's earnings presentation, Mar 31, 2020
Slide 1: Final Results - Year Ended December 2019
Final Results - Year Ended December 2019 31 March 2020 David Marsh – CEO Nigel Rogers - Chairman
Slide 2: Overview
Overview 2019 results Key Activities • Challenging UK climate • Strengthened Quality Assurance • Worldwide 10% revenue growth (QA) & Regulatory Affairs (RA) H2 over H1 structure • Financials in line with September • Defined Marketing message expectations • Developed customer base and strengthened re
Slide 3: Financial Summary
Financial Summary • Revenues of £10.73m (2018: £10.97m) • Gross margin 40.4% (2018: 42.6%) • Increased overhead base in operations and RA/QA • Impairments to Goodwill (£1.63m) and Development costs (£0.63m) • Adjusted** PBT of £0.38m (2018: £1.43m) • Adjusted** EPS 0.05p (2018: 0.21p) • Cash convers
Slide 4: Revenue by Geographical Region (Excl. OEM)
Revenue by Geographical Region (Excl. OEM) RoW, 7% APAC, 5% Europe, 14% UK, 53% USA, 21% 4
Slide 5: Message hitting home!
Message hitting home! FOR A GREENER “It’s right that the NHS and our suppliers should join the national campaign to turn the tide on plastic waste. Doing so will be good for our environment, for our patients and for taxpayers who fund our In the US, it is estimated that NHS.” 20%-33% of all hospital
Slide 6: Market Environment – UK and USA
Market Environment – UK and USA UK – 53% of SI Branded Revenue USA – 21% of SI Branded Revenue • Challenging UK market conditions • Significant hospital groups convert to Eco-Cut • Increase in patients awaiting treatment • FDA Approval for Elite • Reduce, Reuse, Recycle, RESPOSABLE • Sales teams tra
Slide 7: Market Environment – EU, APAC and RoW
Market Environment – EU, APAC and RoW EU – 14% of SI Branded Revenue APAC – 5% of SI Branded Revenue • Delay in Elite roll-out in key markets • New Market Access restricted by QA/RA constraints • Strong account conversions in Japan, NZ & Australia • Outlook: continued growth in 2020 with strong Elit
Slide 8: Market Environment – OEM
Market Environment – OEM Market Environment – OEM AMS – c. 10% of Total Group Revenue Non Medical – c.3% of Total Group Revenue • Extension to agreement to 2024 • Anticipated further RR Orders, reduced on • Close cooperation on FDA submission 2019 • Expected continued growth • Revenue from Refurbish
Slide 9: Financial Position
Financial Position • Net cash £0.47m at year end & currently increased • Support and flexibility from Yorkshire Bank • Repaid £1m term loan early Oct 2019, leaving £0.75m outstanding • Relief from covenants and capital holiday in 2020 Q1 • Offer of increase in unutilised RCF from £0.5m to £1m credit
Slide 10: Covid-19 Impact on Activity
Covid-19 Covid19 Impact Impact on Activity • Postponement of all U.K. elective surgery announced 17 March 2020 • Cancer and other emergency surgery continues, but very low volume • European markets effectively closed • US beginning to show slowdown • Japan ordering to buffer inventory • OEM partners
Slide 11: Covid-19 Response to date
Covid-19 Response to date • Followed all appropriate Government H&S advice • Condensed production activity to match visible demand • Furloughed non-essential management and staff including sales team • Implemented short-term salary reductions for all staff above furlough threshold • Led by Board imp
Slide 12: Prospects
Prospects • Navigating a challenging period with resilience • Whole team approach to problem solving demonstrates commitment • Streamline operations, QA/RA procedures for MDR implementation • Maintaining production and inventory to support customers and patients • Confident of significant market sha
Slide 13: Appendices
Appendices • Income Statement • Cash Flow Statement • Financial Position • Major Shareholders 13
Slide 14: Income Statement
Income Statement 2019 2018 £m £m Revenue 10.73 10.97 Cost of sales (6.40) (6.30) Gross profit 4.33 4.67 Other operating expenses (6.77) (4.33) Other Income - 0.28 Adjusted EBITDA 1.44 2.36 Amortisation of intangible R&D costs (0.29) (0.35) Depreciation of tangible assets (0.62) (0.48) Adjusted opera
Slide 15: Cash Flow Statement
Cash Flow Statement 2019 2018 £m £m Cash flows from operating activities Operating profit (2.44) 0.62 Depreciation & amortisation 0.91 1.62 Impairment of Intangibles 2.60 - Other 0.19 0.15 Working Capital (0.54) (0.59) Cash generated from operations 0.72 1.81 Taxation received / (paid) 0.00 (0.07) I
Slide 16: Financial Position
Financial Position 2019 2018 £m £m Tangible assets 1.96 0.93 Intangible assets 7.61 10.19 Total non-current assets 9.57 11.12 Inventories 2.93 2.08 Trade receivables 1.95 2.58 Other current assets 0.59 0.46 Trade & other payables (1.52) (1.55) Accruals & deferred income (0.32) (0.64) Total working c
Slide 17: Major Shareholders
Major Shareholders Getz Bros & Co (BVI) Inc 13.7% Directors 12.2% BGF Investments 7.6% Ruffer LLP 7.5% Healthinvest Partners AB 4.9% Liontrust Asset Mgt 4.7% Hargreaves Lansdown AM 4.2% Mr CWN John 4.2% Cavendish AM 4.1% Unicorn AIM VCT plc 3.4% Interactive Investor 3.3% 17
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