Sisram Medical Ltd. · HKEX:1696
Sisram Medical — Investor Presentation (March 2018)
39 slides from Sisram Medical's investor presentation, Mar 19, 2018
Slide 1: Investor Presentation
Strictly Confidential INVESTOR PRESENTATION March, 2018
Slide 2: The Presenting Team
The Presenting Team Yi Liu Lior Dayan Jianping Hua Chairman & Executive Director Chief Executive Officer & Executive Director Chief Financial Officer 17+ years’ experience in the medical 17+ years’ experience in the laser 10+ years’ professional financial and and medical devices industry industry in
Slide 3: Section
Section 1 Company Overview 2 Investment Highlights 3 Financial Information 4 Future Strategies Appendix - Industry Overview - Corporate Development History - Supplementary Business Segment Overview - Supplementary Financial Information 3
Slide 4: Company at a Glance
Company at a Glance A leading provider of energy-based medical aesthetic treatment systems in the PRC and globally Sisram Medical is an Israeli company incorporated in April 2013 for the acquisition of Alma Lasers by Fosun Pharma Alma Lasers Market leader in the PRC ✓ A wholly-owned and principal 1
Slide 5: Strong Operational and Financial Performance
Strong Operational and Financial Performance Comprehensive portfolio of treatment systems for non-invasive medical aesthetic and minimally invasive treatments Main Business Segments 2017A Revenue (% Group Total) Core: Offerings from versatile-modular, multi-application Non-invasive treatment syste
Slide 6: Wide Applications in Key Aesthetic Segments
Wide Applications in Key Aesthetic Segments Our products serve a broad range and specialist forms of medical aesthetic treatments Non-invasive Core Product Line Minimally Invasive Medical Aesthetic Core product family systems: Minimally invasive systems: 73.9% Soprano – hair removal FemiLift – A
Slide 7: Global Sales and Distribution Network
Global Sales and Distribution Network 2017A Revenue by Geography: North America US$136.9m 24.5% Europe 27.6% Middle East & Africa 4.4% China 20.6% APAC Latin America 12.5% Sells products directly 10.4% Sells products to distributors Direct sales(1) Distributor sales(2) is 37.6% of revenue in 2017 is
Slide 8: Business Model Overview
Business Model Overview From R&D, production to commercialisation Direct sales Product and Technology Procurement, Concept Treatment Production and Generation, R&D Providers Quality Inspection Distributors and Regulatory Sub-distributors Approval R&D platform: Production by forecast: Direct sa
Slide 9: Global Industry Competitive Landscape
Global Industry Competitive Landscape Major global suppliers in the energy-based medical aesthetic treatment systems market Global Market Share by Revenue (2016) Sales by manufacturers regardless of sales channels (i.e. either directly to treatment providers or distributors) Total revenue: US$2,670m
Slide 10: PRC Medical Aesthetic Market
PRC Medical Aesthetic Market Sisram was ranked Number 1 in the PRC market by revenue in 2016 PRC Market Share by Revenue (2016) Sales by manufacturers regardless of sales channels (i.e. either directly to treatment providers or distributors) Total revenue: US$158.9m Estimated PRC market Ranking Comp
Slide 11: Corporate Structure
Corporate Structure As at November 22, 2017 Fosun International(2) 100% Fosun High Technology 37.75% Pramerica-Fosun Fund(1)(1) Pramerica-Fosun Fund Fosun Pharma 100% 67.36% Fosun Industrial 100% 32.64% 100%(3) Magnificent View Magnificent View Ample Up Chindex Medical (CML) Public Shareholders 21.9
Slide 12: Section
Section 1 Company Overview 2 Investment Highlights 3 Financial Information 4 Future Strategies Appendix - Industry Overview - Corporate Development History - Supplementary Business Segment Overview - Supplementary Financial Information 12
Slide 13: Investment Highlights
Investment Highlights 1 Industry Leader Globally and Largest Provider in the PRC 2 Broad Technology Platform and Comprehensive Product Offerings 3 Efficient Mix of Global Sales and Distribution Channels 4 FOSUN PHARMA —— Innovation for health 13
Slide 14: Industry Leader Globally and Largest Provider in the PRC
1 Industry Leader Globally and Largest Provider in the PRC Well-positioned to take advantage of the global growth in demand for energy-based medical aesthetic treatment systems Fast-growing PRC Market Global Consumer Demand PRC – Energy-based Medical Aesthetic Systems Market Total global consumer ex
Slide 15: Broad Technology Platform and Comprehensive Product Offerings Meet Market Needs
2 Broad Technology Platform and Comprehensive Product Offerings Meet Market Needs Treatment Systems Treatment Providers Treatment Recipients Non-invasive medical aesthetic Skin remodeling & lifting Skin tightening Soprano Harmony Accent Hair removal Body &face Liposuction & contouring fat grafting R
Slide 16: Efficient Mix of Global Sales & Distribution Channels
3 Efficient Mix of Global Sales & Distribution Channels Adapting to different market dynamics and allowing access to multiple customer segments resulting in high profitability 33. Direct sales 3% 2015 2016 2017 US$110.4m US$118.2m US$136.9m Distributor sales 64. 2.3 4%(1) %Other customers 37.6% 35.9
Slide 17: FOSUN PHARMA — Innovation for health
4 FOSUN PHARMA —— Innovation for health Pharmaceutical Medical Distribution Healthcare R&D Manufacturing Diagnosis& Devices and Retailing Services Hospital Network of Fosun Pharma Suqian Zhongwu Hospital Grade A Class II General Hospital Yueyang Guangji Hospital Grade A Class II General Hospital Anh
Slide 18: Section
Section 1 Company Overview 2 Investment Highlights 3 Financial Information 4 Future Strategies Appendix - Industry Overview - Corporate Development History - Supplementary Business Segment Overview - Supplementary Financial Information 18
Slide 19: Financial Analysis Overview
Financial Analysis Overview Strong operating leverage with superior net income growth Revenue/Gross Profit/Adjusted Net Profit(1) Gross Profit Margin/Adjusted Net Profit Margin (2) US$’000 % 136,887 2015–2017 118,156 CAGR 110,406 53.5% 11.3% 52.7% 73,197 57,363 62,223 13.0% 52.0% 20,353 25,290 16,59
Slide 20: Adjusted Net Profit
Adjusted Net Profit Adjusted Net Profit 2015 US$’000 For the year ended December 31, 2017 US$’000 4,882 16,592 0 0 4,040 (923) 2015 2016 2017 8,593 Profit for the year/period 8,593 8,501 11,049 Adjusted for : Net Interest Listing Interest Amortization Deferred Adjusted profit expenses expenses expen
Slide 21: Operating Costs Analysis
Operating Costs Analysis Selling and Distribution Expenses Administrative Expenses(1) Research and Development Expenses 11.0% US$’000 US$’000 US$’000 10.1% 10.1% 19.0% 18.1% 13,862 12,399 26,059 12,989 16.8% Amortization 9.1%(2) 11,121 6.4% 21,380 4,827 6.2% Amortization 4,885 18,590 Amortization 4,
Slide 22: Section
Section 1 Company Overview 2 Investment Highlights 3 Financial Information 4 Future Strategies Appendix - Industry Overview - Corporate Development History - Supplementary Business Segment Overview - Supplementary Financial Information 22
Slide 23: Future Strategies
Future Strategies Formulating Our Strategies on the Basis of Five Key Factors Organic New Revenue Growth and Streams Non-organic through R&D Growth Re-branding with B2C IoT focus Technology Current and Global Market Technological Previous Market Industry Trends Competition Trends Innovations Researc
Slide 24: Continuation Growth
Continuation Growth Aesthetic Line (To be launched through 2018 – 2019) 1 Most advanced workstation for skin tightening, body contouring & aesthetic enhancement Accent Prime Combines Ultrasound and Radio Frequency (RF) technologies for enhanced, long lasting results Introducing a new special f
Slide 25: Other Key Strategies
Other Key Strategies New Revenue Streams Fillers New Biotechnology Partnership with an European OEM Partnership with an European Business company to become a worldwide company distributor Encourage a brisk healing response Cooperation (To be launched Providing practitioners with a complete s
Slide 26: Section
Section 1 Company Overview 2 Investment Highlights 3 Financial Information 4 Future Strategies 5 Appendix - Industry Overview - Corporate Development History - Supplementary Business Segment Overview - Supplementary Financial Information 26
Slide 27: Medical Aesthetic Industry Overview
Medical Aesthetic Industry Overview Medical Aesthetic Treatment Improvement of cosmetic appearance of individuals through treating medical and physical conditions (scars, skin laxity, wrinkles, moles, excess fat, cellulite, unwanted hair and skin discoloration) Non-invasive to Minimally Invasive Tre
Slide 28: Global Energy-Based Medical Aesthetic Market Size
Global Energy-Based Medical Aesthetic Market Size Global Sales Revenue of Energy-based Medical Aesthetic Treatment Systems (1) Overall Market By Region US$ million US$ million CAGR 0 1,000 2,000 3,000 4,000 5,000 ’16-’21 4,380 North 1,395 4,043 America 2,359 11.1% 3,700 3,353 537 Europe 7.6% 2,995 7
Slide 29: Key Industry Drivers
Key Industry Drivers 1 Worldwide consumer expenditure US$28.7tn (2005) → US$42.7tn (2015), CAGR 4.1% Increased Improvements in standards of living, increased individual wealth and discretionary discretionary income income in some markets Consumers can allocate more disposable income to medical
Slide 30: Development History
Development History Key Corporate and Business Development Milestones Launched proprietary radiofrequency Acquired the remaining 75% Launched its Introduced a multi-application technology “Unipolar Technology” of Orion Lasers and MSQ (now Alma first diode aesthetic treatment platform based
Slide 31: Strong M&A Interest in Medical Aesthetics
Strong M&A Interest in Medical Aesthetics Mergers and consolidation of key players in the energy-based medical aesthetic treatment systems market Four of Sisram’s direct competitors and comparable U.S. listed companies have been acquired in recent years ─ Three major acquisitions (Zeltiq / Allerga
Slide 32: Robust Premia Paid in Medical Aesthetics Takeover
Robust Premia Paid in Medical Aesthetics Takeover Recent Significant M&A transactions in Medical Aesthetics since February 2017 Price (USD) Volume (m) Price (USD) Volume (m) Price (USD) Volume (m) 75.00 15 60.00 25 12.00 15 千 千 千 20 60.00 10 45.00 9.00 10 15 45.00 10 5 30.00 6.00 5 30.00 5 15.00 0 1
Slide 33: Non-Invasive Segment
Non-Invasive Segment Strong track record of developing and commercializing non-invasive systems Core: Ranging from versatile multi-application treatment systems (wider range of technologies and treatment options for a lower upfront investment and flexibility to upgrade) to more specialized systems
Slide 34: Minimally Invasive Segment
Minimally Invasive Segment Strong market uptake of our minimally invasive products since our first sale of FemiLift in 2013 Targeted for use by specialist physicians to perform minimally invasive treatments Procedures may require a minor incision Suitable for a medical office or aesthetic medi
Slide 35: Service Segment
Service Segment Service and other activities Sale of Extension Servicing Fees of Warranty for Product Contracts Maintenance After-sale services Installation and product training Product service and maintenance Sale of Direct Sales of Other Spare Sales of replacement applicators and spare par
Slide 36: Revenue Analysis
Revenue Analysis Revenue by Geographical Segments Revenue by Products Segments US$’000 2015–2017 US$’000 CAGR 2015–2016 2016–2017 136,887 Growth Rate Growth Rate 4.2% 14.7% 19.5% 101,189 118,156 110,406 -26.2% 31.9% 37,839 88,249 88,249 84,719 8.7% 83.8% 21.0% 32,729 26,492 5.0% 5.4% 33,508 4.5% 28,
Slide 37: Turnover Days and Operating Capital Analysis
Turnover Days and Operating Capital Analysis Average Inventory Turnover Days Average Trade Receivables Turnover Days Days Days 141 86 83 137 130 74 2015 2016 2017 2015 2016 2017 Average Trade Payable Turnover Days Working Capital Cycle Days Days 180 49 47 173 40 162 2015 2016 2017 2015 2016 2017 37
Slide 38: Key Ratios
Key Ratios Return on Equity(1) Return on Total Assets(2) % % 26.4% 3.2% 21.0% 3.1% 3.0% 5.0%(5) 4.7%(5) 3.8% 2015 2016 2017 2015 2016 2017 Current Ratio (3) Quick Ratio(4) x x 4.82 4.13 2.07 2.02 1.55 1.55 2015 2016 2017 2015 2016 2017 Notes: (1) Return on equity equals Profit for the year divided b
Slide 39: Cash Flow Analysis
Cash Flow Analysis Net Cash Flows from Operating Activities Net Cash Flows used in Financing Activities US$’000 US$’000 17,057 2015 2016 2017 48,171 16,013 15,847 2015 2016 2017 (12,333) (13,052) Net Cash Flows used in Investing Activities Cash and Bank Balances US$’000 US$’000 2015 2016 2017 104,13