Nanosonics Limited · ASX:NAN
Nanosonics — H1 FY2024 Earnings Presentation
43 slides from Nanosonics's earnings presentation, Feb 26, 2024
Slide 1: 2024 Half Year Results Investor Presentation
DRAFT FY24 H1 LBE For personal use only Infection Prevention For Life 2024 Half Year Results INVESTOR PRESENTATION Michael Kavanagh, CEO & President Jason Burriss, CFO
Slide 2: Disclaimer
Disclaimer This presentation is intended to provide a general outline only and is not intended to be a definitive statement on the subject matter covered in it. The information in this presentation, whether written or verbal, has been prepared without taking into account the commercial, fi nancial o
Slide 3: Contents
Contents For personal use only I. Mission and Strategic Priorities II. FY24 H1 key highlights III. Installed base and upgrades IV. Financial results V. trophon business profitability VI. trophon opportunity VII. Research & development VIII. CORIS® – our next instrument reprocessing product platform
Slide 4: Our Mission
Our Mission For personal use only We improve the safety of patients, clinics, their staff and the environment by transforming the way infection prevention practices are understood and conducted and introducing innovative technologies that deliver improved standards of care. Nanosonics Limited | Half
Slide 5: Our Strategic Pillars
Our Strategic Pillars We have defined 5 Strategic Pillars aligned with our mission that guide the organisational strategies to deliver For personal use only value creation for patients, customers, employees, shareholders and the planet. Value Our Mission Creation for We improve the safety of patient
Slide 6: Our Strategic Priorities
Our Strategic Priorities For each of the Strategic Pillars we have defined a core set of strategic priorities that guide the growth investments and activities across the organisation. For personal use only • Continue to establish automated ultrasound reprocessing as standard of care and deliver inno
Slide 7: Key Highlights
Key Highlights Half year revenue of $79.6 million, down 2% on prior corresponding period (down 4% in constant currency). • Half year capital revenue of $21.9 million, down 15% on prior corresponding period primarily related to delays in expected upgrade unit sales. For personal use only • Half year
Slide 8: FY24 H1 Key Highlights: Financial
FY24 H1 KEY HIGHLIGHTS Financial For personal use only TOTAL CAPITAL CONSUMABLES/ GROSS PROFIT OPERATING CONSOLIDATED REVENUE REVENUE SERVICE REVENUE MARGIN EXPENSES PROFIT BEFORE TAX $79.6m $21.9m $57.7m 79.7% $60.8m $4.9m 2% 15% 4% 0.8PTS 12% 57% VS. FY23 H1 VS. FY23 H1 VS. FY23 H1 VS. FY23 H1 VS.
Slide 9: FY24 H1 Key Highlights: trophon Units
FY24 H1 KEY HIGHLIGHTS trophon Units For personal use only With an installed base of 33,550 trophon units globally, more than 26 GLOBAL INSTALLED BASE NEW INSTALLED BASE UPGRADES million patients are protected every year from the risk of ultrasound 33,550 1,100 620 probe cross contamination. 3% 13%
Slide 10: Installed Base and Upgrades
For personal use only Installed Base and Upgrades Nanosonics Limited | Half Year Results 2024 10
Slide 11: Installed Base
Installed Base units 33,550 G L O B A L T O T A L I N S T A L L ED B A S E Units For personal use only 32,450 33,550 31,120 29,850 trophon continues to 28,160 % 3 In last 6 months strengthen its position as 8% In last 12 months the standard of care for automated high level disinfection of ultraso
Slide 12: New Installed Base Growth
New Installed Base Growth G L O BAL NEW I NS T AL L ED BAS E units 1,100 Units For personal use only 1,690 The global new installed 1,410 1,270 1,330 1,100 13% Vs FY23 H1 base grew 1,100 units during the period. The pipeline for new installed H1 H2 H1 H2 H1 base continues to grow, FY22 FY23 FY24 h
Slide 13: Upgrade Units
Upgrade Units G L O B A L T O T A L U P G R A D ES units 620 Units 1,010 For personal use only 800 620 During the first half, the 400 600 23% Vs PCP sales pipeline for upgrades continued to grow with strong customer interest H1 H2 H1 H2 H1 based on the value FY22 FY23 FY24 proposition trophon2 off
Slide 14: Financial Results
For personal use only Financial Results Nanosonics Limited | Half Year Results 2024 14
Slide 15: Global Revenue
REVENUE Global Revenue H1 H2 T O T AL REV ENUE 166.0 $m m $79.6 For personal use only 120.3 103.1 84.4 100.1 Total Revenue for the first half 51.6 60.0 59.7 79.6 2% VS FY23 H1 year was $79.6 million, down 2% (4% CC1) 81.6 79.6 on prior corresponding period. 48.5 43.1 60.6 The decline in revenue w
Slide 16: North America Revenue
REVENUE North America Revenue H1 H2 $72.3m T O T AL REV ENUE For personal use only $m 150.4 Total revenue for the half was 106.9 2% vs. FY23 H1 90.3 89.2 76.2 $72.3 million, down 2% on prior 52.5 72.3 corresponding period (4% on 46.5 52.3 CC1). 43.8 36.9 54.4 74.1 72.3 FY20 FY21 FY22 FY23 FY24 Cap
Slide 17: Europe and Middle East Revenue
REVENUE Europe and Middle East Revenue H1 H2 $4.3m T O T AL REV ENUE For personal use only $m Total revenue was $4.3 million, 8.1 7.2 7.5 19% vs. FY23 H1 up 19% on prior corresponding 5.2 4.5 3.6 4.1 4.3 period. 2.8 3.6 3.6 4.3 3.4 2.4 While the total number of units installed FY20 FY21 FY22 FY23
Slide 18: Asia Pacific Revenue
REVENUE Asia Pacific Revenue H1 H2 $3.1m T O T AL REV ENUE For personal use only $m 7.5 6.7 Total revenue for the first half 4.7 5.9 3.7 18% vs. FY23 H1 was $3.1 million, down 18% on 2.3 4.1 3.1 3.1 prior corresponding period. 2.9 3.8 3.1 2.4 2.6 FY20 FY21 FY22 FY23 FY24 Capital revenue of $0.8 mi
Slide 19: Gross Profit Margin
Gross Profit Margin 79.7% For personal use only GROS S P ROFI T MARGI N Global, % Gross profit margin for the 79.4% 79.7% 78.9% half was 79.7% up from 78.5% 0.8 PTS vs FY23 H1 78.9% in prior 77.0% 76.6% 76.2% corresponding period. The stronger gross margin was driven by revenue mix and the positiv
Slide 20: Operating Expenses
Operating Expenses $60.8m H1 H2 For personal use only TOTAL OP ERATI NG EX P ENS ES Global, $m 114.2 Operating expenses for 90.5 the half totalled $60.8 70.8 59.7 12% vs. H1 FY23 63.2 million, up 12% on prior 47.8 60.8 2% vs. H2 FY23 corresponding period and 32.5 37.7 2% on prior half. 30.7 33.0
Slide 21: Global Operating Expenses
Global Operating Expenses Investing in a significant Infection Prevention market opportunity Nanosonics has M ARKET DEV EL OPM ENT For personal use only established D R IVIN G ON GOIN G GR OWTH IN MATU R E MAR KETS significant • Continue to grow new installed base • Convert significant installed bas
Slide 22: Profit Before Tax
Profit Before Tax $4.9m For personal use only Operating profit 11.4 before tax of $4.9 10.2 million compared 57% vs. H1 FY23 4.9 with $11.4 million in 3.3 prior corresponding period. -1.7 H1 H2 H1 H2 H1 FY22 FY23 FY24 Nanosonics Limited | Half Year Results 2024 22
Slide 23: Cash Reserves
Cash Reserves F R E E C AS H F L OW $7.9m For personal use only Global, $m 13.7 Free cash flow for the half year of $7.9 million compared with a $7.9 6.1 net inflow of $19.8 million in 3.6 FY23. -3.8 $118.3m H1 FY22 H2 H1 FY23 H2 H1 FY24 as at 31 December 2023 C AS H AN D C AS H E QU IVAL E N T S Ca
Slide 24: Profit and Loss Summary
Profit and Loss Summary HIGHLIGHTS $ millions FY24 H1 FY23 H1 Change % • Half year revenue of $79.6 million, down 2% on prior For personal use only Capital revenue 21.9 25.9 -15% corresponding period (4% in constant currency). Consumable/service revenue 57.7 55.7 4% – Half year capital revenue o
Slide 25: trophon Business Profitability
For personal use only trophon Business Profitability Nanosonics Limited | Half Year Results 2024 25
Slide 26: trophon Business Unaudited Pro forma Profit and Loss
TROPHON BUSINESS Unaudited Pro forma Profit and Loss A significant proportion of the Company’s operating expenses are associated with future earning opportunities from new produc t development and expansion. Presented below is the profitability profile of the current core trophon business without th
Slide 27: trophon Opportunity
TROPHON® OPPORTUNITY For personal use only Nanosonics Limited | Full Year 2021 27
Slide 28: trophon Lifetime Value
trophon Lifetime Value Every new installed base delivers a significant incremental lifetime For personal use only value. Initial Upgrade installation YEAR 8 14 trophon2 + Printer CAPITAL CAPITAL + Cart + Mount REVENUE .. . + ECOSYSTEM (C ON SU MABL ES + + + + + ... & AC C ESSOR IES) Sonex Chemical
Slide 29: Significant Global Opportunity
Significant Global Opportunity Market Penetration • Significant global growth opportunity. GL OBAL Installed base opportunity • Increasing number of international guidelines requiring high level disinfection (HLD) 140,000 For personal use only 1 24% supporting growing international demand. • Nanoson
Slide 30: Significant opportunity continues in North America
Significant opportunity continues in North America There are over 150 procedures that use 1 Market Opportunity For personal use only • Approximately 5700 hospitals use ultrasound extensively in USA3 ultrasound probes across many departments • trophon currently exists in approximately 70% of these ho
Slide 31: Significant Upgrade Opportunity
Significant Upgrade Opportunity A significant upgrade potential exists in the current North American installed base For personal use only for both capital revenue and incremental annuity revenue through service. GROW I NG UP GRAD E OP P ORTUNI T Y 9,000+ units 0-1 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9+
Slide 32: North America capability established to capture market opportunity
North America capability established to capture market opportunity In North America we have established internal capabilities to lead and drive the successful direct commercialisation of our product portfolio while maintaining flexibility of appointing distributor partners under a range of commercia
Slide 33: Research & Development
For personal use only Research & Development Nanosonics Limited | Half Year Results 2024 33
Slide 34: Investment in R&D
Investment in R&D During the half, the Research and Engineering Company continued to For personal use only development continues Industrial Design Mechanical to invest in its product Electrical Sof tware expansion strategy to be a cornerstone of Sy stems across ultrasound the future growth of the re
Slide 35: Transforming the cleaning of flexible endoscopes
For personal use only Transforming the cleaning of flexible endoscopes Our Next Instrument Reprocessing Product Platform All research and new product development programs involve inherent risks and uncertainties w hich can impact commercialisation Nanosonics Limited | Half Year Results 2024 35 timel
Slide 36: CORIS - Continue to target FDA regulatory submission by end Q3 FY24
CORIS® - Continue to target FDA regulatory submission by end Q3 FY24 For personal use only De novo Regulatory Pathway United States In the United States, CORIS® represents a disruptive innovation. As such, there is no existing Food and Drug predicate device like it on the market. As a completely nov
Slide 37: CORIS - International Conference Presentations
CORIS – International Conference Presentations CORIS presented at several international conferences during H1 highlighting best in class efficacy against toughened biofilm. Additional presentations are planned in H2 2024. For personal use only Association for Professionals in Infection Control and E
Slide 38: Biofilm forms quickly in narrow channels and is resistant to removal
Biofilm forms quickly in narrow channels and is resistant to removal Water channel Air channel A/W junction For personal use only Air/Water Air/Water cylinder port Air Air channel channel Air pipe Water Air/Water Water channel junction channel Biofilm formed in A/W channels in just 60 days (30 days
Slide 39: CORIS Preliminary Results
CORIS Preliminary Results 1.4 mm lumens representing the air water and aux channels Protein Total Organic Carbon Colony Forming Units For personal use only *** * *** 60 25 *** 8 40 Protein (µg/cm2) 20 6 log10CFU/cm2 TOC (µg/cm2) 20 Acceptance limit (6.4 µg/cm2) 15 1.0 Acceptance limit 4 10 (12 µg/cm
Slide 40: Visual Removal of Biofilm
Visual Removal of Biofilm HEAD-TO-HEAD CLEANING TEST ON A SIMULATED NARROW CHANNEL For personal use only S I MULATE NARROW CHANNEL 1 Auxiliary channel conditions: 1.5 mm diameter, 3.6 m length, PTFE material Unsoiled channel SI MULATE CLI NI CAL CONDI TI ONS 2 Biofilm grown across entire channel len
Slide 41: CORIS represents a significant global opportunity
“.. it has become apparent that contamination of patient-ready flexible endoscopes with multi-resistant CORIS® represents a significant global bacteria is a world-wide problem that results in transfer opportunity of these organisms to patients resulting in long-term colonization and/or infection. Bi
Slide 42: Outlook
For personal use only Outlook Nanosonics Limited | Half Year Results 2024 42
Slide 43: Business Outlook FY24
BUSINESS OUTLOOK FY24 The underlying fundamentals for the ongoing growth of the trophon ultrasound reprocessing business remain strong with the sales pipeline for both new installed base and upgrades continuing to grow. As the macroeconomic conditions have not materially changed from those experienc