Somnomed Limited · ASX:SOM
Somnomed — Investor Presentation (August 2018)
22 slides from Somnomed's investor presentation, Aug 22, 2018
Slide 1: Improving lives through better sleep
For personal use only Improving lives through better sleep Investor Presentation – Financial Year 2017/18
Slide 2: Disclaimer & Regulatory Disclosure
Disclaimer & Regulatory Disclosure For personal use only This document has been prepared as a summary only, and does not contain all information about the Company’s assets and liabilities, financial position and performance, profit and losses and the rights and liabilities attaching to the Company’s
Slide 3: Global Highlights 2017/18
Global Highlights 2017/18 For personal use only Strong revenue growth but disappointing group EBITDA results due to RSS • Group revenue of $63.6m (growth of 29% year on year) • Core revenue of $52.4m (growth of 10% year on year) • RSS revenue of $11.2m • EBITDA loss of $6.5m • Core EBITDA of $3.9m (
Slide 4: The SomnoMed opportunity is large
The SomnoMed opportunity is large For personal use only There is a significant market for Obstructive Sleep Apnea * Oral Appliance Therapy (OAT*) is equally effective to CPAP particularly in The global market for Sleep Apnea is mild to moderate patients and is better tolerated approximately $7-8B. a
Slide 5: The COAT market is growing at approximately 20% per annum
The COAT™ market is growing at approximately 20% per annum For personal use only There is a high ceiling for COAT™ growth Estimated COAT™ penetration in Western Europe Estimated share of therapy for newly % diagnosed OSA patients in the USA in 100 90 2017* COAT™ share 7% 80 48 70 60 75 70 60 82 93 8
Slide 6: SomnoMed competitive advantage
SomnoMed competitive advantage For personal use only Substantial, multi-faceted and growing • Clinical Research: Strongest body of clinical research and evidence which supports the COAT™ treatment using SomnoMed products across the globe • Proprietary materials and design: Essential for patient comf
Slide 7: SomnoMed's vision and strategy
SomnoMed’s vision and strategy Driving an integrated sleep solutions business For personal use only Clinical guidelines Simplify patient Clinical and patient Re-imbursement Therapy affordability journey therapy awareness Traditional COAT™ medical device business Managed Care business preferred netwo
Slide 8: Strong track record for revenue growth
Strong track record for revenue growth For personal use only A$’000 70,000 FY18 +29% 60,000 FY14-FY18 = 20.4% CAGR +606% 50,000 +23% 40,000 30,000 +7% 20,000 10,000 0 2013/14 2014/15 2015/16 2016/17 2017/18 MAS Revenue Other Revenues RSS Revenue 8
Slide 9: Total group revenue growth by region
Total group revenue growth by region For personal use only Growth in NA slowed in second Accelerating growth in Europe APAC rebounds strongly half A$000’s North America & RSS A$000’s Europe A$000’s APAC 35,000 35,000 4,500 +5% +26% +36% 4,000 30,000 30,000 3,500 25,000 25,000 3,000 20,000 20,000 2,5
Slide 10: SomnoMed core revenue growth and regional split
SomnoMed core revenue growth and regional split For personal use only SomnoMed core revenue growth SomnoMed core revenues by region A$m’s First half = 5% 60 Second half= 15% $4.20m +10% 8% 50 FY14-FY17 CAGR = 15% $17.85m 34% 40 30 20 $30.36m 58% 10 0 FY14 FY15 FY16 FY17 FY18 North America Europe APA
Slide 11: Improving margins and significantly improved SOM core EBITDA results
Improving margins and significantly improved SOM core EBITDA results For personal use only % MAS Gross Margin % A$’000 EBITDA* SOM core 73.0% $3.9m 75 4,000 70 +65% 3,000 65 2,000 60 55 1,000 50 0 2013/14 2014/15 2015/16 2016/17 2017/18 2013/14 2014/15 2015/16 2016/17 2017/18 % Group Gross Margin %
Slide 12: Key initiatives to ensure on-going growth in the core business
Key initiatives to ensure on-going growth in the core business For personal use only • Support clinical research and lobby for stronger payor and clinical guidelines • Support ongoing investigations and initiatives to get re-imbursement in key countries • Modified go-to-market strategy in the USA •
Slide 13: Renew Sleep Solutions – business update
Renew Sleep Solutions – business update For personal use only • Strategic “Direct to Patient” model finished the year operating 16 centres across 12 different US metropolitan areas • “Direct to Patient” model was implemented to provide the 20m.+ population of suffers of OSA easier access to medical
Slide 14: Renew Sleep Solutions – building the competitive advantage
Renew Sleep Solutions – building the competitive advantage For personal use only • Significant amount of progress made building the infrastructure and skillset to succeed over the long term • Very high patient satisfaction • Strong internal revenue cycle team • “Direct to Patient” marketing engine a
Slide 15: Renew Sleep Solutions – centre cohort results
Renew Sleep Solutions – centre cohort results For personal use only 15
Slide 16: Renew Sleep Solutions – strategic learnings
Renew Sleep Solutions – strategic learnings For personal use only Original assumptions Learnings Marketing method Talk radio - able to acquire patients at a cost of < $700 a Broader marketing channels and capability required patient Target audience Males 30-65 years of age Optimal targeting of a wid
Slide 17: Different insurance landscapes which favour success with today's RSS model
Different insurance landscapes identified which favour success with today’s RSS model For personal use only (cities above 1.5m in population size = 39 cities) Small # insurance companies RSS favourable High in-network covered lives conditions 18% 1 18% of cities fit into very favourable category 44%
Slide 18: Renew Sleep Solutions – modified strategy to produce a successful business
Renew Sleep Solutions – modified strategy to produce a successful business For personal use only • Re-base business focused on those cities where there is confidence of future success • Withdraw from cities where there are not currently favourable circumstances: Philadelphia, Tulsa, Hartford and Mil
Slide 19: New and more promising cohort picture
New and more promising cohort picture For personal use only Pro forma cohort results for 2017/18 financial year Primary Issue with cohort 2 is (after removing second centre costs and normalizing for full year) media cost in large cities and 2000 lack of media and conversion efficiency in not being ‘
Slide 20: Summary profit and loss
Summary profit and loss For personal use only Financial Summary – AUD $000’s SomnoMed SomnoMed SomnoMed SomnoMed Core Core RSS Core Group FY17/18 FY16/17 FY17/18 FY17/18 FY17/18 Revenue 52,393 47,740 9.7% 8.3% 11,216 52,393 63,609 Gross margin 31,855 27,835 14.4% 6,335 31,855 38,190 Sales and market
Slide 21: Guidance 2018/19
Guidance 2018/19 For personal use only SomnoMed Group • Revenues of between $74m - $75m and growth of 16% - 18% • EBITDA at breakeven ( +/- $1m) Key Metrics • SomnoMed core business • 15%+ revenue growth to $60m+ • Between $5m – $5.5m EBITDA • RSS Business • Between 25%-35% revenue growth to between
Slide 22: Contact details
Contact details For personal use only CHIEF EXECUTIVE OFFICER Mr. Derek Smith CHIEF FINANCIAL OFFICER Mr. Neil Verdal-Austin Address Level 3, 20 Clarke Street Crows Nest NSW 2065 Australia Telephone +61 (2) 9467 0400 Website www.somnomed.com.au 22