Adheris Health Limited · ASX:AHE
Adheris Health — FY2021 Earnings Presentation
40 slides from Adheris Health's earnings presentation, Aug 30, 2021
Slide 1: FY21 Results presentation
Global leader in mymedadvisor.com digital medication adherence solutions FY21 Results presentation 30 August 2021 MedAdvisor Limited ABN 17 145 327 617
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER This presentation is dated 30 August 2021 and has been prepared by MedAdvisor Limited ABN 17 145 327 617 (MedAdvisor or the Company) for information purposes only. This presentation is not an offer or invitation to acquire securities in MedAdvisor and is not a disclos
Slide 3: FY21 Results Agenda
FY21 Results Agenda 01 MedAdvisor Overview 04 Operational Review - US 02 FY21 Financial Review 05 Strategy & Outlook 03 Operational Review - Au 06 Q&A Robert Read Simon Glover Chris Ridd Managing Director & CEO CFO Chairman 3
Slide 4: We are passionate about improving the way medications are managed
MedAdvisor FY2021 Financial Results Your health in your hands We are passionate about improving the way medications are managed Improving healthcare outcomes by giving people back control of their medications through simplicity, convenience & education
Slide 5: About Us & Strategic Overview
MedAdvisor FY2021 Financial Results About Us & Strategic Overview MedAdvisor is directly addressing the global problem of medication non-adherence which is a US$630b p.a (1) problem, costing 125,000 lives in the US every year (2) Leveraging unique medication data and insights, with access to patient
Slide 6: MedAdvisor has expanded beyond Australia
MedAdvisor FY2021 Financial Results MedAdvisor has expanded beyond Australia Founded and developed in Australia and focusing on growing in the US & UK markets Corporate Overview1 195 $38.8m Employees globally FY21 Operating Revenue (2) 2.0m+ Digitally Connected 27% Patients in Au Like-for-Like Growt
Slide 7: FY21 has changed the shape of the business
MedAdvisor FY2021 Financial Results FY21 has changed the shape of the business Transformational year with a significant acquisition providing scale and opportunity in the world’s largest medicines market (1) 01 Take MedAdvisor Global 1. Acquisition of Adheris (Nov 2020) in USA 2. Launched in the UK
Slide 8: FY21 Built a strong distribution foundation with attractive unit economics
MedAdvisor FY2021 Financial Results FY21 Built a strong distribution foundation with attractive unit economics OP ERAT I NG REV ENUE AU ARR L T V P ER P HARM ACY • 65%+ market share in Au with reach of ~2m patients can drive significant revenue from patient reach and $38.8m $6.6m $34k + 2 7 % YO Y +
Slide 9: FY21 Results Review
“I have multiple prescriptions which are difficult to manage. MedAdvisor allows me to order all the outstanding items from home at any time...and communicate with the pharmacist for access to diabetes items like needles and strips. It makes it much easier for both myself and my pharmacist.” --Felici
Slide 10: Revenue
Revenue MedAdvisor FY2021 Financial Results FY21 Revenue shows like-for-like growth of 26.7%, with recovery in Adheris on back of new programs and investment in sales post-acquisition Reported Revenue ($M AUD) 1, 2 Like-for-Like Revenue ($M AUD) 3,4 $M A U D $M A U D 50 50 45 + 3 03.9% 45 43.1 + 26.
Slide 11: Revenue
MedAdvisor FY2021 Financial Results Revenue Adheris has seen a strong recovery in revenue in FY21 following the acquisition in November 2020 Adheris revenue FY18 to FY21 ($M USD)- full financial year • US revenue step down FY19 to FY20 due to -46.8% 43.8 patent expiration for several high volume 43.
Slide 12: AU revenue driven by SaaS base supported by strong fundamentals
MedAdvisor FY2021 Financial Results MedAdvisor AU revenue driven by SaaS base supported by strong fundamentals, with growing contribution from digital programs MedAdvisor Australia revenue FY18 to FY21 (AUD $M) • FY21 growth impacted by sales resource +6.5% $m +11.9% constraints. New EGM Sales & Mar
Slide 13: Gross Margin
Gross Margin MedAdvisor FY2021 Financial Results MedAdvisor has a high AU gross margin, US gross margin of ~ 46% has significant scope to increase MedAdvisor AU gross LFL US gross margin $M LFL annual gross margin margin $M (AUD) & % (AUD) & % $M (AUD) & % $M AUD GM % $M AUD GM % $M AUD GM % 30 90 3
Slide 14: Overheads
Overheads MedAdvisor FY2021 Financial Results Medadvisor operating costs of $36.2m adjusted for acquisition and related costs, up 12.5% on a like-for-like basis Reported and like-for-like operating costs Comments: $M AUD • Operating costs on an underlying basis up 12.5% 45 + 12.5% +23.0% year-on-yea
Slide 15: Overheads
Overheads MedAdvisor FY2021 Financial Results MedAdvisor opex of $36.2m after one-offs and acquisition costs, up from $32.2m on a like-for-like basis FY21 like-for-like operating costs ($M AUD) by type Comments: $M AUD • FY21 opex impacted by acquisition and +12.5% associated one-off restructuring c
Slide 16: EBITDA
EBITDA MedAdvisor FY2021 Financial Results FY21 EBITDA on a like-for-like basis of $12.6m loss before non-recurring costs Reconciliation of EBITDA FY20 FY21 ($M AUD) Comments: -1.2 -3.2 • EBITDA adjusted for lease payments results in a loss of $12.6m • Gross margin uplift of $2.4m reflects a margin
Slide 17: FY21 Cashflow reflects acquisition of Adheris and required funding
FY21 Cashflow reflects acquisition of Adheris and required funding; underlying cashflow for Q3-Q4 is ~ $1.5m to $1.8m outflow FY21 reconciliation of cash $M AUD • Operating cashflow inclusive of lease payments of 12.3 ($13.5m) impacted by timing of receipts by key 7.2 13.5 6.6 0.1 customers ($6.6m)
Slide 18: Operational Review - Au
“I was forever forgetting to take medicines and running out and getting stuck. This never happens anymore.” - Saskatoon (Australia) 02 / Operational Review - Au Robert Read Managing Director & CEO
Slide 19: MedAdvisor's Australian model is centred around the patient
MedAdvisor FY2021 Financial Results MedAdvisor’s Australian model is centred around the patient MedAdvisor is a free app for patients, revenue comes from pharmacies and pharmaceutical companies of Revenue from Pharmacy of Revenue from pharmaceutical companies 88% Each patient on MedAdvisor adds on a
Slide 20: MedAdvisor is solving the non-adherence problem through its patient centric solutions
MedAdvisor FY2021 Financial Results MedAdvisor is solving the non-adherence problem through its patient centric solutions Medication data powers solutions to help patients directly or via healthcare practitioner (HCP) Our Platform Helping Patients & Pharmacists MedAdvisor impacts adherence by 20%+ P
Slide 21: MedAdvisor has delivered some important milestones in Australia
MedAdvisor FY2021 Financial Results MedAdvisor has delivered some important milestones in Australia Growing the network, investing in R&D to improve our products for our customers ✓ Recent pharmacy roll outs and wins including API (Priceline) in July, to add 65% ~250 stores and additional patients i
Slide 22: Australian market is fragmented, MDR has taken a leading market share
MedAdvisor FY2021 Financial Results Australian market is fragmented, MDR has taken a leading market share Consolidated way to engage with patients and pharmacies in Australia Market Size Existing Reach Pharmacy Customers Pharma Customers 3700+ Pharmacies & Groups 25+ Companies 5,750 3,700 Pharmacies
Slide 23: Australian product evolution is driven by investments in R&D in FY21
MedAdvisor FY2021 Financial Results Australian product evolution is driven by investments in R&D in FY21 MDR invests heavily in a capable team of 40+ innovating & releasing frequent new product updates • App rebuild. Allowing simplified code base and faster and more responsive Free to patient design
Slide 24: Operational Review - US
03 / Operational Review - US “MedAdvisor has helped me get my HbA1c down from 9.7 to 6.1 by reminding me to take my insulin on time and check my blood glucose level during my busy day. It is so easy to use. This app has extended my life.” - Paul (Australia)
Slide 25: Overview of Adheris when we bought it?
MedAdvisor FY2021 Financial Results Overview of Adheris when we bought it? Highlights • Operating for ~30 years, Adheris had become the industry standard for delivering adherence programs delivered at 180m Patients scale, with precision measurement. • Large scale platform with ability to reach ~180m
Slide 26: Operational initiatives were designed to return Adheris to growth
MedAdvisor FY2021 Financial Results Operational initiatives were designed to return Adheris to growth, whilst laying the digital foundations for accelerated profitability from 2023 Delivered 34% like-for-like revenue growth from core business. Positive customer reaction to innovation agenda First 6
Slide 27: Potential size of the US awareness and adherence market is significant
MedAdvisor FY2021 Financial Results Potential size of the US awareness and adherence market is significant Opportunities to grow strongly in large TAM for Adherence and Awareness (DTC) through existing network Revenue Source Estimated Market Size Why & How • Pharma estimated to be spending USD $1.9b
Slide 28: MedAdvisor's strategic priorities for the US to drive profitable growth
MedAdvisor FY2021 Financial Results MedAdvisor’s strategic priorities for the US to drive profitable growth Digital roll out is the "catalyst", allowing MedAdvisor to leverage predictive analytics to change the revenue model, boost margins and increase the addressable market Adheris Standalone Strat
Slide 29: Strategy & Outlook
05 / Strategy & Outlook “Before I downloaded the app, I was always losing my scripts. I would place my scripts in a special spot and then I would forget where that special spot was. Now I can hit re-fill and my carer can pick up the scripts for me.” - Gail (Australia)
Slide 30: Digitalisation: Initial milestone of 40m+ patients digitally accessible in the US
MedAdvisor FY2021 Financial Results Digitalisation: Initial milestone of 40m+ patients digitally accessible in the US expected to be reached by December 2021 A digital patient in the US, behaves in a consistent manner to app patients in Australia Now Dec 31 2021 Stores Est. Digital Patients Stores E
Slide 31: Dynamic Engagement, driving new revenue model & increased margins
MedAdvisor FY2021 Financial Results Dynamic Engagement, driving new revenue model & increased margins in the USA expected to start in CY22 Leverages Adheris’ predictive analytics, sophisticated modelling & AI to target the right message to the right patient, in the right frequency via the optimal ch
Slide 32: MedAdvisor expanding into the UK
MedAdvisor FY2021 Financial Results MedAdvisor expanding into the UK Founded in Australia and expanding to UK, similar market 3x the Au market UK key growth opportunity – SaaS led, then ~14,000 programs opportunity • MedAdvisor’s leading SaaS solution to a market 3x Au, with attractive market dynami
Slide 33: Guidance remains unchanged for H1 FY22 and months to December 2021
MedAdvisor FY2021 Financial Results Guidance remains unchanged for H1 FY22 and 12 months to December 2021 Revenue Outlook $55-57m $55-57m+ Revenue $30m+ 12 months to Dec 21 H1 FY22 Gross Margin ~55% Gross Margin • MDR re-affirms guidance of $55-57m for 12 months to December 2021. • Consolidated grou
Slide 34: Management Team and Board of Directors
MedAdvisor FY2021 Financial Results Management Team and Board of Directors Over 70+ years of combined healthcare and technology experience Executive Team Robert Read John Ciccio Simon Glover Wayne Marinoff Ruba El Afifi Jamal Butt CEO & Managing Director CEO USA CFO EGM Sales & Marketing Chief Opera
Slide 35: Analyst Pack
Analyst Pack mymedadvisor.com
Slide 36: FY21 MedAdvisor Australia performance providing foundation for growth
MedAdvisor FY2021 Financial Results FY21 MedAdvisor Australia performance providing foundation for growth Pharmacy network Patients (m) Annual Recurring Revenue 3,566 3,672 2.0 6.3 6.6 3,297 1.7 3,099 5.4 4.5 1.2 1.1 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 Lifetime Value/CAC1 Chu
Slide 37: Working capital cycle favourable and cash generative
MedAdvisor FY2021 Financial Results Working capital cycle favourable and cash generative Working capital for Adheris programs as Reconciliation of Current Liabilities at 30 June 2021 ($M USD) as at 30 June 2021 ($M USD) Days sales Days payables outstanding: outstanding: 23.3 76 days1 126 days2 0.4 4
Slide 38: FY21 Revenue shows like for like growth of 26.7% on like-for-like basis
MedAdvisor FY2021 Financial Results FY21 Revenue shows like for like growth of 26.7% on like-for-like basis • Total Revenue growth of 263.8%, 25.6% (LFL) • Operating revenue is up 303.8% (26.7% LFL) due to strong performance by Adheris during the year, particularly in Q4 • Other revenue reflects R&D
Slide 39: Cashflow statement
MedAdvisor FY2021 Financial Results Cashflow statement • Total cash receipts $37.9m, +$27.8m • Underlying cash outflow from operations impacted by timing of debtors ($6.6m), subsequent to year end this issue has been resolved. • R&D receipt of $1.2m received • Proceeds from capital raise, $45.1m and
Slide 40: FY21 Balance sheet
MedAdvisor FY2021 Financial Results FY21 Balance sheet Appendix Year Ended 30 June 2021 ($000) FY21 FY20 $ Var • Cash balance of $7.2m , down from $12.3m due to timing of debtor receipts ($6.6m). This debtor was Cash & cash equivalents 7,151 12,345 (5,194) received in Q3 and new payment arrangements