Nanosonics Limited · ASX:NAN
Nanosonics — Shareholder Meeting (November 2018)
42 slides from Nanosonics's shareholder meeting presentation, Nov 9, 2018
Slide 1: 2018 Annual General Meeting
Nanosonics Limited 2018 ANNUAL GENERAL MEETING 9 November 2018
Slide 2: Board of Directors
BOARD OF DIRECTORS Maurie Stang Steven Sargent Michael Kavanagh Non-Executive Chairman Non-Executive Director CEO and President and Deputy Chairman David Fisher Marie McDonald Richard England Non-Executive Director Non-Executive Director Non-Executive Director Nanosonics Limited 2018 Annual General
Slide 3: Chairman's review: R&D, installed base, shareholder return
/ Revenue ($m) INVESTMENT IN R&D ($M) “I have been told repeatedly [by Joint GLOBAL INSTALLED BASE Commission surveyors] that it [trophon] 17,740 17,740 9.9 9.5 is the gold standard for maintaining 14,160 7.3 patient and user safety.” 10,130 Raleigh White, Director of Imaging Services, Hutchison Reg
Slide 4: 2018 Annual General Meeting - CEO & President
Mr. Michael Kavanagh CEO & President 2018 ANNUAL GENERAL MEETING 9 November 2018
Slide 5: 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, financial or
Slide 6: Senior Leadership Team
SENIOR LEADERSHIP TEAM Michael Kavanagh McGregor Grant Gerard Putt Dr. Steven Farrugia Leanne Baxendale Ralf Schmähling Ken Shaw CEO and President CFO and Company Chief Operations Officer Chief Technology Officer Head of People Country Manager – Regional President Secretary and Culture Germany Ameri
Slide 7: We have come a long way but the real journey is only beginning
NANOSONICS R&D CHEMISTRY Nanosonics has built the MICROBIOLOGY “We have come a infrastructure and capability long way but the to be a world leader REGULATORY real journey is in infection prevention MANUFACTURING only beginning.” QUALITY Michael Kavanagh CEO & President CLINICAL MARKETING GEOGRAPHICA
Slide 8: Expanding Global Presence
EXPANDING UK Nanosonics direct Saudi Arabia Exploring distributor GLOBAL PRESENCE North America operation in place and growing. Guidelines now in place in partnership for market entry Nanosonics direct England, Scotland, operation with over 54 people. GE Wales and Northern Qatar Ireland. Distributor
Slide 9: Our Mission
OUR MISSION WHY We improve the safety of patients, clinics, their staff and the environment … by transforming the way infection prevention HOW practices are understood and conducted… and introducing innovative technologies that WHAT deliver improved standards of care.
Slide 10: Corporate Objectives
CORPORATE CUSTOMER EXPERIENCE OBJECTIVES Establish our offerings as new standards of care globally and provide customers a convenient, seamless and consistent experience with both product and brand. PRODUCT INNOVATION Supporting our Create and bring to market a portfolio of innovative and quality Mi
Slide 11: trophon
TROPHON® The trophon® is an automated system that delivers effective, efficient and safe high level disinfection of ultrasound probes The latest innovation in ultrasound probe trophon® Consumables Accessories high level disinfection. Key Features • Highly effective in killing bacteria, fungi and vir
Slide 12: Simply Smarter
Simply Smarter High Level Disinfection for Ultrasound Probes Nanosonics Limited 2018 Annual General Meeting
Slide 13: Smart Protection: trophon2
SMART PROTECTION trophon2 delivers protection for patients, staff and the environment – reduces risk SMART FLEXIBILITY Streamlines set-up, can be customised Tap into the to your workflow and has extensive probe latest innovation compatibility – improves efficiency in ultrasound SMART FUNCTIONALITY p
Slide 14: What People Are Saying About trophon
WHAT PEOPLE ARE SAYING ABOUT “trophon is so quick and easy to TROPHON use that it’s just an easy addition to the end of the scan and doesn’t add any time.” Sue Rogers, Ultrasound Manager, Ascot Radiology, New Zealand. “I have been told repeatedly [by Joint Commission surveyors] that it [trophon] is
Slide 15: Replacement/Upgrade Opportunity
REPLACEMENT/ Replacement/upgrade expected after 5-7 years UPGRADE Age distribution of global Installed Base at June 2018 OPPORTUNITY 25 20 Significant replacement/ 15 upgrade 10 opportunity as installed base 5 ages and new 0 generation Age 1yr 2 yrs 3 yrs 4 yrs 5 yrs 6 yrs 7 yrs 8 yrs devices are in
Slide 16: trophon Now Delivers a Total Reprocessing Solution
TROHON NOW “You can clean without disinfecting, but DELIVERS A TOTAL REPROCESSING CLEAN you cannot disinfect without cleaning.” SOLUTION Dr. Earle Spaulding trophon2 trophon now DISINFECT delivers a total reprocessing solution – STORE not just high level disinfection. TRACE INTEGRATE Nanosonics Limi
Slide 17: FY18 Highlights
FY18 – HIGHLIGHTS • Global installed base increased 25% to 17,740 units. “The 2018 financial year – North America up 26% to 15,620 units. has been a year of – EMEA up 49% to 730 units. – Asia Pacific/Middle East up 9% to 1,390 units. ongoing achievement • Fundamentals for ongoing adoption of trophon
Slide 18: Installed Base
INSTALLED BASE Global 17,740 14,160 Global installed base up 6,250 10,130 +25% 3,960 2014 2015 2016 2017 2018 Global installed North America 15,620 base grew 25% to 12,400 North America installed base up 17,740 units 3,000 5,000 8,700 +26% 2014 2015 2016 2017 2018 EMEA 730 EMEA installed base up +49
Slide 19: Fundamentals for Adoption Strengthen Internationally
FUNDAMENTALS European society of Radiology (ESR) FOR ADOPTION • High level disinfection required for all semi-critical procedures and STRENGTHEN automated system presented as preferred option. INTERNATIONALLY In FY18 the British Medical Ultrasound Society (BMUS) • HLD and use of sterile sheath requi
Slide 20: FY18 Financial Results Review
FY18 FINANCIAL RESULTS REVIEW
Slide 21: Nanosonics Revenue Profile
RANGE OF SELLING MODELS 1 Direct Channel Distribution Channel Managed Full Service Capital Capital Sale equipment service Rental Distribution Reseller Market • Capital equipment sold • Nanosonics provides • Customer rents capital • Distributor purchases • Distributor purchases upfront with 12 month
Slide 22: Revenue
REVENUE • Revenue of Capital Revenue ($M) $60.7 million reflects: 39.3 • Transitionary reduction in Sales Revenue ($M) capital revenue associated 25.5 with the earlier than anticipated regulatory 35.2% approval of trophon2 and 67.5 subsequent run down 60.7* of trophon EPR inventory FY17 FY18 by dist
Slide 23: Revenue Mix by Region
REVENUE MIX North America BY REGION Total Revenue ($M) Capital Revenue ($M) Revenue associated with consumables/service ($M) 62.3 54.4 37.5 30.3 24.1 24.8 22% Revenue mix FY17 FY18 FY17 FY18 FY17 FY18 demonstrates strong growth in EMEA sales associated Total Revenue ($M) Capital Revenue ($M) Revenue
Slide 24: Operating Expenses
OPERATING Operating Operating Expense Expense ($M)($M) FY18Quarterly FY18 Quarterly Operating Operating Expense Expense ($M) ($M) EXPENSES 42.6* 42.6* 37.0 37.0 32.1 32.1 Continued investment in our growth strategy, 22.8 including an increase 19.7 22.8 in headcount by 36% to 19.7 12.8* 225 employees
Slide 25: Profit Before Tax, Free Cash Flow and Cash
PROFIT BEFORE TAX Profit Before Tax ($M) 13.9 13.9 5.6 5.6 0.1 (2.6) (5.5) 0.1 (2.6) (5.5) 2014 2014 20152015 2016 2016 2017 2017 2018 2018 Reduction in Profit Before Tax reflects growing investments in our strategic growth agenda plus transitionary impact of reduction in Capital Sales associated wi
Slide 26: Growth Strategies
GROWTH STRATEGIES Expand trophon usage Geographic expansion Product expansion Regional highlights | North America www.nanosonics.com.au in existing markets Establish trophon as standard of care Entry into new markets with trophon Continued investment in R&D where we for all semi-critical probes acro
Slide 27: Significant Global Market Opportunity
SIGNIFICANT GLOBAL MARKET OPPORTUNITY Installed Base Opportunity Market Penetration Cumulative Installed Base 17,740 • Increasing number of international guidelines requiring high level Global 15% 14,160 disinfection (HLD) supporting growing international demand. 120,000 • Nanosonics expanding its f
Slide 28: New Product Development
NEW PRODUCT Continued investment in R&D where we are building a pipeline of new product opportunities DEVELOPMENT with the goal of introducing a range of new products over time commencing with the first by the end of FY20 (subject to regulatory approval). Investment in R&D ($M) 13.0* Significant R&D
Slide 29: Business Outlook: FY19 and Beyond
BUSINESS OUTLOOK FY19 BEYOND FY19 Nanosonics expects: Nanosonics expects: • Continued growth in installed base in North America with FY19 adoption similar to FY18. • Continued growth in trophon installed base in all core markets as new • GE North America to rebuild inventory of capital equipment. gu
Slide 30: Thank you
Thank you
Slide 31: Formal Business
Formal Business 2018 ANNUAL GENERAL MEETING 9 November 2018
Slide 32: Resolution One
Resolution One RE-ELECTION OF A DIRECTOR: RESOLUTION MR STEVEN SARGENT That Mr Steven Sargent, who retires by rotation as a Director pursuant to the Company’s Constitution and, being eligible, offers himself for re-election, be re-elected a Director. Steven Sargent
Slide 33: Resolution One - Proxy Votes
Resolution One RE-ELECTION OF A DIRECTOR: MR STEVEN SARGENT RESOLUTION PROXY VOTES RECEIVED That Mr Steven Sargent, who retires by rotation as a Director pursuant to the Company’s Constitution and, being eligible, offers himself for re-election, be re-elected Votes for 140,869,663 Against 250,307 a
Slide 34: Resolution Two
Resolution Two RE-ELECTION OF A DIRECTOR: RESOLUTION MS MARIE MCDONALD That Ms Marie McDonald, who retires by rotation as a Director pursuant to the Company’s Constitution and, being eligible, offers herself for re-election, be re-elected a Director. Marie McDonald
Slide 35: Resolution Two - Proxy Votes
Resolution Two RE-ELECTION OF A DIRECTOR: MS MARIE MCDONALD RESOLUTION PROXY VOTES RECEIVED That Ms Marie McDonald, who retires by rotation as a Director pursuant to the Company’s Constitution and, being eligible, offers herself for re-election, be re-elected Votes for 140,727,121 Against332,280 a D
Slide 36: Resolution Three
Resolution Three REMUNERATION REPORT RESOLUTION That the Remuneration Report for the financial year ended 30 June 2018 be adopted.
Slide 37: Resolution Three - Proxy Votes
Resolution Three REMUNERATION REPORT RESOLUTION PROXY VOTES RECEIVED That the Remuneration Report for the financial year ended 30 June 2018 be adopted. Votes for 139,491,054 Against702,249 Discretion797,976 Abstained/Excluded1,186,068
Slide 38: Resolution Four
Resolution Four ISSUE OF 33,003 RESOLUTION PERFORMANCE RIGHTS That approval be given for all purposes under the TO THE CHIEF EXECUTIVE Corporations Act 2001 (Cth) and the ASX Listing Rule 10.14 OFFICER AND PRESIDENT, for the issue of 33,003 Performance Rights to Mr Michael MR MICHAEL KAVANAGH, Kavan
Slide 39: Resolution Four - Proxy Votes
Resolution Four ISSUE OF 33,003 PERFORMANCE RIGHTS TO THE CHIEF EXECUTIVE OFFICER AND PRESIDENT, MR MICHAEL KAVANAGH, PROXY VOTES RECEIVED UNDER THE 2018 SHORT Votes for 134,164,596 TERM INCENTIVE SCHEME Against5,978,631 (2018 STIS) Discretion1,616,542 Abstained/Excluded417,578 RESOLUTION That appro
Slide 40: Resolution Five
Resolution Five ISSUE OF 20,900 RESOLUTION PERFORMANCE RIGHTS That approval be given for all purposes under the AND 286,885 OPTIONS Corporations Act 2001 (Cth) and the ASX Listing Rule 10.14 TO THE CHIEF EXECUTIVE for the issue of 20,900 Performance Rights and 286,885 OFFICER AND PRESIDENT, Options
Slide 41: Resolution Five - Proxy Votes
Resolution Five ISSUE OF 20,900 PERFORMANCE RIGHTS AND 286,885 OPTIONS TO THE CHIEF EXECUTIVE OFFICER AND PRESIDENT, PROXY VOTES RECEIVED MR MICHAEL KAVANAGH, UNDER THE 2018 LONG- Votes for 134,267,772 TERM INCENTIVE SCHEME Against 5,882,955 INVITATION (2018 LTIS) Discretion 1,569,742 Abstained/Excl
Slide 42: Questions?
Questions?