Paragon Care Limited · ASX:PGC
Paragon Care — FY2019 Earnings Presentation
26 slides from Paragon Care's earnings presentation, Sep 2, 2019
Slide 1: Full Year Results Presentation FY19
Full Year Results Presentation FY19
Slide 2: Paragon is at a value inflection point
Paragon is at a value inflection point The continuing Strong top line growth: Headline revenue growth rate 5% on a pro-forma basis (excluding Total business remains Communications only a half year contribution) strong Seasonality reduced: Improvement in half year seasonality evidences strong bui
Slide 3: Acquisitions are starting to demonstrate significant organic growth
Acquisitions are starting to demonstrate significant organic growth Devices Capital & Consumables Eye care $46.7m REM $41.9m Revenue up 12% pcp systems NZ Revenue pcp up 6% Eye care is comprised of 3 businesses The acquisition of REM Systems in July FY19 strategically acquired between FY15 - FY18 re
Slide 4: Financial performance
1 Financial performance 2 Strategy 3 Transformation update and outlook Paragon Care Limited (ASX:PGC) 4
Slide 5: Strong continuing business performance in 2019
Strong continuing business performance in 2019 Revenue EBITDA NPAT EPS Continuing $236.1m $28.2m $8.8m1 2.7c Operations +101% +28% -37% down from 8.9c Statutory $256.7m $24.7m $(14.4)m (4.5)c +88% +36% down from $10.9m down from 5.4c Notes: 1. The drop in NPAT is driven by an $8m increase in D&A; wh
Slide 6: Continuing business of each Paragon vertical performed strongly
Continuing business of each Paragon vertical performed strongly Devices ~$76m 9.0% Revenue of each vertical continues to grow Diagnostics ~$23m 4.4% Capital & ~$120m 2.8% Consumables Services ~$17m 4.7%1 Notes: 1. Excluding Total Communications, if included growth rate for Services was -6.6%
Slide 7: FY19 results reflect a strong, underlying business in transition
FY19 results reflect a strong, underlying business in transition Statutory Group total revenue and EBITDA up reflecting acquisitions and continuing business performance Group total net loss after tax of $14.4m, reflecting performance of discontinued and divested businesses Earnings per share o
Slide 8: Strategy
1 Financial performance 2 Strategy 3 Transformation update and outlook Paragon Care Limited (ASX:PGC) 8
Slide 9: Growing our share in a ~A$9bn industry
Growing our share in a ~A$9bn industry Australia and New Zealand ~$9bn >4% 3 Industry continues to grow, driven by strong tailwinds per year Total market opportunity1,2 +3% 4 Increasing proportion of total population over 64 ~$4.5bn Paragon’s current core +4% 5 Increasing proportion of chronic disea
Slide 10: Broadly winning share in key Paragon verticals
Broadly winning share in key Paragon verticals 2019 market share1,2 7.9% 5.1% 3.3% 2.4% Devices Diagnostics Capital and Services Consumables Paragon revenue $77m $23m $120m $17m (FY19 continuing business) Core target sizes1 ~$1,500m ~$700m ~$1,500m ~$700m Paragon growth (FY19 continuing business) 9.
Slide 11: Paragon's strategy on a page
Paragon’s strategy on a page Mission To achieve category leadership in focus areas to be ANZ’s leading supplier of healthcare & vision equipment and integrated services Organic growth rate EBITDA margin Customer NPS Employee NPS FY21 goals 7%+ 12%+ +5 y.o.y +5 y.o.y Where to play Grow with leading E
Slide 12: Where to play: Achieve category leadership with attractive portfolio
Where to play: Achieve category leadership with attractive portfolio …With high road product suite Key thematic: …In large & growing Practitioner led, differentiated therapeutic areas… products command higher margins and deeper practitioner relationships Look for category Key thematic: Growth and un
Slide 13: Where to play: Transitioning to higher margin, high road products
Where to play: Transitioning to higher margin, high road products PGC portfolio evolution towards high road products Low road Middle road High road Commodity products ‘Middle ground’ products – historically Proprietary technology products with Procurement led spend generating favourable marg
Slide 14: How to play: Repeatable growth model enabled by agility and scale
How to play: Repeatable growth model enabled by agility and scale Break in to sell products to a new customer Excellent service provided to the customer embeds relationship; proactively identify further A B customer needs New customers C Provide complimentary and Achieve proprietary products through
Slide 15: Paragon's strategic growth initiatives
Paragon’s strategic growth initiatives Initiative Levers for execution 1 Add new customers in priority Laser-like focus on targeting large and attractive deals, leveraging appropriate senior capacity to close Target lucrative profiles and serve with excellence through strong in field support the
Slide 16: Strategic initiatives mapped for each of Paragon's business units
Strategic initiatives mapped for each of Paragon’s business units Capital and Devices Diagnostics Consumables Services Lab Electro- Ophthalmic Orthopaedics IVD equipment Consumables diagnostic Services International Top-line Add new customers growth Depth of wallet Add new leading products Margin Pr
Slide 17: Using our agility and scale to win share and add new products
Using our agility and scale to win share and add new products STRATEGY IN ACTION Newly formed product committee focused on customer needs Sourcing capability in full swing 31 new products added in FY19 Numerous Devices 9 Identified gaps suppliers Redefined Extensive available customer call customer
Slide 18: Devices business vertical – transition towards premium products
Devices business vertical – transition towards premium products STRATEGY IN ACTION Having mapped the strategic …PGC is already seeing benefits from initiatives…. implementing these initiatives Strategic initiatives for the group How to win: Building a world-class sales culture Sales management cou
Slide 19: Transformation update and outlook
1 Financial performance 2 Strategy 3 Transformation update and outlook Paragon Care Limited (ASX:PGC) 19
Slide 20: Paragon is nearing the end of a significant transformation period
Paragon is nearing the end of a significant transformation period FY18 FY19 H2 FY20 Clear need for Transformation Strong future integration programme underway outlook PGC had completed 16 acquisitions A whole of business transformation Synergies from transformation in 5 years, creating corporate and
Slide 21: The transformation programme is made up of three key categories
The transformation programme is made up of three key categories Paragon’s transformation pillars Business and Standard work, Single operational product review and progression platform Consistent best-in-class culture, Streamlined portfolio focused on Cost out – from 14 to 1 IT playform processes and
Slide 22: Paragon successfully delivered against the plan set out for FY19
Paragon successfully delivered against the plan set out for FY19 FY19 progress (completed) FY20 outlook Business and Divestment of legacy capital equipment Continued focus and addition of high margin product review business after strategic review products Formed product committee Ongoing rev
Slide 23: $6.5m cost out over next 18 months on track with clear path forward
$6.5m cost out over next 18 months on track with clear path forward Approximate Area for improvement Improvement opportunity cost reduction • Consolidate the ‘silo’ management structure and rationalise middle management to suit a more focussed and integrated Excess management layer team ~ $1.2m • In
Slide 24: Corporate overview
Corporate overview Share price performance (A$) Board of Directors 1.0 Shane Tanner Andrew Just (appointed 31 May Non-Executive Chairman 2018) Chairman of Zenitas Healthcare, Managing Director 0.8 Rhythm Biosciences Limited and 25 years’ experience across Fortune Cronos 500 and ASX-listed health
Slide 25: Disclaimer
Disclaimer Some of the statements in this presentation constitute “forward-looking statements” that do not directly or exclusively relate to historical facts. These forward-looking statements reflect Paragon Care Limited’s current intentions, plans, expectations, assumptions and beliefs about future
Slide 26: Andrew Just Chief Executive Officer and Managing Director
Andrew Just Chief Executive Officer and Managing Director P: 1 300 369 559 E: andrew.just@paragoncare.com.au Paragon Care Limited (ASX:PGC) 26