Somnomed Limited · ASX:SOM
Somnomed — FY2023 Earnings Presentation
43 slides from Somnomed's earnings presentation, August 2023
Slide 1: Investor Presentation: Full Year 2023 Results and Capital Raising
Investor Presentation Full Year 2023 Results and Capital Raising August 2023 Treatment focused. Technology driven.
Slide 2: SomnoMed's vision and mission
SomnoMed’s vision and mission Our vision is to lead in the treatment of patients suffering from obstructive sleep apnea and relevant adjacent conditions Our mission is to advance the adoption, acceptance and treatment of oral sleep apnea therapies by medical specialists, dentists, patients and insur
Slide 3: Agenda
Agenda 1. FY23 highlights 2. Rest Assure® connected technology 3. Financial information 4. Strategic outlook 5. Capital raising © August 2023 SomnoMed 3
Slide 4: FY23 highlights
FY23 highlights
Slide 5: FY23 financial highlights
FY23 financial highlights1 Total revenue Cash A$83.6m2 EBITDA3 A$12.0m +15% vs FY22 and in line with A$2.1m revised guidance 30 June 2023 Increased product gross Drawn debt of $17.6 North America +22% vs FY22 margin to 72% million as at Europe2 EBITDA3 in-line with 30 June 2023 +12% vs FY22 guidance
Slide 6: FY23 strategic & operational highlights
FY23 strategic & operational highlights • Developed all Rest Assure® validation and verification testing for a 510k FDA regulatory filing in the United States • Continued to invest in technical engineering and software teams to be ready to manufacture and commercialise Rest Assure® once approvals ar
Slide 7: Capital raising to accelerate growth and support balance sheet strength
Capital raising to accelerate growth and support balance sheet strength • Fully underwritten capital raising of A$15.5 million which comprises: • An institutional placement (“Placement”) to raise approximately A$2.5 million Capital raising to • A pro rata accelerated non-renounceable 1 for 3.82 enti
Slide 8: Strategic growth outlook
Strategic growth outlook Advance the acceptance and adoption of technology enabled OAT solution for OSA patients FY24 Guidance Operational Initiatives Strategic Objectives FY2027 aspiration2 • Revenue growth of at least • Drive medical initiative • Remain patient centric and • Over 1.5 million patie
Slide 9: Rest Assure
Rest Assure ® SomnoMed’s technology-enabled oral appliance
Slide 10: What are the barriers to prescription for OAT?
What are the barriers to prescription for OAT? A Key barriers to prescribing OAT ▪ Currently physicians don’t know if a patient is wearing their oral appliance device or if it’s effectively treating the patient's OSA Lack of night-time monitoring ▪ Patients, physicians and dentists have never had th
Slide 11: Rest Assure - all night, every night data for OAT
Rest Assure® - all night, every night data for OAT Rest Assure® Addressing a key difference to CPAP SomnoMed's technology enabled oral appliance: Oral appliances have lacked overnight monitoring, unlike • Enables patients, physicians and sleep dentists to CPAP, leading to: better understand and moni
Slide 12: Rest Assure technology – how does it work?
® Rest Assure technology – how does it work? Smart oral appliance and cloud-based infrastructure SOM algorithms determine AHI1, graphs, tables Patient app Smart oral appliance with sensors recording overnight data. Physician portal Patient docks their device after Raw data transferred via night’s sl
Slide 13: Rest Assure commercial readiness
® Rest Assure commercial readiness SomnoMed’s extensive testing and operational readiness activities are de-risking the commercial rollout of Rest Assure® Delivered in FY22: Delivered in FY23: FY24 focus: • Patent strategy was finalised • First production run of 400+ devices for • US FDA 510K submis
Slide 14: Financial information
Financial information
Slide 15: Solid growth profile despite tough trading conditions
Solid growth profile despite tough trading conditions +15% $83.6m • Solid revenue recovery out of COVID-19 pandemic with 13% +16% CAGR since FY20 $72.6m +9% • Total patients treated now exceeds 810,000, up 43% from 565,000 (3%) $62.7m in 2020 $58.9m $57.3m • Revenue and patient growth reflective of
Slide 16: Total regional revenues
Total regional revenues North America Europe APAC $35m $50m +12% $7m +22% 47.3 +13% $45m $30m $6m 6.1 30.2 $40m 42.2 5.4 $25m $35m $5m 24.7 $30m $20m +13% $4m +18% +8% $25m +11% 25.7 +28% +16% $15m 22.8 $3m 15.2 14.9 $20m 21.6 3.1 3.0 19.5 2.8 12.8 2.6 11.9 $15m $10m $2m $10m $5m $1m $5m $0m $0m $0m
Slide 17: EBITDA and margin analysis
EBITDA1 and margin analysis Group Gross Group Margins Gross Margin 60.0 $51.9m 50.0 $44.3m • EBITDA1 of $2.1m in line with guidance 40.0 30.0 • Gross margin grew by $7.6m vs FY22, reflecting increased revenues 20.0 $39.5m $46.4m driven by regional growth initiatives 10.0 • The MAS product gross marg
Slide 18: Profit and loss summary
Profit and loss summary A$m FY23 FY22 % change Revenue 83.6 72.6 +15% Gross margin 51.9 44.3 +17% Regional Sales & Marketing Expenses including: • $3.4m on sales and marketing resources to facilitate Regional sales & marketing expenses (24.5) (19.7) xx +24% the pre-launch of Rest Assure® and drive o
Slide 19: Cash flow summary
Cash flow summary Statement of cash flows Statutory Statutory Operating Activities: A$m 30 Jun 2023 30 Jun 2022 • $1.5m interest on $16m fully drawn loan from Epsilon Direct Lending to EBITDA(1) 2.1 1.3 reduce in FY24 as facility partially repaid by offer proceeds Movement in working capital & other
Slide 20: Strategic Outlook
Strategic Outlook
Slide 21: Significant addressable markets globally
Significant addressable markets globally Obstructive sleep apnea, a growing burden on the medical system affecting a significant portion of the population Obstructive sleep apnea (OSA) is a disorder that occurs when a person’s breathing is interrupted during sleep because the airway becomes blocked
Slide 22: Positioned for future growth
Positioned for future growth Technology driven Investment in the technology pathway to unlock true COAT™ potential Best in class service and technical support Growing and extensive sales and distribution footprint in both dental and medical channels Treatment focused Design and innovation driving pa
Slide 23: Growing the sector through positioning the patient's alternative
Growing the sector through positioning the patient’s alternative Leverage One Platform and Rest Intensified efforts to position Product COAT as an effective alternative to Assure® to influence all steps Development within the patient journey and CPAP as first line therapy; and Technology provide nig
Slide 24: Capital Raising
Capital Raisince rie cr’
Slide 25: Capital raising details
Capital raising details • $15.5m capital raising comprising an Institutional Placement to raise approximately $2.5m (“Placement”) and a 1 for 3.82 pro rata accelerated non-renounceable entitlement offer to raise approximately $13.0m (“Entitlement Offer”) • The Entitlement Offer comprises: Offer size
Slide 26: Use of funds and pro forma balance sheet
Use of funds and pro forma balance sheet Use of funds breakdown Statement of financial position Statutory Impact of Capital Use of Funds A$m Pro forma 30 Jun 2023 Raise Category A$m Cash and cash equivalents 12.0 4.5 16.5 Inventories 4.1 1.0 5.1 Pay down a portion of the Epsilon Direct Lending Facil
Slide 27: Timetable
Timetable Event Date (2023) Trading halt - Placement and Institutional Entitlement Offer opens Thursday, 31 August Placement and Institutional Entitlement Offer closes Friday, 1 September Trading halt lifted, trading resumes on an ex-entitlement basis Monday, 4 September Record date for the Entitlem
Slide 28: Key Risks
Key Risks
Slide 29: Key Risks
Key Risks Key risk Description Specific investment risk There can be no guarantee that SomnoMed’s products will continue to be successful in the market nor that SomnoMed will continue to receive significant revenues from the sale of its products or services. Unexpected expenses or Changes affecting
Slide 30: Key Risks
Key Risks Key risk Description Specific investment risk There is a risk of security breaches of data (whether that of SomnoMed’s or that of its clients) by unauthorised access, theft, destruction, loss of information or misappropriation or release of confidential customer data. Any data security Cyb
Slide 31: Key Risks
Key Risks Key risk Description General Investment Risks Non-renounceable The Entitlement Offer is non-renounceable, and shareholders will not be able to transfer or trade Entitlements on ASX or in private sales. Investors who do not participate in the Entitlement Offer, or do not take up all of thei
Slide 32: Foreign Selling Jurisdictions
Foreign Selling Jurisdictions
Slide 33: Offer Restrictions
Offer Restrictions This document does not constitute an offer of new ordinary shares (“New Shares”) of the Company in any Other than in the entitlement offer, the New Shares may only be offered or sold in New Zealand (or jurisdiction in which it would be unlawful. In particular, this document may no
Slide 34: Important Notices and Disclaimer
Important Notices and Disclaimer
Slide 35: Important Notices and Disclaimer
Important Notices and Disclaimer The following notice and disclaimer applies to this investor presentation (Presentation) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any information contained in this Presentation. By accepting,
Slide 36: Important Notices and Disclaimer
Important Notices and Disclaimer Effect of rounding A number of figures, amounts, percentages, estimates, calculations of value and fractions in this Presentation are subject to the effect of rounding. Future performance and forward looking statements This Presentation contains certain "forward-look
Slide 37: For further information please contact
For further information please contact: Corporate Investors Mr. Neil Verdal-Austin Mr. Howard Marks CEO SomnoMed Automic Markets +61 406 931 477 +61 402 438 019 Nverdal-austin@somnomed.com Howard.marks@automicgroup.com.au © August 2023 SomnoMed 37
Slide 38: Appendix
Appendix
Slide 39: Impact on control from TDM sub-underwriting
Impact on control from TDM sub-underwriting Background information to assess the potential impact of the Offer on control Based on publicly available information as at the date of this presentation, the Company’s largest shareholder is TDM which holds 26.96% of the Company’s Shares. TDM has pre-comm
Slide 40: Ownership of the Company following completion of the Offer
Ownership of the Company following completion of the Offer Ownership of the Company following completion of the Offer The potential effect that the issue of the New Shares will have on the control of the Company, and the consequences of that effect, will depend on a number of factors, including: • t
Slide 41: Underwriting Agreement Summary
Underwriting Agreement Summary Underwriting agreement Wilsons Corporation Finance Limited (Wilsons) is acting as sole lead manager and underwriter of the Placement and Entitlement Offer (together, the Offer). SomnoMed has entered into an underwriting agreement with Wilsons in respect of the Offer (A
Slide 42: Underwriting Agreement Summary
Underwriting Agreement Summary p) (insolvency event) any insolvency event occurs in respect of SomnoMed or any of its subsidiaries (together, the Group). q) (facility agreement) the facility agreement to amend the existing covenants under the Epsilon Facility as described under the slide “Use of fun
Slide 43: Underwriting Agreement Summary
Underwriting Agreement Summary gg) *(change in law) there is introduced, or there is an official public announcement of a proposal to introduce, into the Parliament of Australia or any State of Australia a new law, or the Reserve Bank of Australia, or any Commonwealth or State authority, adopts or a