Surgical Innovations Group Plc · LSE:SUN
Surgical Innovations — H1 2016 Earnings Presentation
17 slides from Surgical Innovations's earnings presentation, August 2016
Slide 1: Interim Results
Interim Results For the six months ended 30 June 2016 Nigel Rogers – Executive Chairman Melanie Ross – Group Finance Director & MD (SI Ltd) “…robust trading performance……commitment to R&D.......moved to net cash at bank position......strong relationships.........focus on niche med-tech” August 2016
Slide 2: What We Do
What We Do Surgical Innovations Group plc specialises in the design, manufacture and sale of innovative devices for use in minimally invasive surgery (MIS) We distribute branded products through a global network of trusted partners The Group designs and develops medical solutions for carefully selec
Slide 3: Highlights
Highlights • Healthy revenue growth led by exports • Further margin gains through volume and productivity • Returned to profitability at operating level • Strong cash generation – moved to net cash position at bank • Inventory reduced within target range • Continued investment in new products
Slide 4: Financials – Income statement
Financials – Income statement 2016H1 2015H1 2015 £m £m £m Revenue 3.04 2.60 5.47 Revenues up 16.9% Cost of sales (2.23) (2.38) (4.70) Gross profit 0.81 0.22 0.77 Gross margin of 26.6%% in H2 (up from 19.2% in Other operating expenses (0.78) (2.05) (2.74) 2015H2) Adjusted EBITDA 0.50 (0.05) 0.24 Exce
Slide 5: Export-led revenue growth
Export-led revenue growth 3.5 Revenues by destination (£m) 3 2.5 RoW (up 23%) 2 Europe (down 3%) 1.5 UK (up 11.7%) 1 US (up 35.5%) 0.5 0 2015H1 2016H1
Slide 6: Revenues by segment (£m)
Revenues by segment (£m) 3.5 3 2.5 Precision Engineering 2 OEM 1.5 1 SI brand 0.5 0 2015H1 2016H1
Slide 7: Productivity gains
Productivity gains Net inventory (£m) Gross margin (% of revenues) 5 40 4.5 35 Target range 4 30 3.5 3 25 Actual 2.5 20 2 15 1.5 Target range 10 1 0.5 5 0 0 Dec-14 Jun-15 Dec-15 Jun-16 2015H1 2015H2 2016H1
Slide 8: Financials – Cash flows
Financials – Cash flows 2016H1 2015H1 2015 £m £m £m Cash flows from operating activities Operating profit/(loss) 0.03 (1.83) (1.97) Exceptional items - 1.33 1.15 Depreciation & amortisation 0.47 0.49 0.93 Other - (0.04) (0.05) Operating cash flows before movements in working capital 0.50 (0.05) 0.06
Slide 9: Financials – Cash flows (continued)
Financials – Cash flows (continued) 2016H1 2015H1 2015 £m £m £m Net cash generated from operations 1.77 0.60 1.51 Cash flows from investing activities (0.25) (0.20) (0.45) Capex on tangible FA (0.05) (0.04) (0.17) Capitalised development costs (0.20) (0.16) (0.28) Cash flows from financing activitie
Slide 10: Bank position switched to net cash
Bank position switched to net cash 2012 2013 2014 2015 2016H1 1 0.5 Net debt down to (0.72m) 0 -0.5 -1 -1.5 -2 -2.5 -3 -3.5 -4
Slide 11: Financials – Balance Sheet
Financials – Balance Sheet Jun 2016 Dec 2015 Jun 2015 £m £m £m Tangible fixed assets 1.62 1.83 1.95 Intangible assets 1.36 1.36 1.48 Trade receivables - - - Total non-current assets 2.98 3.19 3.43 Inventories 1.28 1.91 2.86 Trade receivables 0.89 1.30 0.80 Other current assets 0.59 0.39 0.32 Trade &
Slide 12: Innovation
Innovation • The YelloPort Elite • Product Development Roadmap – Internally generated development – Factoring of products • Precision Engineering – further development of existing partnership
Slide 13: Current trading & prospects
Current trading & prospects Current trading • Second half revenue to date has continued to grow above industry trend • Productivity gains yet to show through fully – will do so by end of year • Regulatory approval of new products imminent Prospects for FY16 & beyond • Industry trend CAGR of 6.5% for
Slide 14: Growth opportunities
Growth opportunities Geographical expansion • US market (currently 1/3rd of revenues) – progressing well and benefiting from strong dollar • APAC – renewed vigour in relationship with regional distributor Product portfolio • New product launches on track for 2016 H2 • Close links with OEM and Precis
Slide 15: Appendices
Appendices | _~® a " Surgical : ( Qe
Slide 16: Board of Directors
Board of Directors • Nigel Rogers (Executive Chairman) – 20 years experience as CEO of AIM-listed engineering businesses. Now committed to portfolio of NED/Chairman appointments • Prof. Mike McMahon (NED and Clinical Lead) – founder/director, leading Laparoscopic Surgeon • Melanie Ross (Group FD and
Slide 17: Financials – R&D spend
Financials – R&D spend Jun 2016 £m Unamortised amount b/f 1.36 R&D spend incurred in period 0.44 R&D charged directly to P&L (0.24) Amortisation charge (0.20) Unamortised amount c/f 1.36
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