Euroeyes International Eye Clinic Limited · HKEX:1846
Euroeyes International Eye Clinic — FY2021 Earnings Presentation
42 slides from Euroeyes International Eye Clinic's earnings presentation, March 2022
Slide 1: EuroEyes 2021 Annual Results Presentation
EuroEyes International Eye Clinic Limited 2021 Annual Results Presentation
Slide 2: Disclaimer
Disclaimer This presentation is for reference purposes only. This presentation is prepared by EuroEyes International Eye Clinic Limited (“EuroEyes” or “the Group”) for business communications and general reference of the Group and shall not constitute in whole or in part any offer to purchase or sub
Slide 3: 2021 Company Performance Overview
2021 Company Performance Overview 3
Slide 4: 2021 Overview – Strong Momentum
2021 Overview – Strong Momentum Total Revenue Adjusted Gross Profit Adjusted Net Profit After Tax +48.2% YoY 33.6% YoY 48.2% YoY +94.4% YoY HK$ 632,931,000 HK$ 317,393,000 HK$ 137,278,000 50.1% Margin 21.7% Margin 632,931 50.1% 21.7% 45.2% +33.6% 42.1% 317,393 473,818 429,692 +48.2% 14.9% 137,278 +1
Slide 5: Patient Payment Method - Focus on Consumer Market
Patient Payment Method - Focus on Consumer Market EuroEyes’ revenue all comes from patients’ out of pocket payment. No government health insurance is covered, thus we are not affected by change of government insurance policy. 5
Slide 6: Rapid Growth in Specialized Lens Surgeries
Rapid Growth in Specialized Lens Surgeries Revenue by Type of Surgery 2021 Lens surgeries: 66.7% (+2.7 p.p YoY) of total surgery revenue 6-Time World Champion The Most Zeiss Trifocal Lenses Exchange Surgeries Worldwide Refractive Laser Surgery 33.4% Lens Exchange Surgery 52.2% European Champion ICL
Slide 7: Rapid Growth in Specialized Lens Surgeries
Rapid Growth in Specialized Lens Surgeries Revenue of Phakic Lens (ICL) Surgery Revenue of Lens Exchange Surgery (in thousands of HKD) (in thousands of HKD) 89,394 323,777 +30.9% +42.4% 68,291 227,386 58,918 201,088 +15.9% +13.1% 2019 2020 2021 2019 2020 2021 Lens surgeries include Phakic Lens (ICL)
Slide 8: Adjusted Net Profit Margin Increased by Higher Capacity Utilization in 2021
Adjusted Net Profit Margin Increased by Higher Capacity Utilization in 2021 Number of Surgery Capacity Utilization Rate Adjusted NPAT Margin 26,282 26.2% 21.7% 21.7% +14.5% +65.2% 26.2% +15.6% 26,282 23.2% 137,278 20.0% 14.9% 21,640 +12.9% 19,664 11.7% +21% +94.4% 70,614 50,283 +40.4% 2019 2020 2021
Slide 9: Acquisition of London Vision Clinic
Acquisition of London Vision Clinic 9
Slide 10: We Finished the Largest Acquisition since IPO
We Finished the Largest Acquisition since IPO Founded in Location Completion consideration Harley Street 2002 London £ 13,130,000 + Earn out payment £ 21,197,985 at maximum Refractive Surgery Clinic Private Clinic Outpatient Surgery High-end Market Maximum Consideration £ 34,327,985 Subject to the C
Slide 11: Sellers Agreed on Ambitious Growth for Earn-Out
Sellers Agreed on Ambitious Growth for Earn-Out Earn-Out Scenario Revenue Target EBIT Target (in thousands of GBP) (in thousands of GBP) +10% +32% 14,641 6,151 13,310 12,100 4,921 11,000 10,000 3,645 2,700 2,000 2021E 2022E 2023E 2024E 2025E 2021E 2022E 2023E 2024E 2025E HK$ HK$ HK$ HK$ HK$ HK$ HK$
Slide 12: Significant Revenue and EBIT Scale-up through Acquisition
Significant Revenue and EBIT Scale-up through Acquisition Estimated Revenue 2021 Estimated EBIT 2021 (in thousands of HKD) (in thousands of HKD) For the year ended 31 December 2021 For the year ended 31 December 2021 +16.9% +11.2% 739,831 632,931 212,642 191,262 Before transction Post transaction Be
Slide 13: Founder and Key Surgeon - Professor Dan Reinstein
Founder and Key Surgeon - Professor Dan Reinstein No. 1 Expert in Laser Eye Surgery A Pioneer in Corneal Laser Surgery Inventor of PRESBYOND® Laser Blended Vision World-renowned Research Scientist and Lecturer 13
Slide 14: Synergies
Synergies Access to UK Refractive Market Expand business to a new first tier city worldwide, access to the UK refractive surgery market; Further improve EuroEyes’ market position in refractive surgery. pe roo. Enlarge EuroEyes’ Patient Group of 40+ PRESBYOND® Laser Blended Vision will enable EuroEye
Slide 15: EuroEyes 2025 – Strategy Update
EuroEyes 2025 – Strategy Update 15
Slide 16: Reasons for Strategy Upgrade
Reasons for Strategy Upgrade We have upgraded our strategy since we entered the post-pandemic era: ▪ New clinics ▪ New consultation centres ▪ Enter new market Organic Growth Capacity Utilization Mergers & Acquisitions ▪ Increasing number of patients ▪ Accelerate speed in mergers & ▪ Improvement of c
Slide 17: PRC – Six-Year Growth
PRC – Six-Year Growth Revenue Growth of China Growth Drivers ▪ Increasing number of populations with high demand for eye care services; Improved personal income level and living standards - consumption upgrade; 149,012 expansion of high-net-worth group 35.8% ▪ More advanced equipment and expanding s
Slide 18: PRC – Continuously Improved Profitability with Optimized Operation
PRC – Continuously Improved Profitability with Optimized Operation EBITDA Growth Advertising and Marketing Expense Ratio 54,199 43.9% 16% 37,599 26,159 9% 9% 2019 2020 2021 2019 2020 2021 (in thousands of HKD) 18
Slide 19: PRC – Organic Growth with New Clinics
PRC – Organic Growth with New Clinics Despite the COVID-19 pandemic, we managed to open two new clinics in 2021 -- Chongqing and Chengdu We are pushing forward the clinic expansion to new cities, and expecting to accelerate the progress when the pandemic is eased Chengdu clinic - Located in high-end
Slide 20: PRC – New Consultation Centres
PRC – New Consultation Centres Plan to build two consultation centers in Beijing and Shanghai respectively near the existing clinics In lease contract negotiation Beijing Location Shanghai Location 20
Slide 21: PRC – New Surgeons Training
PRC – New Surgeons Training New Local Surgeons We continuously improve our internal training system and have been training new Chinese surgeons to perform laser surgeries. Dr. Emily He Dr. Ellen Yao Dr. Mike Zhong 21
Slide 22: Organic Growth – Consultation Center
Organic Growth – Consultation Center Our existing consultation centers have an EBIT margin of more than 60% Consultation center model: ▪ Small outpatient practice in a retail area without surgical unit ▪ Consultation and examinations take place in the center Small premise ▪ EuroEyes showroom Consult
Slide 23: Organic Growth – Consultation Center Model (Average Germany)
Organic Growth – Consultation Center Model (Average Germany) EUR 110,000 revenue 100,000 ▪ Referral of more than 5 patients/month will deliver additional EBIT margin of 90,000 75% 80,000 ▪ Consultation Centers next to existing EE 70,000 clinics will cause a rise in Capacity Utilization Rate 60,000 t
Slide 24: Germany – New Premium Consultation Center in Baden-Baden
Germany – New Premium Consultation Center in Baden-Baden Baden-Baden ▪ A spa town in southwestern Germany’s Black Forest, famous worldwide as a spa and culture town and a top-class reputation for healthcare ▪ We have finalized the lease contract, and is in sketch designing ▪ Aged population (avg. 47
Slide 25: New Clinic Pipeline
New Clinic Pipeline City Country Site selection Lease contract signing Design confirmation Construction Trail operation Chengdu Clinic March 2022 Beijing Consultation Centre Shanghai Consultation Centre Wiesbaden Clinic Second half of 2022 Baden-Baden Consultation Centre Q4 / 2022 Kiel Clinic Q4 / 2
Slide 26: Strategy in Mergers & Acquisitions
Strategy in Mergers & Acquisitions Target acquisition of "Famous privately owned eye clinics“ ▪ Achievement of bundled scientific/clinic know-how to EuroEyes ▪ Branding of EuroEyes as the eye clinic group managed and (partly) owned by leading ophthalmologist ▪ Easier recruitment of ophthalmologist ▪
Slide 27: Strategy in Mergers & Acquisitions
Strategy in Mergers & Acquisitions Target acquisition of "Famous privately owned eye clinics“ ▪ Win founder/owners for EuroEyes ▪ Grant them clinical autonomy ▪ Set business targets by ambitious revenue/EBIT goals for Earn-Out ▪ Deal-size in the same range as LoVC 27
Slide 28: Strategy in Global Organic Growth
Strategy in Global Organic Growth Global Chinese Market remains our strategic focus ▪ Growing EuroEyes branding awareness among Chinese people both in China and overseas ▪ Large base of Chinese customers living in Europe (London 100,000, Paris 500,000) ▪ Word of mouth and patient referrals among fri
Slide 29: Strategic Purchasing Management
Strategic Purchasing Management Company Purchasing Price of Primary Medical Supplies We signed a new 4-year deal with one of our primary medical supplies : ▪ Fixed the prices for the surgery-related consumables (lenses, codes, Hyalin) globally ▪ Discount of 35% for the latest equipment needed for th
Slide 30: 2021 Financial Overview
EUroEyes 2021 Financial Overview 30
Slide 31: Six-year Financial Growth of EuroEyes
Six-year Financial Growth of EuroEyes Revenue Adjusted Net Profit After Tax (in thousands of HKD) (in thousands of HKD) 632,931 21.7% +19.4% +52.5% 473,818 429,692 14.9% 137,278 397,394 12.8% 11.7% 325,956 260,943 70,614 6.4% 6.7% 50,885 50,283 16,643 21,888 2016 2017 2018 2019 2020 2021 2016 2017 2
Slide 32: 2021 Financial Performance – Strong Momentum
2021 Financial Performance – Strong Momentum Total Revenue Adjusted Gross Profit Adjusted Net Profit After Tax +48.2% YoY 33.6% YoY 48.2% YoY +94.4% YoY HK$ 632,931,000 HK$ 317,393,000 HK$ 137,278,000 50.1% Margin 21.7% Margin 632,931 50.1% 21.7% 45.2% +33.6% 42.1% 317,393 473,818 429,692 +48.2% 14.
Slide 33: Revenue country-by-country
Revenue country-by-country Revenue in Germany Revenue in the PRC Revenue in Denmark HK$404,032,000 HK$149,012,000 HK$79,887,000 +32.6% YoY +37.8% YoY +31.1% YoY 404,032 +32.6% 149,012 304,788 265,240 +37.8% 113,475 +14.9% 108,114 79,887 -4.7% 60,916 50,977 +31.1% +19.5% 2019 2020 2021 2019 2020 2021
Slide 34: Revenue Drivers
Revenue Drivers Organic Growth of Revenue Outperformance of Price Increase in total surgery numbers ICL and Lens Exchange Surgeries ICL and Lens Exchange Surgeries 21.5% YoY 39.7% YoY 8.4% YoY Increase of total number of Overproportional growth of ICL Price Increase realized eye surgeries performed
Slide 35: Double-Digit Gross Profit Growth year for year over the last six years
Double-Digit Gross Profit Growth year for year over the last six years Adjusted Gross Profit Margin 50.1% 45.2% 42.1% 317,393 40.5% 35.5% 32.6% +30.1% 214,100 180,959 161,100 115,733 85,119 2016 2017 2018 2019 2020 2021 35
Slide 36: Continuous Decline in Cost of Sales Ratios
Continuous Decline in Cost of Sales Ratios Salaries & Doctor’s Fees Raw Materials & Consumables 20.9% 20.2% 19.8% 17.4% 16.4% 14.9% 2019 2020 2021 2019 2020 2021 Depreciation Others 11.5% 9.6% 8.8% 6.6% 6.3% 5.1% 2019 2020 2021 2019 2020 2021 36
Slide 37: Declined Sales Expense with Effective Word-of-mouth Strategy
Declined Sales Expense with Effective Word-of-mouth Strategy Sales Expense 14.0% 9.7% 60,209 8.5% 53,767 46,044 2019 2020 2021 37
Slide 38: Adjusted Net Profit After Tax
Adjusted Net Profit After Tax Reasons for Profit Increase Adjusted Net Profit After Tax (in thousands of HKD) Profitability Enhancement 21.7% ▪ Improvement of utilization rate with increasing number of surgeries +52.5% ▪ Strategically focused on ICL surgeries and lens exchange surgeries which have h
Slide 39: Key Take-Aways
Key Take-Aways New Normal Strong internal Huge growth in Next to outperformed organic growth profitability come Revenue Revenue Growth of 33.6% achieved Adjusted NPAT Growth of New clinics in pipeline HK$ mil 633 94.4% YoY +33.6% YoY Perfect Business Constellation: New consultation centres - Organic
Slide 40: Thank You For Your Attention!
Thank You For Your Attention! 40
Slide 41: 2021 Overview – Key Financial Data
2021 Overview Key Financial Data in 2021 The Year ended 31 December 2021 2020 2019 Change YoY HKD‘000 HKD‘000 HKD‘000 % Revenue 632,931 473,818 429,692 33.6% Cost of Sales (320,413) (259,718) (251,971) 23.4% Gross Profit 312,545 214,100 177,721 46.0% Gross Profit Margin (%) 49.4% 45.2% 41.4% 4.2 p.p
Slide 42: Non-IFRS Adjustments
Non-IFRS Adjustments The Year ended 31 December 2021 2020 2019 2018 2017 2016 HK$‘000 HK$‘000 HK$‘000 HK$‘000 HK$‘000 HK$‘000 Revenue 632,931 473,818 429,692 397,394 325,956 260,943 Reported gross profit 312,545 214,100 177,721 161,100 85,119 115,733 Adjustment – Share-based compensation expenses 4,
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