Nanosonics Limited · ASX:NAN
Nanosonics — FY2014 Earnings Presentation
33 slides from Nanosonics's earnings presentation, August 2014
Slide 1: Leader in Infection Control Solutions: 2014 Full Year Results
LEADER IN INFECTION CONTROL SOLUTIONS Improving the safety of patients, clinics, their staff and the environment 2014 Full Year Results Investor Presentation
Slide 2: 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. The information in this presentation, whether written or verbal, has been prepared without taking into account the commercial, financial or other needs o
Slide 3: Corporate Mission
Corporate Mission We improve the safety of patients, clinics, their staff and the environment by transforming the way infection prevention practices are understood and conducted, and introducing innovative technologies that deliver improved standards of care. Johns Hopkins Photo Credit: American Nur
Slide 4: Company Overview
Company Overview Proprietary automated system for low temperature, High Level Disinfection (HLD) ® First product, trophon EPR, for High Level Disinfection of ultrasound probes Approved for sale in most major markets including: US/Canada, ANZ, Europe, Singapore, HK, South Korea, Japan 110 Sta
Slide 5: Company Overview
Company Overview Top 10 Institutional Investors (31.4%)# Key Corporate Data Share price* $0.94 • Allan Gray Shares on issue 264.2 million • Kinetic Investment Partners • Fisher Funds Management Market capitalisation* $247 million • Goldman Sachs Asset Management Liquidity (30 day avg) 212,000 shares
Slide 6: 2014 Highlights
2014 Highlights New Agreement with GE Healthcare and GE Ventures in North America 40 of top 50 hospitals in US and over 1600 sites across United States adopting trophon New Regulatory approvals to support territory expansion Korea Japan New strategic partnerships in Europe Toshiba in U
Slide 7: 2014 Financial Results
2014 Financial Results $ million H1 H2 FY14 FY13 Highlights Operating Operating revenue up 44.3% 9.7 11.8 21.5 14.9 revenue Gross margin 65% vs 57% driven by Gross Profit 6.0 7.9 13.9 8.5 positive exchange impact, increased % 62% 67% 65% 57% EU/direct sales and higher proportion Other Income 0.8
Slide 8: 2014 Financial Results
2014 Financial Results Operating Expenses $ million $20.1 $16.4 $14.2 $13.5 Operating expenses of $20.1 $10.3 $9.6 million grew 22.6% compared to sales growth of 44.3% 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 2014 net loss down 55% to -$2.6 million -$2.6 Includes $1.5 millio
Slide 9: North America Highlights
North America Highlights FY14 sales of $17.7 million up 34% on FY13 $17.7 New GEHC and GEV agreement in place Sales $ million driving growth $13.2 Trophon now represented in 40 of the top $10.2 50 hospitals in and in over 1600 sites New guidelines from American Institute of Ultrasound in Med
Slide 10: European Highlights
European Highlights FY14 sales of $1.7 million, greater than five fold increase vs. FY13 UK primary driver of sales in the period with Sales $1.6 adoption of trophon in a number of key $ million hospitals Validation trials conducted in UK demonstrating efficacy of trophon. $0.4 Miele Profess
Slide 11: Australia / New Zealand Highlights
Australia / New Zealand Highlights Sales in ANZ grew 57% to $2.3 million $2.3 Australia’s largest medical imaging Sales $ million clinic network, I-MED, expanded $1.7 adoption nationally $1.5 Regulatory approvals for Korea & Japan received and commercialisation strategies in advanced stages of
Slide 12: 2014 Sales – All Regions Contributing
2014 Sales – All Regions Contributing 10% 2% 7% 11% 82% 88% North America ANZ Europe / Others 12
Slide 13: Market fundamentals continue to strengthen
Market fundamentals continue to strengthen
Slide 14: Growing Awareness of Imaging Procedure HAIs
Growing Awareness of Imaging Procedure HAIs Imaging procedure HAIs – a critical subset of HAIs that are not often discussed. 0.9 - 9% of barrier sheaths and condoms leak.1, A meta-analysis has shown that 12.9% of transducers are contaminated with pathogenic bacteria following routine disinfection.
Slide 15: trophon EPR Positioned to Meet Trends towards Automation and Stricter Reprocessing Controls
trophon EPR Positioned to Meet Trends towards Automation and Stricter Reprocessing Controls New American Institute of Ultrasound in Medicine (AIUM) guidelines released in May reinforce importance of high level disinfection and include a reference to trophon technology 15
Slide 16: trophon EPR Assists Compliance with Guidelines
trophon EPR Assists Compliance with Guidelines TJC Quick Safety 2014 identified Infection Control as one of the top five non-compliant TJC requirements1 In addition1 Of 13 immediate threat to life (ITL) discoveries from surveys conducted in 2013, seven were directly related to improperly steri
Slide 17: Proven Superior Efficacy of trophon EPR
Proven Superior Efficacy of trophon EPR A peer-reviewed publication reported on 59 different efficacy experiments at four different testing locations in Europe and Australia. Successful tests against 21 species of bacteria, fungi and viruses demonstrated the HLD efficacy of trophon EPR using multi
Slide 18: trophon EPR Simply Smarter Infection Control
trophon® EPR Sim p ly Sma rter Infec tio n c o ntro l 18
Slide 19: trophon EPR
trophon® EPR Fast Helps protect Consistent Probe friendly Fully enclosed system Probe friendly process. Fast automated high Quality assured limits exposure to Compatible with more level disinfection consistency harmful chemicals than 600 probe models Environmentally Friendly Cost Efficient Effective
Slide 20: Fast 7 Minute Cycle
Fast 7 Minute Cycle Preclean trophon® EPR Wipe/Print Label 7 minute \ Automated HLD cycle ORE BREE RRR Eee 20 j/ / Lie d 6, ¢ C >a <a woe LQQQe 4S {2 ~Ba PPE Preclean Test/Log Vented Soak Station PPE Rinse Rinse Rinse Wipe Log , . nanosonicS 20. (
Slide 21: Compatible With More Than 600 Probe Models
Compatible With More Than 600 Probe Models More than 600 probes approved to date Covers all major manufacturers Includes both intracavitary and surface probes 21
Slide 22: “…complete and safer protection for our patients and staff”
“…complete and safer protection for our patients and staff ” “The trophon EPR has been the biggest thing to hit ultrasound since colour Doppler. “trophon was an answered prayer! It has solved so many high level disinfection (HLD) issues while offering more complete and safer protection for our patie
Slide 23: trophon EPR Adoption Growing
trophon EPR Adoption Growing Penrose Hospital Colorado Springs, CO: 8 units across 3 departments purchased over 12 months Palo Alto Medical Foundation Palo Alto, CA: 9 units across 2 departments purchased over 3 months Hurley Medical Center, Michigan: 5 units across 2 departments purchased over 3 mo
Slide 24: Delivers “significant cost savings”
Delivers “significant cost savings” “It has also had a positive impact on patient confidence as they know the probe has been automatically reprocessed rather than manually cleaned. “While there is an additional cost required to implement the trophon EPR, versus the alternative HLD wipe system we loo
Slide 25: Potential to Leverage Platform Technology
Potential to Leverage Platform Technology Nanosonics has strong intellectual property with number of granted/accepted patents has doubled since April 2013 – from 47 to 95 Currently investigating a range of opportunities Company has capabilities to develop both technology and chemistry 25
Slide 26: Focussing on 5 Core Corporate Objectives
Focussing on 5 Core Corporate Objectives Establish our offerings as new standards of care globally and Customer Experience provide customers a convenient, seamless and consistent experience with both product and brand Create and bring to market a portfolio of innovative and quality Product Innovatio
Slide 27: Summary
Summary FY14 delivered strong growth with sales up 44% NLAT trending positively towards profitability with Net loss down 55% to 2.6 million Market fundamentals continue to strengthen with awareness and drivers for adoption increasing Europe now gaining traction after commencement of full ope
Slide 28: Appendix
Appendix nanosonics
Slide 29: The Need for Disinfection in Ultrasound
The Need for Disinfection in Ultrasound Ultrasound transducers must be reprocessed between patients to prevent cross-infection Any transducer that contacts broken skin, mucous membranes or sterile body cavities should be high level disinfected or sterilised1 Heat sensitive transducer construct
Slide 30: Traditional HLD Methods
Traditional HLD Methods Disinfection processes unchanged in 20+ years Existing methods have many shortfalls The traditional methods: soak, spray or wipe Chemical spills and vapour control present OH&S risks Probes often must be transported to a central sterilisation facility Pathogens may rema
Slide 31: Our Technology – Nano-Nebulisation for Low Temperature Disinfection
Our Technology – Nano-Nebulisation for Low Temperature Disinfection High frequency sonic vibration turns disinfecting liquid into nano-sized droplets “Nano” droplets disperse like a gas • Covers entire surface of object being disinfected NanoNebulant is a strong oxidising agent • Lethal to bac
Slide 32: Large and Accessible Market
Large and Accessible Market Addressable install base: ~120,000 trophon EPR units ~40,000 units in North America Equivalent sized markets in Europe and RoW NAN revenue potential >$300 million p.a.* Installed Base 120,000 units 5 year replacement cycle 4 disinfections cycles / trophon EP
Slide 33: Attractive Revenue Model
Attractive Revenue Model Multiple revenue streams: Up-front sales plus consumables, accessories and service contracts Accessories Trophon Consumables Service and maintenance contracts 35% 5% 45% 15% Figures refer to % of revenue Each unit sale results in robust annuity type revenue stream 33