Surgical Innovations Group Plc · LSE:SUN
Surgical Innovations — FY2022 Earnings Presentation
22 slides from Surgical Innovations's earnings presentation, March 2023
Slide 1: Year End 2022 Investor Presentation
1 Year End 2022 Investor Presentation David Marsh, CEO Charmaine Day, CFO
Slide 2: Company Overview
Company Overview Design & Manufacturing Focus on Minimally Founded By Prof. Michael McMahon, Expertise In Innovative Invasive Surgery (MIS) Leading Laparoscopic Surgeon Surgical Devices Leading The Change Direct Sales In The UK & Global Strong Industry Partnerships, To Sustainable Distribution Throu
Slide 3: Our Mission
Our Mission To provide high- performing medical devices for surgeons leading to improved clinical outcomes for patients, with a focus on sustainable instrumentation to make a positive impact on the environment. 3
Slide 4: Commercial & Operational Highlights
Commercial & Operational Highlights
Slide 5: Commercial & Operation Highlights
Commercial & Operation Highlights Strong sales in UK, Japan and Investment in sales and Capex investment driving key EU markets marketing driving commercial efficiencies & cost reduction opportunity through manufacturing Geographical Expansion NPD & cost reduction Regulatory *Medical investment Devi
Slide 6: Addressing Headwinds In 2022
Addressing Headwinds In 2022 Challenge Actions Current Position 4-day week trial, loyalty Stabilised retention of key Recruitment and retention of incentives and increased personnel key personnel financial packages in line with Cost of living rises continues to industry norms create wage inflation p
Slide 7: Market Environment - UK
Market Environment - UK Elemental Sales 6 • Sales growth up 29.5% over 2021 (+20.7% vs. 2019) 5 • New account conversions underpinned by Revenue £'m 4 sustainability driving growth 3 • Investment in key Sales & Marketing positions enhancing relationships in NHSSC* 2 and private sector 1 • Growth con
Slide 8: Market Environment - USA
Market Environment – USA • Overall Sales down 6.8% USA Sales ‒ Elective surgery reduced by Q1 Covid 2 ‒ Evaluations hindered by ongoing hospital 1.8 staff shortages 1.6 Access Devices: Revenue £'m 1.4 • H2 deliveries improved on disrupted H1 1.2 (supply chain) 1 • YelloPort™ Elite 5mm and Optical tr
Slide 9: Market Environment - EU, APAC & ROW
Market Environment – EU, APAC & ROW Europe APAC RoW 1.5 1 0.8 Revenue £'m Revenue £'m Revenue £'m 0.6 1 0.5 0.4 0.5 0.2 0 0 0 2019 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022 • Strong return to growth, +28% • Continued growth up 24.6% • Sales remain suppressed vs. 2019 • Sustainability re
Slide 10: Market Environment - OEM Business
Market Environment – OEM Business OEM Sales • Strong sales growth up 45% 2 • Collaboration with CMR to develop YP Elite opens opportunity within 1.5 robotics and new territories Revenue £'m • Ongoing supply chain issues disrupted 1 sales to partners in Q1 0.5 • Strong order book for Q2 0 2019 2020 2
Slide 11: Sustainability Initiatives
Sustainability Initiatives Environmental & Financial Calculator: • Provides healthcare providers with a tool to demonstrate the value of Resposable® technology • Evidence based approached, quantifying our value proposition Strategy: • Revised training programme for our partners • Developing relation
Slide 12: New Product Developments
New Product Developments Successful 2022 Product Launches: • YelloPort Elite® 5mm – addresses demands of Robotic surgery and key markets • 5mm Optical Trocar range – completes offering in key target markets 2023 NPD Projects (under MDR): • Cost down initiatives on YelloPort Elite® range • Extension
Slide 13: Compliance & Regulatory
Compliance & Regulatory • Ongoing investment in personnel and processes Impact of extension to MDR timeline Current MDR Status: • CE certification under MDD* is • QMS1 approved extended only to companies on MDR pathway • One of three product groups approved • Raises barrier to market for new • Secon
Slide 14: Capex Investments
Capex Investments 2022 Key Investment Projects • Improving overall efficiency • Increasing capacity to bring more manufacturing in-house • Investment in tooling and plant enabling cost down initiatives • Rolling Capex investment • In conjunction with Capex, introducing upskilling programmes within t
Slide 15: Financials
Surgical Group Plc
Slide 16: Financial Highlights
Financial Highlights Change vs. prior 2022 2021 comparative Revenues £11.34m +24.3% £9.13m Underlying Gross Margin 42.5% +0.2% 42.3% Adj. EBITDA1 £0.70m +0.20m £0.50m Adj. operating profit/(loss)1 £0.01m +0.14m £(0.33)m Adj. earnings /(loss) per share (pence)1 0.036p +0.058p (0.022)p Increased inves
Slide 17: Revenue Analysis
Revenue Analysis Revenue FY comparative £'m 12.00 • SI Brand sales increased by 15.6% to £5.56m 10.00 4.04 3.11 8.00 • Distribution sales showing strong growth 3.12 and representing a larger proportion of 1.79 1.74 6.00 overall revenue 2.31 1.20 4.00 0.61 • OEM sales have grown overall up by 45% 5.8
Slide 18: Margin Analysis
Margin Analysis Gross Margin Analysis 2022 2021 • Underlying gross margin within target range £’m £’m Revenue 11.34 9.13 • Manufacturing overhead rates uplifted to reflect the cost increases Cost of Sales (6.53) (5.27) Underlying Gross Margin 4.82 3.86 • Inflationary pressures from suppliers mitigat
Slide 19: Operating Expenses
Operating Expenses Underlying operating expenses1 £'m 4500 • Increased investment in sales and 4000 marketing to support the growth 14.8% of revenue (2021: 14.6%) 3500 3000 • 10.3% of revenue invested into 2500 research expenses (2021: 10.7%) 2000 • Improved employee compensation 1500 and wellbeing
Slide 20: Financial Position
Financial Position 31 Dec 2022 31 Dec 2021 £’m £’m • Increased capital expenditure to Tangible assets 1.78 1.20 £0.66m, further commitment in 2023, Intangible assets 6.40 6.22 circa £0.50m Total non-current assets 8.18 7.41 • Continual investment in R&D Inventories 3.16 2.96 Trade receivables 1.76 1
Slide 21: Summary & Outlook
Summary & Outlook • Significant regulatory progress on MDR • Responsive management to supply chain and inflationary challenges • Continued investment improving efficiencies and cost out initiatives • Order book in line with management expectations for 2023 • Strong sales growth in 2022 and a return
Slide 22: Thank You For Your Time, Any Questions?
22 Thank You For Your Time, Any Questions?
Surgical Innovations Group — FY2022 Earnings Presentation on 6ix