Tristel Plc · LSE:TSTL
Tristel — Investor Presentation (July 2018)
38 slides from Tristel's investor presentation, Jul 17, 2018
Slide 1: Shareholder Open Day 17 July 2018
SHAREHOLDER OPEN DAY 17 JULY 2018 CHAIRMAN: FRANCISCO SOLER CHIEF EXECUTIVE: PAUL SWINNEY FINANCE DIRECTOR: LIZ DIXON
Slide 2: 2018 Global Revenue
2018 GLOBAL REVENUE £22.2M 99% INFECTION PREVENTION OTHER 1 of 18
Slide 3: Infection prevention business with global reach
Your company is an infection prevention business, and it is a global business. Our products play an important part in stopping the spread of infections in hospitals. We do this with a very powerful disinfectant called chlorine dioxide, the chemical symbol for which is ClO2. As you can see, 99% of ou
Slide 4: 2018 Revenue by Application
2018 REVENUE BY APPLICATION 80% MEDICAL INSTRUMENT DISINFECTION SURFACE DISINFECTION & OTHER 2 of 18
Slide 5: Three main uses for a disinfectant in hospitals
In a hospital, there are three main uses for a disinfectant: first, to disinfect medical instruments which is what we focus on and 80% of our revenues come this activity. The other applications are to disinfect surfaces, which we are involved in but to a far lesser extent, and to disinfect hands, wh
Slide 6: 2018 Revenue by Chemistry
2018 REVENUE BY CHEMISTRY 89% CHLORINE DIOXIDE OTHER 3 of 18
Slide 7: Chlorine dioxide is our proprietary chemistry
Chlorine dioxide is our proprietary chemistry. Even after twenty-five years we are still the only company in the world that uses chlorine dioxide for the high-level disinfection of medical instruments. 89% of our global sales come from products that use this very special chemistry. We are always ask
Slide 8: 2018 Revenue by Market
2018 REVENUE BY MARKET 89% HUMAN HEALTH ANIMAL HEALTH CONTAMINATION CONTROL 4 of 18
Slide 9: Hospital focus plus veterinary and contamination control markets
The hospital is where our business is focussed. This is where the medical instruments that we disinfect are mainly used. We have a presence in the veterinary market and in what we call the contamination control market, which means manufacturing facilities in the life sciences industry where very hig
Slide 10: ClO2 Wipes and Foams Share of Sales
2018 REVENUE: ClO2 WIPES + FOAM SALES AS A PERCENTAGE OF ALL ClO2 PRODUCT SALES 74% TM ULT TM OPH ClO2 WIPES + FOAMS ClO2 NON-WIPES + FOAMS 5 of 18
Slide 11: Trio and Duo wipes and foams
Whilst we use our chlorine dioxide chemistry in various formats: as soaking solutions and as sprays, it is the way in which we have been able to incorporate chlorine dioxide into wipes and foams to disinfect medical instruments that has been our great success story. We call our wipe and foam product
Slide 12: Multiple user sites in all hospitals worldwide
MULTIPLE USER SITES IN ALL HOSPITALS WORLDWIDE NASENDOSCOPE LARYNGOSCOPE ENDOCAVITY PROBE TONOMETER PRISM CLEFT PALATE INTUBATION ECTOPIC PREGNANCY GLAUCOMA EAR, NOSE & THROAT ACCIDENT & EMERGENCY ULTRASOUND OPHTHALMOLOGY DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT 6 of 18
Slide 13: Instruments requiring high-level disinfection
When we refer to medical instruments requiring high-level disinfection we mean those medical devices that enter the body to perform a diagnosis. These instruments will be found in departments like endoscopy and ultrasound, and in ophthalmology, cardiology and in A&E. They span a very wide assortment
Slide 14: Sales Growth History
22.2 SALES GROWTH HISTORY CAGR 17% - £MILLIONS 20.3 17.1 15.3 13.5 10.9 10.6 9.3 8.8 6.8 6.0 5.1 3.7 3.0 05 06 07 08 09 10 11 12 13 14 15 16 17 18 7 of 18
Slide 15: Sales grown from £3m to £22m since 2005
We have explained what we do and now we would like to look at our record. Since we went public in 2005 we have grown our sales from £3m to £22m, at an annual compound rate of 17% over a thirteen-year period.
Slide 16: International Sales Growth vs UK Sales Growth
51.3% INTERNATIONAL SALES GROWTH VS UK SALES GROWTH £MILLIONS UK SALES INTERNATIONAL SALES 05 06 07 08 09 10 11 12 13 14 15 16 17 18 8 of 18
Slide 17: Overseas sales growth accelerating
Back in 2005 almost all our sales were in the United Kingdom. A key achievement of the past thirteen years has been our expansion overseas and you can see from the chart that overseas sales have been growing far quicker than domestic sales – they have doubled in the past four years. In the year that
Slide 18: Strategic Objectives
STRATEGIC OBJECTIVES • LONG TERM SUSTAINABLE GROWTH IN SHAREHOLDER RETURNS • INVEST IN GAINING REGULATORY APPROVALS WHICH ENABLE US TO ENTER NEW GEOGRAPHICAL MARKETS AND EXPAND WITHIN EXISTING MARKETS • SALES GROWTH OF BETWEEN 10% AND 15% PER ANNUM, ON AVERAGE, OVER THREE YEARS • PBT MARGIN OF AT LE
Slide 19: Three-year financial plan to June 2019
When in October 2016 we revealed our three-year financial plan to take us to June 2019, we had just reported turnover growth of 12%, and a pre-tax profit margin of 19%. In our results announcement we informed our shareholders that we intended to begin a momentous project to seek approval by the FDA
Slide 20: Sales Growth Objective
SALES GROWTH OBJECTIVE £MILLIONS 15% GROWTH 10% GROWTH 2016-2017 17.1 20.3 22.2 25.3 16 17 18 19 (BROKERS FORECAST) 10 of 18
Slide 21: Third and final year of the plan
We are now entering the third and final year of the plan, with sales having increased on average by just under 15% in the first two years. The two lines on the chart show where sales would end up at the end of this financial year if we achieve the topend of our target, 15%, and the lower-end of our
Slide 22: Profitability Objectives
PROFITABILITY OBJECTIVES 23% 20% 17.5% 15% 15 16 17 18 PBT MARGIN REPORTED PBT MARGIN EXCLUDING USA INVESTMENT TARGET 11 of 18
Slide 23: US approval spend and underlying margin
We have spent £1.3m over the past four years on the United States approval programme, all of which has been expensed. Despite this considerable spend, the target we set out to attain, of at least a 15% profit margin, was so comfortably achieved in the first year that we increased it to 17.5% for the
Slide 24: Cash Use: Capital Expenditure, Acquisitions and Investments
CASH USE: CAPITAL EXPENDITURE, ACQUISITIONS + INVESTMENTS £MILLIONS 1.6 1.5 1.3 1.1 0.9 0.2 15 16 17 18 CAPITAL EXPENDITURE ACQUISITIONS & INVESTMENTS 12 of 18
Slide 25: Cash generative business investing in infrastructure
The business continues to be very cash generative. This has allowed us to continue to invest in the business infrastructure and acquire two of our long-standing distributors’ businesses which have subsequently contributed to sales growth.
Slide 26: Cash Use: Dividends
CASH USE: DIVIDENDS 1.82 £MILLIONS 1.52 1.36 1.24 1.27 0.8 15 16 17 18 (BROKERS FORECAST) STANDARD DIVIDENDS SPECIAL DIVIDENDS 13 of 18
Slide 27: Standard dividend policy and special dividends
Whilst we have been making these investments we have simultaneously been increasing our standard dividend year on year. At the 30th of June we held £6.7m in the bank. We have previously stated that if the Board feels there are no suitable opportunities for the investment of surplus cash then a speci
Slide 28: How can we continue to grow our business profitably?
HOW CAN WE CONTINUE TO GROW OUR BUSINESS PROFITABLY? • REPLICATE THE PENETRATION WE HAVE ACHIEVED IN OUR TARGETED CLINICAL AREAS IN THE UK, IN MULTIPLE MARKETS OVERSEAS • EXPAND OUR GLOBAL FOOTPRINT • FIND NEW CLINICAL AREAS TO TARGET – FOLLOW THE DEVICE! • EXTEND OUR REACH INTO SURFACE DISINFECTION
Slide 29: Four things to accomplish the goal
We must do four things to accomplish the goal: • Replicate the penetration we have achieved in our targeted clinical areas in the UK in multiple markets overseas • Expand our global footprint • Find new clinical areas and opportunities to target – follow the device! • Extend our reach into surface d
Slide 30: Replicate penetration achieved in UK in overseas markets
REPLICATE THE PENETRATION WE HAVE ACHIEVED IN OUR TARGETED CLINICAL AREAS IN THE UK, IN MULTIPLE MARKETS OVERSEAS UK GERMANY CHINA & HONG KONG AUSTRALIA NUMBER OF HOSPITALS IN 672 1,950+ 29,478 1,311 COUNTRY (PUBLIC & PRIVATE) 2018 SALES £6.1M £3.6M £0.3M £2.3M ClO2 WIPES & FOAMS MARKET PENETRATION
Slide 31: Replicating UK penetration in multiple markets overseas
Replicate the penetration we have achieved in our targeted clinical areas in the UK in multiple markets overseas. The table says it all I think. The UK, Germany and Australia are our largest and most developed markets in which we have set up our own direct sales teams. The range of regulatory approv
Slide 32: Expanding our global footprint, including the USA
EXPANDING OUR GLOBAL FOOTPRINT, INCLUDING THE USA SURFACES INCLUDING NON-CRITICAL DEVICES SEMI-CRITICAL DEVICES SURFACE DISINFECTANT WITH SPECIFIC CLAIMS HIGH-LEVEL DISINFECTANT EPA FEDERAL APPROVAL GRANTED IN Q4 FY2018 510(k) PREMARKET NOTIFICATION SUBMISSION EXPECTED DECEMBER 2018 STATE REGISTRATI
Slide 33: EPA and FDA regulatory paths in the United States
Expand our global footprint, including the United States To enter a market, we need two things: first, regulatory approval, and second a route through which we can sell our products. The stats I just gave you indicate just how much effort we are putting into expanding our global footprint; but the m
Slide 34: Find new clinical areas – follow the device
FIND NEW CLINICAL AREAS AND OPPORTUNITIES TO TARGET – FOLLOW THE DEVICE! CERVICAL CANCER A MOBILE IS DIAGNOSED COLPOSCOPE USING A NEEDS A COLPOSCOPE. DISINFECTANT THAT IS EQUALLY Conventional colposcopes are expensive and bulky, MOBILE. and require intensive Tristel Duo EVE is training to use them.
Slide 35: Mobile ODT colposcope opportunity
Find new clinical areas and opportunities to target – follow the device! For us to continue our strong growth for another decade or more, we need to find new sets of instruments that require high-level disinfection for which our chlorine dioxide wipes and foams are ideal. We are going to see many op
Slide 36: Decoupling the liquid from the wipe
EXTEND OUR REACH INTO SURFACE DISINFECTION THROUGH PRODUCT INNOVATION – ENABLE CHLORINE DIOXIDE TO BE USED IN A FAR LARGER MARKET PLACE DECOUPLING THE LIQUID FROM THE WIPE 18 of 18
Slide 37: Extending chlorine dioxide into surface disinfection wipes
Extend chlorine dioxide’s reach into surface disinfection through product innovation. We have been using our chlorine dioxide chemistry for the disinfection of hospital floors for quite a few years; and with some good success. We have many hospital trusts in this country using our product. When we u
Slide 38: Thank You
THANK YOU PANCHO