Advanced Medical Solutions Group Plc · LSE:AMS
Advanced Medical Solutions — FY2018 Earnings Presentation
25 slides from Advanced Medical Solutions's earnings presentation, Mar 13, 2019
Slide 1: Unaudited Preliminary results for the year ended 31 December 2018
Advanced Medical Solutions Group plc Unaudited Preliminary results for the year ended 31 December 2018 Chris Meredith Chief Executive Officer Eddie Johnson Chief Financial Officer 13 March 2019
Slide 2: FY 2018 Highlights (incl. post period end)
Advanced Medical Solutions Group plc 1 FY 2018 Highlights (incl. post period end) • Group revenues up 7% at constant currency to £102.6m and up 6% at reported currency • Adjusted operating margin improvement of 180 basis points to 28.0% (2017 FY: 26.2%) • Branded performing well, marginally offset b
Slide 3: Market
Advanced Medical Solutions Group plc 2 Market • Our global surgical and advanced woundcare markets have both shown steady growth over many years due to favourable healthcare trends and both provide significant future opportunities • Strong growth has continued in our main surgical markets • Sealanti
Slide 4: Strategy
Advanced Medical Solutions Group plc 3 Strategy • Our long-term growth strategy remains unchanged • Enhance our product portfolio • Expand into new geographies • Increase distribution of our surgical products • Our corporate strategy is focused on four pillars: • Growth • Innovation • Operational Ex
Slide 5: Licensing & Acquisitions: supporting growth
Advanced Medical Solutions Group plc 4 Licensing & Acquisitions: supporting growth Net cash of £76.4m and debt facility of £80m (+£20m) at 31 December 2018 The Group continues to actively look for further businesses that deliver value for shareholders, immediately or in the short to medium term, and
Slide 6: Acquisition of Sealantis
Advanced Medical Solutions Group plc 5 Acquisition of Sealantis • Acquisition in January 2019 for $25m (c. £19m), plus royalty agreement • Internal sealants market over $1.0 billion and growing • Brings a significant pipeline of products, intellectual property, and an outstanding R&D team • The most
Slide 7: AMS broadens its opportunities in the combined >$3.3bn Fixation, Sealants & Haemostats market
Advanced Medical Solutions Group plc 6 AMS broadens its opportunities in the combined >$3.3bn Fixation, Sealants & Haemostats market 1200 >$0.5bn Fixation 1000 >$1bn Thrombin >$900m Haemostats Sealants Market Size ($m) 800 >$3.3bn 600 >$600m Fibrin Sealants Fixation, Sealants & Fixation >$500m Haemo
Slide 8: Internal sealants and fixation devices portfolio strengthened by acquisition of Sealantis
Advanced Medical Solutions Group plc 7 Internal sealants and fixation devices portfolio strengthened by acquisition of Sealantis Intended for use in laparoscopic & open surgical repair of inguinal and ventral hernias, achieved >$0.5bn through the fixation of prosthetic mesh to the abdominal wall, ap
Slide 9: Significant clinical need and platform technology advantages strengthen the Sealantis proposition
Advanced Medical Solutions Group plc 8 Significant clinical need and platform technology advantages strengthen the Sealantis proposition Significant Clinical Need Gastrointestinal leakage is associated with high rates of post-op complications, >$0.5bn cost, re-operation & mortality2 Fixation >$1bn 9
Slide 10: R&D Progress
Advanced Medical Solutions Group plc 9 R&D Progress • Continued development of the LiquiBand product range • Launched LiquiBand® Exceed mini device in US • Launched LiquiBand® Fix8™ for open surgery in the EU • Regulatory process for newly-developed large wound device progressing; US approval expect
Slide 11: Realigned Business Units
Advanced Medical Solutions Group plc 10 Realigned Business Units Significant benefits have been identified by implementing a realignment of our Business Units, effective January 2019. Changes include: • Transfer of ActivHeal (£6.3m sales in 2018) from Branded to OEM • Surgical (previously the Brande
Slide 12: Regulatory
Advanced Medical Solutions Group plc 11 Regulatory European Medical Devices Regulation (MDR) inception May 2017 • Long-term benefits for the Group due to higher barriers to entry for new products and recertifications • AMS expects to see market growth opportunities in the medium term as a result of
Slide 13: Our Current Business Units
Advanced Medical Solutions Group plc 12 Our Current Business Units Branded OEM • Selling, marketing and innovation of all AMS branded • Distribution, marketing and innovation of products that products are supplied to medical device partners under their own • Sold directly and through distributors br
Slide 14: Multiple product growth drivers
Advanced Medical Solutions Group plc 13 Multiple product growth drivers Surgical ActivHeal Dressings Sutures Collagens LiquiBand Fix8 Internal sealants Foams Antimicrobials LiquiBand
Slide 15: Branded: 2018 Progress
Advanced Medical Solutions Group plc 14 LiquiBand® Revenue Branded: 2018 Progress 35 Revenue up 13% to £62.1m (2017: £55.2m) 30 • Advanced Closure - LiquiBand® Revenue up 24% to £31.7m (2017: £26m) 25 • US sales up 30% to £23.0m (2017: £18.2m) 20 • US market share increased by 2% during the year • U
Slide 16: Branded: 2018 Progress (continued)
Advanced Medical Solutions Group plc 15 Branded: 2018 Progress (continued) Biosurgical Revenue 15 • RESORBA® Biosurgical (Collagen) 10 Revenue up 6% to £8.6m (2017: £8.0m) 5 • Growth in Asia and Europe 0 • First patient use of antibiotic collagen pouch £m 2017 2018 Traditional Closure 20 • RESORBA®
Slide 17: OEM: 2018 Progress
Advanced Medical Solutions Group plc 16 OEM: 2018 Progress Revenue down 2% at £40.5m (2017: £41.7m) Sales were impacted by lower royalties from Organogenesis due their temporarily reduced reimbursement status, increased lower-cost competition and some other reimbursement changes • Infection Manageme
Slide 18: OEM: Growth opportunities
Advanced Medical Solutions Group plc 17 OEM: Growth opportunities 2018 achievements driving future growth: • Successful launches in Q4 of patented silver post-operative dressings and premium PHMB foam range • Regulatory approval in Brazil in H2 paving way for Latin America expansion Further launches
Slide 19: 2018 Financial Highlights
Advanced Medical Solutions Group plc 18 2018 Financial Highlights Reported Constant 2018 2017 growth growth1 Group revenue (£m) 102.6 96.9 6% 7% Adjusted2 operating margin (%) 28.0% 26.2% 180bps - Adjusted profit before tax (£m) 28.9 25.4 14% - Group Effective Tax Rate (%) 20.3 20.3 - - Adjusted2 di
Slide 20: Revenue by product
Advanced Medical Solutions Group plc 19 Revenue by product £m
Slide 21: 2018 operating margins
Advanced Medical Solutions Group plc 20 2018 operating margins £M Branded Business Unit 80.0 35.0% 29.4% 70.0 26.2% 30.0% 60.0 25.0% 50.0 20.0% 40.0 15.0% 30.0 62.1 55.2 20.0 10.0% 10.0 18.3 5.0% 14.5 0.0 0.0% 2017 2018 Sales £ M Op profit £ M (adj) Op mgn (adj) % £M OEM Business Unit 50.0 27.3% 27.
Slide 22: Cash Flow Summary
Advanced Medical Solutions Group plc 21 Cash Flow Summary 2018 2017 £ million £ million Profit from operations 28.2 25.2 Depreciation and Amortisation 3.2 3.0 Working capital movements (8.8) (8.0) Share-based payments expense 1.7 1.3 Taxation (3.8) (4.5) Net cash inflow from operating activities 20.
Slide 23: Summary and outlook
Advanced Medical Solutions Group plc 22 Summary and outlook • Another strong performance in 2018 • New product launches continue to strengthen the Group’s portfolio • Four new product launches in Q4 2018 • Acquisition of Sealantis enables AMS grow into the $1 billion internal sealants market • Well
Slide 24: Appendix
Advanced Medical Solutions Group plc Appendix
Slide 25: Currency and Hedging
Advanced Medical Solutions Group plc 24 Currency and Hedging 58,000 2018 Currency Flows - GBP 000 equivalent 48,000 38,000 28,000 18,000 GBP 8,000 USD EUR GBP EUR USD GBP EUR USD EUR GBP USD EUR (2,000) GBP USD (12,000) (22,000) Sales Costs, capital spend Net cash flow (pre fx Contracts in place Cas
Advanced Medical Solutions Group — FY2018 Earnings Presentation on 6ix