Surgical Innovations Group Plc · LSE:SUN
Surgical Innovations — H1 2022 Earnings Presentation
23 slides from Surgical Innovations's earnings presentation, September 2022
Slide 1: 2022 Interim Results
2022 Interim Results David Marsh, Chief Executive Officer Charmaine Day, Chief Financial 1Officer
Slide 2: Company Overview
Company Overview Founded by Prof. Michael Design & Manufacturing Focus on Minimally McMahon, leading expertise in innovative Invasive Surgery (MIS) Laparoscopic surgeon surgical devices Direct sales in UK. Strong industry partnerships, Leading the change to Global distribution through most recently
Slide 3: Financials
Financials 3
Slide 4: Financial Highlights
Financial Highlights Change vs. 2022 H1 2021 H1 Change 2019 H1 prior vs pre- pre- comparative pandemic pandemic Revenues1 £5.41m +28% £4.22m +6% £5.10m Underlying 45.3% +2.9% 42.4% +3.0% 42.3% Gross Margin1 Adj. EBITDA2 £0.29m +0.44m £(0.15)m -0.36m £0.65m Adj. operating (£0.01)m +0.14m £(0.15)m -0.
Slide 5: Revenue Analysis
Revenue Analysis Revenue by Segment £'m 6.00 SI Brand sales back to relatively normal 5.00 levels 4.00 Distribution showing strong growth, exceeding 2019 and up by 34.7% 3.00 OEM recovering with new partner collaborations, additional orders in H2 2.00 Continued overall momentum into H2 1.00 0.00 H1
Slide 6: Margin Analysis
Margin Analysis Gross Margin Underlying gross margin within target range 2022 H1 2021H1 2021 Analysis Inflationary pressures from suppliers mitigated and £’000 £’000 £’000 passed on where possible Revenue 5.41 4.22 9.13 Net costs of manufacturing increased Cost of Sales (2.96) (2.43) (5.27) Underlyi
Slide 7: Operating Expenses
Operating Expenses Adjusted Operating Expenses £'m Adjusted1 operating expenses increased 17% to 2.50 £1.88m (2021H1: £1.60m) 2.00 Incremental change in overheads in H1, due to: 1.50 Investment into sales and marketing to support 1.00 growth 0.50 Inflationary pressures on the cost of employment, wit
Slide 8: Net Result
Net Result Net result £'m 2.5 2022H1 2021H1 2019H1 2 £’m £’m £’m 1.5 Adj. Operating expenses1 (1.88) (1.60) (1.98) Adj. EBITDA1 0.29 0.21 0.65 1 Adj. Operating (loss)/profit (0.01) (0.15) 0.22 0.5 Adj. Operating (loss)/profit (0.57) (0.21) (0.13) before tax1 0 2022H1 2021H1 2019H1 -0.5 Adj Opex Adju
Slide 9: Financial Position
Financial Position 30 June 2022 31 Dec 2021 Inventory levels remain high, to mitigate supply chain £’m £’m risk Tangible assets 1.42 1.20 Intangible assets 6.26 6.22 Cash generated from operations at £0.22m (FY to Total non-current assets 7.68 7.41 Dec 2021 cash used in operations of £0.53m) Invento
Slide 10: Commercial & Operational
Commercial & Operational 10
Slide 11: Commercial & Operational Highlights
Commercial & Operational Highlights Strong sales in UK & Japan Investment in Sales & Improvements in provides foundation for Marketing driving Manufacturing capacity growth forward new initiatives driving efficiencies Geographical expansion Investment in people & Investment in New Product processes
Slide 12: Key Challenges In H1 2022
Key Challenges In H1 2022 Recruitment and retention of key personnel Implemented 4-day week trial, loyalty incentives and increased financial packages in line with industry norms. Supply chain disruptions continue Maintaining higher inventory levels above norm to minimise disruption to customers. du
Slide 13: Market Environment - UK
Market Environment - UK H1 UK SALES Strong sales in UK surpassing pre-pandemic levels despite 4.0 NHS operating below capacity 3.5 Investment in sales resource to focus on Private and Key 3.0 accounts delivering growth 2.5 Supply chain challenges present some back-order issues £m 2.0 deferring reven
Slide 14: Market Environment - USA
Market Environment - USA H1 US SALES 0.9 COVID impacted Q1 with restricted hospital 0.8 access affecting evaluations 0.7 US dealer network training roll out in H2 0.6 £m 0.5 Full launch of YelloPort Elite™ 5mm and 0.4 Optical Trocar with the Microline Sales Team 0.3 in Q4 0.2 Initial YelloPort Elite
Slide 15: Market Environment – EU, APAC & ROW
Market Environment – EU, APAC & ROW H1 EU SALES H1 APAC SALES H1 ROW SALES 0.7 0.7 0.7 0.6 0.6 0.6 0.5 0.5 0.5 £m £m £m 0.4 0.4 0.4 0.3 0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.0 0.0 0.0 2019 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022 COVID affected start to 2022 Strong sales in Japan underpins
Slide 16: Market Environment – OEM
Market Environment – OEM OEM SALES 1.2 Delays in supply chain deferred H1 sales to H2 1.0 Strong H2 2022 orderbook for AMS, CMR and BD/Carefusion 0.8 0.6 Developing opportunities for collaboration with key partners £m 0.4 Opportunities to leverage instrument expertise to exploit opportunities in rob
Slide 17: New Markets Opportunities
New Markets Opportunities India New Partnership in India leveraging CMR and Peters relationships Registration and product training to be completed during Q4 Germany Developing partnership with specialist distribution company Initial evaluations during October Significant CMR installed base 17
Slide 18: Environmental Messaging
Environmental Messaging SU S TA OP IN A ER B IL AT IT Y IN G IN TH TH EA E TR E SUS OPE TAINA RAT BILI ING TY Ag TH IN TH uide to g EAT E RE Ma y ood 202 p ra 2 ctic e ww w.rc s eng .ac.u k/sta nda rds and guid anc e CREATE THE ENVIRONMENT PROVIDE THE VALIDATION DELIVER THE EDUCATION 18
Slide 19: ROI & Financial Break Even Point In Month Four
Industry Cost Curve Analysis Segmentation ROI & Financial Break Even Point Case Study – UK NHS Trust In Month Four 6,400kg £250k 10,000 £150k £70k £149k 3,252 85% 19
Slide 20: New Product Development
New Product Development 2022 Key Product Launches (under MDD): Q1 saw the launch of Yelloport Elite™ 5mm designed to facilitate robotic surgery via the CMR Versius Robot Q3 launch of the 5mm Optical Trocar Q4 launch of Logi™ MIM instrument Future Pipeline (under MDR): Extension of Resposable® portfo
Slide 21: Compliance & Regulatory
Compliance & Regulatory Investment in people and processes Successful recertification on MDSAP Unannounced FDA audit passed MDR Technical files submission completed MDR review of quality management systems successfully completed UKCA Certification in process 21
Slide 22: Summary
Summary Healthcare markets strong, with pent up demand Growing market share from sustainability messaging and NPD Supply chain and recruitment constraints; strategies to mitigate being implemented Growth opportunities in robotics and through market expansion Strong order book for Q4 Recovering marke
Slide 23: Appendix Cashflow Statement
2021 2020 £’m £’m Cashflow from operating activities Operating loss (0.06) (0.46) Depreciation & amortisation 0.29 0.70 Impairment of intangibles - 0.15 Other (0.07) - Working Capital 0.05 (0.93) Cash generated from Operations 0.22 (0.53) Appendix Taxation received/ (paid) Interest paid ( Net) 0.10
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