Surgical Innovations Group Plc · LSE:SUN
Surgical Innovations — H1 2023 Earnings Presentation
20 slides from Surgical Innovations's earnings presentation, September 2023
Slide 1: 2023 H1 Investor Presentation
2023 H1 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 Operational and supply chain Implementation of operational key EU markets challenges impacting margin improvement plan to improve margins and efficiencies Geographical expansion Overhaul of supply chain Transition *Medical to MDR Device
Slide 6: Operational Headwind
Operational Headwind Operational and supply chain challenges impacting margins and efficiencies Supply Chain Manufacturing Increasing key components costs and A review of operational process extended lead times and regulatory requirements has highlighted Minimum order quantities increased manufactur
Slide 7: Market Overview – UK
Market Overview – UK • Strong Sales, 13% v 2022 H1, 3.300 despite clinical staff industrial 3.100 action and increasing waiting list 2.900 2.700 • Robust organic growth in SI- branded products Revenue £'m 2.500 2.300 2.100 • Sustainability continues to drive new account conversions 1.900 1.700 • Ful
Slide 8: Market Overview - USA
Market Overview - USA 0.700 • Sales down 20% v 2022 H1 (excluding 2022 H1 0.600 Microline stocking order, sales remain flat) 0.500 • Adler maintaining scissor sales in South East but Consortium network, covering balance of 0.400 USA, not developing Revenue £'m 0.300 • Plan to identify key distributo
Slide 9: Market Overview – Europe, APAC & ROW
Market Overview – Europe, APAC & ROW Europe APAC ROW 0.750 0.560 0.250 0.700 0.540 0.200 0.520 Revenue £'m Revenue £'m Revenue £'m 0.650 0.150 +18% 0.500 +12% +58% 0.600 0.100 0.480 0.550 0.460 0.050 0.500 0.440 0.000 H1 2023 H1 2022 H1 2023 H1 2022 H1 2023 H1 2022 • Minor delays in registration of
Slide 10: Market Overview - OEM
Market Overview - OEM 1.000 0.900 • Supply chain delays suppressed H1 0.800 sales 0.700 • Backlog of OEM orders addressed in 0.600 July-August 0.500 • Strong order book until year end and 0.400 0.300 beyond 0.200 0.100 • Significant progress to address supply 0.000 chain challenges although margins
Slide 11: Compliance Update
Compliance Update Compliance –Road to MDR • Quality System, Technical files and Microbiology compliant with MDR, audited by BSI and fully approved • Product technical reviews well underway for all products with progress as follows: • 2/3 approved for MDR • Third product has clinical review in progre
Slide 12: New Product Developments
New Product Developments • Successful Launch of Optical 5mm Elite, provides opportunities in key markets (USA and UK). Japan to follow pending Q4 registration • Rapid development of the Shielded cutting Trocar to meet need in gynaecology completes YelloPort Elite™ family • Logic Dissect and Grasp: l
Slide 13: Financials
Surgical Group Plc
Slide 14: Financial Highlights
Financial Highlights Change vs. prior 2023 H1 2022 H1 comparative Revenues £5.65m +4.38% £5.41m Underlying Gross Margin 40.5% -5.03% 45.53% Adj. EBITDA1 £0.01m -£0.28m £0.29m Adj. operating (loss)/profit1 (£0.28m) -£0.29m £0.01m Adj. (loss)/earnings per share (pence)1 (0.037p) -0.041p 0.004p 1. Adju
Slide 15: Revenue Analysis
Revenue Analysis Revenue by Segment £'m 3.50 • SI-branded sales increased by 10.2% to £2.86m 3.00 2.50 • Distribution sales continue to show strong growth up 10.9% 2.00 • OEM sales down hindered by supply 1.50 chain delays 1.00 0.50 0.00 SI Distribution OEM H1 2022 H1 2023 15
Slide 16: Margin Analysis
Margin Analysis • Commercial margins remain just within Gross Margin 2023H1 2022 2022H1 target range at 40.5% Analysis £’m £’m £’m • Continued increase with inflationary pressures have contributed to the Revenue 5.65 11.34 5.43 decline Cost of Sales (3.36) (6.53) (2.96) • Series of planned price inc
Slide 17: Operating Expenses
Operating Expenses Adjusted Operating Expenses £’m • Adjusted Operating Expenses1 increased 2.50 to £2.14m (2022 H1:£1.88m) 2.00 • Additional investment in Sales & Marketing 1.50 • Regulatory costs continue to be higher 1.00 due to MDR 0.50 • Inflationary pressures continue 0.00 2022H1 2023H1 Sales
Slide 18: Financial Position
Financial Position 30 June 2023 31 Dec 2022 £’m £’m • Investment in capital expenditure of Tangible assets 1.83 1.78 £0.18m Intangible assets 6.39 6.40 Total non-current assets 8.22 8.18 • Inventory reduction plan underway to Inventories 3.57 3.16 return to normalised levels. Trade receivables 1.57
Slide 19: Summary & Outlook
Summary & Outlook • Strong sales growth in 2023 H1 positions the Group well to deliver robust organic sales growth in 2023 H2 and beyond • Continued regulatory progress on MDR • Responded effectively to operational challenges • Continued investment improving efficiencies and cost out initiatives • P
Slide 20: Thank you for your time. Any questions?
Thank you for your time Any questions?
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