Inspiration Healthcare Group PLC · LSE:IHC
Inspiration Healthcare — H1 FY2025 Earnings Presentation
28 slides from Inspiration Healthcare's earnings presentation, October 2024
Slide 1: Inspiration Healthcare Group plc
Inspiration Healthcare Group plc ”Pioneering medical technology starting with the very first breaths of life” Roy Davis – Executive Chairman October 2024 Alan Olby - CFO Innovate | Create | Inspire
Slide 2: Disclaimer
Disclaimer While the information contained herein has been prepared by Inspiration Healthcare Group plc (“Inspiration”) in good faith, neither it nor any of its directors, officers, agents, advisers, affiliates or employees makes any representation or warranty, express or implied, nor shall any of t
Slide 3: Today's Agenda
Today’s Agenda 1. H1 2024 Highlights 2. Business Update 3. Financial Review & Outlook 4. Summary and Q&A 5. Appendices 3 Innovate | Create | Inspire
Slide 4: Overview: A Challenging Time
Overview: A Challenging Time ▪ Overall H1 revenues of £17.0m – down 17% vs prior year ▪ Neonatal sales declined by 26% − Impacted by discontinued products − UK sales down 20% to £4.3m (H1 FY24: £5.4m) – UK restructuring beginning to gain traction − International sales down 40% at £6.5m (H1 FY24: £10
Slide 5: Financial Highlights
Financial Highlights ▪ Revenues down on prior year at £17.0 million (H1 FY24: £20.4 million) ▪ Gross margin: Reduced to 43.5% (H1 FY24: 48.6%) ▪ EBITDA loss of £0.9m (H1 FY24: profit of £1.8m) Product mix Impacting ▪ Operating loss of (£2.0m) (H1 FY24: profit of £0.6m) Margins ▪ Operating cash outfl
Slide 6: Operational Highlights
Operational Highlights ▪ Build on positives ▪ Leverage NHS business in UK ▪ Neonatal – UK re-organization starting to work ▪ Infusion – build on strength in Homecare to enter new markets ▪ Middle East order received – expect H2 shipment Infusion ▪ CCO Appointment YoY Growth 19% ▪ Restructured UK sal
Slide 7: Today's Agenda
Today’s Agenda 1. H1 2024 Highlights 2. Business Update 3. Financial Review & Outlook 4. Summary and Q&A 5. Appendices 7 Innovate | Create | Inspire
Slide 8: Business Update: A Reminder of What We Do – Two Distinct Markets
Business Update: A Reminder of What We Do – Two Distinct Markets Inspiration Healthcare designs, manufactures and markets pioneering medical technology that saves lives and improves the outcomes of patients starting with the very first breath of life Neonatal Intensive Care ▪ Own brand capital and c
Slide 9: Our Immediate Focus – 'Back to Basics'
Our Immediate Focus – ’Back to Basics’ 4. EXECUTE FUTURE STRATEGY 1. DRIVE SALES Develop vision & strategy Improve geographic spread Develop & execute US product & Improve distributor sales commercial plan Leverage NHS relationships Develop & Implement R&D Increase recurring revenues from Roadmap to
Slide 10: Back to Basics: Driving Sales
Back to Basics: Driving Sales ▪ Improve geographic spread ▪ Direct sales in H1 67% ▪ Indirect sales in H1 33% ▪ Strengthen sales team ▪ Pursue US market opportunity Indirect 33% ▪ 50% of global neonatal market – minimal sales at Direct present 67% Sales ▪ FDA approval of SLE6000 ▪ Leverage Airon pos
Slide 11: Back to Basics: Increase Profits
Back to Basics: Increase Profits ▪ Improve operational efficiency ▪ Closed Hailsham site – transferred production to China ▪ All UK operations now in one site - Croydon ▪ Increase product margins Closed Hailsham ▪ Focus on higher margin products & markets saves ▪ Increased focus on service – sales +
Slide 12: Back to Basics: Improve Working Capital
Back to Basics: Improve Working Capital ▪ Reduce inventory ▪ Inventory £14.1m ▪ Actively managing suppliers ▪ Majority of inventory increase relates to SLE6000 Actively ▪ Ship delayed ME order Manage ▪ Sales is key driver of reduction Indirect ▪ Manage DSO / CSO 50% Drive ▪ Additional credit control
Slide 13: Back to Basics: Execute Future Strategy
Back to Basics: Execute Future Strategy ▪ Develop & execute future vision & strategy ▪ Focus! ▪ All about the customer! ▪ E3 – Excellence in Everything We Do ▪ Deliver on potential Strong Sales Channels ▪ Recruit new CEO ▪ Key drivers of future growth Indirect Execute 50% on ▪ Strong sales channels
Slide 14: Today's Agenda
Today’s Agenda 1. H1 2024 Highlights 2. Business Update 3. Financial Review & Outlook 4. Summary and Q&A 5. Appendices 14 Innovate | Create | Inspire
Slide 15: H1 Financials Summary
H1 Financials Summary Revenue £17.0m (H1 FY24: £20.4m) Operating £(2.3)m Cash Flow (H1 FY24: inflow £3.5m) Gross Margin 43.5% (H1 FY24: 48.6%) £(6.8)m Net Debt2 (31 January 2024: £(6.0)m) Adjusted £(0.9)m EBITDA1 (H1 FY24: £1.8m) Capital £3.0m gross Raise Adjusted Operating (Loss)/ £(2.0m) Profit3 (
Slide 16: H1 FY25 Revenue
H1 FY25 Revenue H1 FY25 H1 FY24 Change £'000 £'000 % Neonatal products 12,000 16,125 -26% Infusion Therapy products 5,039 4,245 19% 17,039 20,370 -16% Neonatal products: Capital 6,473 11,734 -45% Neonatal revenues declined 26% to £12.0m Consumable 4,312 4,391 -2% ▪ Capital sales declined 45% due to
Slide 17: Income Statement
Income Statement H1 FY25 H1 FY24 £’000 £’000 Revenue 17,039 20,370 Gross Profit 7,405 9,898 ▪ Margin impacted by: ▪ Lower capital sales Gross margin 43.5% 48.6% ▪ Increased sales of distributed products Operating expenses pre non-recurring items (9,377) (9,342) ▪ Operating expenses in line with PY A
Slide 18: Balance Sheet
Balance Sheet 31 Jul 24 31 Jan 24 £’000 £’000 Intangible assets Non-current assets 25,522 25,993 ▪ Inventory increased £0.4m Inventories 14,118 13,743 Trade and other receivables 9,623 8,669 ▪ Receivables increase of £1.0m from revenue phasing and timing of prepayments Net debt (6,762) (6,047) ▪ Lia
Slide 19: H1 Movements in Net Debt
H1 Movements in Net Debt ▪ Operating cash outflow of £2.2m (H1 FY24: inflow of £3.5m) due to EBITDA loss and working capital increase ▪ Working capital increased by £0.9m ▪ Inventory remains elevated at £14.1m due to ongoing delay to large Mid East order and excess purchasing ▪ Equity raise of £2.7m
Slide 20: FY25 Revenue Pipeline
FY25 Revenue Pipeline ▪ FY25 Revenue forecast broken into component parts ▪ YTD Revenue of £17.0m reflects H1 revenue to 31 July ▪ Orderbook of £6.4m represents confirmed orders for delivery in balance of FY25 ▪ Run Rate of £8.9m – based on current (H1 FY25) run rates, predictable revenues with shor
Slide 21: Today's Agenda
Today’s Agenda 1. H1 2024 Highlights 2. Business Update 3. Financial Review & Outlook 4. Summary and Q&A 5. Appendices 21 Innovate | Create | Inspire
Slide 22: Summary: Turnaround Underway It's All About Execution!
Summary: Turnaround Underway ▪ Focus on ‘Back to Basics’ ▪ Driving sales – especially internationally ▪ Ensuring operational and cost efficiency ▪ Managing cash generation ▪ Change will take time ▪ Developing new strategy and R&D roadmap for future success ▪ Recruiting new CEO ▪ Outlook ▪ Revenues H
Slide 23: Today's Agenda
Today’s Agenda 1. H1 2024 Highlights 2. Business Update 3. Financial Review & Outlook 4. Summary and Q&A 5. Appendices 23 Innovate | Create | Inspire
Slide 24: Broad portfolio of innovative, specialist neonatal products
Broad portfolio of innovative, specialist neonatal products Key Neonatal Products Core focus area with a high level of expertise Products designed specifically for the neonate • Include benefits such as OxyGenie , The Queen’s Award-winning auto- O2 software Manufactured products are supported Airon
Slide 25: Portfolio of specialist infusion products
Portfolio of specialist infusion products Infusion Products Exclusive UK distributor for Micrel Medical Active in multiple markets; • Parenteral Nutrition • PCA and Regional Anaesthesia • Epidural pain management • Oncology Rythmic Rythmic MPmlh+ Value add through direct Sales and Serena Ultima Syri
Slide 26: Neonatal Intensive Care: A Growing Core Market Despite Changing Market Dynamics
Neonatal Intensive Care: A Growing Core Market Despite Changing Market Dynamics Global Growth Drivers Changing Market Dynamics ▪ Post-Covid healthcare spending changes (Adult Ventilator Market contraction due to oversupply Increase in healthcare Increase in premature resulting in more aggressive com
Slide 27: Infusion Therapies: A Growing Opportunity
Infusion Therapies: A Growing Opportunity UK and Ireland Market Growth Market Opportunities* Drivers NHS desire to get patients home New products with superior features earlier (including remote monitoring) Technology advancements – remote monitoring of equipment Expand into new therapy areas Centre
Slide 28: Revenue by geography
Revenue by geography H1 FY25: H1 FY24: Domestic £9.4m 55% 48% (H1 FY24 £9.7m) H1 FY25: H1 FY24: Europe £2.8m 16% 15% (H1 FY24 £3.2m) H1 FY25: H1 FY24: Americas £1.7m 10% 6% (H1 FY24 £1.1m) H1 FY25: H1 FY24: Asia Pacific £2.0m 12% 15% (H1 FY24 £3.1m) H1 FY25: H1 FY24: Mid East, Africa £1.1m 7% 16% (H
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