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AGM November 2018 CHAIRMANS REPORT Overview The Board has - PowerPoint PPT Presentation

Jun 13, 2023 •478 likes •955 views

1 Chairmans Address AGM November 2018 CHAIRMANS REPORT Overview The Board has continued to follow its strategic plans which have provided the company with significant growth and improved profitability during the last financial year.

  1. 1 Chairman’s Address AGM November 2018

  2. CHAIRMAN’S REPORT Overview The Board has continued to follow its strategic plans which have provided the company with significant growth and improved profitability during the last financial year. Each of our businesses in our main markets (Australia, Europe and North America) contributed strongly to the result. The group continues to invest in our best of breed suite of innovative products - to maintain market leadership, which we believe, is fundamental to your company’s success. The global management team has remained constant throughout the year and the Board is confident that they can continue to deliver long term sustainable financial results given the appropriate strategies. In late August of this year the Board held a two-day strategy meeting attended by all members of the global leadership team. With the core principles of our strategy intact we focused on developing trends within our existing markets and how best we could position the company for emerging future opportunities. These include conducting research and developing innovative solutions with some of our prestigious clients. In September the group appointed an experienced researcher to lead our efforts in this area. We are also in the process of further developing our capacity in the artificial intelligence (AI) space. During the year we announced several new contracts including Yale New Haven Health and Visage Open Archive to Mercy Health, in North America as well as the expansion of our relationship with I-MED Radiology Network in Australia. Each of these will contribute to our future revenues. The group remains in an excellent position to continue to capitalise on the increasing global and local opportunities that present themselves. The management team is working on a number of new opportunities and our pipeline is greater than it has ever been. Financial Results The financial results for the 2018 financial year recorded another healthy increase in net profit after tax (2018 $12.744 million: 2017 $9.321 million or 36.7%). This result was another record for the company and just reward for maintaining our strategic focus and has been achieved after making the necessary ongoing investments for future growth. The underlying profit for the year of $12.567million after tax was up 27.4% on the previous year. As I foreshadowed last year the Board has taken steps to mitigate the impact of currency fluctuations and this resulted in a positive result for the year, after taking into account the cost of hedging the company’s exposure.

  3. The Company continued to be cash flow positive with retained cash increasing from $23 million to nearly $25 million after paying an increased dividend. The Board anticipates another strong year with the majority of growth occurring in the second half of the financial year. Results to date are tracking in line with our expectations and are slightly ahead of budget. Many of our previously announced contracts are progressively contributing to our revenues and we expect this trend to continue as the year unfolds. Dividend Policy The Board was pleased to increase dividend payments for the 2018 financial year to 6 cents per share fully franked. This represents an increase of 50% over the previous year and a payout ratio of just below 50%. The dividends were fully funded from the company ’s internally generated cash flow. The Board anticipates that future dividends will be fully franked. The Board will continue to determine an appropriate level of dividends having regard to the profitability of the business, its need for ongoing investment and the necessity to retain sufficient funds to pursue other growth opportunities. Closing In closing, on your behalf, I would like to thank all of our dedicated staff in Australia, North America and Europe for their contribution to the company during what has been another very positive year. I would also like to thank my fellow Directors who have also worked tirelessly and diligently to ensure that the company reaches its ultimate goals.

  4. 2 CEO Presentation AGM November 2018

  5. Pro Medicus (ASX:PME) Healthcare IT company specialising in Enterprise Medical Imaging and radiology information system (RIS) software. Leading edge products, growing presence globally. EU Headquarters / R&D Berlin, Germany US Headquarters San Diego, CA Group Headquarters Melbourne Over 40 Software Engineers

  6. Global Management Structure Malte Westerhoff – Chief Technology Officer Sean Lambright - Head of Sales Brad Levin – Head of Marketing Teresa Gschwind – Head of S ervices 4

  7. PME Visage 7 * Visage RIS Product Suite Pro Medicus.net OEM

  8. FY18 in review • November 2017 - $18M Yale New Haven contract • May 2018 – I-MED renewal and extension contract • May 2018 - Mayo Rochester go live • June 2018 – $15M Mercy Open archive deal • US implementations on/ahead of schedule • Visage RIS – increased market lead • Pipeline continues to grow strongly

  9. FY2018 Highlights - Financial Results Financial Highlights FY2017 FY2018 % YoY Revenue ($M) 31.60 36.00 14% Profit before tax ($M) 13.41 17.37 30% NPAT ($M) 9.32 12.74 37% Cash ($M) 22.78 25.24 11% EPS (cps) 9.1 12.4 36% DPS (cps) 4.0 6.0 50% Positive free cash flow in FY2018 Growth in North American business

  10. Operational (Transaction) Model 8 • Used in vast majority of US contracts • Delivered as SaaS model • Now used in RIS contracts in Australia [insert chart • Model based on guaranteed transaction comparing transaction with minimums capital model] • Forward revenue > A$135M/5 years* • Upside as client examination volumes grow • Annuity style revenue stream – greater predictability * Assumes the majority of key contracts up for renewal in years 4 and 5 are renewed

  11. FY- 18 Full Year Revenue Split $40,000,000 Exam/licence revenue*** Support/baseline revenue*** Capital revenue Professional Services ***Recurring revenue $35,000,000 $6,817,000 $30,000,000 $6,601,000 $3,689,000 $25,000,000 $10,858,000 $1,890,000 $20,000,000 $10,118,000 $9,991,000 $1,810,000 $15,000,000 $224,000 $2,427,000 $1,694,000 $10,000,000 $18,286,000 $9,359,000 $14,878,000 $10,980,000 $11,951,000 $5,000,000 $3,894,000 $1,370,000 $- FY14 FY15 FY16 FY17 FY18 Actual Actual Actual Actual Actual

  12. High Operating Leverage 10 • Highly scalable offering • No capex (HW) – SW only model • Training & Installation – charged as professional services • Relatively fixed cost base • Margin continues to grow as footprint increases

  13. Margin Expansion 11 EBIT Margins 60 50 40 30 20 10 0 FY-14 FY-15 FY-16 FY-17 FY-18

  14. Visage RIS

  15. Visage RIS – I-MED • 5 year renewal of existing contract • Extension of contract to include I-MED Queensland and Regional Imaging practices • Additional revenue $1.4M pa once fully deployed • One of the largest RIS installations worldwide • Growing via acquisition

  16. Visage RIS • Long term (5 year) contracts with Primary Healthcare and I-MED, the 2 biggest radiology providers in Australia • Combined additional revenue of $4.4M pa once fully deployed • Rollouts progressing well • Potential upside via organic and M&A growth • Repositions PME as undisputed market leader

  17. Leading Edge Product Set – Visage Imaging Still Number 1 in Speed, Functionality, Scalability 15

  18. North American market 16 • PACS market estimated at > US$2 billion pa and growing • Expanding into Enterprise Imaging • Paradigm shift to “deconstructed PACS” – best in breed approach • Market fragmented - in process of consolidating • Visage 7.0 – proven, market leading technology • Company ideally positioned

  19. Massive data explosion 17 • Higher image density - CT leaps from 64 slices to 256 and now 640 • 3.0T MRI – much larger dataset than 1.5T • Functional Imaging e.g. PET scan often > 1.5 to 2 gigabytes • Digital Breast Tomosynthesis (DBT) files can be over 4 to 6 gigabytes • Prior examinations multiply the problem

  20. Electronic Medical Record (EMR) 18 • Mandated in US Hospitals by end of 2018 • Consolidates all hospital data – clinical and financial • 90% of EHR is imaging data (by volume) • Need all imaging data in one repository • Driving adoption of VNA • Need for a single Viewer for all images

  21. Solution - Visage 7.0 Streaming Technology 19

  22. Fast Track Implementation • All implementations on or ahead of schedule • Fast track methodology continues to deliver • Large scale projects completed in under 1/4 the time of industry norm • Delivers huge savings for client • Frees PME staff for other jobs • Reduces barrier to change • A key differentiator of Visage offering

  23. Visage - Proven RoI • Significant IT and infrastructure savings • Increased equipment utilisation – CT thin slice – no reformatting. • Unparalleled increase in radiologist efficiency • Greater clinical accuracy • Improved physician engagement • Delivers superior value proposition

  24. Visage – Case Study • Child presents with severe headaches • CT shows multiple aneurysms requiring emergency interventional surgery • No time to wait for lengthy technologist or 3D lab post- processing • MRA/MRV performed on-the-fly by Visage

  25. Visage - Proven RoI - Clinical

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