Full Y ll Year ear R Res esult lts Presentatio ion FY18 18 - PowerPoint PPT Presentation

Full Y ll Year ear R Res esult lts Presentatio ion FY18 18 27 August 2018 | ASX:PGC

1. Executive Summary 2. Paragon Strategy and Vision 3. FY18 Financial Results 4. FY19 Focus Areas Paragon Care Limited (ASX:PGC) 2

Executive summary FY18 highlights – a transformational year  Successful completion of 9 acquisitions, resulting in a stronger, more diversified business  Now a $238m revenue and $30m EBITDA business (FY18 pro forma)  New senior team in place  FY18 revenue of $136.7m and underlying EBITDA of $19.7m 1 Executing on a tightened strategy and vision  Focused on a $9bn revenue opportunity  Strong organic growth drivers, targeting ~10% organic growth per annum (2x market)  Investing for the future, with $2m capex programme expected to deliver $3m annualised cost savings  Focus on recurring revenue streams as the business evolves from cyclical capital equipment sales Strong outlook and guidance  Strong start to FY19 with a record revenue performance in July 2018  Strong outlook for growth as recent acquisitions are successfully integrated  Targeting FY19 revenue of approximately $260m and EBITDA of approximately $36m Notes: 1. Underlying EBITDA quoted before one-off costs of approximately $1.5m largely related to acquisitions (reported EBITDA of $18.2m) Paragon Care Limited (ASX:PGC) 3

FY18 was a transformational year for Paragon Significant step change in revenue Paragon is building a people and Executing on a tightened strategy and EBITDA infrastructure platform to support and vision a $1bn revenue business  Successful completion of 9  New CEO in place with multiple acquisitions During FY18 PGC invested in: Board changes  $238m pro forma revenue in  Sales team growth  Key organic growth drivers FY18, up approximately 100% include improved sales  IT infrastructure from FY17 capabilities and product  Driving cross selling expansion  $30m pro forma EBITDA in FY18, opportunities and cost  Potential M&A opportunities to up approximately 75% from efficiencies FY17 accelerate growth in customer These initiatives are expected to base and geographies, in line accelerate in FY19 and beyond with strategy Clear plan to continue Paragon’s strong growth trajectory Paragon Care Limited (ASX:PGC) 4

FY18 acquisitions create a more balanced business Pre FY18 Post FY18 Capital & Services & Capital & Services & Devices Diagnostics Devices Diagnostics Consumables Technology Consumables Technology Australia Australia (national) (national) VIC VIC NSW NSW QLD QLD WA WA SA SA NZ NZ Purchasing complementary geographic and product category leaders to build out platform for future growth Notes: 1. Inclusive of acquisitions since FY15 Paragon Care Limited (ASX:PGC) 5

FY18 results highlights Revenue Net profit after tax Operating cash flow $136.7m $10.9m $7.6m up 7% 2017: $117.2m up 17% 2017: $10.2m 2017: $12.0m Gross profit Earnings per share Cash balance $54.9m 5.4c $40.4m up 19% FY18pf: 6.6c 2017: $46.1m 2017: 6.2c 2017: $18.6m EBITDA Dividend per share Net Debt/EBITDA 1 $19.7m 2.0c ff 2.1 x up 15% up 5% 2017: $17.1m 2017: 1.9c 2017: 1.1 x Notes: 1. Underlying EBITDA quoted before one-off costs of approximately $1.5m largely related to acquisitions (reported EBITDA of $18.2m) Paragon Care Limited (ASX:PGC) 6

FY19 guidance Clear plan supporting FY19 guidance Revenue ($m) 260 238  Restructure of sales team and enhanced IT infrastructure to strengthen organic growth 137  Optimisation of capital and consumables mix 117 93  Momentum building with a record revenue 32 performance in July 2018 FY15A FY16A FY17A FY18A FY18 FY19F pro forma Revenue targeting ~$260m EBITDA ($m)  Assumes full contribution from FY18 acquisitions 36  Targeting organic growth of ~10% (2x market) 30  Further upside possible from potential M&A 20 17 12 EBITDA targeting ~$36m 4  Expected cost savings of $3m in FY19 from business FY15A FY16A FY17A FY18A* FY18 FY19F transformation pro forma Notes: * Underlying EBITDA quoted before one-off costs of approximately $1.5m largely related to acquisitions (reported EBITDA of $18.2m) Paragon Care Limited (ASX:PGC) 7

1. Executive Summary 2. Paragon Strategy and Vision 3. FY18 Financial Results 4. FY19 Focus Areas Paragon Care Limited (ASX:PGC) 8

Market opportunity in Australia and NZ is $9bn p.a. and growing Significant opportunity to increase market share in an attractive and growing market $193bn p.a Total healthcare spend in $193bn p.a ~5% Total healthcare spend in Australia and New Zealand Australia and New worth $193bn Total sector Total sector Zealand ($AUD) 1 (includes hospital labour, all size growth capital spending etc) Paragon’s $9bn target market represents the high value $9bn p.a ~6% opportunities in medical and Total addressable Segment growth surgical supplies expenditure, market per annum growing faster than overall market $9bn p.a Paragon’s share is estimated at PGC target $238m ~3% just 3% of the target market market 2 PGC FY18 revenue Current market Significant room for organic (pro forma) share and inorganic growth Notes: 1. Total healthcare expenditure includes hospitals, medical and surgical supplies, primary health care, referred medical services, other services, research and capital expenditure 2. Paragon’s thorough screening process excludes low-value opportunities, resulting in a target market roughly 80% the size of the total medical and surgical supplies segment Source: Australian Institute of Health and Welfare, Health Expenditure 2015-16 Paragon Care Limited (ASX:PGC) 9

Executing on a tightened strategy and vision Mission To simplify and improve our customers’ work, thereby contributing to patient care To be Australia and New Zealand’s leading supplier of healthcare equipment and integrated Vision services We are creating a healthcare platform with a broad range of products and services for the hospital, allied and veterinary healthcare sectors Leveraging platform Growing Growing economics organically inorganically Strategy To drive sustainable By becoming an enduring Through select acquisitions efficiencies to deliver partner for our customers to add products and services benefits to our customers with our broad range of to our platform and increase products and services our geographic reach Revenue EBITDA margin Organic growth Aspirational 15% $500m ~10% (2x market) targets Paragon Care Limited (ASX:PGC) 10

Platform economics create a virtuous cycle More products and services… …sold via one platform… …to more customers Medical Specialists Speciality Devices Acute Care Ability to adjust product range to Speciality Diagnostics suit customer needs Aged & Primary Care Capital & Consumables Significant cost synergies through centralised functions Veterinary Services & Technology Single procurement platform offers  Common warehousing and significant efficiency for customer Laboratory market distribution logistics lowers costs   National reach offers upside Broader offering increases share of benefits to product/service wallet , deepening customer providers who sell their relationship, leading to further business to Paragon sales opportunities Virtuous cycle Paragon Care Limited (ASX:PGC) 11

Multiple drivers of organic growth Paragon is investing in a scalable business platform to leverage opportunities to drive organic growth  Investing into best-in-class sales  Developing IT infrastructure and architecture (e.g. ERP, CRM, EDI management team  Growing sales representative team systems) in conjunction with appropriate third parties for higher coverage Sales IT Developing Best-in-class IT Standardised IT architecture designed Organic growth multiplier through capabilities architecture and to enable information flows to unlock increasing share of customer ‘wallet’ infrastructure and growing customer base further sales opportunities A sophisticated and effective sales team Easy and intuitive information flows from CRM  Resource investment into building  Implementing and leveraging new skills, FTEs and project management technology (e.g. EDI) to automate system to develop standardised sourcing and supply of right product Integration approach across business lines Supply Chain for customer needs Competency in Ability to accelerate Accelerating path to leveraging Winning business by fulfilling synergies and sourcing products customer relationships across customer needs with right product at integration fulfilling unmet needs integrated businesses for growth the right time Leverage synergies across business lines Effective delivery of valued products and services Paragon Care Limited (ASX:PGC) 12