Inspiration Healthcare Group plc Interim Results Presentation For period ended July 2018 October 2018
Our Business Our vision • To improve patient outcomes in critical care Our mission • To develop outcome-enhancing products for intensive care patients and to promote these globally. We are passionate about improving patient Hypothermia Station outcomes through innovation, research and life-saving customer service. The business • An international supplier of Neonatal Intensive Care and Patient Warming Equipment and distributor of Life Support Equipment • Key Markets: Critical Care, Operating Theatres and Home Healthcare • Core Values: Patient focus, Outcome changing, Pioneering, Research driven 1
H1 ended July 2018 Highlights In line with management expectations Sales growth despite regulatory delay Continued Investment in staff Patient Warming System launched Renewal of Tecotherm and Micrel Agreements Neuroprotexeon Ltd announced seeking to IPO H2 2018 AlphaCore 5 Patient Warming Controller and expanded mattress offering for surgery and areas of critical care 2
H1 ended July 2018 Financial Headlines • Revenue up 3% to £7.4m in line with our expectations (H1 2017/18: £7.2m) • Revenue grew both domestically (2%) and internationally (4%) • EBITDA up by 9% to £0.7m (H1 2017/18: £0.6m) • Operating profit £0.5m (H1 2017/18: £0.5m) • Cash remains strong ending the half year at £2.4m; a net inflow of £0.3m in the period • Outlook unchanged with growth expected in H2 1 before exceptional items in 2017 3
Consolidated Income Statement Unaudited Unaudited H1 2019 H1 2018 £’000 £’000 7,391 7,185 Revenue Gross Profit 3,319 3,202 696 641 EBITDA 502 514 Operating profit 2 (2) Finance Income/(Expense) 504 512 Profit before tax (70) (51) Taxation 434 461 Profit after tax 1.4p 1.5p Diluted EPS 4
Revenue by Product Ownership H1 2019 Technical Support 11% (H1 2018: 13%) Other 2% (H1 2018: 2%) Inspiration Branded 44% (H1 2018: 48%) Distributed 43% (H1 2018: 37%) 5
Revenue by Market Sector H1 2019 Operating Theatre Critical Care £5.1m £0.8m Thermoregulation Respiratory Thermoregulation Brain Monitoring Medos Acutronic Operating Theatre Acutronic £0.8m (11%) Novalung H1 2018: £0.8m Critical Care Home Healthcare £5.1m (69%) £1.5m (20%) H1 2018: £5.1m H1 2018: £1.3m Home Healthcare £1.5m Parenteral Feeding 6
Revenue by Geography H1 2019 Rest of World 2% Middle East & Africa Americas 6% 8% Europe 16% Domestic 68% 7
Consolidated Cash Flow 6 6 months months H1 2019 H1 2018 £’000 £’000 Profit before taxation 504 512 Depreciation & Amortisation 158 111 Movement in working capital (124) (464) Other 33 3 Net cash generated from operations 571 162 Taxation (69) (50) Purchase of tangible and intangible assets (201) (467) Other 2 (18) Net increase/(decrease) in cash and cash equivalents 303 (373) Cash and cash equivalents at the beginning of the year 2,086 2,165 Cash at end of period 2,389 1,792 8
Consolidated Balance Sheet 31.07.18 31.07.17 31.01.18 £’000 £’000 £’000 Non-Current Assets 1,824 1,362 1,782 Cash 2,389 1,792 2,086 Other Current Assets 3,930 2,911 3,625 Total Liabilities (3,306) (2,479) (3,128) Net Assets 4,837 3,586 4,365 9
Strategic Markets - Focus on Neonatal Intensive Care Core skills Current Neonatal own-brand product portfolio • • Strong market knowledge Respiratory (Inspire nCPAP) • • Track record in growing sales in NICU Neurological (Unique + CFM) • • Strong relationships with Key Opinion Resuscitation (Inspire rPAP and LifeStart) Leaders • Thermoregulation (Tecotherm Neo / AlphaCore 5 ) • Increased regulatory and development capability in field 10
Strategy: World Leader in Neonatal Intensive Care Identifiable Disruptive Brand Technologies Worldwide 11
Global Market Drivers WHO is committed to 15m babies born reducing the health Prematurely p.a. problems and lives lost as a worldwide result of preterm birth Over 1m deaths per year – As infant mortality rates fall largest cause of mortality in (reduction in childhood diseases infants under 5 (18%) etc) prematurity becomes increasingly the main cause of death 75% of deaths preventable with cost-effective equipment Global Market for Neonatal Medical Equipment: Procurement changing to • $2.7bn by 2024 (Persistence reduce wastage and Market Research) improve value • Regulatory compliance $9bn by 2025 (Transparency becoming more burdensome Market Research) across the industry Footnote: Source World Health Organization Fact Sheet: Preterm Birth 12
Strategic Objectives – Size Matters!!! Strategic Imperative Objective • £100m + t/o • Organic, Acquire, Leverage • Direct Operations in key markets • Acquire / Develop • Comprehensive range for NICU • Acquire / Develop • Disruptive technologies • Acquire / Develop 13
Putting together the pieces Comprehensive Social Range Conscience Leading-Edge Patient Technology Focussed Route to Outcome Market Changing Products Proven by Outstanding Clinical Research Customer Service Complementary Value Products enhancing Endorsed by Innovative KOLs Solutions 14
Outlook • Outlook unchanged with growth expected in H2 • Exploring Distribution Opportunities • Develop markets further over 3 years • Continual investment from our balance sheet to grow business over the next 3 years • New product introductions to steadily increase growth rate • Actively seeking synergistic acquisitions in neonatal intensive care 15
Appendices
The Inspiration Story Sales Sales Sales Sales Sales Sales Sales c.5.3m c.9.5m c.14.3m c.15.5m c.£0.6m c.£1.6m c.13.1m 2003 2007 2010 2015 2016 2017 2018 Outsource 3 new Consolidated Distribution of Licensed Launched Listed on AIM Manufacturing products & 4 products in Tecotherm Inspire nCPAP & new cleared in EU reengineered UK corporate Group head office 17
Shareholder Base Institutional Shareholders 28% Management Shareholders 50% Notifiable Private Investors 10% Other/ Free Float 12% 18
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 them have any responsibility whatsoever in respect of the accuracy or completeness of, or omissions from the contents of this document or any other document or information, written or oral, supplied at any time or in respect of any opinions or projections expressed herein or omitted there from. • No responsibility is accepted, and any and all responsibility and liability is expressly disclaimed, by Inspiration and its directors, officers, agents, advisers, affiliates or employees for any errors, miss-statements, misrepresentations or omissions in this document or any other such document or information supplied at any time to the recipient or its advisers in the course of the recipient’s evaluation of Inspiration. • Any forward looking information contained in this document is based on subjective estimates and assumptions made by representatives of Inspiration and about circumstances and events that have not yet taken place. Such estimates and assumptions involve significant elements of subjective judgement and analysis which may or may not be correct. Accordingly, no representations are made as to the accuracy of such information and there can be no assurance that any such projected results will be attained or outcome realised. • Neither Inspiration, nor any of its subsidiaries, affiliates, representatives, partners, directors, officers, employees, advisers or agents has any authority to make or give any representation or warranty whatsoever in relation to Inspiration or the prospects of Inspiration and makes no such representation or warranty. • This document does not constitute or form part of any offer for the sale of shares, business or assets of Inspiration nor shall it constitute the basis of any contract which may be concluded for the sale of the shares, business or assets of Inspiration. 19
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