For personal use only. Chairman s Address AGM November 2018

Transcription

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 $ 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 Services 4

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

8 FY18 in review November $18M Yale New Haven contract May 2018 I-MED renewal and extension contract May 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 ($M) % Profit before tax ($M) % NPAT ($M) % Cash ($M) % EPS (cps) % DPS (cps) % Growth in North American business Positive free cash flow in FY2018

10 Operational (Transaction) Model 8 Used in vast majority of US contracts Delivered as SaaS model [insert chart comparing transaction with capital model] Now used in RIS contracts in Australia Model based on guaranteed transaction minimums 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 $40,000,000 $35,000,000 FY- 18 Full Year Revenue Split Exam/licence revenue*** Support/baseline revenue*** Capital revenue Professional Services ***Recurring revenue $6,817,000 $30,000,000 $6,601,000 $25,000,000 $3,689,000 $1,890,000 $10,858,000 $20,000,000 $10,118,000 $15,000,000 $224,000 $1,694,000 $1,810,000 $2,427,000 $9,991,000 $10,000,000 $5,000,000 $10,980,000 $9,359,000 $11,951,000 $14,878,000 $18,286,000 $- $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 EBIT Margins 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 T 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 postprocessing MRA/MRV performed on-the-fly by Visage

25 Visage - Proven RoI - Clinical

26 Visage Case Study Radiologist able to walk through the interventional surgery in advance Saved precious time (estimated at tens of minutes) Increased the quality and speed of the surgical planning Interventional radiologist commenting on the contributions of Visage 7 to his work; "Visage 7 was priceless"

27 Visage - Proven RoI - Clinical Current Prior Fused Image Fused Subtraction showing intracranial bleed

28 Visage - Proven RoI CT Volume Growth at Visage Customer Reading Thins"

29 Visage - Proven RoI Acquisition protocols thin slice since Visage 7 golive Techs quicker - no modality-based reformats CT volume increased 23% since go live No change in staffing (radiologists or technologists) No change in modality (CT Scanner) count Techs spend more time with patients

30 Visage - Proven RoI - Financial Radiologist Productivity and Turn-Around Time Data Analytics STAT exams 30.4% Radiologist turn-around-time improvement (Enterprise)

31 Visage - Proven RoI - Financial

32 Visage - Proven RoI Radiologist Unparalleled increase in radiologist productivity. Greater clinical accuracy Improvements of 20% or more Results in better less stressful radiologist work environment Delivers very significant financial benefits

33 Marketing - North America

34 Building on the success of RSNA 2017 Larger more prominent stand Record number of pre booked meetings Visage to showcase latest product release and AI offerings

35 US Pipeline 33 Pipeline robust in terms of quality and quantity of opportunities [insert chart comparing transaction with capital model] Increasing number of opportunities coming to market Network effect from recent high profile wins Prospects at various stages of cycle

36 Growth Strategy 34 Transaction growth from existing clients Expand current footprint - new clients New product offerings for existing clients Extend to other geographical markets Leverage R&D capability to introduce next generation products

37 New products Visage 7 Open Archive 35 Same highly scalable enterprise imaging platform used in Visage 7 Modular design interoperable in complex environments Enables Visage to offer choice of deconstructed or single vendor solutions Well placed for the North American archive market

38 Visage 7 Open Archive - Mercy 36 $15M 7 year deal Mercy to standardise on Visage 7 Open Archive across its diagnostic imaging business Transaction-based model with potential upside Over 25 million diagnostic imaging exams to be migrated Once completed - one of the largest medical imaging archives in North America

39 New products - Enterprise Imaging 37 Single viewer for all images in the medical record (EMR) Radiology/Cardiology (DICOM format) Other Ologies neurology, ophthalmology etc Non radiology - reflected light - hi res photos & video Visage technology ideally suited Increases Visage value proposition Growth opportunity within existing contracts Image courtesy of Gray Consulting

40 38

41 Enterprise Imaging 39

42 Artificial Intelligence (AI) 40 Healthcare imaging ideally suited to AI Visage well positioned to take advantage of this emerging technology Advanced image processing in healthcare is in our DNA Visage architecture uses GPU technology Growing academic/research focused client base

43 Visage 7 AI - 41 Malte Westerhoff Chief Technology Officer Detlev Stalling Head of Research & Development Ming De Lin Clinical Research Manager North America

44 Visage 7 AI - 42 In product AI - automate high end functions within Visage 7 Visage 7 AI - single visualization platform for both clinical and research environments Visage 7 AI - Open platform enables integration of 3 rd party algorithms Platform for possible future Visage created algorithms

45 Summary 43 Unique market position Leading edge technology Proven implementation & support capability Delivers measureable financial benefits Meaningful improvement in clinical outcomes Unparalleled value proposition New products Enterprise Imaging & Open archive Leveraging R&D/Research capability AI/Deep Learning

46 44 Thank you AGM November 2018