EMIS Group Analyst Presentation (merged) · 2015-06-16 · 3 healthcare without boundaries EMIS Group – Presentation Team Sean Riddell, Chief Executive, 45 – BSc in Psychology

1 healthcare without boundaries

Analyst Presentation

29 March 2010


EMIS Group – Table of Contents

PageEMIS Group - Presentation Team 3Investment Opportunity 4Company Background and History 5Current Products and Services 6Products and Services – 2009 Income Breakdown 7Revenue Model 8EMIS – The Market Leader 9The Healthcare IT Environment 10EMIS Web – The Opportunity 11EMIS Web – Revenue Model 12EMIS Web – In Action 13EMIS Web – Liverpool PCT Roll-out 14Strategy and Opportunity 15Financial Summary 16Financials – Profit and Loss Account 17Financials – Balance Sheet 18Financials – Cash Flow 19Summary 20Appendices 21-29


EMIS Group – Presentation Team

Sean Riddell, Chief Executive, 45– BSc in Psychology– 20 years’ experience of healthcare IT – Joined EMIS in 1989 (CEO since 2006)

Phillip Woodrow, Finance Director, 62– Chartered Accountant– Baker Tilly 1965-2008 (Partner since 1972)– Joined EMIS in April 2008 as Finance Director

EMIS has been delivering healthcare to patients since 1987.

EMIS


Investment Opportunity

Trusted, market-dominant healthcare software business

Profitable and highly cash generative

20+ year track record of organic growth

High visibility of earnings with substantial recurring revenues

History of successful product development

Experienced management team

Clear growth strategy - organic + acquisition

Dividend paying“Written by Doctors for Doctors”

EMIS named best technology supplier of the year 2009 in the UK IT industry awards.

EMIS award win


Company Background and History

Established in 1987

Based in Yorkshire

Canadian operations established 2005

774 employees

UK market share of 52%

2009 turnover of £58m; £15.8m EBIT*

Strong cash conversion

* IFRS

“EMIS has made the data sharing process simple. Feedback from the practices has been excellent.”Sue Manifold, Midway Medical Centre

EMIS PCS


Current Products and Services

Hosting

OtherHardware Sales and Training

Support Services

Software Licences

GP Practices

Medical records

Appointment booking

Consultation mode

Intelligent prescribing

Decision support

Installation

Call centre support

Maintenance

Hardware

Training

3rd party software

Patient arrival screens

Appointment recall screens

Patient kiosks

c13 million patient records in data centres

CfH accredited (PCS WAN)

Supporting GPs’ management of cradle to grave electronic health records

Over 2,000 practices are now actively using EMIS Access online services.

EMIS Access


Products and Services – 2009 Income Breakdown

UK Revenue by Product/Service

Recurring revenues – £42.7m

Other – £14.5m75%

25%

Percentage of Recurring Revenues

Total - £57.2m

0% 50% 100%

Other

Recurring £40.4m95%

53%

Gross Margin – £48.1m

£7.7m

Support Services – 27%

Hardware sales and Training – 16%

Hosting – 6%

Other – 6%

Software Licences – 45%

45%

27%

16%

6% 6%

In December 2009, 500,000 patients logged in to EMIS Access.

EMIS Access


Revenue Model

Average annual revenue per GP Practice of approximately £10,000

64% of customers have been with EMIS for >10 years

1000

6000

7000

8000

9000

10000

3000

4000

5000

2000

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

£

Software Licences £4,700

Support Services £1,100

Other Recurring Income £1,700

Hardware Sales and Training £1,600

Other Sales £900

75% Recurring

25% Non-recurring

Over one million repeat prescriptions requests were submitted online using EMIS Access July - December 2009.

EMIS Access


EMIS – The Market Leader

39 million Electronic Patient Records on EMIS’ platformFurther opportunities for market share expansion:

Scotland / legacy system share erosion / PCT driven consolidation

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

England

Northern Ireland

Scotland

Wales

EMIS

InPS

iSoft

TPP

Other

(Allocation of competitor data estimated)

“It has reduced the pressure on our reception staff and given patients new services at their fingertips. It’s awin-win.”Malcolm Scanlan, Windmill HealthCentre

EMIS Access


The Healthcare IT Environment

The NHS National Programme for IT / Connecting for Health

Objective: national care record service – single, centralised patient recordMethod : ruthless standardisation – “rip and replace”Focused on hospital IT as the solution (not cradle to grave record)Two LSPs withdrawnWell documented issues surrounding delivery of LSP systems£500m spending cuts for NPfITOutcome: classed now as a failed IT programme

New policy: “connect all” rather than “replace all”*

New opportunity: EMIS Web

Focus on cradle to grave recordConnecting healthcare professionals Delivering efficiency and cost savingsNHS ordered “familiarisation service” in 2010

*NHS – Informatics Planning 2010/2011

A total of 52 EMIS PCS Enterprise hosted systems host data for 2.9 million registered patients.

EMIS PCS Enterprise


EMIS Web represents the future of healthcare software

EMIS Web – The Opportunity

Upgrade our existing GP practices in England to EMIS Web NHS accreditation for GP use expected H2 2010, growth to be reflected in 2011

Convert non-EMIS GP practices

Penetrate new areas of NHSBenefits

• Shared cradle to grave record• Reduces waiting times • Saves admin time – cost saving• Reduces risk of errors – LIFE SAVING

Successful roll out to date• Liverpool – minor surgery wait times cut from 9 months to 1 day in some cases• Gateshead – primary care records of 206,000 patients accessible by out of hours clinicians• Tower Hamlets – physio team saving 7 admin hours per week

EMIS Web now contains c13 million patient records.

EMIS Web


EMIS Web - Revenue Model

2012 illustrative average annual revenue per GP Practice of £13,000

1000

6000

7000

8000

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10000

3000

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0

1000

2000

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4000

5000

6000

7000

8000

9000

10000

£

Software Licences

Support Services

Other Recurring Income

Hardware Sales and Training

Other Sales £800

78% Recurring

22% Non-recurring

EMIS Web = incremental revenue opportunity

11000

12000

13000

£3,500Hosting and EMIS Web

£300

£5,000

£1,400

£2,000

“The physiotherapy admin team is saving seven hours each week thanks to EMIS Web.”Mark Caulfield, NHS Tower Hamlets

EMIS Web


EMIS Web – In Action

Real time, multidirectional, cost effective flow of information

Before EMIS Web

After EMIS Web

Limited electronic information flow, slow and costly

Diabetes PatientExtended Primary Care Contact team

GP

Specialist Nurse

Dietician

£425 per

seat pa

Psychologist

Diabetic Specialist

Podiatrist

Patient Record

Pharmacist

Patients of the Liverpool minor surgery service have seen waiting times slashed from nine months to less than one day in some cases.

EMIS Web


EMIS Web – Liverpool PCT Roll-out

Multidisciplinary Teams

Liverpool PCT

CommunityMatrons

EMIS: LV/PCS InPS

FeedMessaging

and/or ViewingiSOFT

MMT

End of Life

GP System Primary Care Interfaces

AED Diversion –Royal Liverpool

Anti Coag

Minor Surgery

Outside of Hospitals Services – Primary & Community

ABPI (April Go Live)

Emergency Department –

Royal Liverpool

Walk-In Centres

Weight ManagementJoint Injections

Dermatology (April Go Live)

ENT

Gynaecology (April Go Live)

North Mersey Clinical Pathways – spanning numerous Health and Social Care Services

Out of Hours GP

Child Health (V&I)

COPD

PCI Clinic

Coronary Care

Heart Emergency Centre

Acute Medical Unit

In Patient

Out Patient

Pharmacy

Diabetes Heart Failure Cancer

Treatment Rooms

IV Therapy

AED Diversion –Alder Hey


Alder Hey


Aintree

Emergency Renal

Surgical Assessment Unit

Emergency Care

Secondary Care ServicesKEY

Installed

Underway

Planned

Social Care / SAP

MentalHealth

EMIS Web

Waiting times for ultrasound appointments have been slashed from nine months to two weeks because of EMIS Web streamlined appointment booking.


Strategy and Opportunity

Growth of existing business

ScotlandUpgradesNew productsReplacement of legacy GP systems

Roll out of EMIS Web

Sale to other (non-GP) healthcare professionalsConversion of current GP customer base over 2-4 year periodAddition of current non-EMIS GPs

Acquisitions - healthcare software and service providers

Overseas - Canada provides foothold in North American market

Patient discharges from the Acute Medical Unit are quicker, with 2-4 hours a day saved not contacting practices for patient information.

EMIS Web


Financial Summary

Growth business (despite NPfIT)

High visibility of earningsc75% recurring revenuesLong-term growth trendEnd user loyaltyStable and secure customer base

Annual licence fees; quarterly invoicing mainly in advance

Consistently strong cash generation

Healthy balance sheet

8 year sales history - UK GAAP

30.0

35.0

40.0

45.0

50.0

55.0

60.0

2002 2003 2004 2005 2006 2007 2008 2009

8 year EBITDA history - UK GAAP

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2002 2003 2004 2005 2006 2007 2008 2009

NPfIT

NPfIT

“Using EMIS Web means patient care can become safer and moreefficient.”Dr William Lumb, Sedbergh Health Centre

EMIS Web


Financials – Profit and Loss Account

(all in £ millions) Year ended 31 December

2009 IFRS 2008 IFRS 2007 IFRS

Turnover 57.7 55.4 48.5EBITDA 20.1 10.1 7.0EBITDA Margin 34.8% 18.2% 14.4%EBIT 15.8 5.9 5.1EBIT Margin 27.4% 10.6% 10.5%

Growth in revenue driven primarily by increase in software licences / support fees

Strengthening EBITDA margin as costs reduce

Consistently profitable

“Our patients think the service is wonderful. We’ve cut down on call volumes and queues at reception. A great result all round.”Zoe Clarke, Melrose Surgery

EMIS Medicine Manager


Financials – Balance Sheet

(all in £ millions)At 31 December

2009 IFRS 2008 IFRS 2007 IFRS

Fixed assets 49.0 44.9 10.8

Current assetsCash at bank and in hand 5.2 6.1 25.1Other current assets 8.2 6.7 6.7

Total current assets 13.4 12.8 31.8

Current liabilities (15.7) (16.1) (13.2)

Long-term liabilities (35.3) (40.2) -

Net assets 11.4 1.4 29.4

Low net working capital requirement

10 year founder loan - £23 million - to be repaid in full on admission

“I am able to view patients’records before visiting. It’s timesaving and cost effective.”Susan Tay, Liverpool PCT Provider Services

EMIS Web


Financials – Cash Flow

(all in £ millions)At 31 December

2009 IFRS

2008 IFRS

2007 IFRS

Cash generated from operations 19.9 10.9 1.2Interest (2.6) (2.1) 1.6Tax (3.1) (2.8) (1.2)Net capital expenditure (3.9) (1.2) (2.3)Software development (4.5) - -Purchase of subsidiary - (30.9) -Net financing ex dividends (6.6) 14.0 -Dividends - (7.0) -Net decrease (0.8) (19.0) (0.8)B/F at 1 January 6.1 25.1 25.9C/F at 31 December 5.3 6.1 25.1

Highly cash generativeFree cash flow allows sensible dividend

Up to eight hours a week are saved by community matrons using EMIS Web, enabling them to spend more time with patients.

EMIS Web


Summary

Profitable and highly cash generative

Strength of market share

High visibility of earnings and substantial recurring revenues

Growth of existing business

Potential of EMIS Web

Dividend paying


Appendices


EMIS Group Structure


The History of EMIS Group

1987: Development of core EMIS Software

2008: Roll out of EMIS Web commences (non GP)

1997:EMIS MoD GP systems contract signed

1998: Launch of LV ‐ text based version with GUI Interface

2006 EMIS Web Development starts

August 2007: GPSoC Signed

2006: DMICP MoD Contract signed for both GP and Dental software

1987

1999/2002: Launch of EMIS PCS –Windows and MS SQL based GP product LAN then WAN

1999: Egton set up as separate trading division to concentrate on hardware support

2010


Market Share

Country EMIS estate EMIS % InPS estate InPS % iSoft estate iSoft % TPP estate TPP % Other Other %

England 4936 59.0% 1545 18.5% 832 9.9% 731 8.7% 321 3.8%

Northern Ireland

149 40.8% 82 22.5% 72 19.7% 0 0% 62 17.0%

Scotland 132 12.7% 203 19.6% 25 2.4% 0 0% 673 65.0%

Wales 160 31.7% 242 47.9% 99 19.6% 2 0% 3 1%

UK TOTAL 5377 52.4% 2072 20.2% 1028 10.0% 733 7.1% 1059 10.3%

Country MOD Overseas Isle of Man Channel Islands EMIS Canada EMIS Web projects

EMIS Non GP EMIS Dental (Non MOD)

HMP Customer

Number 634 4 13 16 26 140 108 2 36

Total:6356

Other areas

Market Share by Geography



Market Share – Last 10 Years

GP Supplier Yr 1999 % Yr 2000 % Yr 2005 % Yr 2009 %

EMIS 3,030 28% 3734 35% 5541 49% 5377 52.4%

InPS 1,871 17% 1683 16% 1695 15% 2072 20.2%

iSOFT 2,294 21% 2095 19% 1825 16% 1028 10.0%

GPASS 933 9% 922 9% 861 8% 673 6.6%

TPP 110 1% 733 7.1%

Other 2,748 25% 2378 22% 1361 12% 386 3.8%

UK Total 10876 10812 11393 10269



EMIS Award Wins

Finalist 2009


ISO Accreditation

ISO 9001:2008 TickitMoD and Overseas & international

ISO 9001:2008Egton

ISO 27001Information Security Quality Management SystemEMIS including Egton

ISO 20000 IT Service ManagementEgton

ISO 20000 IT Service ManagementEMIS (Hosted product)


EMIS Group - Probono

LV in use by Africaid medics Qresearch.orgQsurveillance.orgQrisk.orgSigntranslate.com


Barriers to Entry

Longevity of customer relationships – disincentive to move

Less expensive than competitor products

Dominant market share and consolidation of PCTs

Supplier accreditations

EMIS Web core development effort largely complete – significant development costs for a new entrant

Data mobilisation benefits

EMIS Group Analyst Presentation (merged) · 2015-06-16 · 3 healthcare without boundaries EMIS Group – Presentation Team Sean Riddell, Chief Executive, 45 – BSc in Psychology

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