Ewan Phillips, CEO Jonathan Shaw, FD ... - Deltex Medical · Results for year ended 31 December 2016 Ewan Phillips, CEO Jonathan Shaw, FD April 2017

Results for year ended 31 December 2016

Ewan Phillips, CEOJonathan Shaw, FD

April 2017

Proven: ODM fluid management halves

post-op complications

2© 2016

© 2017

• Consumable revenues up 5% at £5.8m (2015: £5.5m)

• US probe revenues up 40% to £1.9m• 28 platform a/cs at 31 December, up from 17

• 25% growth in local currency with sterling sales overtaking UK

• International probe revenues up 25% at £1.7m

• UK probe revenues down 26% at £1.9m• Signs of stabilisation: new probes and new evidence

• Gross margin on consumables up to 74% (2015: 70%)

• Monitor revenues down £0.2m at £0.4m

• Cash position £0.6m: additional £0.4m raised in March

Financial highlights – 2016 progress

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• Probe revenues returned to growth: up 14% on H2 15• Strong growth in export markets: volumes up plus pound weaker

• H2: US up 40%, International up 30%

• H2 UK down 17% (H1: down 36%)

• Substantially reduced operating loss• H2 operating loss £0.6m down >50% (H2 15: £1.3m)

• £1m+ annualised cost savings before forex came through in H2

• Substantially reduced cash consumption• H2 operating loss before non-cash costs of £0.2m (H2 15: £1.0m)

• H2 total cash consumption halved to <£0.4m

Financial highlights – second half progress

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• 30th US platform account in place from January• Redeploying US resources to better match platform distribution

• March probe margin higher than fixed staff costs for first time

• UK Q1 2017 revenues slightly ahead of Q1 2016• 10% fall in probe revenues offset by monitor sales and 3rd party

• International on track but behind Q1 2016• Increased monthly probe order from France; other regulars up or maintained

• Timing differences on low margin monitor orders

• All probe tip assembly in-house from January: £30,000+ per month saving

• Successful field trials of embedded impedance technology: launch pending

• EU pilot grant €50,000 awarded re VP loop Graphical User Interface

YTD 2017 progress

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US platform accounts

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Newsflow forward look

US expansion programme• Traction in platform accounts

• Adding new accounts

– Platform type

– System cross-selling

New product development• Multi-modal workstation concept

– Non-invasive HD ICG

– Velocity Pressure loops – TruVue GUI

• Digital QI – marketing programmes

• Broadening market – animals

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Summary

• US growth rate continuing to improve

• Target of 30 platform accounts• Achieved in January: 28 at year end

• Focus shift from evaluations to implementations: spread best practice

• Redeploying resources to match platform constituents

• March first month where probe margin covered regular US staff costs

• UK trends improving, signs of stabilising

• Manufacturing margin improvement validated and underway

• Positioned for returns from investment in product development

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Appendices

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Appendix A

Summary financial information

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Appendix A –2016 results – Pro-forma

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2016£’000

2015£’000

Probes 5,458 5,230

Other consumables 331 259

Total consumables 5,789 5,489

Gross profit 4,306 3,855

Sundry income / (expense) (5) (6)

Net monitor income / (costs) 28 (15)

Cash costs (6,176) (6,716)

Cash loss before USA investment costs (1,847) (2,882)

Non cash costs (522) (253)

US market development costs - (351)

Operating loss (2,369) (3,486)

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Appendix A - Balance sheet assets and liabilities

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Liabilities Dec 16£’000

Dec15£’000

Trade & other payables 2,414 2,766

Borrowings - current 858 1,864

Borrowings - >1 year 967 34

Provisions 119 117

4,358 4,781

Assets Dec 16£’000

Dec 15£’000

Non-current assets

Intangible assets 2,396 2,006

Property, plant and equipment 431 573

2,827 2,579

Current assets

Inventories 760 805

Trade & other receivables 2,499 2,621

Tax recoverable 107 125

Cash at bank and in hand 582 575

3,948 4,126

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Appendix B

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Addressing previously unmet clinical need

Proven: ODM fluid management halves

post-op complications