Capital Markets Day Medica Group PLC - Poised for further growth medica.co.uk
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Capital Markets Day
Medica Group PLC
Poised for further growth
Executive Team
7th September 2021
medica.co.uk
Document classification: Medica Restricted
Disclaimer
The Presentation is being made, supplied and directed only at persons:
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Any person in the EEA who is not a Qualified Investor, and any person in the UK who is not a Relevant Person, may not attend the Presentation and should not act or rely on this document or any of its contents. Any investment or investment activity to which the Presentation relates is available only to Relevant Persons in the United Kingdom and Qualified Investors in any member state of the EEA, and will be engaged in only with
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•CONFIRMATION OF YOUR REPRESENTATION: The Presentation is being made available to you on the basis that you are deemed to have represented to the Company, Investec and Liberum, that: (i) if you are in any member state of the EEA, you are a Qualified Investor and/or a Qualified Investor acting on behalf of Qualified Investors, to the extent you are acting on behalf of persons or entities in the EEA; (ii) if you are in the
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The Presentation is provided for general information only and does not purport to contain all the information that may be required to evaluate the Company. The information in the Presentation is provided as at the date of the Presentation (unless stated otherwise) and is subject to updating, completion, revision and further verification. No reliance may be placed for any purpose whatever on the information or opinions
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The Presentation contains inside information with regard to the Company and/or its securities and is being made available to recipients for the purposes of a market sounding pursuant to article 11 of the EU Market Abuse Regulation (Regulation 596/2014) as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”). Recipients of the Presentation should not deal or encourage any other
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in which it or they operate may differ materially from the impression created by the forward-looking statements contained in the Presentation. Important factors that could cause these differences include, but are not limited to, the ongoing national and international impact of the COVID-19 pandemic, general economic and business conditions, industry trends, foreign currency rate fluctuations, competition, changes in
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Document classification: Medica Restricted
Medica strategy
Delivering sustainable growth to enhance patient outcomes
1. Invest in our people and systems to build an engaged
and motivated team
Delivering
2. Be the company of choice for specialist doctors and
clinicians wanting to expand their expertise in
Invest in our
profitable
people &
growth with
systems
diversification
telemedicine
Trusted, go-to
partner
Telemedicine
company of
3. Be the trusted, go-to partner for healthcare providers
enhancing
patient outcomes
choice for
specialist doctors with a reputation for reliability and transparency to
enhance patient outcomes
4. Deliver profitable, diversified growth underpinned by
commitment to ESG with focus on market-leading
clinical governance
Document classification: Medica Restricted
Driving growth by delivering against
our values
Patient first and truly Adaptive and Excellence in Responsible and
collaborative pioneering our DNA accountable
1. Aim to double revenues to c.£100m within 3-5 years: remains on track despite Covid
2. Sustain market leadership in teleradiology in UK & Ireland
3. Invest to develop faster organic growth in adjacent fields such as clinical trials &
ophthalmology
4. Continue to invest & partner to deliver new technologies that enable our core
telemedicine offerings by enhancing quality and speed of reporting – for example
Augmented Intelligence
5. Drive additional growth via selective M&A in adjacent areas of telemedicine & new
geographies
Document classification: Medica Restricted
Document classification: Medica Restricted
Progress driving our strategy (2020-21)
As of Sept 2021:
Main market listing Market Capitalisation Over 300 employees Network of over 750
on London Stock radiologists, specialist
£200M+
Exchange
doctors and
radiographers
Document classification: Medica Restricted
FutureTech
Programme
Improving efficiency
Marc O’Brien
Chief Information Officer
medica.co.uk
Document classification: Medica Restricted
Future Tech Components
Advanced visualisation
The Integration Layer
tools
PACS
Orchestration
AI
Document classification: Medica Restricted
Costs & Benefits
Costs:
Approx. £6m investment over 3 years (incl. Licences, Hardware & Staff Time)
Benefits:
Cash Support Improved Significant Significant
payback 20%+ Reporter Efficiency Productivity
within 5 Operating Experience Gains Gains
years Leverage & Better
for Group Clinical
Outcomes
Document classification: Medica Restricted
UK teleradiology
Market
Strong demand in core market
Kevin Terrins
Director of Business Development
medica.co.uk
Document classification: Medica RestrictedIncreasing imaging demand translates
to increasing teleradiology
• ‘Traditional’
o Significant YoY growth in imaging for past 7 years
o CT 58% between FY13/14 and FY19/20*
o MR 46% between FY13/14 and FY19/20*
o Increasing clinical applications for CT/MR (complex/time consuming to report)
• ‘Additional’
o Backlog- 1.2m less cross-sectional exams were performed in 2020 vs 2019, despite underlying historical growth trend*
2019 vs 2018 2020 vs 2019 2020 vs 2019
CT 108% -8% -454,235
MR 104% -20% -784,250
-1,238,485
o Diagnostics: Recovery and Renewal Report Oct 2020 (“Richard’s Review”)
represents ambition for step change in access to diagnostics and an associated increase in imaging growth rates
o Recommendation 8 - CT Scanning capacity should be doubled in the next 5 years
o Recommendation 9 - MRI, PET CT, Plain X-Ray, Ultrasound & DEXA to expand in line with historical growth
rates as a minimum
o Recommendation 12 - Additional 2000 radiologists and 4000 radiographers required
o ~3 hubs per million population, or ~168 hubs, each with CT, MRI, Ultrasound and Plain X-Ray
*activity figures taken from NHS England Diagnostic Imaging Dataset Document classification: Medica RestrictedSystemic radiologist capacity issue
RCR forecasts widening workforce gap with no plan to close it
• Shortfall of 1876 (33%) radiologists in 2019 expected to grow to 3331 (43%) in 2024
• 5-6 years required for qualified doctor to become a radiologist
2014 2019 RCR 2024 estimate
419 1876
3331
4418
3048
3732
WTE Establishment Additional WTE Required WTE Establishment Additional WTE Required WTE Establishment Additional WTE Required
*RCR UK Workforce census published April 2020 Document classification: Medica RestrictedMedica Ireland
Our expertise in a complimentary
market
Caroline Byrne
Managing Director, Ireland
medica.co.uk
Document classification: Medica RestrictedIrish Radiology Market Fundamentals
*
€545m
** ***
37.5% 8-10%
Undersupply.. Increasing Demand.. Radiology Services
Market
..3rd lowest number of ..Putting further
..providing significant
radiologists per capita pressure on stretched
opportunity for private
in Europe public resources
providers
Radiology services provided primarily by public and private hospitals, as well as private providers
– Public sector has consistently been unable to meet demand
Outsourced radiology services and particularly teleradiology play a significant role in bridging supply
/ demand imbalance
Even pre-Covid, HSE strategy focused on current capacity, future requirements and GP access to
diagnostics
*Faculty of Radiologists presentation Spring 2019 ** OECD forecast growth *** Management Estimate based on national diagnostics per annum
Document classification: Medica RestrictedMedica Acquisition – benefits & synergies
Focus & Expertise Business Development Radiologist Access Systems & Readiness Governance & Quality
- Holistic review - Growth strategy - Migration to - Phased approach - Audit, Response
on where Medica defined central support for alignment for to Concerns and
UK operating model - central support Clinical
- Short & medium 1 New client
model could add term focus plan recruitment, Governance
value for Medica rostering and deployment defined and
agreed
Ireland, allocation 2 Nighthawk –model enhanced
leveraging - Resource and scoping
team structure to - UK IMC - New team
resources and radiologist 3 Interface for MDI structure to
defining enable growth PACs
mobilisation support
successful team 4 NIMIS* elective
structure for solution
growth
*National Imaging Information System Document classification: Medica RestrictedWhat our staff say:
“I have worked for Global Vision for 5 years before the
acquisition of the company by Medica.
Medica has made me feel very valued and included. We
have a great team, from Management right down to the
administration staff.”
Debbie, Patient Engagement Team Administrator
“I started with Medica (formerly Global Diagnostics) in 2008 and even
though there has been growth in the number of colleagues and
patients, the focus on the patient has never changed and that focus
remains as part of Medica.”
George, Sonographer
Document classification: Medica RestrictedRadMD Summary
Leveraging our core capabilities
in a new area
Rick Patt, MD
Co-founder and Principal
medica.co.uk
Document classification: Medica RestrictedRadMD Background
• Founded in 2006 by two pharma industry veterans
o Focus on supporting use of medical imaging in pharma, biotech, and medical device clinical trials
o Acquired by Medica in Q2 2021
• Business Rationale
o Many clinical trials for new drugs/devices use medical imaging to prove efficacy, safety, mechanism of action,
and other properties.
o Imaging performed for clinical trials is evaluated in a completely different manner than imaging for clinical
patient management
o Industry arose in the 1990’s around managing imaging in clinical trials, the Imaging Core Lab business
• Business Focus
o RadMD focuses on providing high-value expertise functions related to imaging in trials: consulting,
regulatory support, training of radiologists to evaluate the images, trial personnel training on imaging,
matching and managing expert radiologists to trials
o Most of our competitors focus on what have become commoditized operations of imaging management in
clinical trial
Document classification: Medica RestrictedRadMD Clients
What is our typical client?
• Special focus on small to mid-size pharma and biotech
• Have big 10 pharma/biotech clients also
• Start-ups with single compound in development
Therapeutic areas of specialization
• Oncology (drug and device)
• Imaging diagnostics (contrast agents)
• Neurology (Alzheimers, degenerative diseases)
• Cardiovascular
Document classification: Medica RestrictedRadMD Advantages in the Marketplace
• Upper and middle management has big pharma
experience, understand client needs
• Focus on service: “raising the bar on imaging in
clinical trials”
• Level of flexibility provided to clients that is not
typical in our industry
• Focus on expertise, not (commoditised)
operations
• Quality acknowledged in the industry
o Acknowledged global leader in expert clinical trial
radiologists to perform image analysis
o BRITI training: only dedicated training and testing
platform
o Oncology, imaging diagnostics
Document classification: Medica RestrictedTranslating strategy
into growth & returns
Financial metrics
Richard Jones
CFO
medica.co.uk
Document classification: Medica RestrictedCorporate objectives outlined in early 2020
Document classification: Medica RestrictedUK Revenue- long term track record of
double digit growth pre Covid
• Prior to the impact of Covid,
UK Revenues the UK business grew at double
50
45
digit rates over the period
40 • Revenues split broadly equally
35
30
between NightHawk and
25 Elective
20
15 • NightHawk remained resilient
10
5
despite pandemic, but Elective
0
2016 2017 2018 2019 2020 work significantly impacted as
EL
NH
15
13.5
16.9
16.8
19.7
19.3
24.5
22.1
12.5
23.0
NHS ceased non-urgent
procedures requiring imaging
Document classification: Medica RestrictedUK Gross and Net Operating Margins
UK margins Despite impact of pandemic, margins
remained constant in 2020 as a result of
60.0%
careful management of margin pressure
50.0% over the period via :
40.0% • Selective bidding for key new
NightHawk contracts
30.0%
• Pro-active engagement with
existing clients for extensions and
20.0%
new contracts without full tenders
10.0% • Focus on quality & reliability of
service as key differentiators
0.0%
2016 2017 2018 2019 2020
• COS efficiencies including use of
GPM 49.8% 48.7% 49.0% 47.8% 47.4% overseas reporters
NOP 28.5% 28.1% 27.4% 24.3% 14.0%
Document classification: Medica RestrictedUpdated Target revenue and growth rates-
organic
£100m+ 12-14% 15%+
Ireland/US
UK
Short to medium
Short to medium
3-5 Year Group term
term Revenue
Revenue Target Revenue growth
growth rate
rate
Document classification: Medica RestrictedUpdated Target margins and cash
conversion
45%+ 20%+ 80%+
Group Group
Group
Short to medium Operating profit
Net Operating
term Gross to cash
Margins
Margin conversion
Document classification: Medica RestrictedNew Target returns
20%+ 15%+You can also read
