Healthcare without boundaries EMIS Group plc 2012 results presentation Mike O’Leary - Chairman Peter Southby - CFO
Introduction Mike O’Leary Chairman
Agenda • Introduction Mike O’Leary • Financial Review Peter Southby • Operational Review Mike O’Leary • Summary and Outlook Mike O’Leary 3
Financial review Peter Southby CFO
Financial highlights • Total revenue of £86.3m (2011: £73.2m), up 18% • Recurring revenue of £69.4m (2011: £61.1m), up 14% • Group operating profit: - Reported - £24.1m (2011: £21.5m), up 12% - Adjusted (1) - £22.8m (2011: £20.8m), up 10% • Cash generated from operations (2) of £27.4m (2011: £27.1m) • Net cash at £7.7m (2011: £8.0m) • EPS: - Reported – 32.55p (2011: 28.71p), up 13% - Adjusted (1) – 30.76p (2011: 27.69p), up 11% • Total dividend 14.2p (2011: 12.4p), up 15%, including final dividend 7.1p (2011: 6.2p) (1) Excludes exceptional items/capitalised development costs and adds back amortisation. For EPS also adjusts for related tax impact. (2) Adjusted to exclude internal development costs capitalised of £5.3m (2011: £3.8m). 5
Profit and loss £m H1 H2 FY FY % Year ended 31 December 2012 2012 2012 2011 Increase Revenue 42.3 44.0 86.3 73.2 18% Adjusted operating profit 11.5 11.3 22.8 20.8 10% Capitalised development costs 2.2 3.1 5.3 3.8 Amortisation (1.7) (1.9) (3.6) (3.1) Exceptionals/other 0.1 (0.5) (0.4) (0.1) Profit before tax 12.1 12.0 24.1 21.4 12% Tax (2.3) (2.3) (4.6) (4.4) Minority Interest/other (0.3) (0.3) (0.6) (0.2) Earnings 9.5 9.4 18.9 16.8 Adjusted EPS 15.6p 15.2p 30.8p 27.7p 11% Reported EPS 16.3p 16.2p 32.5p 28.7p 13% • Revenue increase driven by EMIS Web roll-out • Adjusted operating profit up by 10% despite £2.5m H2 increase in staff costs • 2012 underlying tax rate 23% excluding deferred tax rate change 6
Segmental analysis 2012 2011 £m (rounded) % Year ended 31 December EMIS RX Total EMIS RX Total Increase Revenue 69.8 16.5 86.3 59.6 13.6 73.2 18% Of which recurring revenue 56.7 12.7 69.4 49.7 11.4 61.1 14% Segmental operating profit 22.5 3.0 25.5 20.7 1.6 22.3 Capitalised development costs (5.3) - (5.3) (3.8) - (3.8) Amortisation 2.7 0.8 3.5 2.2 0.9 3.1 Adjusted segmental profit 19.9 3.8 23.7 19.1 2.5 21.6 10% Group costs (0.9) (0.8) Adjusted operating profit 22.8 20.8 10% • EMIS growth driven by EMIS Web roll-out including hosting, training • Cost base scaled up with average staff numbers 24% higher (1,236 at 31 December 2012, average for year 1,116) • RX benefited from £1.6m EPS R2 revenue and growth in estate 7
Core business analysis £m H1 % of H2 % of FY % of FY % of Year ended 31 December 2012 sales 2012 sales 2012 sales 2011 sales Licenses and software support 17.8 42% 18.6 42% 36.4 42% 33.2 45% Other support services 9.9 23% 12.2 27% 22.1 26% 20.3 28% Hosting 3.9 9% 5.1 13% 9.0 10% 5.8 8% Hardware and training 7.0 17% 6.1 14% 13.1 15% 10.4 14% Other 3.7 9% 2.0 4% 5.7 7% 3.5 5% Total 42.3 100% 44.0 100% 86.3 100% 73.2 100% Recurring 34.4 81% 35.0 80% 69.4 80% 61.1 83% Non-recurring 7.9 19% 9.0 20% 16.9 20% 12.1 17% Total 42.3 100% 44.0 100% 86.3 100% 73.2 100% • Recurring revenue growth £8.3 m – EMIS £7.0m and RX £1.3m • £3.2m growth in hosting driven by EMIS Web roll-out • High level of visibility through recurring revenue 8
Cash flow £m FY FY Year ended 31 December 2012 2011 • Cash from operations at £27.4m Operating profit 24.1 21.5 • Capex includes: Depreciation and amortisation 8.5 6.5 Working capital 0.1 2.9 • Hosting assets (£6.0m) Cash flow from operating activities 32.7 30.9 • Computer equipment (£2.5m) Development costs capitalised (5.3) (3.8) • Motor vehicles (£2.0m) Cash from operations 27.4 27.1 • Refurbishment costs (£1.5m) Discontinued operation - (0.8) • Net cash broadly unchanged at £7.7m Contingent consideration for acquisition (0.8) (0.2) Net capex (12.8) (6.2) Transactions in own shares (1.8) (0.9) Tax paid (4.6) (5.6) Dividends (7.7) (6.9) Other - (0.1) Change in net cash in year (0.3) 6.4 9
Balance sheet £m FY FY Year ended 31 December 2012 2011 Goodwill 22.0 22.0 • Strong balance sheet with £11.1m in cash / £3.4m debt Other intangible assets 30.8 28.6 • Investment in PPE Property, plant & equipment 22.1 14.8 • Deferred income steady and provides Associate and other current assets 19.2 16.2 good revenue visibility Deferred income (15.9) (16.1) • Cost of final proposed dividend £4.1m RX contingent consideration - (0.8) Other current liabilities (14.3) (10.5) Deferred tax (7.5) (8.1) Net cash 7.7 8.0 Net assets 64.1 54.1 10
Operational review Mike O’Leary Chairman
Summary • UK GP software market share maintained: - New basis - UK 51.2% (5,113 practices) - (2011: 51.6% - 5,247 practices)* Old basis – UK 53.7% (5,367 practices) – (2011: 53.1% - 5,397 practices)* - • EMIS Web GP moved into accelerated roll-out - by the year end : - 1,635 GP practices live (2011: 360) - 1,252 unfulfilled orders (2011: 1,565) - 2,564 practices in EMIS Web GP familiarisation service (2011: 2,359) • RX Systems: - High street pharmacy market share increased to nearly 35% (4,595 pharmacies) from 34% (4,338 pharmacies) - EPSR2 successfully rolled out to 83% of estate • New Group HQ successfully refurbished and occupied • Transformation of healthcare delivery in the UK opening up new markets : - EMIS Web integrated care projects progressing - EMIS Web Mobile developed and launched - EMIS IQ GPES contract being delivered - Healthcare Gateway beginning to gain traction * New basis installed systems only * Old basis installed plus orders not deployed 12
Operational review – EMIS GP systems • Business continues to perform well • UK market leader • GP System of Choice framework agreement – extension in hand • Cross selling and development in Scotland • NHS Wales opportunities 13
GP market-leading position maintained EMIS InPS iSoft TPP Country Other Total % % % % % estate estate estate estate England 8,164 4,284 1,428 371 1,916 165 52.5 17.5 4.5 23.5 2.0 Scotland 517 486 1 - - 1,004 51.5 48.4 0.1 - - Wales 152 251 69 - 4 476 31.9 52.7 14.5 - 0.9 Northern Ireland 160 113 51 - 26 350 45.7 32.3 14.6 - 7.4 UK Total 9,994 5,113 2,278 492 1,916 195 51.2 22.8 4.9 19.2 1.9 (EMIS and competitor data estimated based on company records showing customers installed as at 31 December 2012) 14
EMIS Web GP • Accelerated roll-out to GPs: - 1,635 GP practices using EMIS Web by the year end (2011: 360) - Familiarisation Service in 2,564 practices (2011: 2,359) - Total of 1,252 unfulfilled orders for EMIS Web by year end (2011: 1,565) - Total orders as of March 2013: 1,200 • Average rollout 150 EMIS Web practices per month • Expect to deploy substantially all outstanding GP order book by end 2013 • EMIS Web Mobile released • 2,000 th EMIS Web site installed 15
EMIS Web Integrated care • Pathfinder pilot projects progressing • Created ring fenced resource in sales, commercial development and software development • This opens a significant opportunity in the next few years 16
Healthcare Gateway and EMIS IQ Healthcare Gateway • Gaining traction • Now includes all major GP Suppliers EMIS IQ • Delivered under the national General Practice Extraction Service (GPES) Patient.co.uk • Helps patients play a part in their own care • 42% growth in total visits • Patient Access App launched in March 2013 17
NHS Commissioning – EMIS at the heart Context: • Public Finance • Demographics and LTCs • Patient Care NHS Commissioning Board • £80 billion Commission budget split - £20 billion centrally commissioned - £60 billion CCGs • 212 CCGs to come into being on 1 April 2013 The Way Forward “We will guarantee every patient the opportunity of online access to their own primary care medical record by the spring of 2015” “We will expect commissioners to promote the benefits of technology in improving outcomes” “We will support commissioners to provide patients with access to digital tools to help them manage health and care as they choose and shall also support a move to paperless referrals in the NHS by March 2015” 18
Strategic direction for EMIS Group • Starting point – strong patient record market share in primary care (GPs) • Extending across the spectrum of healthcare • Build or inter-operate • Timeframe – medium/long term opportunity • Quantum – order of magnitude larger market opportunity 19
Summary and outlook Summary Strong performance: • UK GP software market leading position maintained • RX Systems market share increased • New market initiatives progressing Investment in delivery capability for EMIS Web Outlook • Strong and growing revenue visibility • Trading in-line with management expectations since the year-end • EMIS Web accelerated roll-out continues • Continued development of EMIS Web into the wider NHS with exciting prospects delivering integrated care systems 20
Q & A
APPENDIX
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