Transcript Slide 1
Annual Meeting of Shareholders January 11th , 2013 TSX : OMG 1 Forward-Looking Statement Certain statements included in this PowerPoint presentation constitute “forward looking” statements, including those identified by the expressions “will”, “continue”, “predict”, “may”, “would”, “could” “anticipate”, “believe”, “plan”, “estimate”, “expect”, “intend” and similar expressions, to the extent they relate to OPMEDIC Group Inc. (“OPMEDIC” or the “Corporation”) or its Management. The forward looking statements are not historical facts but reflect Management’s current expectations regarding future results or events. These forward looking statements are subject to a number of assumptions, risks, uncertainties and other factors, such as business and economic conditions; market competition; changes in government regulations; the ability of the Corporation to secure and maintain all required licenses, permits and certifications to provide its services in the jurisdictions where the Corporation is currently doing business or intends to do business in the implementation of its business plan; risk associated with third-party service providers; the ability for the Corporation to establish and develop new relationships and to build on existing relationships with clients; the ability of the Corporation to recruit and retain the services of its key personnel; the ability of the Corporation to obtain additional financing on reasonable terms or at all; and the ability of the Corporation to market its services, that could cause actual results, performance, achievements, industry results or events to differ materially from current expectations. These forward looking statements are made as of the date of this PowerPoint presentation and OPMEDIC does not intend, and does not assume any obligation, to update or revise them to reflect new events or circumstances, unless otherwise required by law. Prospective investors are cautioned not to place undue reliance on forward looking statements. 2 Investment Highlights Leading provider of professional services and facilities in the healthcare industry, with a focus on fertility, genetic, endoscopic and surgical services Strong macro trends and positive fiscal & regulatory environment Well-positioned in a fragmented industry offering growth and acquisition opportunities Solid financial performance, stable & recurring revenues with strong margins and cash flows generation Experienced management team with aligned interests and a proven track-record of execution 3 Corporate Profile Overview OPMEDIC is a provider of a wide range of professional fertility and genetic services, sperm banking services and surgical and endoscopic services and facilities for patients and surgeons LTM Stock Price Performance 4 Corporate Profile Capital Markets Highlights Share Price (January 1, 2013 ) $2.70 Shares Outstanding 17.3M Market Capitalization $46.7M Enterprise Value $42.5M EV/EBITDA 7.1x P/E 15.7x Dividend Yield 3.0% Financial Highlights Revenue Gross Profit Gross Margin EBITDA EBITDA Margin Net Income Net Margin EPS 2009-2012 Revenue CAGR 2009-2012 EBITDA CAGR 2009-2012 Net Income CAGR Cash Bonds Total Debt (August 31, 2012) $19.8M $10.3M 52% $5.9M 30% $3.0M 15% $0.17 13.9% 17.2% 20.8% $7.1M $1.4M $2.9M 5 Organization PROCREA Clinics OPMEDIC Surgical Facilities and Services Surgical and endoscopic services and facilities One site for surgery, three sites for endoscopy (Laval, Quebec city and South Shore of Montreal) Fertility Clinics Diagnostic Lab, Prenatal Screening, Fetal Ultrasound PROCREA Cryopreservation Center Sperm Banking Fertility treatments, laboratory analysis, imaging and diagnostic procedures Donor sperm banking and sperm preservation services Two sites and four satellites in Quebec One of the largest donor sperm banks in Canada One site and one satellite in North of Toronto Eventually ovocyte bank 6 Management and Board of Directors Name Position with OPMEDIC Group Principal occupation / Experience Dr. Pierre St-Michel Director, President and CEO Founder Extensive experience in both medicine and corporate management, Medical Director of the ART Medical Board Canadian Fertility and Andrology Society, former chief of Gynaecology at Maisonneuve Rosemont hospital and former Chief of Surgery at Hôpital Fleury in Montreal Jean-Marc Lachance CFO Over a decade of experience in financial management, former administrative director of the Quebec Order of Pharmacists Dr. Marc Villeneuve Director, Medical Director Founder Nearly 20 years of experience in Obstetrics, Gynaecology, and Reproductive Endocrinology Jacques Landreville Chairman of the Board Director of Colabor Group Inc., GLV Inc. and Lassonde Industries Inc. Hani Basile Director (Chairman Audit Committee) Businessman and director of Sanimax Industries Inc. Jean Larivée Director (Chairman Governance Committee) President and Chief Executive Officer of Prochaps Corporation Jacques Lemieux Corporate Secretary Partner at the law firm Norton Rose Solid Board of Directors and management team with significant experience in the healthcare industry 7 Business Strategy & Objectives Build on our current platform to consolidate our position as a leading provider of fertility and genetic services in Québec Expand our presence in the fields of fertility and surgical/endoscopy services and consider new segments of the healthcare industry Enter new geographic markets, organically and through accretive acquisitions Leverage the scope, scale and reputation of our existing operations to broaden our presence in the Canadian healthcare industry 8 OPMEDIC Group Services Offering 9 PROCREA - Fertility Mission Help individuals conceive children using leading-edge biotechnology. Assist in the diagnosis, treatment and prevention of diseases related to reproductive medicine. Services Offering In vitro fertilization Diagnostic laboratory services Prenatal screening Foetal ultrasounds Related surgery: hysteroscopy laparoscopy colposcopy Solid reputation and track-record as a provider of fertility treatments & services 10 PROCREA - Fertility One of the largest fertility service providers in Canada. Two locations in the Province of Quebec: Montreal & Quebec City One newly opened location in Toronto (Vaughan) Medical team has increased to : 14 gynaecologists 3 endocrinologists 3 urologists Four satellite locations in the Province of Quebec: Sherbrooke, Chicoutimi, Laval and South Shore of Montreal One satellite in North of Toronto (New Market) Regional platform providing sound basis for expansion in new markets, organically and through accretive acquisitions 11 Regulatory Catalyst BILL 26 – NEW LEGISLATION IN FORCE SINCE AUGUST 5TH, 2010 Quebec Health Insurance Board pays for three in-vitro fertilization treatments Reimbursement for IVF has decreased from $6,975 to $4,600 in January 2012. Increased reimbursement for Frozen Embryos Transfers (FET) with significant increase in volume. All other covered services are paid the same amount. Quebec government estimates that the number of IVF cycles done in Quebec could increase between 8000 and 10,000 cycles by 2014 Approximately 7,500 IVF cycles were performed in Quebec last year. OPMEDIC currently performs over 30% of all IVF cycles in Quebec Currently, OPMEDIC has the capacity to increase the number of its IVF treatments. The company has virtually no private competition in Quebec outside the Montreal area. Competition from public hospitals to come, but implantation is slower and smaller than announced. Well positioned to capitalize on Quebec’s new legislation relating to fertility treatments 12 OPMEDIC - Surgery Mission Provide surgeons in private practice with access to state-of-theart surgical facilities and related services. Enable timely access to elective surgical procedures for patients. Services Offering General surgery Plastic surgery Gynaecology Head and neck surgery Urology 13 OPMEDIC - Endoscopy Mission Provide patients with diagnostic and operative endoscopic procedures Quebec City Opened June 2008 1 operating room, 3 surgeons, 4 gastroenterologists Endoscopic Center Laval Opened January 2008 2 operating rooms, 6 surgeons, 2 gastroenterologists South Shore of Montreal Opened October 2011 3 operating rooms, 6 surgeons, 5 gastroenterologists Quebec’s new prevention policy in colo-rectal cancer Should increase the demand Discussions with the RAMQ to cover the ancillary costs New Quebec government prevention policy is expected to increase the demand 14 PROCREA Cryopreservation Center Mission Offer short and long term sperm storage services. Support fertility operations through sperm auto preservation & sperm donation. Eventually offer ovocyte banking for donor cycles. Services Offering Donor sperm banking (Samples distributed to major fertility clinics throughout Quebec) Sperm preservation services for short or long periods of time for men undergoing certain medical treatments (chemotherapy, radiotherapy or surgery) One of the larger donor sperm banks in Canada 15 OPMEDIC Group Selected Financial Information 16 Summary Balance Sheet As of August 31, 2012, OPMEDIC had a cash of $7.0 million (41¢/share), total debt of $2.9 million and bond investments of $1.4 million In $000s, IFRS FY 2012 31-August-2012 FY 2011 31-August-2011 Cash $7,053 31% $9,789 42% Current Assets $9,927 43% $12,360 53% Total Assets $23,103 100% $23,263 100% Current Liabilities $2,040 9% $3,459 15% Long-Term Debt $2,676 12% $2,939 13% Shareholders' Equity $18,151 79% $16,613 71% Total Liabilities & Shareholder’s Equity $23,103 100% $23,263 100% Working Capital $7,887 $8,901 Strong balance sheet - well positioned to fund organic growth and take advantage of strategic acquisition opportunities 17 Income Statement Highlights Significant ramp up in 2011 revenues and significant improvement in margins In $000s (except EPS), IFRS Revenue Gross Profit FY 2012 31-August-2012 19,804 FY 2011 31-August-2011 22,215 10,259 12,860 Gross Margin - % 52% 58% EBITDA 5,949 9,344 EBITDA Margin - % 30% 42% Net Income 2,967 5,442 Net Margin - % 15% 24% EPS (Basic and Diluted) $0.17 $0.32 Dividend per Share $0.085 $0.085 Return on assets 13% 26% Return on equity 17% 38% Solid performance since 2011, as we register the impact of the new government policy 18 Revenue by division 2012 YTD Revenues Enhanced stability of operations through diversification of its revenues 19 Historical Performance 2009-2012 Revenue CAGR = 13.9% 2009-2012 EBITDA CAGR = 17.2% 2009-2012 Net Income CAGR = 20.8% Note: Numbers in 2009 and 2010 in Canadian GAAP. Numbers in 2011 and 2012 in IFRS. Strong growth in revenue, EBITDA and net income 20 YoY Margin Improvement Strong operating leverage resulting in significant improvements in operating margins 21 First Quarter Highlights Q1 2012 November, 30 2012 Q1 2011 November, 30 2011 Revenue 5,309 5,390 Gross Profit 2,713 3,038 Gross Margin - % 51% 56% EBITDA 1,697 2,127 EBITDA Margin - % 32% 39% Net Income 921 1,247 Net Margin - % 17% 23% EPS (Basic and Diluted) $0.05 $0.07 Dividend per Share $0.02 $0.025 In $000s (except EPS), IFRS 22 Financial Markets Highlights Share Price (January 3, 2013) $2.70 Shares Outstanding 17.3M Market Capitalization $46.7M Enterprise Value $42.5M EV/EBITDA 7.1x P/E 15.7x Dividend Yield 3.0% Major Shareholders (% of Basic Shares Outstanding): Two principal shareholders (physicians) Other officers & directors 57.4% 0.5% 23 17,274,867 shares outstanding 69,441 options outstanding TSX : OMG 24