Announcement PDF ImpediMed Limited 1/50 Parker Court Pinkenba, QLD, 4008 Australia E: investorrelations@impedimed.com W : impedimed.com 22 October 2024 Companies Announcements Office Australian Securities Exchange Investor Presentation ImpediMed Limited (ASX:IPD) releases the attached presentation to be delivered to investors and analysts today. Approved for release by the Board of ImpediMed Limited. For more information, contact Leanne Ralph, Company Secretary, at leanne.ralph@bellev.com.au Impedimed Limited Q1 FY25 Results October 2024 Proprietary, do not reproduce, distribute, or excerpt without written permission from ImpediMed. ©2024 ImpediMed Limited. 1 Forward Looking Statements This presentation contains or may contain forward-looking statements that are based on ImpediMed Limited (ImpediMed) management’s beliefs, assumptions and expectations and on information currently available to management. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements, including without limitation our expectations with respect to our ability to expand sales and market acceptance in the US and Australia including our estimates of potential revenues, costs, profitability and financial performance; our ability to develop and commercialise new products including our ability to obtain reimbursement for our products; our expectations with respect to our clinical trials, including enrolment in or completion of our clinical trials and our associated regulatory submissions and approvals; our expectations with respect to the integrity or capabilities of our intellectual property position. Any forward-looking statements, including projections, guidance on future revenues, earnings and estimates, are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. While management has prepared this information based on its current knowledge and understanding and in good faith, there are risks and uncertainties involved which could cause actual results to differ from projections. You should not place undue reliance on forward-looking statements which speak only as of the date when made. Except as required by law, ImpediMed does not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. ImpediMed may not actually achieve the plans, projections or expectations disclosed in forward-looking statements. Actual results, developments or events could differ materially from those disclosed in the forward-looking statements and no representation, warranty or assurance (express or implied) is given or made in relation to any forward-looking statement by any person (including ImpediMed Limited). Proprietary, do not reproduce, distribute, or excerpt without written permission from ImpediMed. ©2024 ImpediMed Limited. 2 Agenda 1 Building a sustainable business – Strategy recap 2 Key metrics and Q1 FY25 results 3 Other Q1 highlights 4 SOZO® Digital Health Platform product roadmap update 5 Q2 FY25 outlook 3 Immediate strategy Execute to breakeven with a focus of sales, marketing and clinical execution in BCRL 12-Month Priorities Next 12 months: Execute towards break even July 2025 Next 1-2 years: Innovate and expand GOAL 1 GOAL 2 GOAL 3 GOAL 4 GOAL 5 BCRL sales execution World-class customer experience Progress to break even Expand reach in oncology Develop new markets • Continued focus on sales execution with urgency • Manage cash burn • Support LPP implementation and patient utilisation • Progress towards break even • Oncology body comp • ROW Strategy in progress • Leg lymphoedema • Completed new product roadmap at Board for review • Execute on discussions with large IDNs on systemwide implementation • Continued progress to towards payor coverage target 85% through support of Academic Societies and KOLs • Deliver actionable insights at the point of care Ensure everything we do is underpinned by quality and integrity 4 Building a sustainable business Momentum continues 1 New strategy changes implemented 2 Confidence in the business model • Forward sales indicators improving • Sales momentum increasing • Payor coverage increasing 3 Focus on cost control remains 4 Finalising product roadmap for future growth 5 New strategy changes implemented Refocus on sales growth • • • • Completed market and customer segmentation analysis. Refined marketing strategy and pricing model. Headcount realigned to support sales with customer facing staff increasing by 15%. Established structured sales processes and metrics: • Pipeline • Average sales lead time • Unique customer interactions • Increase in marketing and awareness campaigns to support clinical adoption. Reintroduced dedicated resource for contract renewals focusing on both price and unit opportunities Cost out completed – full year benefit to be realised in FY25. • 10% reduction in cash expenditure vs FY24. • Staffing costs reduced: • Executive base remuneration reduced 30% on a like for like basis. • No cash bonuses paid for FY24. 6 Q1/Q2 Initiatives driving awareness & lead generation Increasing conference attendance and media activity drives awareness and supports clinical adoption. • 15 national and regional conferences • 12 media placements with several more planned through Q2 • Two new study articles in highly respected journals featuring BIS supporting clinical adoption • Stevie Award Finalist for Most Innovative Company of the Year lifting awareness • Breast Cancer Awareness Month Campaign 7 Key Metrics Improving Q1 FY25 Metrics Opportunity Pipeline Units 585 34% increase vs Q4 FY24 1 new NCCN Center Covered Lives1 146.6M 5% vs Q4 FY24 3 additional payors providing coverage 16 States now at Critical Mass2 SOZO at 23/33 19 Private payors providing positive coverage3 New! - NAPBC Accredited Centers 39 Private payors providing silent coverage4 SOZO at 143/570 Institutions 1.Covered Lives: represents the number of people nationally covered by Medicare or private insurance payors. 2.Critical Mass: 80% or more of the population in a State is covered by Medicare or private insurance payors (includes Medicare and the top 5 payors with covered lives within the state). 3.Positive coverage: Insurance payor has a publicly available medical policy stating that BIS is medically necessary. 4.Silent coverage: Insurance payor has not explicitly included or excluded BIS for lymphedema assessment in their medical policy. CPT 93702 was removed from their experimental/investigational medical policy but the payer has not developed a BIS specific medical policy. 8 Forward sales indicators continue to improve U.S. SOZO Units Opportunity Pipeline1 Unit Opportunity up 100% Q1 FY25 Pipeline up 34% vs. Q4 FY24 1.Total Opportunity Pipeline represents validated leads for SOZO units in pipeline at end of quarter. 9 Core business revenue and TCV improving Q1 FY25 Financial Highlights # SOZO units sold U.S. SOZO Core Business TCV 28 $4.8 million1 22% vs Q4 FY24 40% vs Q4 FY24 Total revenue SOZO Core Business ARR $2.7 million $11.6 million 7% vs Q4 FY24 5% vs Q4 FY24 1.Includes 3-year renewal of large multisystem customer. 10 TCV – Momentum continues with record quarterly increase A$ millions SOZO Core Business Quarterly Total Contract Value1 • 6 networks contracted with 2-3 devices • Renewed a top 5 customer • Price of renewed contracts increased 19% on average SOZO Annual Recurring Revenue2 • ARR up 21% vs Q1 FY24 1.Total Contracted Value (TCV) relates to new and renewed contracts and includes any consideration for the sale of SOZO units as well as the total licence fees for the duration of the signed contracts. Typically, these contracts are for a period of three years. 2.Annual Recurring Revenue (ARR) represents the amount of revenue reasonably expected to be recognised for the next 12-month period based on existing contracts, assuming installation upon sale and no churn. The amounts shown are as reported. The exchange rate used for Q1 FY25 ARR calculation was 0.67497 (Q4 FY24: 0.66699). 11 Revenue and Installed Base Revenue Global Installed Base A$ millions Units Q1 FY25 revenue down 7% vs Q4 FY24 mainly due to: • Lower ROW (timing of distributor inventory replenishment); and • The impact of FX – in constant currency North America revenue increased vs Q4 FY24. ROW Installed Base US Installed base • Churn 3% annualized. • U.S. installed base adjusted for inactive units • 78 inactive or non-revenue generating units removed from base • Working on reactivating a third of these units. 12 Cashflow Cashflow In thousands AUD Receipts from customers Research & development Product manufacturing & operating costs Advertising costs Staff costs Administration and corporate costs Interest received Government grants and tax incentives Net operating cash in/(out)flow: Q1 FY25 Actual 2,718 (88) (314) (301) (4,899) (2,199) 279 (4,804) Purchase of property and equipment Purchase of intangibles Net investing cash in/(out)flow: (447) (447) Operating leases Net financing cash in/(out)flow: (107) (107) Net cash in/(out)flow: Net foreign exchange differences Cash at beginning of period Cash at close of period (5,358) (626) 24,632 18,648 • Results largely in line with expectations. Board is comfortable with current cash position and continues to monitor closely. • FY25 budget phasing includes higher cash consumption in Q1 and assumes customer receipts increase throughout the year, in line with revenue. • FY25 cash expenditure is forecast to be 10% below FY24 and cost control remains a focus. • Operating cash outflow of $4.8m was 10% higher than budget due mainly to timing. • As the timing issues revert, operating cash outflow is expected to decrease from $4.8m in Q1 to <$3.5m in Q2. • Cash balance of $18.6m was notionally impacted with strengthening AUD. The change is largely unrealised. • Deposits are held in USD and provide a natural hedge against the Company’s predominantly US cost base. 13 Key Q1 highlights • National Accreditation Program for Breast Cancer Centers (NAPBC) Standards, released in October, included BIS for the first time in the Survivorship section • SOZO in 143/570 NAPBC centres • Payor coverage continues to increase: • • • • • • Positive coverage published by three additional payors. Increasing coverage in NY, CT, NJ, & NM Covered lives increased 6.6m to 146.6m1 16 States now at critical mass 19 Private payors providing positive coverage 39 Private payors providing silent coverage Patient Tests (000s) • • • Installed Base growth driving increased Patient Testing 71,000 Patient Tests in Q1 FY25 Up 4% versus Q4 FY24 24% 3-year CAGR1 • v6.0 software release & upgrade commenced • Astra Zeneca contracts 2 SOZO devices • • Phase 1b trial to assess fluid volume in a pharmaceutical study of patients with heart failure and moderate renal impairment 18-month trial to be conducted in Europe 1.Compound Annual Growth Rate. Quarterly patient tests Q1 FY22 to Q1 FY25 14 SOZO Digital Health Platform product roadmap update • Andrew Grant returned to Non-executive Director role after completing draft product roadmap for the SOZO Digital Health Platform following extensive workshop process and broad cross-functional input. Board now reviewing. • Rigorous business model cases developed for evaluation with additional voice of customer research to follow. • SOZO Pro incorporated into lymphoedema indication expansion and potential new indications. • Expanding growth initiatives beyond BCRL will require additional funds. After finalising priorities and identifying the right time to pursue these opportunities, the Company will assess various potential sources of capital to support any investment. • An update on the product roadmap and growth outlook is expected with the release of Q2 FY25 results. 15 Outlook for Q2 FY25 • Continued focus on Lymphoedema awareness activities to generate leads • Drive further improvement in sales and other key business metrics • Optimise contract renewal outcomes • Further expansion of private payor coverage • Continued cost focus with operating cash outflow expected to reduce to <$3.5m • Finalise the product roadmap and next steps for longer term growth 16 17