MACH7 TECHNOLOGIES LIMITED — Investor Presentation 2017

Sep 18, 2017

Copyright © 2013 Mach7 Technologies

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M7T:ASX CORPORATE OVERVIEW

2007

FOUNDED

2012

MACH7 PRODUCT LAUNCHED

2016

MERGER WITH 3DM:ASX

2017

FY17 Rev A$10.3m (+76%)

FINANCIAL INFORMATION ($A)

Share price (29-Aug-17)	$0.17
Number of shares (m)1,2,	118.2m
Market Capitalisation	$20.1m
Cash (30-June 17)	$2.7m
Debt (31-Dec-16)	$0.01m
Enterprise Value	$17.4m

1. Excludes 25m unlisted performance shares 2. Excludes 3.6m unlisted options

MAJOR SHAREHOLDERS

% # shares (m)	% # shares (m)	% # shares (m)
JM Financial Group (Melb., Australia)	11.8	10.3%
BV Healthcare II (BioVeda Capital, Singapore)	11.4	9.9%
Ravindran Krishnan (Mach7 Founder, Singapore)	5.5	4.7%
PT Dwi Satrya Utama (HNW, Indonesia)	4.8	4.2%

Note: 66.76% of shares held by Top 20

52 blue chip customers

Divestment of 3DM

Total $35m cumulative investment in product Copyright © 2013 Mach7 Technologies development

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MACH7 – THE SOLUTION

Mach7 Enterprise Imaging Platform is a flexible and scalable solution that allows images and data to be easily shared, improving clinical workflows and patient care outcomes. With multi specialty capabilities, across all the ‘ ologies’, complete patient records with all specialist content, enhancing the EMR.

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SIGNIFICANT FIRST MOVER ADVANTAGE

MOVER ADVANTAGE 100% already handling owned > 1 billion IP portfolio[}] images

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enterprise imaging technology with a suite of complementary clinical tools

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INVESTMENT HIGHLIGHTS

VALIDATED MARKET DEMAND

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Proven execution with track record of strong double-digit revenue growth and secure longterm contracts

Focused strategy to achieve positive EBITDA in 2018

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52 11 456
blue chip countries sites
customers
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Top tier board and management team with strong founder ownership and involvement

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Mach7 Technologies Proven execution with track is a revenue stage record of strong double-digit company with a and secure revenue growth long-term contracts rapidly expanding global customer base.

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FY17 HIGHLIGHTS A$

Revenue

$10.3m +76%

EBITDA

($4.2)

+51%

Cash balance

$2.7m

Strong revenue growth from new contracts with large U.S. university medical centres, healthcare networks and radiology groups

7-year deal signed with Maine Health (TCV btw $3.8m and $5.5m)

Major implementation completed in Qatar (TCV $2m+) Recurring revenue +88% or $1.6 million

R&D continues to be fully expensed ($2.65m). Expenses also included non-recurring items 3DM and CEO transition ($1.75m combined).

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STRONG REVENUE TRAJECTORY

• 2013 to 2017 revenue CAGR of +37.3%

• Growth driven by customer wins in the US market

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($m)
Total Revenue USD
9.0
8.0
$7.7m
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
FY13 FY14 FY15 FY16 FY17
Total revenue Linear trend
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INCREASING CONTRIBUTION FROM RECURRING REVENUE

• 2013 to 2017 recurring revenue CAGR of +73.3%

► Recurring revenue growth driven by bias of new contracts favouring a higher mix of annual maintenance support and pay as you go pricing in lieu of a lower upfront licence fee.

($m) 6.0

Revenue mix USD

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5.0
4.0
3.0
2.0
1.0
0.0
FY13 FY14 FY15 FY16 FY17
Recurring S'ware licence and services Linear (Recurring)
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REVENUE GROWTH FUELLED BY GLOBAL MARKET OPPORTUNITY

► Graph shows the extrapolation of current revenue trend (2013 to 2017) out to 2023.

• This is considered a business as usual scenario given the significant market opportunity in the U.S. alone.

Global revenue growth potential (USD)

($m)

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100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
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Total Revenue Base case forecast Recurring Revenue Base case forecast

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SALES MOMENTUM AND PIPELINE

Sales pipeline data at August 2017

FY15 FY16 FY17 ~~AVERAGE DEAL SIZE~~ USD*

109 6 6 m $ customers total sales value USD

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FY15 FY16
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FY17
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COMPLETED DEALS
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*Decline in average deal size due to increasing number of new subscription cloud models and contract upgrades

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CUSTOMER EVOLUTION

Mach7’s global customer base is progressing from earlier adopters towards significantly larger mid-market

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456 Installed sites, across…

11 Countries

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52 Unique customers, comprising…

38 Hospitals / medical centres

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12 Imaging centres

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2 Veterinary

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Mid-market opportunities – mid-market adoption of VNA technology increasingly dominating Mach7’s customer focus

Early customers – academic medical centres and large integrated delivery networks

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IMPROVING OPERATING LEVERAGE

M7T approaching EBITDA breakeven – all R&D continues to be expensed

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Expense to revenue ratio []
2.5 x
2.0 x
1.5 x
1X = EBITDA 1X = EBITDA
1.0x
breakeven breakeven
0.5x
CY14 CY15 FY16 FY17 FY18
Forecast
Expense to revenue ratio Including R&D expense
Expense to revenue ratio Excluding R&D expense
Linear (Expense to revenue ratio Including R&D expense)
Linear (Expense to revenue ratio Excluding R&D expense)
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*Operating expenses excluding depreciation, amortisation and impairments, 3DM expenses and CEO transition costs.

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INVESTING IN GROWTH

• High correlation between P&L and cash outgoings with all R&D expenditure expensed

• R&D expenditure ~25% revenue for the last four years as we continue to enhance the product and protect our competitive advantage.

• The graph excludes 3DM expenses and CEO transition costs as they are considered non-recurring.

Expense composition USD

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($m)
12.0
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10.0
8.0
6.0
4.0
2.0
0.0
CY14 CY15 FY16 FY17
R&D Sales & Marketing Royalties Technical support General & Admin
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RESOURCES FOCUSED ON LARGE US MARKET OPPORTUNITY

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GEOGRAPHY FUNCTION
Executive
& Admin.
7 R&D
USA
Headcount 17
43
47
June 2017
AUS. Services
and
1
SING.
Sales support
3
14
9
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IMPROVING FINANCIAL POSITION

More customers, strong revenue trajectory and a clean balance sheet

Balance Sheet (A$m) – major line items 30 June 2017	Balance Sheet (A$m) – major line items 30 June 2017	30 June 2016
Cash	2.7	1.7
Receivables/prepayments	5.2	2.7
Intangible assets	17.8	35.6
Total assets	25.9	40.8
Payables	1.8	1.2
Deferred revenue	2.9	2.4
Interest bearing liabilities	0.0	3.2
Deferred tax liability	5.3	10.5
Total liabilities	10.0	17.3
Net assets	15.9	23.5
Net tangible assets	3.4	(1.6)

• Impairment charges of $17.7

• million were made to intangible assets during FY2017. The charges relate to the acquisition of Mach7 by 3DM.

• R&D expenditure is not

• capitalised

• Interest bearing liabilities

• significantly reduced to $25k due to repayment of debt.

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VALIDATED MARKET DEMAND – TODAY

blue chip customers countries

sites

10,500 4,700 IMAGING CENTRES IMAGING CENTRE NETWORKS

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$3.8 Billion global addressable market – US largest market

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5,600 REGISTERED HOSPITALS

3,900 NON-GOVT HOSPITALS

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MARKET OBSERVATIONS

MARKET FACTORS

• ~6%-10% CAGR

• ~$4B Market

• Shifting to value driven healthcare

• Increasing costs with no net productivity gains in 20 yrs.

• Many hospitals with negative o eratin mar ins p g g

• Routine surgery in USA cost 2X other countries

• Staff and physician shortfalls

• Aging population

• Consumerism: social media, mobile health, patient portals

• Ubiquitous access: interoperability, data interchange , HIE, image exch…

• • Economize healthcare: provider consolidation, risk shifting

• • Personalized HC: Patient Centric, pop health

• Government initiatives: single payer, regional/country exch, ACA, etc

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Opportunity Enterprise Imaging + Sub-specialties (Dental, Vet, Opht etc)

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Problems with current Electronic Health Record Systems [1]
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THE PROBLEM

Lack of interoperability of current systems prevents optimal patient care outcomes and increased healthcare costs.

CURRENT INDUSTRY STANDARDS

PACS Picture Archiving Communication Systems

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Lack of interoperability 46%
Viewers do not work 10%
Not enough vendor support 9%
Data security 5%
Too much downtime 3%
Other 27%
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1
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as of specialists cite lack of interoperability a key problem with storage systems

46%

of providers believe they have lost revenue due to image access challenges

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1
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36%

VNA

Vendor Neutral Archive

52% 1

of specialists believe this problem negatively impacts patient care outcomes

1. Sourced from CHIME, lifeImage CEO Perspectives on Enterprise Imaging study using data collected from 100 participating facilities.

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PREFERRED ALTERNATIVE

As a response to the problems, the preferred investment for imaging related technology is expected to be enterprise interoperability and access to clinical diagnostic content

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MACH7 – THE SOLUTION

Mach7 Enterprise Imaging Platform is a flexible and scalable solution that allows images and data to be easily shared, improving clinical workflows and patient care outcomes.

▶ Platform simplifies the access and sharing of diagnostic images and patient care data.

▶ Enables improved clinical workflow and patient care outcomes.

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INDUSTRY LEADER

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Since its 2012 launch, Mach7 has been recognised as an industry leader, receiving various awards and accolades.

No.1 Leader, US Healthcare Provider VNA/AICA Unstructured Data Platforms for Integrated Care

Our PACS vendors all proposed schemes to improve workflow and imaging access, but we needed a more powerful, newer archive and communication system to help us with data flows. Mach7 will give us so much more power because it can deal with all types of image data sets. That is what we need .

IDC MarketScape (2016)

David Marichal, CTO, Radiology and Imaging Specialists

Asia Pacific Medical Imaging Informatics Company of the Year

Mach7 has been a cost effective solution for Broward … We have better control of the data at a lower cost and high availability to leverage solutions that aren’t proprietary

Frost & Sullivan (2015)

Ronaldo Montmann

VP of Information Technology, Broward Health

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Source: IDC, 2016Copyright © 2013 Mach7 Technologies

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MACH7 KEY FEATURES

Innovative platform with intuitive, point-andclick interface and real-time monitoring dashboard

Proprietary technology that intelligently brings together multiple image formats into a cohesive workflow

Scalable software that grows with the customer

Cloud offering and medical image archiving system reduces IT expense for customers

Highly recommended by customers

► Mach7 Enterprise Imaging Platform is best-in-class software

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Easy Procedure
Physician &
tracking,
Patient Portals
monitoring and Telehealth /
sharing Teleradiology
Rapid delivery
of patient Health
data across Information
the enterprise Exchanges
Smart
Enterprise
Device/Mobile
Connectivity
Image
Acquisition
Easy Access and Regional Patient
Sharing of Patient Data
Labs and Health Referring Physician / Access to “Priors” Routing/Sharing
Data
Clinician Information and Complete
Sharing Patient Histories
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and industry

Worldwide presence with regional support

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STRATEGY TO WIN

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•
Refreshed product positioning and pricing
•
Increase recurring revenue base
•
Shorten the sales cycle Disrupt the •
Grow the app ecosystem
market
•
Evaluate entry into new
verticals (vet, ophthalmology,
dental, Sports Medicine etc)
•
Grow Technology Partners
Enter new
through
markets
partnerships
New regions
through indirect
channels, VAR, and
OEM partners
C U S T O M E R
•
Target relevant CMS incentives,
regulations, and reimbursements
Solve the •
Focus on customer revenue
Transition from
common growth and cost lowering use
“caviar” to “bread Follow the
cases
problems –
and butter” money
not
complex
Copyright © 2013 Mach7 Technologies
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BOARD AND MANAGEMENT

Strong founder involvement with proven Board and management team

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Damien Lim NON-EXECUTIVE CHAIRMAN

• 21+ years experience in private equity and investment banking

• Co-founder of BioVeda Capital

• Currently serves on a number of boards and advisory committees

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Nobuhiko Ito NON-EXECUTIVE DIRECTOR

• Adviser to TPG Capital Japan, Director of Konica Minolta Business Solutions and Tadano Ltd

• Former President and CEO of GE Japan

• Executive with Exxon Chemical Japan for 16 years

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DR Nigel Finch NON-EXECUTIVE DIRECTOR

• Principal at Saki Partners Transaction Advisers

• Director and senior management experience in strategy execution and financial management

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Wayne Spittle NON-EXECUTIVE DIRECTOR

• Extensive industry experience in the global healthcare sector

• Currently: consultant at Samsung Medison; Advisor at Novum Waves

• Former Executive VP with Samsung Medison and Health and Medical Equipment division

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Mike Jackman PRESIDENT AND CEO

• Experienced HCIT executive

• Formerly Americas Region CEO HCIT at GE Healthcare

• The business leader responsible for the GE Healthcare Digital business in Latin America, US, and Canada

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Eric Rice CTO

• 20 years of systems architecture and design, engineering and management experience

• Held leadership roles and designed solutions for GE Healthcare

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Jenni Pilcher GLOBAL CFO and CEO, AUSTRALIA OPERATIONS

• Executive experience in healthcare

• Former CFO of Alchemia, and CFO and Co-Sec of Mesoblast

• Worked in finance teams at Cadbury and Medeva plc

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Ravi Krishnan

COO and FOUNDER

• Founding partner of Mach7 Technologies

• Nearly 20 years of experience with technology intricacies that drive medical imaging

• Previously worked at GE Healthcare and Agfa Healthcare

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FY18 OUTLOOK

Partnering with our customers to deliver better patient and operational outcomes Continued strong revenue growth

Positive EBITDA

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FURTHER INFORMATION

Video

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https://youtu.be/uSkRQwbxzXo

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Website Contact
Jenni Pilcher
GLOBAL CFO and CEO,
AUSTRALIA OPERATIONS
jenni.pilcher@mach7t.com
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www.mach7t.com

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