Alcon Inc. Price & Performance (ALC)

And any questions that are similar of nature or or the same. We'll try and group those together. If we do run out of time and we're not able to answer one of your questions, please follow-up with an investor email to investor@l.com Alcidion we'll try to seek to answer those as soon as possible. Also, as a reminder, the webcast is being recorded today and it will be available later today on Alcidion's website. [indiscernible] Getting into the the core of the presentation, Halcyon Alcidion produced a solid result for the first half. With subsequent events to the half giving us further positive momentum. I'd like to say thank you to those who have joined us on the call today who are long standing shareholders. We know recent times have been challenging, we're really pleased to see the sales momentum that we've been working towards come to fruition and that that's now driving stronger financial performance and greater interest in the company. Before I get into the results today in detail, there are some people on the call who are potentially new to the story. I'd like to give a brief introduction to Alcidion Alcidion some of the core problems we're trying to solve in health care.

You will note that we have lodged the presentation today. There's a little bit of information in that presentation that extends beyond the core. Financial results. For the presentation. In terms of what we do, Alcidion is a health care data and informatics company. We have a platform known as Mya Precision that consolidates large amounts of data and information across health care, into a single platform that allows hospitals and health care services and adjacent health care providers to streamline their workflows and use that information to help improve the delivery of patient care. Our real aim is to support healthcare professionals and to give them the tools they need to make their jobs easier, so that that hopefully, delivers, you know, a more efficient and safer health care system for everyone. We currently operate across three geographies, Australia, New Zealand and The United Kingdom. And the revenue is split roughly evenly between ANZ and The UK, although that can fluctuate half on half depending on when contracts are signed and where they land. As I said, my position is flat software platform. It's cloud based modular solution. That allows you to scale up and down for functionality depending on not only what budget a customer has, but what the problems they're trying to solve at a particular time.

And it is that modular based platform architecture that we've taken that we think is real key differentiator for our product offering. At present, we've got around 16 unique modules. However, as we've recently demonstrated, we've got the capability internally to develop and commercialize new modules quickly. As our customers' needs change, all using the same consolidated data platform. Supporting the product offering is a team of integration and implementation specialists who have extensive experience across the health care market. And it's working it's the way they work with our partners that we are able to stand out in respect of the depth of the solutions that we're able to bring into health care. Moving on to, the actual results from the first half and subsequent events. From both a business and financial perspective, it's been a positive first half for the business. Strengthened, of course, by the announcements on Northumbria and how which occurred subsequent to the period. And I won't go into a huge amount of detail here because I know Matt's going to take you to this in a little bit more but I do want to highlight a few key points. I think they're important. We delivered first half revenue of 17,600,000.0, which whilst down [indiscernible] That decrease in revenue compared to the prior period was primarily due to lower product implementation revenue.

And we highlighted that when we talked about our for FY '24, and it's really the implementation revenue from that Lidos Australia contract. Which as we near the end of delivery of that program of work, quite naturally is tailing off And as we move into North Cumbria, we'll probably start to pick up again. Just to be, clarified that that only relates to the project specific work for that ADF program. Obviously, the ongoing annual license fees and subscriptions will continue for years to come. During the first half, we signed new sales TCV of $18,300,000 primarily driven by three new customers. And then subsequent to the period end, we signed two other key contracts taking the collective year to date new sales revenue for the year to 61,300,000.0, which is a record. For the business. And that is the year to date figure. Before we finish the year out. These new sales have also contributed obviously to the FY '25 contracted revenue, which currently stands at $39,500,000 for the year. Underlying EBITDA for the first half was positive $500,000,500,000 reflecting a material improvement of $3,300,000 on the prior calendar period. Just at a summary level from an operational perspective, we have now signed five new customers since the start of the year along with renewing several other contracts across both The UK and Australia and New Zealand markets.

And I'll touch on the detail of the contracts later, but notably to many on the call. I'm sure you're aware of the announcement that we signed the first EPR deal with North Cumbria NHS Trust that also includes our patient administration system, PCS. Great validation of the business and highlights that continued value proposition that Miya Precision brings to the customers. On the outlook and balance for the year, we're confident, as I said, of delivering positive EBITDA and cash flow for the full year. I'm going to hand over to Matt, who's going to take you through the results in a little bit more detail. Thank you, Kate.

Good morning, everyone. Thank you for joining us. For this results presentation. As Kate said, we've signed five new material contracts in the first eight months of this financial year and we are pleased to update you today with the current TCV sales for the year which stands at $61,300,000 Back in 2022, we signed the first ADF contract That project had a three year implementation period. With revenue recognition spanning four financial years. As forecast, we're now in the final year of that implementation. And as a result of that project nearing completion in H1, we see a $1,200,000 decrease in in the implementation revenue in this half and that sees us delivering revenue in half of $17,600,000 That's precisely where we forecast the revenue to be for this half when we started the year. With Naland Peninsula, signing late in the half, We'll see a full six month contribution from these contracts in H2. Combined with the contribution from Hilda and North Cambria for at least a full quarter, We've announced today that the sold and renewal revenue for FY '25 currently stands at $39,500,000 This time last year, we announced a program to reduce the annualized cost base in the business by $6,400,000 primarily that was to be achieved by a reduction in staff costs.

As we end the first half, staff costs are down $3,400,000 on the prior year, which gives us an annualized reduction in costs of $6,800,000 With this reduction in costs, the business has delivered positive underlying EBITDA of around $500,000 That's an improvement of $3,300,000 on the previous year. Half We've also confirmed today that we are confident of delivering positive full year EBITDA On to the revenue dashboard, on the top left we see the historical half on half revenue. We typically have a record of delivering a stronger second half revenue and we expect that trend to continue in the current year. With second half sold and renewal revenue currently at 21,900,000.0 following the 17,600,000.0 recorded in H1. On the top right, we have the relative contribution from ANZ and The UK. This is unchanged from last year at 5743% respectively. We expect this will flip in favor of The UK for the first time actually by the time we reach the end of the year. On the bottom left, this is a graphic we introduced for the first time at the end of FY twenty twenty four. It demonstrates really well the four streams of revenue in the business, underpinned, of course, by the recurring revenue in dark blue, and we're very happy that we delivered a solid recurring revenue in H1 of $13,700,000 On the bottom right, we can see the proportion of revenue that is recurring annually.

That's at 78% in H1. But this graphic also demonstrates the substantial shift the business has made away from services revenue towards ARR over the last five years. Thank you, Kate. Onto the balance sheet, look, I don't have a lot to comment on here. I'll touch on cash on the next slide. We ended the half with $8,200,000 of trade debtors, that's $4,700,000 higher than at June. Which had a balance of 3,500,000.0 It's a recurring feature of our business that December debtors are materially higher than in June. That's one of the factors that sets Alcidion up for a stronger second half cash receipts and operating cash flow performance. Largely consistent with June at $13,000,000 And as we've talked about before, this balance fully washes through the book each year. Onto the cash flow, so coming to the end of the financial section of this presentation, I'll point out to start with that we do not capitalize staff costs in our business. 100% of the staff cash costs are presented in the operating cash flow that we see here. This is the same cash flow we saw at January with the Appendix 4C. For the half receipts are marginally up on the prior year at 15,300,000.0 The important number here, however, is the 7,000,000 reduction in payments to suppliers and employees that we report in this half. [indiscernible] After reporting negative operating cash flow $3,900,000 in Q1, which is very much a result of large VAT payments.

That arise out of the prior year Q4 invoicing in The UK. We followed that up with modest negative operating cash flow of 259,000 in Q2. Leaving us with negative operating cash flow of 4,100,000.0 for the half, which is consistent with our forecasts. With the reduction in spend, that's an improvement of $7,300,000 versus the prior year. We're very comfortable with the cash at $7,700,000 at the December. The business has consistently delivered positive H2 operating cash flow since 2021. And as announced today, we are confident at this point of achieving full year positive operating cash flow. Thanks for joining us. Kate, back to you. Thank you, Matt.

It's worth probably, just recapping, I think, for those on the call, the notable contract wins and renewals we've had throughout the first half. In the first half, we signed three new deals across the Australian market. Which is a market where we're seeing increasing opportunity for Flow. Command center and mobile access solutions. As this market along with the rest of the world really grapples with those challenges of demand versus capacity in the health care system. In Victoria, we partnered with Hume Rural Health Alliance and with Peninsula Health further expanding our presence across the acute care market in this state. And that's where we're using the platform as we are also in Western and Alfred Health. To help manage that flow and capacity challenges. So increasing presence across Victoria. In South Australia, we entered into a contract with North Adelaide Local Health Network or what we refer to as NARLAND, which was particularly exciting for us as that's our first customer in South Australia, the place where Alcidion was founded and where we have a significant staff presence. It's worth noting that all of these opportunities were won in competitive tender. Often in this call, I do talk about the importance of referenceability in procurement particularly in healthcare where they really look to evidence based.

In Australia, we've now got a really diverse range, both GIC mix. Of markets in this of deployments in this market that really demonstrate the benefit of our solutions. Increasingly, we're able therefore to reference benefits as a key differentiator for our products against competitors, And you will have heard us talk before about some of the the benefits that have been articulated in quantitative and qualitative measures done by independent studies. We continue to receive inbound interest for our patient flow solutions given the importance of this for hospital administrators and clinicians at this point in time and how they can continue to support their blockage and in fact, I think we'll continue to see increasing interest in this in the coming months and years. And lastly, during the half, we will this is subsequent to the half period. We signed our first contract in Wales, which was a 5 and a million dollars deal over five years. Again, following a competitive tender process. Looking for solutions, to not only address flow and capacity management, but also observations, assessments and mobile. Data availability for clinicians. Wales is actually a really interesting market. It's not that large in population. It does have several health boards.

And many of those health boards, recently selected the better medications management partner for their for medications management to roll out. So not through us, but it demonstrates that Wales is taking that at this point in time, that sort of best of breed Really well suited to their health care needs. With that sort of modern modular platform. Resonating quite well with several customers in that market. I have touched on this slide, that depicts an Cumbria deal before, but I thought I'd just reiterate it, and sort of talk to it in the construct of what this contract means, for Alcidion and for us in that market. As many of you are aware, we've now signed signed the contract and it marks the first full APR deployment with PAS solution PCS. At the core of that APR solution is our Mya Precision platform. Providing a full suite of applications to meet the requirements of the trust. And to enhance the deployment of PCS, which they've had for some eight years or so. The contract is total value of $337,500,000.0, sorry, over a ten year period. And the initial 8 to $9,000,000 which we expect to recognize in this financial year is primarily related to an upfront license fee.

Receiving a portion of the license fee upfront is not uncommon fee feature of The UK market where they're funding these big programs of work in a capital way for some portion of the contract. And we've provided a range of revenue in terms of recognition, and that $3,039,500,000.0 is taking the lower end of that range. For the North Cumbria recognition. And we've done that because there are some payments beyond the license pay that will license, I should say, that will be related to implementation milestones and the achievement of those and just taking a risk based view of how much of that will be recognized in this financial year. But yes, there may be more than the 8,000,000. Also note that North Cumbria, already used the better medications management contract relationship. So the fees for the BetterMed's component are not part of this total TCV. Unlike in Dartford and South Tays where we are in fact the prime contractor, for BetterMeds. Deployment is already kicked off. It started this week, so we're really excited and looking forward to seeing how that rolls out in the coming months. It's been actually a very busy first half for us in terms of deployments.

In Q1, we went live with the Hampshire Hospitals Trust. Was our first site using our new emergency department module. And it was a key milestone for the business. Demonstrating our ability to bring whole new modules to market very quickly getting them out and live with our customers. And bringing new functionality that we're really seeing some increasing interest from across not just, the UK, but across our whole customer base. At Bolton, which has been a long term patient track customer, they went live with Flow Access and Command where they chose to replace the ExtraMed solution which was the legacy flow solution we acquired a few years back. Thus creating another MyaPrecision site in The UK. And around the same time, we also went live with medications management at Dartford where they're using Mya Noting and the rest of the Mya platform for observations, assessments and communication as well. We also went live at Hume, which was, rolled out very quickly as our fastest ever rollout of Maya Precision over twelve weeks enabling our customers to demonstrate how quickly they can achieve that value and the Hume rollout is particularly exciting one as we're across the rural region that has got some very large central hospitals in the, large towns such as Aubrey and Wangaratta, but then a number of hospitals spread out across quite a wide geographic area.

Our ability to effectively implement these and our third party solutions has always been a strength. And it's a unique part of our skill set in that we have such strong understanding of project implementation and integration. And we're continuing to be able to sort of demonstrate how we can deliver on those promises to our customers. I have, got a few slides now. I've just just to reiterate some of the advantages. Sorry. I jumped ahead there. Of our solution, not going to go into it a lot of detail. We have presented this information before, but updated it in light of some of the deployments we've now had in respect of how we position ourselves against competitors. We really are very confident that our precision plan platform is at the forefront of modern, health care IT architecture for an enterprise. And that we are continuing to really focus on those critical challenges that clinicians and health care administrators are facing. You know, as many of you will know, Myer was originally developed by clinicians specifically for clinicians. And our purpose has really always been to remove our necessary process and administrative burden so that we can provide people that are in that frontline, with an e a way of digesting information in a way that reduces the COVID burden.

And I think, you know, the benefits that we are seeing are continuing to be amplified in achieving those. This slide, I appreciate, is fairly detailed and not one we're going to necessarily go through in great depth here on the presentation. But just wanted to give you an idea of the not only the depth of what MyApprecision is addressing now, but also the ways in which we [indiscernible] the architecture and take the capability to market. At the bottom underpinning everything, you have the core Mya Precision architecture, which is cloud based driven by a FHIR event platform, incorporating two way integration, from our modules not only into our modules, but into those systems that we are importantly getting information from in respect to third parties. And then on right up the top, you have that Miya command capability, which is essentially a type of operation center that allows you to see what's happening not only across a hospital, but a region or an entire integrated care system if that's how it is deployed. The beauty of that is that the opportunities it gives you. And just as a really good example, was recently went up to Hume to see a showcase of the work that has been achieved there they told the story about one of the hospitals being well and truly, full and that they were going to need to divert ambulances from that hospital.

And another large hospital in that region was able to actually look at what the data that was available in Bayer and see that a lot of their patients were actually out of catchment area, and they were able to have those patients move back into catchment area and then create opportunities, which meant there was no requirement to divert ambulances and divert those ambulances in a country area is not diverting them down the road ten minutes. It's potentially diverting them to two hour journey. So, you know, those are the sort of stories that really demonstrate the value that Miya Precision can bring. And it's in that context that we see the continuing opportunity in Australia whilst we're getting a really good footprint in Victoria, whilst we've got our first site in South Australia, opportunities absolutely exist to expand that throughout this this country. South Australian market Naland is the first, hopefully of the local health networks that will be interested in what we're doing. They're getting very close eye on the progress of that project. Queensland, the direct new director general, has been given a direct mandate to help alleviate patient flow issues across that market. So, you know, whilst Australia is a region that we've actually had several longstanding customers in, there remains significant opportunity for expansion of our solutions focused on those verticals, not to mention hospital in the home and virtual care, which continues to be an area where we're seeing people seek solutions such as Myer.

In the NHS, and in The UK or in England, specific you already know about the opportunity for the NHS frontline digital program, which is focused on new electronic patient records for England and we will continue to see procurements come out, in that market over the next twelve months. And we will expect to be continue to be active participants in those procurements, but equally we equally we're seeing opportunities to further develop more of our modules or deploy, I should say, more of our modules but also to look at the optimization of the digital environment. In England. In Scotland and Wales, we now shortly have live sites in both of those markets. We have a number of our observations and assessments across Scotland and currently deploying into Wales. So we're looking forward to the opportunity to continue that momentum that has been building. Looking to the outlook, as we said, we've got a minimum FY '25 contracted revenue standing at $39,500,000 which does include the contributions from how Haldar and North Cumbria with North Cumbria being at the lower end of that expectation. As a result of those wins and where we stand now, we are confident of delivering positive EBITDA and cash flow for the full year.

We continue to engage with a variety of new and existing customers across our key markets and potentially newer markets with increasing momentum that's been created, you know, off the back of those wins and that underpins our confidence in creating a sustainable growing and profitable business into the future. [indiscernible] At that point, I'm very happy to take any questions that we may have received online or prior to the webinar.

Thanks, Kate. We have had a few questions come in before and a few questions come in While we've been presenting, there are a couple around South Tease which I'll combine. There's published information that North Tease and Huddl Pool planning to combine their APRs with South Tease in November 27. Our CDN has a ten year contract with T's. Are we well placed are we well positioned to win these two EPS?

Yeah. It's interesting. There are a number of these sorts of opportunities coming up in England where, trusts are merging within an system. I think we're in a strong market position in this opportunity. We've got demonstrable and positive position and feedback at South East. I understand why they need to go to market, There is a different supplier in North Tease, and therefore at some point, they will need to understand and give, you know, everyone an opportunity Just reiterating the position we have in that integrated care system. So not only T's in South Toots in the North Cumbria, Integrated Care System, so is NCIC as well as Northumbria. That uses our PCS solution. So we continue to see that whole care system as an opportunity. Thanks, Kate.

Another customer question. Could you please provide an update on our Alcidion relationship with University Hospital Southampton Trust including whether contract extension options are likely to be exercised.

Look, we continue to work with University Hospital Southampton. They're rolling out the emergency module. They're a sister trust to Hampshire hospitals, and they were sort of waiting. They've been sort of following on from what they do. They're a little bit different in Hampshire that they're replacing an existing system so they are taking their time to get all the elements right before they go live. They're also part of an ICS that's going to market for an EPR later in the year. So I expect we won't see them roll out too many more additional modules and ahead of that procurement because they're part of Hampshire Isle Of Wight. ICB, and there's four significant trusts in that in that ICB who intend, as I said, to go to market for an EPR later this year.

Thanks, Kate. And we've now had a flurry of First one is what benefits have you seen as a result of the Navarre and or Alinkwa partnership?

Look, I can't point to any particular opportunities where we have, you know, won a deal because of that partnership. But what it does open up to our customers and to the opportunities that we go after. A widening of that So a link was really focused on areas and Navarre that we don't do. And so it allows us to present opportunities for our customers to partner with a wider eco And that's really what Alcidion is about. How do we create an ecosystem that supports customers' needs using the Myer platform as the consolidator.

Okay. What percentage of hospitals in Australia and England don't have a digital patient software?

All customers would have some form of digital patient record. Many of them don't have the whole end to end process fully digitized yet. There are conflicting views on how many actually are still out to market. I think there was some press in the last twenty four to forty eight hours saying there were seven that weren't going to meet the requirement to be live by March 2026. But there are several in procurement and several who haven't started procurement. But all of them would have some form of digital solution that would be doing elements, even if it's just the patient management. Okay, Kate.

How is the NHS procurement? I think this follows on. How is the NHS procurement landscape evolving? There have previously been a number of delays, but new contracts are coming in now. Is this a sustainable cadence of new contract adds?

Look, the procurement landscape is continuing. We did have a period where there was really nothing much happening and a lot of them had been slowed down. We know that people are still completing business cases. We know that people are still coming to market. I think I've said before there's two parts to the process. There's a pre market engagement and then the tender process, though that is still occurring actively. And then there are other opportunities emerging around optimization of digital health pathways in England. But as I said, I think on the quarterly, the ten year plan that we're expecting to be published very soon is going to give us greater clarity on where England, NHS England, intends spending its budget for digital health in the next ten years, I guess.

Thanks, Kate. I think I can answer this one if you want. The recurring component North Cumbria, would this be $37,500,000 less the $8,000,000 to $9,000,000 upfront divided by 10?

No. It would in fact be the 37.5 less that plus some implementation I would have thought, Matt.

Yeah. Yeah. Correct. Correct. And then, of course, there'll be CPI applied in later years as well. I mean, what is the I think we've got a rough idea. It's around 3,000,000, isn't it?

Yes. It's around 3,000,000. Exactly. Okay. Alright. Thank you. Alright. Sorry. How many other silver so this is off the back of the NCIC agreement being signed, how many other Silverlink clients are there in The UK who you think could be upgraded?

Look, I mean, without I don't want to predict that because they've got to go to market and go through a competitive tender process. And there are some that might not be necessarily going by the frontline digitization program Northumbria is a very good example of that We have other customers who might have actually gone through the EPR program, but still can't be planning to maintain PCS or the Silverlink for the foreseeable future. So there are three or four customers, PCS customers that will over time, I think, move from our piece our past to another APR provider, but still several that are in play. Thank you, Kate.

And this one is regarding the current pipeline. And how do you see that compared to where it was a year ago.

Look, the pipeline is healthy and remains healthy. My view on the pipeline is that, you know, opportunities come in and opportunities go out. When you sign something the size of North Cumbria, you remove that from pipeline. Obviously, we are adding on new EPRs, new opportunities in Australia as they come in. So over time, the [indiscernible] does stay fairly similar, although to be honest, I think if I was to look at it now right today, it's probably about 20% larger in value. But it's really important to understand that one one opportunity in and out the pipe same. If you think about a deal, it could be 5,000,000 versus a deal, it could be 37. It's the measurement not only of the value of the pipeline, but the numbers of opportunities that are in the pipeline. And as I've said, we are increasingly seeing interest in what we're doing as we take more customers live and sign more opportunities. Thanks, Kate.

Can you give an estimate for what portion of future revenues will be implementation revenue? No.

No. Not really. I mean, I would expect though that we are Where we are now is probably around about where it will continue unless we got to a point that we weren't signing new customers that we're implementing and we were just in a steady state situation, which is a long way from where we are at the moment. I expect we will continue to sign new customers and they will continue to require us to implement their solution.

Okay. So we've got a buildup of questions around one topic, which I'll leave to the next question. I'll ask this question first. It's a bit off topic, but do you encourage staff to become shareholders? In our business?

Yes. I mean, of course, I mean, know what encouragement you mean by encourage, but of course, we have been very supportive of customers, of staff who choose to become shareholders. And in fact, we have a number of staff who are shareholders. I think, Kate, also, we have a very good long term incentive program in place that obviously is incentivized through shares too. [indiscernible] [indiscernible] Okay. More questions keep coming in. I'll get this one out. How does the modular platform architecture work in parallel with another module provider such as another better module for medications from another provider What's the likelihood of another competing entity winning over our Citi and for flow as well?

Well, obviously, the platform is built to connect other modules, which we can demonstrate across all of our customer base, and then obviously very tightly with the work we do with better medications management. At this point in time, [indiscernible] believe I can confidently say that we are one of the preeminent flow solutions in the market based on the number of the fact that we have won all competitive tenders in this market for flow of recent times. But we remain ever vigilant about what is going on with competitors in our market, and we feed that intelligence into what we're doing in respect of future product and sales opportunities.

Okay. So we're coming, I think, to the end of the questions. So I'll ask this one, which we've got three different people asking a very similar question. How aggressively are you looking at expansion beyond The UK Are there opportunities in sales for Scotland? And Ireland? What about expanding further, I. E. Canada? And from another question, The U. S. Well, we have always been in The UK market as a whole. So, Scotland, Wales, Northern Ireland have always been for us. Obviously, the big opportunity at the time was in England, We're seeing increased activity out of Wales. As I said, we've always had sort of a steady stream of sales in Scotland, particularly with observations and so forth. So that market remains obviously very important to us. We have quite rightly, I think, over the last twelve months, been very focused on, delivering on our proposition in our existing markets. We have always said that we keep open to new geographical expansion. In the next few months, we will really be turning our mind towards where those markets may be and, you know, Canada remains a definite opportunity. We were recently, as many of our shareholders will know, because it was on our LinkedIn We recently went to a patient flow, dedicated flow conference in The US to really start to understand what was going on in that market.

And I can confidently say the problems we're seeing in health care in our existing markets exist pretty well universally across health care systems. And so our job now is to understand which of those markets present the best opportunity for us. And how we might go about looking at those markets. [indiscernible] There's a couple of other questions around implementation revenue, which I think we've touched on in the slide. So there's no other questions that have come in now.

Thank you. Thanks, everyone. Really, thank you. Just want to thank you once again for your interest and ongoing support of Alcidion. We're very pleased with how the [indiscernible] We look forward to keeping you updated. I thank you as shareholders. I thank the Board and the senior leadership team of Alcidion Alcidion have worked very hard to deliver this result and continue to remain focused on increasing the value for both our shareholders and our customers.

Okay.