Annual Report & Accounts 2020

Creating quality outcomes through our innovative surgical and woundcare products

Advanced Medical Solutions Group plc Annual Report & Accounts 2020

About AMS

Advanced Medical Solutions is a world-leading developer and manufacturer of innovative and technologically advanced products for the global surgical and woundcare markets

Creating quality outcomes for our...

..patients

...employees

...investors

Read about our Patients

Read about our Employees

Read about our Investors

on pages 8 to 9 and 30 to 31

on pages 10 to 11 and 30 to 31

on pages 12 to 13 and 30 to 31

For our other Stakeholders please see pages 32 to 35

Impact of COVID-19

The restrictions relating to the COVID-19 pandemic during 2020 severely disrupted the entire global market and resulted in a significant slowdown in surgical and wound treatment volumes. In addition, the reduced access to hospitals for our direct sales teams and our partners sales teams significantly restricted our business development activities during the year.

Throughout 2020, we maintained supply to our healthcare partners and customers whilst implementing safety measures to minimise risks for our employees and their families and continued to invest in R&D and other key projects in order to be in a good position for strong growth as our end markets recover.

Our strong cash position (£54 million cash, no debt and an undrawn £80 million credit facility at 31 December 2020) underlines our robust financial condition, which enabled us to weather the global disruption caused by the pandemic.

The biggest impact was felt in the second quarter of 2020, with subsequent quarters being less impacted as hospitals gradually started to reinstate non-urgent procedures. In the first quarter of 2021, demand for our products remained below normal historical levels due to COVID-19 disruption but vaccination progress provides increased confidence of a return to more normal volumes later in the year.

B

Overview

Strategic Report

Governance

Financial Statements

Financial Highlights

Group revenue (£ million)

Diluted earnings per share (p)

£86.8m

3.94p

2019: £102.4m

2019: 8.72p

Change: -15%

Change: -55%

Profit before tax (%)

Adjusted1 diluted earnings per share (p)

Company Overview

  1. Highlights
  2. Our Business at a Glance
  1. Investment Case

Strategic Report

8

Our Patients

10

Our Employees

12

Our Investors

14

Chief Executive's Q&A

16

Market Overview

11.6%

2019: 23.7%

Change: -12.1pp

Adjusted1 profit before tax (%)

15.4%

2019: 26.0%

Change: -10.60pp

Profit before tax (£ million)

5.44p

2019: 9.83p

Change: -45%

Net operating cash flow

£21.5m

2019: £21.7m

Change: -1%

Net cash2 (£ million)

18

Our Strategy

20

Strategy in Action

24

Key Performance Indicators

26

Operating Review - Surgical

28

Operating Review - Woundcare

30

Stakeholder Engagement (s172)

36

ESG and Sustainability

44

Financial Review

46

Risk Management

Governance

52 Board of Directors

54 Senior Management Team

  1. Corporate Governance Report
  1. Audit Committee Report
  1. Remuneration Report
  1. Directors' Report

Financial Statements

£10.1m

£53.8m

2019: £24.3m

2019: £64.1m

Change: -58%

Change: -16%

Adjusted1 profit before tax (£ million)

Proposed full-year dividend per share (p)

£13.4m

1.70p

2019: £26.6m

2019: £1.55p

Change: -50%

Change: +10%

  1. Independent Auditor's Report
  1. Consolidated Income Statement
  1. Consolidated Statement of Comprehensive Income
  2. Consolidated Statement of Financial Position
  3. Consolidated Statement of Changes in Equity
  1. Consolidated Statement of Cash Flows
  2. Notes Forming Part of the Consolidated Financial Statements
  1. Company Statement of Financial Position
  2. Company Statement of Changes in Equity
  3. Notes to the Company Financial Statements
  1. Five Year Summary
  1. Alternative Performance Measures
  2. Advisors

Operational Highlights (including post-period end)

  • Sales and profitability heavily impacted by COVID-19.
  • Proposed increased dividend and repayment of UK Government furlough reflects Board's confidence and strong financial position.
  • Investment in R&D increased to £7.9 million (2019: £6.5 million) as progress continued on all key projects across the Group.
  • Approval and restricted US launch of LiquiBand® Rapid™. Successful completion of LiquiBand® XL clinical trials keeps us on track for approval and launch towards the end of 2021.
  • US clinical trial for LiquiBandFix8® progressing well. Filing expected in 2022, following 12 month patient follow up.
  • Seal-G®and Seal-G® MIST clinical study enrolment began in February 2021. CE mark extensions expected in H1 2021. Provides access to a new $1 billion market to fulfil a significant unmet need.
  • Acquisition of Raleigh Adhesive Coatings in November 2020 for £22 million. Strong strategic fit with commercial synergies.
  • Grahame Cook appointed to Board in February 2021. Steve Bellamy to retire from the Board at the AGM in June 2021. Board refreshment to continue over the next two years.
  1. Certain financial measures, including adjusted results above, are not defined under IFRS and are alternative performance measures as described on page 140.
  2. Net cash is defined as cash and cash equivalents plus short term investments less bank loans and financial liabilities excluding those relating to IFRS 16.

01

Advanced Medical Solutions Group plc Annual Report & Accounts 2020

Our Business at a Glance

Our Purpose

Creating quality outcomes through our innovative surgical and woundcare products

Achieved through our value chain

New product development

Research and development

Design and testing

Regulatory

Approvals for new products and new territories

Maintain approvals for existing products/markets

Operations

Manufacturing and security of supply

Quality assurance

Routes to market

Flexible route to market incorporating our direct sales teams, our global network of distributors and our OEM partners

For information see Our Supply Chain on pages 34 and 35

Underpinned by Our Values

For more information see Our Values on pages 42 and 43

Care

Caring about the work we undertake and the real life differences we can make

02

Overview

Strategic Report

Governance

Financial Statements

Our Strategic Pillars

Growth

Exploiting the opportunities arising from having a broad product range sold via multiple routes to market and across multiple geographies

Innovation

Strengthening our portfolio by developing or acquiring market-leading high quality products

Operational

Excellence

Continuously improving our operations to drive out cost and defend margin

Culture

Investing in recruiting and developing talent while embedding our values of Care, Fair, Dare

For information see Our Strategy on pages 18 to 23

Fair

Acting with integrity and ensuring we are fair in all aspects of business

Delivering for Our Stakeholders

Our Patients

Delivering excellent outcomes for our Patients

Our Employees

Being a great place for our

Employees to work

Our Investors

Delivering long-term sustainable growth and value for our Investors

Our Clinicians

Delivering effective, efficient and safe experiences for our Clinicians

Our Partners

Delivering quality and value for our Partners

Our Regulators

Meeting the evolving requirements of our Regulators

Our Communities

Involvement and support for our Communities

Our Supply Chain

Strong, mutually beneficial relationships for our Supply Chain

For information on Our Stakeholders see pages 30 to 35

Dare

Moving boundaries and challenging constructively to build on others' ideas

03

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Advanced Medical Solutions Group plc published this content on 30 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2021 16:34:02 UTC.