5 February 2018
Trading Update for Half-Year Ended 31 December 2017
• Ellex Group sales up 11.7% (13% in constant currency) compared with prior corresponding period, driven by glaucoma sales growth strategy
• Ellex iTrack™ sales up 65% in USA and 30% outside the USA in constant currency compared with prior corresponding period
• Ellex Core Laser & Ultrasound sales up 9% in constant currency compared with prior corresponding period, driven by strong glaucoma laser sales
• Glaucoma therapy device sales of A$19.8 million now comprise 50% of Ellex group revenue and are growing at a four-year CAGR of 16%
Adelaide, Australia 5 February 2018 – Ellex Medical Lasers Limited (ASX:ELX), a global leader in medical devices for the diagnosis and treatment of eye disease, today provided a trading update on its expected financial performance for the six months ended 31 December 2017.
Expected sales and expected EBITDA by segment (unaudited) are shown in Table 1:
|Table 1: $A Million|
|Core Lasers & Ultrasound||2RT®||iTrack™||Corporate Costs||Other Income||Total|
Progress on Strategy in H1FY18
The Company’s strategy to focus on glaucoma therapy devices achieved traction during the period, with Ellex recording strong sales revenue for the first-half. Revenues from glaucoma therapy devices were A$19.8 million in the first-half and have grown at a CAGR of 16% over the last four periods.
Ellex will continue to exploit its unique combination treatment offering of glaucoma treatment lasers (“SLT”) and Ellex iTrack™ minimally invasive glaucoma surgery (MIGS) device in the fast-growing glaucoma therapy market.
“These results show that the glaucoma market provides a solid base for the future growth of our business. We are well funded to continue to pursue this market and we are confident that this will lead to continued sales growth,” commented Ellex CEO, Tom Spurling.
Sales revenue in the USA of the Ellex iTrack™ MIGS device grew by 65% to US$2.5 million during the period, up from US$1.5 million in the prior corresponding period. This growth was achieved as a result of the Company’s initial expansion of sales and marketing efforts in the USA. Outside the USA, sales grew by 30% to US$1.6 million, up from US$1.2 million in the prior corresponding period. This can be attributed to improved sales demand in existing European markets, and as a result of improved distribution management throughout the region. Gross margin on sales also improved, reflecting increased volume through the Fremont production facility.
Commenting on the result, Mr Spurling said: “While the improvement in Ellex iTrack sales in the USA is creditable, the investment we are continuing to make in our sales and marketing effort in the USA is significant for Ellex, and it is only just starting to demonstrate results.”
Ellex Core Laser & Ultrasound
Driven by a 35% lift in sales for SLT lasers, the Company’s Core Laser & Ultrasound sales grew by 8% (9% in constant currency) to A$32.8 million, up from A$30.4 million in the prior corresponding period. A concerted effort to reduce inventory by A$2.1 million also generated strong cash flow during the period.
As foreshadowed in November 2017, Ellex undertook significant investments in sales and marketing, product management and additional management. Whilst these initiatives contributed to strong top-line sales growth of the Company’s SLT laser portfolio, they resulted in a reduction of EBITDA to A$3.5 million during the period, down from A$4.3 million in the prior corresponding period.
Commenting on this segment’s profit performance, Mr. Spurling said: “In the second half and beyond, we expect current sales growth rates to continue and to be reflected in increased profitability.”
Ellex expects to release its audited half-year results in the week beginning 26 February, 2018.
Ellex designs, develops, manufactures and sells innovative products that help eye surgeons around the world to effectively and efficiently treat eye disease. Ellex is a world leader in this field. Headquartered in Adelaide, Australia, Ellex has ophthalmic lasers and devices that treat glaucoma, retinal disease primarily caused by diabetes, secondary cataract and vitreous opacities, as well as age-related macular degeneration. Manufacturing is carried out in Adelaide, Australia and Fremont, California. Sales and service directly to eye surgeons is conducted via subsidiary offices in Minneapolis, Lyon, Berlin and Tokyo. A network of more than 50 distribution partners around the world services other markets.
For additional information about Ellex and its products, please visit www.ellex.com
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