Monash IVF Group Annual Report 2021

Managing Director & CEO’s Report

Michael Knaap — Chief Executive Officer & Managing Director

Our FY21 performance was ahead of market expectations not only due to record industry growth in Australia, but through Monash IVF Group’s collective efforts to increase its market share and build for future sustainable growth.

We are pleased to have delivered a strong financial performance in FY21 against a backdrop of attractive industry fundamentals that saw ARS services in Australia reach record levels.

By executing on our strategy, we delivered revenue growth of 26.3% to reach total revenue of $183.6m, buoyed by market share gains and strong industry volumes. Stimulated cycle market share grew by 0.6% to 21.0% in Monash IVF Group’s key markets underpinned by an increase in marketing investment, which is growing the short-term and long-term patient pipelines.

Over the course of the year, we were able to attract new fertility specialists in New South Wales, Queensland and Victoria, who have contributed significantly to building solid patient pipelines and fostering strong patient relationships. Recent doctor engagement scores have been at record levels, demonstrating a ‘culture of success’ that our Company upholds across its fertility and ultrasound operations.

New clinical infrastructure is paramount to continued execution of our strategic growth objectives, and we are excited by the progress made during FY21 to add capacity and increase our market presence. In November 2020, our new Sydney CBD flagship clinic, which represents best practice patient experience, opened and has already performed more than 200 stimulated cycles. We have a number of new clinics in the pipeline for FY22, including projects that are well advanced in Melbourne, Gold Coast and Penrith. Our South East Asian expansion strategy is also progressing despite COVID-19 challenges.

We are proud of the positive momentum we have created during the year, and we will enter the FY22 year focused on continuous improvement to pregnancy rates and patient experience.

FY21 Performance

Our business achieved strong growth in FY21. Revenue growth in the period was underpinned by market share gains and industry volume growth, with revenue accelerating in 2H21 compared to 1H21.

FY21 started strongly due to the pent-up demand/deferred treatment resulting from an initial COVID-19 related shutdown of services in Q4FY20, and this momentum continued resulting in strong volume growth throughout the year.

Notwithstanding on-going and sporadic COVID-19 related lockdowns, IVF services have been largely undisrupted and as a result, growth continued throughout the year. Market share gains were achieved in Victoria, New South Wales, Queensland and Northern Territory whilst the exceptionally high level of market share in South Australia was maintained above 60%.

Building on strong foundations

Since 2018, we have improved our clinical pregnancy rates by 4.5% following a huge amount of effort invested into improving outcomes for our patients, including harmonisation of laboratory protocols and new innovation.

“We faced a year of challenges and opportunities in 2020. I am enormously proud of how adaptive and resilient our employees were in the face of a global pandemic.”

Michael Knaap
Chief Executive Officer
& Managing Director

During FY21, some of the key initiatives we implemented to drive further improvements included:

  • The publication of the first PIEZO clinical trial (a gentler form of microinjection) with continued recruitment of the phase 2 multi-centre clinical trial across 5 Monash IVF Group sites
  • Sperm selection device development (Felix) in partnership with Memphasys (ASX:MEM) is progressing and on track for phase 1 clinical trial
  • A continued focus on Research and Development with the submission and presentation of 21 scientific/ clinical abstracts at national and international conferences
  • Transition planning of Monash IVF Group genetic laboratories to G-Category status to enable best‑in‑class Preimplantation Genetic Screening
  • Looking ahead, we will be expanding our genetics capabilities and service offerings with innovation such as the soon-to-be launched At Home Genetic Carrier Screening Test.

We are confident our strategic outputs are assisting in driving the current strong new patient and returning patient pipelines and with our sustainable marketing investment, those levels are expected to continue to grow in FY22 and beyond.

Our People

The Employee Value Proposition at Monash IVF Group has been a key priority in FY21. We continue to position ourselves as a dynamic industry leader in reproductive care and we offer prosperous workplaces for those driven to make a difference. At the heart of our strategy has been an effort to transform our people and culture proposition to offer exceptional employee experiences and ways of working that inspire our 771 employees across 125 locations. We were thrilled to achieve record Group engagement scores in 2021 which exceeded our 2022 targets and industry benchmarks.

I have touched on some of the new fertility specialists that have joined the Group in 2021. A further key hire made in the period was the appointment of Dr Tristan Hardy, Genomic Pathologist, to the position of Medical Director of Genetics. The appointment is at a crucial time for the Company as the new NPAAC Laboratory Supervision Guidelines come into effect for all IVF laboratories from August 2021. This ensures the continuity of in-house genetic service offerings and provides a platform for expansion of our genetics suite of offerings in the future.

Looking ahead

We believe there is a fundamental shift in the community whereby the on-going pandemic has changed the mindset of our patient cohort with greater focus on family, health and wellbeing resulting in re-direction of priorities towards family extension. This shift has driven strong industry growth in FY21 and is expected to be maintained in FY22.

We faced a year of challenges in 2020 and continue to face further challenges in 2021. I am enormously proud of how adaptive and resilient our people were in the face of a global pandemic and am grateful for their unwavering commitment to delivering services for our patients in Australia and abroad.

I believe we have the right team and strategy in place to deliver long-term sustainable growth and continue to create value for all of our stakeholders. I would like to extend my thanks to our shareholders, patients, employees and partners for their continual support.

Michael Knaap

Chief Executive Officer
& Managing Director