Managing Director & CEO’s Report
Managing Director and Chief Executive Officer, Monash IVF Group
Monash IVF Group’s strong FY16 performance reflects the quality of our businesses, a clearly articulated and executed growth strategy, and the commitment of our employees and doctors to delivering high standards of care to patients across our facilities.
We’ve enjoyed a strong year of both revenue and EBITDA growth across all services and businesses. This growth has come from ensuring our core strategy of focusing on high quality research-led reproductive services and imaging is at the core of everything we do. Our position remains unchanged- to be a leader in scientific and clinical innovation driven by a philosophy of “excellence in science and care”.
We now have an expanded network of fertility related services with over 40 IVF clinics, ultrasound practices and service centres across Australia and Malaysia. Our network also includes over 100 dedicated doctors, and in excess of 700 scientific, nursing, allied health and support staff.
Our heritage is such that we were there at the very conception of the assisted reproductive technology specialty, having achieved the world’s first IVF pregnancy in 1973. Since then over 35,000 babies have been born with our help. A Monash IVF baby is born every two-and-a-half hours in Australia. By the time you’ve finished reading this annual report, we will have welcomed another Monash IVF Group baby into this world!
We now deliver approximately one in four of the IVF treatments undertaken in Australia. Our market share in-roads have been driven by our clinic network growing its domestic patient treatment numbers by 12.4% versus the prior corresponding period. This was well above industry growth rates.
We are exceptionally proud of the pregnancy success rates we deliver across our clinics. We have been marketing and promoting these assertively and as a result we are seeing market share gains across the Monash IVF Group.
Our NSW growth story is particularly impressive. We have gone from 0.6% market share a few years ago to 8.3% today through a mix of acquisitive and organic growth. Our Bondi Junction and Next Generation Fertility full service clinics in Sydney continue to go from strength to strength.
The fundamental drivers of growth in our industry remain sound and unchanged. Women continue to defer child birth until their mid to late 30s. Single women and same-sex couples seeking treatment also continues to rise. We are also supporting more patients through the use of donated gametes (eggs or sperm). These treatment programs are exceptionally important – and often the last available option – for patients unable to obtain biological assistance from family and friends.
Our low intervention clinics continue to gain momentum and are making an improved contribution to the Group. Patient treatments delivered by our BUMP and MyIVF clinics represented just over 5% of total patient treatments for the year. Our low intervention services are very much complementing our full service clinics with up-referral occurring into our full service clinic network.
Ultrasound and Imaging
This year marks the first full year of ownership of our Sydney Ultrasound business, a business acquired in June 2015. We are comfortable with the way this business is performing. The combination of Sydney Ultrasound and Monash Ultrasound for Women’s 17 locations now represents almost 17% of Monash IVF Group’s revenues. We now provide in excess of 80,000 scans a year for a wide range of female health issues. The patient mix is both IVF patients and patients who have conceived spontaneously.
Our network of ultrasound practices has provided us with a wide geographic footprint to further promote our non-invasive prenatal testing (NIPT) to both IVF and non-IVF patients. This screening test can determine – with great certainty – whether a yet unborn baby has a high risk of being affected by a genetic condition. We saw a quadrupling of our NIPT testing numbers to in excess of 9000 tests. As a result of the growth in this test – and our strong in-house research and development capabilities – we will be bringing this testing in-house to offer a more contemporary and faster service to our patients.
Research and Development
We continue to invest heavily in research across our clinic network and through the Monash IVF Research and Education Foundation with considerable quarantined funding made available to drive activities aimed at improving treatment outcomes for our patients. We currently have 34 projects underway and funded. Many of these research activities are undertaken in collaboration with some of Australia’s leading universities and research institutes which we have deep and long term relationships.
The Group has successfully submitted over 50 scientific papers and presentations both locally and internationally. A number of these research initiatives have already provided us with stepped improvements to our already leading reproductive treatment methods. The Group’s “Embryo Screen” technology remains amongst the most advanced embryo genetic screening test available in Australia. We’ve continued to see a strong uptake of this test which is up over 70% on the prior corresponding period. We continue to offer patients world’s best technology in this area through our next generation sequencing platform. Almost one in five our patients undergoing IVF treatment are now availing themselves of our Embryo Screen technology. This technology greatly assists in choosing the very best embryo and greatly improves our patients’ chance of a successful pregnancy.
Our international operation on the Malaysian peninsula – KL Fertility – continues its growth with revenues up 10.7% and patient treatments up almost 20%. Our newer fertility specialists continue to build their volumes and local profiles. We are now well advanced on the construction of a much larger premise in Kuala Lumpur to accommodate stronger volumes and improved patient amenity.
We continue to strengthen our medical specialist team – which grew to 103 net of two planned retirements. Our approach of careful and systematic succession planning and transitioning of patients to our younger up and coming doctors is working well.
We have deep experience and passion across our medical, scientific and nursing teams. To further enhance cross-pollination of clinical learnings across the Group and to increase commercial engagement with our medical teams, we established two peak committees: the Group Medical Advisory Committee and the Group Medical Executive Committee. We’ve also appointed an inaugural Group Medical Director, Professor Luk Rombauts, who is one of our long serving fertility specialists.
Our dedicated staff continue to play the defining role in our success. The skills and expertise of our scientists, nurses, support staff, and doctors, across our Australian and Malaysian sites provide an environment for patients that is clinically world class but also warm and supportive. The reproductive journey for some of our patients can be emotionally trying. I am proud of the support and care – and the dedicated lengths our staff go to – to provide our patients with the best chance of having a child. We are now working at further enhancing the Monash IVF Group as the natural employer of choice in our industry.
Internally, we have strengthened our support services across HR, finance, procurement, marketing and business development to ensure we can deliver on our growth ambitions. I am also supported by a very experienced and strong management team. In particular, I’d like to thank Michael Knaap, Group CFO and Company Secretary, for his work over the past 12 months in further improving the Group’s balance sheet and his financial discipline that has put us in a strong position for growth. I am also grateful to Richard Davis and the Board who have provided valuable direction and guidance to the senior management team.
Finally, I would like to thank all of the dedicated and committed staff at Monash IVF Group. Through your hard work and commitment to our vision and values, we are able to achieve world class outcomes for our patients. I look forward to working with you in the coming year to further build on the success of the last year.
Fundamental Drivers of Growth
1 Science, technology and patient success
- Continue to develop industry leading science and technology
- Deliver patients clinically superior services and increase market penetration
- Promote Monash IVF Group’s scientific and clinical excellence with doctors and potential patients
2 Clinic expansion and acquisitions
- Review opportunities to increase Monash IVF Group’s scale and market position in womens health, including ARS and imaging services in Australia
- Consider adjacent business opportunities in womens health
- Continue to look at international growth opportunities that meet our investment criteria, particularly building on our existing Asian hub
3 Lower intervention
- MyIVF (Brisbane) and BUMP IVF (Sydney) ramping up and making an improved contribution
- Monash IVF Group will continue to refine our low intervention model and consider expansion in suitable locations for additional low intervention clinics
- Strategic intent to grow to no more than 10% of Patient Treatments (currently 5.6%)