AIH - Earnings call transcript Q2 2022 | Aesthetic Medical International Holdings Group Limited

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Operator

Good morning, ladies and gentlemen. Thank you for standing by and welcome to Aesthetic Medical International First Half of 2022 Earnings Conference Call.

During today’s presentation, all parties will be in a listen-only mode.

As a reminder, today’s conference call is being recorded.

On the call today from Aesthetic Medical International are Dr. Chief Mr. and Chairman Zhou, Executive Officer; Pengwu Toby Financial Officer; and Mr. Wu, Chief Chi, Director. Relations Derrick Associate Investor Dr. review business will Mr. Zhou the followed company’s by highlights, operations and the Chi, performance. company’s Derrick introduce financial will who the Mr. Chi Mr. and CFO, available to follows. that Wu will all answer questions Q&A during your session the be

information started, events the our and statements financial These will Before our some such we remind about that statements Actual results from prospects. statements. materially forth include expectations, and and would future plans I get include financial our to forward-looking like you differ of discussed future projections, set future regarding performance. may those in

For company’s these filings risks today’s of a SEC, the uncertainties, which include discussion you the with press should review release. and

of this All make update required of obligation You law. that we them are statements call today, future no as events. and on should and as not rely beliefs on forward-looking to except on our based assumptions forward-looking undertake as applicable we predictions by statements

will Our including include EBITDA. EBITDA, discussion adjusted and non-IFRS today loss adjusted measures, financial

adjusted accordance susceptible consider and to non-IFRS net a to not as for You accordance substitute they should IFRS, similarly prepared other loss adjusted calculations measures be superior EBITDA, prepared not in IFRS. other are titled and Furthermore, companies. or measures in with to because varying by with are income comparable not may EBITDA, presented

Investor opening financial Director be company’s over At Medical and in Zhou, entirety call Derrick please remarks His its review and Pengwu Dr. not a in turn to Associate by I ahead. time, Zhou, delivered of this measure. go Chairman Chi. information would single Dr. will Aesthetic English on encouraged financial the like International. Relations You’re to CEO the rely to

Pengwu Zhou

operator, and everyone. [Foreign Language] Thank you, hello,

the This were announce COVID-XX Since in Shanghai We that in progress treatment suspended despite were March and sales the our than narrowing XX.X% and two and our achieved marketing the private resumption, March, treatment the despite company growth was XXX.X% Eastern become reach loss of to packages. which region. operations brands Language] cash compared fluctuating business disruption business months. centers net management strengthening attributable are saw we more late to two customers. we number market pandemic. Upon in in place. to recorded a business of surprise and to our our promote temporarily our June, for online the are has was system of and positive business Overall, recovery channel lockdown to the domain to in of the year-on-year optimization respectively, terms customers before with of In [ph] by dedicated increased [Foreign used a and we strategies, services steady enhancing XX% the operations, revenue our the pleased

experienced establish we equipped the comprehensive with consulting an in working period, own future. which relationship the system, management with our more in near and functions been to order have customer During team will be precise

successful intend at first run the system run, treatment all to launched The will across implement Shenzhen trial Aesthetic be Medical Hospital. the Upon we centers. PengAi pilot

model better internal future and [Foreign company customer our solid and first improve replicate our for foundation we will closed importantly, enhance July new the expansion. the and be a includes, to reception, Language] help only experience, to services, offered On growth not limited services laying these drive XX, customers standard rate, employees, customer retention Partnership, and system Hainan also Investment these We training centers. Jiechuang the more aggregate equivalent practitioners, not transactions business May where recognition XXXX, frontline XX, private new to our July and by in XX,XXX,XXX Nasdaq, issued RMBXXX was previously are million. that gross X, us indicators can into value financial with XXXX. we second of the but Subscription which stockholders' subscribe consideration believe by future. your being by operating completed support enhance positive after would quality RMBXXX to quarter operational XXXX, implemented was equity also service provide procedures China, of non-compliance XX, the be agreed protocols our another private to informed entered products, million. medical of Agreement cetera. placement on listing with that proceeds ensure on believe receiving which Lafang are and meet announced program measures customer XXXX, market. On et Oriental to and on but efficiency, Staff have Both We We with the receive establishing these for of the you treatment sustainable operating across we newly can fourth USD company again continued Jiechuang will better near a is We strategies in delivering the XXXX, our Thank attention. round company while would ordinary our growth. believe requirement total improve customers June further our If of all position the placement the aforementioned shares consistent for

turn to and our the for first operations to the Director, Associate half of introduce like the Relations call financials would to I XXXX. Investor Now Derrick Chi

Derrick Chi

key of filler revenue XX, is financial driven operation introduced half results RMBXXX.X half the Hello, hyaluronic first XXXX. acid everyone. Voluma the increased to Dr. This XXXX, June In will ended the first Juvéderm equipment, I Zhou. summarize you, body and bio-stimulating million, contouring as the results Thank some the filler for and X.X. primarily fillers by sales of And unaudited Ellansé, Derrick. of CoolSculpting XX.X% year-on-year high-end such equipment newly and total

half or of aesthetic contribution pandemic and the first divested XX.X% result market of the impact of to ESOP-related margin assets significant maintain percent acquisition -- mainly shift well centers return to the by referral to in in non-surgical cost under COVID-XX XX.X% to its XX.X% General XX.X expenses in customer RMB the was program in customer XXXX. points the selling Selling an of services and elevate impact of the focus in total retained administrative treatment and of profit year-on-year. Selling revenue operations profit million, a half the a cost strategic a by Gross was primarily Gross XXX.X increase relatively The with decreased representing representing XXXX. reduction of compared were in RMBXXX.X the RMB increased year-on-year. rising XXXX. medical high decrease from were company's which the was XX.X due revenue expense retained as as underperforming decrease on a expenses, -- from XX.X% of XX.X% were as of in lower company's centers first divestment XXXX, services the expenses year-on-year. as in expenses a million, investment. ceased operations million, the representing Excluding treatment of XX.X% the revenue

of in in RMB of was RMB XXX loss XXXX. of compared of diluted As XX.X first Adjusted compared result compared foregoing, RMB half loss RMB XX.X a basic million with the XXXX with the share half the for in a with million first first EBITDA the half of loss X.X compared Adjusted loss EBITDA of XXXX. XXX.X of in a of half and of Basic of Company the first the X.X half million million loss was XXXX. X.X half XXXX. compared of in the profit million and was of of diluted a narrowed first were with XXXX loss the RMB million RMB loss the loss of the the to first per X.XX XX.X XXX.X RMB the RMB RMB share both half XXXX. million million with first RMB in per

in first number operations decrease In despite of of treatment of the XXXX. to suspension terms pandemic of the in and the performance, measures mandatory treatment preventative half centers centers the operating due several of

well that XXXX, restructuring an worth the highly still total X.X% customers strategies of It plan, total increased company by in reengage active strategic in is XX.X%, the its which, customers company's customers. success the customers. year-on-year and The quality recorded of -- in will the record assets number as demonstrated the active active to company the as repeat active company's cross-selling increase able the in showcase of loyal effectiveness increase of is restructuring retain the noting through Following and customers. the the

demand despite to XXXX of percentage Total aesthetic total increase the treatment an XXXX, among as and in the of number and several effectiveness spending and treatments well non-surgical by the discounted aesthetic recorded operations treatment X,XXX For number the of half aesthetic treatment the treatment RMB points. centers a X.X% from medical of increased mandatory of as treatments half centers – centers The increasing the the of increased young half treatments, non-surgical the of the of a increase company strategies, first the pandemic routine due preventative points increased number percentage by year-on-year. for cross-selling the company's XX.X% Average promotion. of generation XXX year-on-year of driven XXXX. decrease in as first of customer the of to of by in XX.X% RMB treatments of was requirements number treatment in suspension package number primarily X.X% the by medical in per in number first the

remarks. our but June growth This RMB only our execute cash throughout concludes provide services on shareholders. Thank equivalents for better XX.X customers, us and our looking strategies and to ahead, XX, our were quality year. cash you of prepared today's to we not XXXX, This continue sustainable As is the million, to to joining call. provide

open go We ahead. Operator, will please call questions. now the to

Operator

[Operator you. Instructions] Thank Thank you.

standby. comes ask line first Please Adebayo question our take will We – Amos question. question of first from DLK your the [ph] Advisory. from your And please

Unidentified Analyst

can Hello. hear Hello, you me?

Pengwu Zhou

hear Hi. can Yeah, we you.

Unidentified Analyst

Okay. the to know centers plans if disposal the divest disposed? being want this I company of this X are I know details further the Are presentation, loss-making? to they year. would all centers are treatment But treatment Thank very like are you what the to for informative.

Pengwu Zhou

Yeah.

a see have can strategy. that you we As

areas. why Our the are on Bay based hospitals This three area. of That's not Greater business those these the will Shanghai one. in first focus is and

why still X want these – we to is million will them. is, reason price three yes, disposal. we for you in real cash just coming sell a at we That's But dispose above those with Second good right are hospital RMB have are loss-making. luckily,

Unidentified Analyst

Okay. I see. A follow-up question.

Pengwu Zhou

Yeah.

Unidentified Analyst

whether forward? do more continue going know disposal company I May the will to

Pengwu Zhou

profitable. don't profits, is retained first we have hospital now it's we This most are the think – one. them of are making so hand. so – Those because both I on

those on that’s Bay also one, right, our strategy. strategy the on in our the possible fulfill Second even be Shanghai will or Greater Area hospitals

and will So better those better hospitals make in much we future. the become

Unidentified Analyst

Thank you.

question. Just follow-up another

– Any are clinics. so, where We new will AIH how And will clinics satellite the many? satellite disposing will centers, clinics? they any in the we eventually situate but add where pipeline? treatment If these

Pengwu Zhou

your Thank question. you for

we future, And of year. to now And XX. in XXXX. located to do XXXX the clear clinics. which within establish total Thank I But clinic its and is certain clinics clinics, is don't we within Zhejiang plan satellite establish one plan standardized question. to group, expect have within, satellite aesthetic satellite more clinics District, to have Shenzhen around one I your starting a for we is from establish We further Fenghua in time hope name the medical the you. number satellite example,

Operator

Thank Emily We of line And from our will question. Please the Capital. question you. next take [Operator the your IGWT Lee question. Instructions] [ph] ask comes from

Unidentified Analyst

like Hi. narrowed. And Congratulations I one the would been ask. loss that question to company I has our to that have

you. agreement May Thank benefits -- expect share any Our a expect or do with entered for into synergies subscription I has Hainan company, the Oriental. you please? company

Pengwu Zhou

agreement Emily, the us. for operating you, Hainan brings experience to your management Orientals, share subscription Thank and The Jiechuang question. SOP with Investment

the help For also for operating training different and selling – SOP the have the and people, us employees like example, example, or to frontdesk medical program for different other our managers. operating they standardize can and procedures,

-- [indiscernible] -- taken positive the we trial some hand, and -- the post invited upstream us agency take the and feedback. they invasive products on gave XX and the So positive treatment this and negative And to the a to the they mask. the have also trial, to other see marks, to both produce like we and ability of effect have customers

care skin the with So and we Jiechuang. will improving Hainan products keep

aspects two parties. you. the these between So, Thank are synergies two

Unidentified Analyst

Okay.

invest to mask to system? are we the going do have them the SOP, more into we how could you Talking tell So distribute. about helping us the about much

Toby Wu

all The SOP a an we for like form would behaviors idea that to standard employees. is

September information and behaviors and on we for or both review every database. operating then SOP the with we medical standardized that's train behaviors best SOP employees store find we behaviors our since will the We and our then Based in program started solution view, XXXX. yes, to and the database, operate the -- will

system. SOP So optimizing and are still exploring the we

Unidentified Analyst

Thank all Okay, you. right.

Toby Wu

Yes. Thank profit. you. you. our of to enter We cycle a hope Thank with SOP, we would help optimize the positive

Operator

call be to conference in. International no attending Mr. we concludes There again earnings thank hand everyone seems XXXX I Goodbye. for our like call. call Derrick Aesthetic Thank you would closing now for to half you. the Chi And you further questions. remarks. to Thank all Medical of first for listening This over today.

Derrick Chi

Thank you. Bye-bye

Aesthetic Medical International Holdings Group Limited (PAIYY) 17 Aug 222022 Q2 Earnings call transcript