In 2019 the medical device group
Ilex Medical
+ 0.7%
Base:11,370
opening:11,500
High:11,650
low:11,300
change:2,457,240
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Showed 5.5% growth in shekel terms. In 2020, when it married on the corona, the growth rate jumped almost 10 times to almost 50% and the company recorded net annual revenues of close to NIS 1 billion. The company is now taking frozen plans out of the freezer, in the year of the Corona, but make no mistake about them: “After”: Galili and the founder and controlling shareholder Moshe Ben Shaul in a conversation with BizPortal.
Galili goes on to say, “We live in a world of tenders, so there is another function that affects our mix of revenues and activities – and is whether the health care system will recover enough to implement infrastructure projects later this year, and not just advertise the tenders around them.”
The Ilex Group includes the diagnostics activities of the company Ilex (which of course during the corona period also produced tests to detect the virus), the subsidiary Medtechnica that imports and markets medical equipment (monitors and respirators for example), and Plate, the subsidiary of Medtechnica (a subsidiary of Ilex) . Ilax notes that about 60% of revenues are based on long-term engagement agreements amounting to 7-10 years.
While net income in 2020 increased to NIS 946 million, the bottom line is that the total annual profit attributed to shareholders has doubled compared to 2019 and amounted to NIS 117 million. EBITDA in 2020 increased by 64% and amounted to NIS 186 million, compared with NIS 113 million in 2019. On the other hand, the company’s reports state that the rate of gross profitability in diagnostic activity in the fourth quarter decreased to 23.4% (36.2% in the corresponding quarter) due to the costs of establishing the corona laboratory as part of the contract with the Ministry of Defense. % In the corresponding quarter) due to large transactions at low profitability.
“With the beginning of the corona, it is no secret that the institution and other bodies began to travel around the world and tried to buy anything called a respirator – even a plastic box with nothing in it,” explains Ben Shaul. ‘So they bought insane lunatics and monitors too. As for Medtechnica, it has won several tenders, one of which is, say, a thousand Philips souls it supplied in the third or fourth quarters. It is clear to you that when you sell a thousand souls it is not like selling one soul. In the days when they are repairing, Dchtnika sells up to 40 people a year, and when it sells a thousand of them, the price per unit is probably lower and profitability is harmed. ”
Can it be assumed that thanks to the vaccines there will be fewer patients who will need respirators, and also that the demand for respiratory health systems in the world has already been met, among other things by you in 2020? If so what will happen to Plate in the coming year?
Ben Shaul: “Plate sold about 500-600 souls a year and Corona sold 3,200 – of which, only 600 were sold in Israel. 2,600 went to production in Europe, Russia, the United States Asia, China and more. In other words, Plate as a company was not based on the Israeli market and even before the Corona we only sold a few units here.
“In the meantime, we are completing the development of a new generation of respirators that will include three products – one for transporting patients over long distances, not only between floors in a hospital but in a way that can accommodate patients flying between countries; the second will suit recovery rooms and the third for non-recovery patients. “From the EU and they are in the testing stages at the FDA and we hope that by the end of the year they will receive approval and we can start marketing them.”
Galili: “The immunization rate in Israel is exceptionally good compared to the rest of the world, and in terms of the amount of respite per thousand people, it is one of the highest in the world, and since we did not focus on Israel in the first place, Some countries are still in real shortage. Besides, it must be said that Plate’s impact on Ilex’s results is minimal – even in 2020, had it not been for the Corona, it would not have had a significant impact on the group. ”
They estimate that by the end of the second quarter you will provide the full order for corona tests to the Ministry of Defense. Is there a scenario in which the attachment will be expanded or the vaccines “killed” this activity?
Galili: “As a personal opinion, I do not think the Corona will end in June 2021 – but it is not on this opinion that we base our strategy. To your question, we take into account that corona tests in the laboratory will decrease dramatically in June, and evaluate alternatives to which field in the world of diagnostics is correct to convert laboratory activity. “There are quite a few fields that use molecular biology that could be relevant to this lab that will continue to exist as a private lab.”
In Africa the situation in terms of immunization is even worse than in Europe. Does this mean that in the meantime for you they are a market for your corona tests?
Galili: ‘Chances are. I do not know how fast the immunization operation will be there, nor do the vaccine manufacturers know what the success rate is on the South African variant. It must also be understood that the more corona is active, the more it comes at the expense of regular business. There is no ‘minyan’. We are now interested in expanding the activities of blood banking and AIDS testing in Africa. ”
So back to the regular business. You said you would promote suspended business ventures. what’s the matter?
Galili: “At both Ilex and Medtechnica, we provide service to health funds and hospitals, and tenders that we expected to be implemented in 2020 but did not materialize are now beginning to be published. In addition, we were supposed to implement a complete automation system in the field of microbiology at the United Health Insurance Fund, which is the first project of its kind in Israel.
“This means, for example, that there will be a conveyor belt that will drive test tubes with urine and throat cultures, a robot will take a sample from the test tube and spread it on a petri dish, from there the sample is transferred to an incubation system and then a clean or positive brace is reported. United are already a customer. Large districts that can use this type of system. ‘
Between 5.5% growth in 2019 and about 50% in 2020 – what growth rate should we expect this year?
Ben Shaul: “We are already a little late in the first quarter and do not see the corona disappearing so quickly. We assume that we will return to the growth rate that characterized us in the past, which is between 10-12%. ”
And speaking of another 5 years, will Ilex still be a group engaged in blood diagnostics, AIDS, microbiology automation and supply of respirators and monitors, or will you find new growth engines?
Galili: “Anyone who has looked at the company in recent years has seen that we are constantly making jumps and changes. We need a change in the level of DNA. That’s why I would say you’ll see another company in 5 years doing what it’s doing today, because we’re already doing it 45 the best we can. It does not contradict the possibility that we will expand to other geographies or to other areas and Moshe really devotes a lot of resources to business development and strategy focus. ”
In this context, mergers and acquisitions are something that interests you at the moment?
Ben Shaul: “Absolutely.”
Moshe, who follows the way you grew up with Ilex, wonders what will happen to the generation that follows you. Already have a plan?
‘I intend to engage in the level of strategy of the company and not in the day-to-day business. In addition, I have already passed the reins to Tammy, who is kicking more than she thinks, and we have a very professional and experienced management. If the question is what am I going to do beyond that, then I have a bicycle that I bought the house for at the time – and whoever can ride 50 kilometers can find me on Saturday in the park. ‘