Despite the rising cost of living and depression in discretionary spending, fertility company Monash IVF (ASX: MVF) has seen no downturn in demand, despite a round of IVF treatment often costing upwards of $10,000 with no guaranteed success.
The broader de-stigmatisation of IVF in Australia through open discussion, media publicity and progressive LGBTIQ+ community have all contributed to wider adoption of IVF, with all contributing factors towards Monash IVF reporting $213.6 million revenue in FY23, an 11.1% increase on the previous year.
“FY23 Key Markets Industry growth rebounded strongly in 2H23, with stimulated cycles increasing by 5.6% on pcp,” said Monash IVF CEO, Michael Knapp.
“Despite the current cost of living pressures, the 2H23 industry growth was well above historical average growth, which reaffirms the non-discretionary nature of IVF services.
“Traditional demand drivers, combined with newer services (including egg freezing and genetics) and growing patient segments (LGBTQI+) provide a positive outlook for industry growth going forward. This is further supported by Monash IVF’s New Patient Registrations growth in FY23 of 12% vs pcp (23% in 2H23 vs pcp including acquisitions).”
Stimulated cycling remains the flagship fertility treatment for Monash IVF which increased its market share in key markets by 1.4% to 22.7% in FY23. This was assisted by some clinic acquisitions during the year. Additional fertility services also offered by Monash IVF include ultrasounds and genetic testing.
The rise in revenue was reflected in Monash IVF’s earnings which flowed down to an 11% increase in underlying EBITDA to $53.4 million, and a 14.7% increase in underlying NPAT to $25.5 million.
Shareholders were rewarded with a final fully-franked dividend of 2.2 cents per share, the same as the interim one announced earlier in the year.
The IVF market in Australia has been on a steady upward trajectory for several years, driven by a convergence of societal, medical, and technological factors. As more women delay starting families due to career pursuits and other life commitments, the demand for assisted reproductive technologies such as IVF has surged. Changing attitudes towards family planning and the increasing acceptance of non-traditional family structures have also contributed to the growth of the IVF market.
Australia’s fertility rates have been declining over the past few decades, mirroring a global trend. Factors such as delayed childbearing, economic uncertainties, and lifestyle changes have led to lower natural fertility rates.
According to data from the Australian Bureau of Statistics, the total fertility rate in Australia stood at 1.7 births per woman in 2022, well below the replacement rate of 2.1 births per woman required to maintain the population.
This declining fertility trend is not unique to Australia; many developed countries are facing similar challenges. Countries like Japan, South Korea, and several European nations are grappling with aging populations and declining birth rates. This has led to an increased focus on fertility treatments like IVF as a means to counteract these demographic shifts.
SouthEast Asia is viewed as an expansion opportunity for Monash IVF which operates five clinics across Singapore, Malaysia and Indonesia. Stimulated Cycles from its international business grew 19.9% in FY23. Underlying EBITDA from the international operations, however, decreased by 18.2% which the Company attributed to investment in scientific, clinical and nursing capabilities, as well as increased marketing.
Whilst macroeconomic conditions in Australia including cost of living are impacting affordability of certain services, Monash IVF confirms that they are not currently impacting new patient registrations, with new inquiries up strongly on prior year.
Monash IVF – FAST MONEY
On 25 Nov 2022, Monash IVF was featured on Emerald Financial’s Fast Money. Watch as Sam and Alfred debate two up and coming stocks on the ASX with only 1 minute each to plead their case: Metals X (MLX) and Monash IVF (MVF).
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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