Post on 22-Aug-2020
Investor Presentation
September, 2013
2
Prasanth Manghat, CFO
Binay Shetty, COO
Roy Cherry, Head of Strategy & IR
Presenting team
3
1. Investment highlights
2. Financial performance & analysis
3. Projects under development
4. Outlook
5. Appendix
Contents
4
BR Medical Suites (Dubai) USD 9mn Status: Achieved
MBZC Medical Centre (AD) USD 10.4mn Status: Achieved
Brightpoint Maternity Hospital (AD, Open Early H1 14) USD 70mn Status: In progress
DIP Hospital (Dubai, Open Early H1 14) USD 30mn Status: In progress
Khalifa Hospital (AD, Open H1 15) USD 200mn Status: In progress
NMC Health Snapshot (NMC LN)
NMC is the largest UAE private healthcare network, received 1.9mn patients in
2012, heading towards 2mn in 2013
Market cap is around USD 950mn
Revenue of USD 490.1mn in 2012, up 10.5% YoY. USD 273mn in H1 13, up 15%
EBITDA of USD 79.6mn in 2012, 12.9% higher YoY. 16% growth in H1 13
EBITDA margin H1 13: Health 28.2%, Dist.9.9%, Consolidated 16.9%.
Net profit USD 59.8mn 2012, up 37% YoY. H1 13: USD 32.3mn, 17.3% YoY
UAE is tax free
Total: 7 assets, 261 beds. Abu Dhabi,
Al Ain, Dubai and Sharjah.
Umm Al Quwain : 1 Hospital (under
O&M, 200 beds)
Total: 8
3 in hospital
5 stand alone
Source: NMC Health H1 13
Hospitals & Medical Centers Pharmacies
Exclusive agency
8 warehouses
197 delivery vehicles
Exclusive agent for NIVEA
Distribution
Use of proceeds: Adding 6 assets: 3 hospitals, 2 medical centres and 1 medical suites. Total of up to 410 new beds
Note: *Operational Beds. Al Ain & Dubai Spl Hospitals has licensed bed capacity of 100 beds each.
Management
Dr. BR Shetty
CEO & Founder
Mr. Binay Shetty
Chief Operating Officer
Mr. Khalifa bin Butti,
Executive Vice - Chairman
Mr. Prasanth Manghat
Chief Financial Officer
Mr. Roy Cherry
Head of Strategy & IR
Overview
1. NMC is the leading UAE private healthcare company
Revenue EBITDA
2. Business details
3. Use of IPO proceeds & project progress
49% 51%
Healthcare Distribution
74%
26%
Al Ain Medical Center (Open H2 14) USD 7mn Status: In progress
5
NMC is well positioned in a fast growing market
1. Strong Macro Indicators High population growth in GCC
2.4% 2.1%
1.2% 1.2% 1.1% 1.0%
0.0%
Africa GCC World Asia OceaniaAmericas Europe
World Avg.
24
49 38
25
89
27
47 36
KSA UAE Kuwait Oman Qatar Bahrain USA Germany
Amongst top-10 highest GDP/Capita
2,731 2,572
1,532
418 401 251 97
AbuDhabi
Dubai Sharjah RAK Ajman Fujairah UAQ
NMC presence targets 85%
UAE est. population by Emirate
2. Favourable UAE Healthcare Market
3. Adoption of Mandatory Healthcare Insurance, Abu Dhabi first to go
47%
37%
16% Basic
Enhanced
Thiqa
50%
95%
2006 - Pre 2012 - Post
Abu Dhabi Est. % of population covered
AD insurance categories
2.7 2.9 3.5 4.2 4.9
5.4 5.7 6.5
7.1 8.1 8.1
8.6
10.0
11.3
13.0
2011 2012E 2013E 2014E 2015E
Public
Private
UAE healthcare expenditure Beds/GDP per capita ('000)
Source: World Bank, UAE Stats, Banks
USA
Germany
KSA
Lebanon
UAE Kuwait Oman Bahrain
UK
France
India Egypt
-
1
2
3
4
5
6
7
8
9
- 10 20 30 40 50 60
Be
ds
USD GDP per capita (PPP)
World Avg.
European
Source: EIU, Booz & Co, IMF, HAAD, DHA, MOH, UAE Stats, Banks
3.1
1.5
1.9
1.4
0.9
8.6
3.0
3.6
2.9
2.3
- 2 4 6 8 10
OECD
UAE
Dubai
AD
NE
Nurses
Physicians
UAE healthcare manpower KPI’s
National 17%
Expatriate 83%
Source: EIU, Booz & Co, IMF, HAAD, DHA, MOH, UAE Stats, Banks
2.7
5.3
-
1
2
3
4
5
6
Abu Dhabi Dubai & Northern Emirates
Mil
lio
ns
Most of UAE population resides in
Dubai & Northern Emirates
6
Strategy to capitalize on potential offered by the UAE healthcare
market
1. Existing Facilities: Continued investments in new technologies, quality manpower and enhanced patient care at our existing
facilities has delivered consistent growth.
- Centers of excellence implementation led to increased uptake of higher value added services
- Increased licensed capacity in Dubai Specialty Hospital from original 75 to 100, now 91 beds operational
- Phasing licensed capacity at Al Ain Hospital, our most recent addition
2. New Expansions: Grow healthcare division organically and inorganically in what remains a highly fragmented market. Acquired
BR Suites in June, 2012 and now focused on developing new hospitals and medical centers. Enhance market position in Dubai
ahead of likely roll-out of mandatory healthcare insurance.
- Short to medium term expansion strategy deploying IPO proceeds into four new assets (Ex BRS & MBZC)
- 410 new beds (350 in AD, 60 in Dubai)
- All assets due for completion in less than 24 months (beds phased)
3. O&M Contracts: Offering operations & management services to the Government for its existing or new healthcare facilities.
- Awarded O&M contract for the 200 bed Sheikh Khalifa Hospital in Umm Al Quwain Emirate recently by UAE Government
- Seeking new opportunities
4. NMC brand centric: As oppose to Doctor brand centric – the team and sustainable overall quality supersedes the individual.
Fixed salary and no revenue sharing. Lower staff turnover and compensation inflation.
5. Value focused: Appealing to patients across wider segments and income groups – approach consistent with UAE demographics
6. Distribution business: Maintain organic growth through product optimization, improved sales & merchandising efforts and
increased efficiencies
Strategy
7
Contents
1. Investment highlights
2. Financial performance & analysis
3. Projects under development
4. Outlook
5. Appendix
8
NMC posts strong H1 13 growth across both divisions
We continued to strive towards performance improvements in 2013 through:
our centres of excellence strategy
increased uptake in our high value added services
growing distribution network
improved operational efficiencies
Our patient centric approach continued to yield results:
patient numbers heading towards 2mn in 2013 – a record for the company
both revenue per patient and occupancy expanded during the period
Improved product mix coupled with enhanced brand positioning and a sales force increase drove the distribution
division’s strong growth in H1 13.
We delivered a strong 16% YoY growth in Group EBITDA (USD 46.1mn, H1 13)
H1 13 highlights
9
Another strong half for NMC Health
Strong 15% YoY top line growth (USD 273mn in H1 13)
Healthcare revenue accounted for 49% of group top-line
EBITDA increased by 16% to USD 46.1mn
EBITDA margin reached 16.9%, improvement of 20bps
Healthcare accounted for 74% of EBITDA
Net profit reached USD 32.3mn, implying 17% YoY growth
and a NPM of 11.8%.
Adjusted net profit* amounted to USD 35.7mn
*Note: Excludes the USD 3.4mn booked as one-off expense on fees related to
replacement of old loans with new JPM loan
Performance NMC Consolidated overview
444 490
238 273
2011 2012 H1 12 H1 13
NMC Revenue
15% YoY growth
70.5
79.6
39.7 46.1
43.8
59.8
27.5 32.3
15.9% 16.2%
16.7% 16.9%
9.9% 12.2% 11.6% 11.8%
0%
5%
10%
15%
20%
0
10
20
30
40
50
60
70
80
90
2011 2012 H1 12 H1 13
Mar
gin
USD
mn
EBITDA Net profit EBITDA margin NPM
10
Summary financial statements
2. Balance sheet (USD mn)
1. Income statement (USD mn)
Detail H1 13 H1 12 Change FY 12 Change Total CWIP Spending 33.6 37.1 -9.4% 94.9 New Projects 28.9 27.1 6.6% 82.3 Maintenance Capex 4.7 10.0 -53.0% 12.6
Working Capital to Sales Working Capital 180.6 161.2 12.0% 185.3 Sales 273.1 238.0 14.7% 490.1 Working Capital to Sales 33.1% 33.9% -2.4% 37.8% -12.5%
Gross Debt 302.6 251.8 20.2% 303.6 -0.3% Bank Balance & Cash 248.6 276.6 -10.1% 257.5 -3.5% Net Debt / (Net Cash) 54.0 -24.8 217.7% 46.1 17.1%
Group Healthcare Distribution
Detail H1 13 H1 12 % Change H1 13 H1 12 % Change H1 13 H1 12 % Change Revenues 273.1 238.0 14.7% 143.2 122.1 17.3% 147.1 131.5 11.9% Gross Profits 90.3 75.8 19.1% 55.6 46.1 20.6% 35.7 30.8 15.9% % Margins 33.1% 31.8% +120bps 38.8% 37.8% +100bps 24.3% 23.4% +90bps
Adjusted EBITDA 46.1 39.7 16.1% 40.4 33.60 20.2% 14.5 13.0 11.5% % Margins 16.9% 16.7% +20bps 28.2% 27.5% +70bps 9.9% 9.9% Nil
Adjusted Net Income 35.7 30.9 15.5% Adjusted NPM 13.1% 13.0% +10bps
Adjusted EPS (USD)
0.192
0.166 15.5%
11
3. Cash flow (USD mn)
Definitions
Adjusted EBITDA: Non-IFRS item, adjusted for exceptional items like pre-operative expenses
Adjusted operating cash flow: Adjusted EBITDA less: changes in working capital, cash payments for PPE
Adjusted Net income: Adjusted for non-operating one-off expenses
Adjusted EPS: Calculated on a like for like basis for both periods using the number of shares in issue as at 30 June
2013, based on adjusted net income.
Summary financial statements (continued)
Details H1 13 H1 12 Change FY 12 Change
Adjusted EBITDA 46.1 39.7 16% 79.6
Capex-Non Projects (4.7) (10.0) -53% (12.6)
Change in NWC (8.4) (15.2) -45% (40.1)
Adjustment for EOSB provision 1.2 0.8 56% 2.1
EOSB paid (0.3) (0.3) 11% (0.6)
Adjusted operating cash flow 33.9 15.0 126% 28.5
Adjusted cash flow conversion 74% 38% 95% 36% 106%
12
Financial performance & Analysis
Healthcare Division H1 13
Contents
13
NMC’s Healthcare Division strategy paid off
Healthcare had a strong start to 2013, revenues reached USD
143.2mn – up a solid 17.3% YoY.
Division EBITDA hit a new record of USD 40.4mn, gaining 20.2% YoY
Both out and inpatient services delivered strong numbers across all of
the Group’s three specialty hospitals
Doctors increased by 12% YoY (440 in H1 13)
Third party referrals higher
219 252
122 143
2011 2012 H1 12 H1 13
Healthcare Revenue
17% YoY growth
56.9 68.2
33.6 40.4
2011 2012 H1 12 H1 13
Healthcare EBITDA
20% YoY growth
Performance Key figures
14
NMC’s Healthcare Division strategy paid off (Continued)
31 35
17 19
2011 2012 H1 12 H1 13
Inpatients (‘000) 6.7% YoY 8.6% YoY
230 230 230
261
2011 2012 H1 12 H1 13
Operational beds 13.5% YoY
2.8%
3.0% 2.9%
3.0%
2011 2012 H1 12 H1 13
Out/inpatient conversion
53.0%
60.5% 60.3% 63.6%
2011 2012 H1 12 H1 13
Overall occupancy 330 bps
100
106 103
112
2011 2012 H1 12 H1 13
Revenue/patient
9.2% YoY
1,681 1,854
932 995
2011 2012 H1 12 H1 13
Outpatients
Key performance indicators
9.2% YoY
6 bps
15
Contents
Financial performance & Analysis
Distribution Division H1 13
16
Distribution Division records 12% YoY top-line growth
Distribution achieved 12% YoY revenue growth, reaching
USD 147mn – It accounted for 51% of the top-line
Division EBITDA hit a new record of USD 14.5mn, gaining
11.5% YoY
Healthy EBITDA margin of 9.9% achieved
Our performance improvement was mainly driven by:
Strong growth in the UAE economy
Increased sales effort backed by a 16% rise in sales
and merchandising staff
Successfully signing up new brands, including
AVICO, Zynex, Wallach and Purple Surgical
253 271
132 147
2011 2012 H1 12 H1 13
Distribution Revenue
12% YoY growth
24.9 26.2
13.0 14.5
2011 2012 H1 12 H1 13
Distribution EBITDA
11.5% YoY growth
Performance Distribution
17
Scientific, 14.7%
Pharma, 29.3% FMCG, 41.3%
Food, 11.0%
Others, 3.8%
Segment contribution H1 13
Distribution snapshot
1.53 1.51
1.68
2012 H1 12 H1 13
Trading staff (‘000)
10% YoY 11% YoY
17% YoY
16% YoY
Scientific, 14.9%
Pharma, 29.6%
FMCG, 43.1%
Food, 9.1%
Others, 3.2%
Segment contribution H1 12
Key performance indicators
821 796
922
2012 H1 12 H1 13
Sales staff
188
179
197
2012 H1 12 H1 13
Vehicles
66
58
68
2012 H1 12 H1 13
SKUs ('000)
18
Contents
1. Investment highlights
2. Financial performance & analysis
3. Projects under development
4. Outlook
5. Appendix
19
Projects under development
Following a review of the various capital project timelines, and recent experiences in relation to both construction and
approval processes in the UAE, management are confident that the opening dates for each of our new facilities will be
met.
We highlight that the communicated dates relate to the expected commencement of patient flow. All construction dates
remain on track and inline with previous communication, with the exception of Brightpoint which has seen some delay.
BR Medical Suites (Dubai) USD 9mn Status: Achieved
MBZC Medical Centre (AD) USD 10.4mn Status: Achieved
Brightpoint Maternity Hospital (AD, Open Early H1 14) USD 70mn Status: In progress
DIP Hospital (Dubai, Open Early H1 14) USD 30mn Status: In progress
Khalifa Hospital (AD Open H1 15) USD 200mn Status: In progress
Al Ain Medical Center (Open H2 14) USD 7mn Status: In progress
20
NMC launches new project in Al Ain
Growth in the Al Ain region coupled with the ramp-up at NMC Al Ain Specialty Hospital, which opened
in 2009, has been robust – this encouraged us to initiate preparations for the second phase of NMC’s
growth there.
To expand our reach within the region, increase referrals to our hospital and boost medium to long-
term growth prospects, we have initiated work on a new medical centre in a prime location in Al Ain’s
Sannayia Industrial area.
The new facility is expected to provide a wide range of healthcare services in an outpatient setting
covering General Clinic, Dental, Dermatology, General Surgery, Internal Medicine, Ophthalmology,
Orthopedics and Urology.
Al Ain Medical Centre is expected to have basic diagnostics facility and a pharmacy.
Expected completion: H2 2014
Estimated Capex: USD 7mn
21
1. Investment highlights
2. Financial performance & analysis
3. Projects under development
4. Outlook
5. Appendix
Contents
22
Positive outlook
Positive outlook for the rest of the year, as the UAE economy continues to post high growth
NMC continues its strong performance
Encouraging start to H2 13 through the commencement of operations in our new MBZC/Mussafah
Day Centre in July 2013
The impact of our loan consolidation and resulting replacement with JP Morgan, is expected to
deliver net savings of USD 2mn annually – starting from H2 13
Recent news and statements, make us hopeful that the Emirate of Dubai is getting closer to the roll-
out of mandatory healthcare insurance.
NMC has two hospitals and one Medical Suites in the emirate and we are approaching
completion of the DIP hospital.
We believe NMC is well positioned to benefit from such a development.
Opening two hospitals and a medical center in 2014
Opening our largest hospital in 2015
23
Contents
Q&A
24
Contents
1. Investment highlights
2. Financial performance & analysis
3. Projects under development
4. Outlook
5. Appendix
25
Appendix
Hospitals & Medical Centers
Existing
Contents
26
Overview of NMC Hospitals and Medical Centers
Established
No. of Beds
Accreditation
Staff
No. of Inpatients
(FY 2012)
No. of Outpatients
(FY 2012)
Bed Occupancy
(FY 2012)
Specialty
Hospital,
Abu Dhabi
Specialty
Hospital,
Dubai
General
Hospital,
Dubai
Specialty
Hospital,
Al-Ain
MBZC
Medical
Center
Sharjah
Medical
Centre
1975 2004 2008 1999 1996 2011 July,
2013
100 100(1) 100(2) 10 – - NA
JCI JCI JCI – – – –
1100 632 536 260 160 20 45
20,025 7,689 6,108 1,387 - n/a n/a
891,147 305,776 367,811 201,308 121,171
1,527
n/a
68.4% 56.0% 55.6% 37.9% n/a n/a n/a
(1) Hospital has licensed capacity of 100 beds with, as of H1 13, 91 operational beds, (2) Al Ain Hospital has 100 licensed beds with 60 beds operational, as of H1 13.
BR Medical
Suites
27
Al Ain Specialty Hospital Abu Dhabi Specialty Hospital
Abu Dhabi Emirate assets deliver strong first half
100 100 100 100
60.4% 68.4% 65.7% 76.5%
2011 2012 H1 12 H1 13
Beds & Occupancy
Beds Occupancy
12
45 45 45 45
60
40.3%
34.1% 44.9% 55.6% 53.3%
54.6%
2009 2010 2011 2012 H1 12 H1 13
Beds & Occupancy
Number of Beds Bed Occupancy
817 891
442 461
2011 2012 H1 12 H1 13
Patients ('000)
Outpatient Radiology Pathology Inpatient Other
294 306
158 166
2011 2012 H1 12 H1 13
Patients ('000)
Outpatient Radiology Pathology Inpatient Other
28
Dubai Specialty & General Hospitals
75 75 75
91 51.1% 55.0%
60.4%
57.7%
2011 2012 H1 12 H1 13
Beds & Occupancy
Number of Beds Bed Occupancy
Dubai General Hospital Dubai Specialty Hospital
294 306
158 166
2011 2012 H1 12 H1 13
Patients ('000)
Outpatient Radiology Pathology Inpatient Other
178 201
103 102
2011 2012 H1 12 H1 13
Patients ('000)
Outpatient Radiology Pathology Inpatient Other
10 10 10 10
30.4%
37.9% 37.8% 41.7%
2011 2012 H1 12 H1 13
Beds & Occupancy
Beds Occupancy
29
BR Medical Suites & Sharjah Medical Centre
1.5 0.1 1.65 3.1
0.7
3.80
Outpatients Others Total
Patients ('000)
2012 H1 13
Sharjah Medical Centre BR Medical Suites
99
121
62 73
2011 2012 H1 12 H1 13
Patients ('000)
Outpatient Radiology Pathology Others
30
Contents
Appendix
NMC Distribution Brands
31
Distribution’s robust global brands portfolio, sees new additions
1. Regional Distributor of Leading Brands
2. Sample of new brands introduced in 2012
3. Sample of new brands introduced in H1 13
32
Contents
Appendix
Management team presenting
33
Mr. Prasanth Manghat
CFO
Fellow member of the Institute of Chartered Accountants of India (FCA), Bachelor of Science (1995), MG
University, Kerala, India, CIA, ACCA from UK (2004), pursuing CA (Institute of Chartered Accountants of
England and Wales)
12 years of experience in management of treasury and banking functions, corporate finance, accounting
and financial reporting activities. Prior to joining NMCH, he has worked as Credit & Operations Head with
Kotak Mahindra Finance, one of the leading non-banking financial institutions in India
10 years at NMC
Mr. Binay Shetty
COO
BSBA (Bachelor of Science in Business Administration from Boston University, USA (2004) with
specialisations in Finance and Entrepreneurship.
Prior to being elevated to the post of COO of NMC Health, he has held the position of COO of the
Healthcare Division, Executive Director, planning and governance, Corporate performance review and new
projects management.
9 years at NMC
Management team presenting
34
Mr. Roy Cherry
Head of Strategy & Investor Relations
Roy Cherry recently joined NMC Health Plc and works closely with the CEO and the Executive Vice
Chairman on NMC’s strategy. He also leads the investor relations efforts.
Roy’s career includes a Senior Consultant role at PwC where he advised on feasibilities and M&As
with a combined transaction value exceeding USD10bn across a variety of sectors including
healthcare. Roy also headed the Equity Research Department at SHUAA Capital in Dubai, one of the
region’s first and most acclaimed. He played an important role on several regional IPOs including,
Saudi Catering, NMC Health, Deyaar, DP World & Royal Jordanian Airlines.
Prior to joining NMC Health Plc, Roy was with Saudi Fransi Capital, where he was the Head of
Research & Advisory Department. He holds a BSc in Management from the University of London. In
addition to English, he is a fluent speaker of both Arabic and Swedish.
************************
Management team presenting (continued)