Apollo Hospitals Enterprise Limited · NSE:APOLLOHOSP
Apollo Hospitals Enterprise — Investor Presentation (September 2020)
46 slides from Apollo Hospitals Enterprise's investor presentation, September 2020
Slide 1: Investor Presentation Sep 2020
INVESTOR PRESENTATION Sep 2020 Strictly private and Confidential
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by Apollo of India (Issue of Capital and Disclosure industry results to differ materially from the results, Hospitals Enterprise Limited (“AHEL” or the Requirements) Regulations, 2009 as amended. financial condition, performance or achievements “Company
Slide 3: Key Highlights
KEY HIGHLIGHTS Leading private sector Attractive industry 01 healthcare services provider 02 opportunity Strong operating & 03 Excellence in practice 04 financial track record Well-Positioned to Anchored for the 05 Accelerate 06 future 07 team Strong management 3
Slide 4: Leading Private Sector Healthcare Services Provider
LEADING PRIVATE SECTOR 01 HEALTHCARE SERVICES PROVIDER 4
Slide 5: Business Snapshot (1/2)
BUSINESS SNAPSHOT (1/2) AHLL & Other Healthcare Services Standalone Pharmacies Businesses 53% * 41% 6% of Consolidated Revenues of Consolidated Revenues of Consolidated Revenues Primary Clinics – 161 Day surgery/ Outlets 3,850 Owned Managed Total Across 20 states Sugar Clinics – 23 CRADLE + 851 = 10
Slide 6: Business Snapshot (2/2)
BUSINESS SNAPSHOT (2/2) FY20 at Apollo Hospitals* High-end tertiary care practice contributes to 470,000+ 4,300,000+ 450,000+ Admissions Out-Patients Preventive 60% of Net revenues# Health Checks 10,000+ 6,500+ 35,000+ Heart Surgeries Joint Cardiology Neuro Surgical Replacements Discharges 21% Oncol
Slide 7: Pan India Presence (1/2)
PAN INDIA PRESENCE (1/2) Leading Hospital Players in India *Apollo Hospitals Fortis Hospitals # of Beds: 10,197 India CARE Hospitals # of Hospitals: 70 Pan Apollo is the Columbia Asia # of Beds: 4,616 # of Beds: 2,223 # of Beds: 1,050 # of Hospitals: 31 leading player in # of Hospitals: 13 # of Hosp
Slide 8: Pan India Presence (2/2)
PAN INDIA PRESENCE (2/2) Details of beds under operation* Category wise Capacity Beds Operational Beds No. of Hospitals Bed Growth Owned Hospitals 8,816 7,364 44 Day care centres/ CRADLE 530 530 21 Owned Beds Managed Hospitals 851 851 5 CAGR (FY05-20) 7.5% Grand Total 10,197 8,648 70 Cluster wise (o
Slide 9: Attractive Industry Opportunity
ATTRACTIVE 02 INDUSTRY OPPORTUNITY 9
Slide 10: Hugely Under-Penetrated Market with Attractive Dynamics (1/2)
HUGELY UNDER-PENETRATED MARKET WITH ATTRACTIVE DYNAMICS (1/2) Demand for healthcare services in India is expected to rise owing to favorable demographics. Private sector players are well-positioned to leverage this opportunity given low contribution of government spending. Indian Healthcare Delivery
Slide 11: Hugely Under-Penetrated Market with Attractive Dynamics (2/2)
HUGELY UNDER-PENETRATED MARKET WITH ATTRACTIVE DYNAMICS (2/2) Beds per 10,000 people Healthcare Infrastructure in India India lags behind other developed and emerging economies in healthcare infrastructure Healthcare infrastructure gap remains substantial, with only 12 beds per 10,000 population, In
Slide 12: Rapid Demand Growth Driven By
RAPID DEMAND GROWTH DRIVEN BY ….. Demographic shifts, changing consumption patterns and increasing affordability makes India one of the fastest growing healthcare delivery markets globally. Non communicable life style diseases India: Demographic shift (% of population by age group) Increasing in-pat
Slide 13: Medical Tourism to Reach $6 BN by 2018 (1/2)
MEDICAL TOURISM TO REACH $6 BN BY 2018 FROM $ 3.5 BN (1/2) Indian Medical Tourism Industry (US$bn) (2012-2018) 6.0 4.8 4.2 3.0 3.5 2.0 2.4 The Indian medical tourism industry is expected to reach US$6bn registering a c.20% CAGR for the period FY12-18 2012 2013 2014 2015 2016 2017 2018 Medical Touris
Slide 14: India Potential to Outperform Other Asian Countries
INDIA HAS THE POTENTIAL TO OUTPERFORM OTHER ASIAN COUNTRIES OVER THE NEXT DECADE DRIVEN BY INCREASED FOCUS ON QUALITY AND OUTCOMES Comparison of major medical tourism destinations in Asia Number of medical JCI accredited Average saving % as Size (US $bn (2012) Popular treatment option tourists 2012
Slide 15: Excellence in Practice
03 EXCELLENCE IN PRACTICE 15
Slide 16: Leaders in Clinical Excellence
LEADERS IN CLINICAL EXCELLENCE • ~ 375 Clinicians across the • ~ 300 Clinicians across the network • ~ 250 Clinicians across the network network • Over 6,500 Joint Replacements in • Over 35,000 Neuro surgical • Over 10,000 heart surgeries in FY20 discharges in FY20 FY20 21% 10% 12% Net Revenues Net
Slide 17: Pioneers in Technology Adoption
PIONEERS IN TECHNOLOGY ADOPTION First Toshiba Aquillion ONE - The G4 Cyberknife Robotic 320-slice dynamics multi- Radiosurgery System, Asia-Pacific’s First in South East Asia: The 3 detector computed most advanced cancer treatment gantry comprehensive tomography (“CT”) scanner - The Novalis TxTM Rad
Slide 18: Service Excellence, the Mintmark of Apollo
SERVICE EXCELLENCE, THE MINTMARK OF APOLLO • Focus on ‘critical customer’ touch points TASCC (The Apollo Standards of Clinical Care) Apollo • 1006 important standards spread over five areas (In Service Patient, Out Patient, House Keeping, Grooming and standards Preventive Health Check) AQP • Certifi
Slide 19: Strong Financial & Operating Track Record
STRONG FINANCIAL & 04 OPERATING TRACK RECORD 19
Slide 20: Strong Growth in Revenues Across Businesses
STRONG GROWTH IN REVENUES ACROSS BUSINESSES … Total Consolidated Revenues (1) (` Mn) FY 20 Consolidated Consolidated Revenues Revenues of $ 1.6 billion (2) CAGR (FY13-20) of 17%. Healthcare services Revenue 57,297 CAGR (FY13-20) of 12%. 51,426 48,206 45,157 40,851 38,860 37,033 32,214 32,689 Standal
Slide 21: Aided by Strong Operating Metrics (1/2)
… AIDED BY STRONG OPERATING METRICS (1/2) Operational Highlights Occupancy rates remain Average length of stay Average revenue per high despite bed (ALOS) has reduced across occupied bed (ARPOB) has additions the portfolio grown at a healthy CAGR of • Growth of in-patient • Reduced in mature 8% over
Slide 22: Aided by Strong Operating Metrics (2/2)
… AIDED BY STRONG OPERATING METRICS (2/2) Bed Occupancy Rate(1) % In-patient Admissions (‘000) Operating Beds 478 399 428 451 3,930 4,257 4,767(2) 5,153(2) 5,549(2)5,811(2) 6,321 6,724 6,940 7,111 7,246 7,491 374 281 313 332 354 76% 73% 73% 71% 72% 71% 68% 265 211 235 63% 64% 66% 68% 67% FY09 FY10 F
Slide 23: Resulting in Consistent Profitability
… RESULTING IN CONSISTENT PROFITABILITY Segment wise EBITDA Margins (%) Mature Hospitals EBITDA margin expansion of 22% 23% 24% 24% 23% 20% 21% 22% 21% 21% 21% 21% 200-300 bps over the next 3 years. 14 New hospitals with 2,850+ beds (2,000 7% 8% operational beds) added in the last few years 5% 6% 3%
Slide 24: And Healthy Return on Investment
… AND HEALTHY RETURN ON INVESTMENT # ROCE - Mature Healthcare Services (%) 24% 27% 20% 20% 20% 17% 15% 19% 18% 19% 18% 18% Steady Improvement in Return on Capital Employed (ROCE) Efficiency (Asset Turnover) Profitability FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY18 FY 19 FY20 ROCE of h
Slide 25: Standalone Pharmacies: Capturing the Growth Potential
STANDALONE PHARMACIES: CAPTURING THE GROWTH POTENTIAL Proven ability to expand the store network 3,766 • India’s largest Organized Pharmacy Chain with 3,021 3,428 Pharmacy 2,556 presence in ~400 cities/ towns spread across 21 1,822 2,326 store 1,632 States and 4 union territories. 883 1,049 1,199 1,
Slide 26: H1 FY21: Financial Performance (1/8)
H1 FY 21: FINANCIAL PERFORMANCE (1/8) Standalone Financials (` Mn) Consolidated Financials (` Mn) H1 FY 20 H1 FY 21 yoy (%) H1 FY 20 H1 FY 21 yoy (%) Revenue 46,928 43,760 -6.8% Total Revenues 54,126 49,322 -8.9% Operative Expenses 24,547 25,968 5.8% EBITDA (Pre Ind AS 116) 6,341 1,907 -69.9% Employ
Slide 27: Q2 FY21: Segment-wise Performance (2/8)
Q2 FY 21 : SEGMENT-WISE PERFORMANCE (2/8) Standalone Financials (` mn) Healthcare Healthcare New Hospitals Proton SAP Standalone Services (Mature) Services (Total) Hospitals 21 10 1 32 Operating beds 3,136 1,529 53 4,718 Occupancy 52% 61% 39% 55% Revenue 7,455 2,964 207 10,626 13,519 24,144 EBITDA (
Slide 28: H1 FY21: Segment-wise Performance (3/8)
H1 FY 21 : SEGMENT-WISE PERFORMANCE (3/8) Standalone Financials (` mn) Healthcare Healthcare New Hospitals Proton SAP Standalone Services (Mature) Services (Total) Hospitals 21 10 1 32 Operating beds 3,136 1,529 53 4,718 Occupancy 44% 48% 32% 45% Revenue 12,295 4,755 399 17,449 26,310 43,760 EBITDA
Slide 29: Q2 FY21: Segment-wise Performance (4/8)
Q2 FY 21 : SEGMENT-WISE PERFORMANCE (4/8) Consolidated Financials (` mn) Healthcare Serv Healthcare Serv Healthcare Serv Group (New & Proton SAP AHLL Consol Group (Mature) Group (Total) Others) Hospitals 30 13 1 44 Operating beds 5264 2,047 53 7,364 Occupancy 54% 61% 39% 56% Revenue 8,553 3,613 207
Slide 30: H1 FY21: Segment-wise Performance (5/8)
H1 FY 21 : SEGMENT-WISE PERFORMANCE (5/8) Consolidated Financials (` mn) Healthcare Serv Healthcare Serv Healthcare Serv Group (New & Proton SAP AHLL Consol Group (Mature) Group (Total) Others) Hospitals 30 13 1 44 Operating beds 5264 2,047 53 7,364 Occupancy 45% 50% 32% 47% Revenue 13,984 5,890 399
Slide 31: H1 FY21: Hospital Cluster-wise Operational Performance (6/8)
H1 FY 21 : HOSPITAL CLUSTER - WISE OPERATIONAL PERFORMANCE (6/8) Tamilnadu Region AP, Telengana Region Total (8) (1) (Chennai & others) (Hyderabad & others) (2) Particulars H1 FY 20 H1 FY 21 yoy (%) H1 FY 20 H1 FY 21 yoy (%) H1 FY 20 H1 FY 21 yoy (%) No. of Operating beds 7,450 7,364 2,208 1,972 1,3
Slide 32: H1 FY21: Hospital Cluster-wise Operational Performance (7/8)
H1 FY 21 : HOSPITAL CLUSTER - WISE OPERATIONAL PERFORMANCE (7/8) Karnataka Region Others (4) Significant Subs/JVs/associates (5) (Bangalore & others) (3) Particulars H1 FY 20 H1 FY 21 yoy (%) H1 FY 20 H1 FY 21 yoy (%) H1 FY 20 H1 FY 21 yoy (%) No. of Operating beds 770 814 951 976 2,177 2,258 Inpati
Slide 33: Standalone Pharmacy Operational Performance (8/8)
STANDALONE PHARMACY OPERATIONAL PERFORMANCE (8/8) Q2 FY 21 Revenues Q2 FY 21 EBITDA Batch Particulars Q1 FY 20 Q1 FY 21 yoy (%) ` 13,518 mn ` 865 mn ` 708 mn No of Stores 1,100 1,072 15% yoy growth Q2 FY 21 Q2 FY 20 Upto FY 12 Batch Revenue/store 3.96 4.24 7.0% EBITDA /store 0.33 0.37 12.0% EBITDA M
Slide 34: Well-Positioned to Accelerate
WELL-POSITIONED TO 05 ACCELERATE 34
Slide 35: Capacitised for Growth (1/2)
CAPACITISED FOR GROWTH (1/2) STRATEGY • Optimise Asset Utilisation in flagship facilities & locations • Focus on Centers of Excellence with one or two • 30 Hospitals, including units anchor specialties in each market. • Potential to accelerate - in Major Tier 1 cities • Set benchmark standards in cl
Slide 36: Capacitised for Growth (2/2)
CAPACITISED FOR GROWTH (2/2) STRATEGY • 1027 Primary care centers • Focus on urban markets; expand in clusters • Potential to grow Apollo Health including Clinics, Sugar, • Owned clinic models in metros, franchisee Diagnostics, Dental & Dialysis. clinics in Tier II towns revenues at 20% CAGR & Lifes
Slide 37: Anchored for the Future
06 ANCHORED FOR THE FUTURE 37
Slide 38: Building the Healthcare Systems of Tomorrow, Today
BUILDING THE HEALTHCARE SYSTEMS OF TOMORROW, TODAY • Digitizing Apollo – Partnership with DxC Technology - “(re) Invent the health system of the future” • Apollo Home Care • Precision Medicine – A Genomic + Digital Revolution • Trend of increasing Day Surgeries and Minimally Invasive Procedures, whi
Slide 39: Plan to Launch an Integrated Digital Health Platform
PLAN TO LAUNCH AN INTEGRATED DIGITAL HEALTH PLATFORM Apollo more than 20 million customers across various business, 10 million have already been tiered digitally “Direct to Patients” mHealth Artificial Intelligence and OneApollo Platform Predictive Health • Partnership with Microsoft to develop and
Slide 40: One Apollo
ONE APOLLO Hospitals Homecare Pharmacy Tele Health OneApollo Digital is Integrating Apollo’s Customer interfacing Bus to ensure Apollo Group’s High Customer Customer Engagement & Life cycle Management across the White Dental Group 40
Slide 41: Summing Up: The Road Ahead
SUMMING UP: THE ROAD AHEAD ……………. Creating positive margin in an uncertain and changing health economy 01 Shaping the Responding to workforce of the health policy and future 06 02 complex regulation 28% Top Challenges 31% facing healthcare stakeholders 46% Engaging with Investing in exponential 31%
Slide 42: Strong Management Team
07 STRONG MANAGEMENT TEAM 42
Slide 43: Executive Board
EXECUTIVE BOARD Shobana Kamineni Executive Vice Chairperson, Dr. Prathap C. Reddy Executive Chairman, Founder • On the Board since 2010 (M.D, MBBS, FCCP, FICA and FRCS) • 30+ years healthcare experience • Conferred the Padma Vibhushan in 2010 • Conferred the Padma Bhushan in 1991 • Spent 36 years wi
Slide 44: Independent Directors
INDEPENDENT DIRECTORS Vinayak Chatterjee MBN Rao Independent Director Independent Director • On the Board since 2014 • On the Board since Feb 2019 • Chairman of Feedback Infra Pvt Ltd • Former Chairman and Managing Director of Indian Bank and Canara Bank Dr T Rajgopal V Kavitha Dutt Independent Dire
Slide 45: In summary we have over the last 36 years
In summary we have over the last 36 years focused approaches for care distribution—day surgery, specialty consistently on putting the patient at the core of all that clinics and virtual care centres. we do in the pursuit of clinical excellence and in creating sustainable value for our stakeholders.
Slide 46: Thank You
In summary we have over the last 33 years focused consistently on putting the patient at the core of all that we do in the pursuit of clinical excellence and in creating sustainable value for our stakeholders. We ensure strict adherence to business ethics and our governance standards stand exemplar
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