Apollo Hospitals Enterprise Limited · NSE:APOLLOHOSP
Apollo Hospitals Enterprise — Investor Presentation (June 2019)
44 slides from Apollo Hospitals Enterprise's investor presentation, June 2019
Slide 1: Investor Presentation
INVESTOR PRESENTATION June 2019 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 01 healthcare services provider 02 opportunity Attractive industry 03 Excellence in practice 04 financial track record Strong operating & 05 Accelerate Well-Positioned to 06 future Anchored for the 07 Strong team 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) Healthcare Services Standalone Pharmacies AHLL & Other Apollo Munich Businesses 54% 40% Health Insurance 6% * of Consolidated Revenues of Consolidated Revenues of Consolidated Revenues AHEL 10% stake Outlets 3496 Primary Clinics – 104 • Gross Written Premium Day surgery/ Tota
Slide 6: Business Snapshot (2/2)
BUSINESS SNAPSHOT (2/2) FY19 at Apollo Hospitals* High-end tertiary care practice contributes to 450,000+ 4,100,000+ 380,000+ Admissions Out-Patients Preventive 60% of Net revenues# Health Checks 10,000+ 6,500+ 30,000+ Heart Surgeries Joint Cardiology Neuro Surgical Replacements Discharges 22% Oncol
Slide 7: Pan India Presence (1/2)
PAN INDIA PRESENCE (1/2) Leading Hospital Players in India *Apollo Hospitals **Fortis Hospitals # of Beds: 10,167 CARE Hospitals # of Hospitals: 70 Apollo is the Columbia Asia India # of Beds: 5,147 Pan # of Beds: 2,241 # of Beds: 906 # of Hospitals: 28 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 8,683 7,246 44 Day care centres/ CRADLE 550 550 21 Owned Beds Managed Hospitals 934 934 5 CAGR (FY05-19) 7.9% Grand Total 10,167 8,730 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 in Medical Tourism
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 • ~ 300 Clinicians across the • ~ 250 Clinicians across the network • ~ 200 Clinicians across the network network • Over 6,500 Joint Replacements in • Over 30,000 Neuro surgical • Over 10,000 heart surgeries in FY19 discharges in FY19 FY19 22% 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 most advanced cancer treatment First in South East Asia: The 3 detector computed 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 REVENEUS ACROSS BUSINESSES … Total Consolidated Revenues (1) (` Mn) FY 19 Consolidated Consolidated Revenues Revenues of $ 1.3 billion (2) CAGR (FY13-19) of 17%. Healthcare services Revenue 51426 45,157 CAGR (FY13-19) of 12%. 40,851 38860 37,033 32,214 32,689 28,843 27,852 25,572 St
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 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 7,246 354 374 399 313 332 235 265 281 76% 73% 73% 71% 72% 71% 68% 68% 211 63% 64% 66% FY09 FY10 FY11 FY12 FY13
Slide 23: Resulting in Consistent Profitability
… RESULTING IN CONSISTENT PROFITABILITY Segment wise EBITDA Margins (%) 24% 24% Mature Hospitals EBITDA margin 22% 22% 23% 23% 20% 21% 21% 21% 21% expansion of 200-300 bps over the next 3 years. 7% 5% 5% 2% 3% 3% 3% 3% 4% 2% 13 New hospitals with 2,700+ beds 0% added in the last few years with over
Slide 24: And Healthy Return on Investment
… AND HEALTHY RETURN ON INVESTMENT # ROCE - Mature Healthcare Services (%) 24% 19% 19% 20% 20% 20% 17% 18% 18% 18% 15% 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 ROCE of healthcare
Slide 25: Standalone Pharmacies: Capturing the Growth Potential
STANDALONE PHARMACIES: CAPTURING THE GROWTH POTENTIAL Proven ability to expand the store network 3,428 3,021 • India’s largest Organized Pharmacy Chain with 2,326 2,556 Pharmacy presence in ~400 cities/ towns spread across 20 1,364 1,503 1,632 1,822 store 1,199 States and 4 union territories. 617 88
Slide 26: Q1 FY20: Financial Performance (1/6)
Q1 FY 20: FINANCIAL PERFORMANCE (1/6) Standalone Financials (` Mn) Consolidated Financials (` Mn) Q1 FY 19 Q1 FY 20 yoy (%) Q1 FY 19 Q1 FY 20 yoy (%) Revenue 19,104 22,292 16.7% Total Revenues 22,105 25,719 16.4% Operative Expenses 10,092 11,631 15.2% EBITDA (Pre Ind AS 116) 2,324 2,945 26.7% Employ
Slide 27: Q1 FY20: Segment-wise Performance (2/6)
Q1 FY 20: SEGMENT-WISE PERFORMANCE (2/6) Standalone Financials (` mn) Healthcare Healthcare New Hospitals Proton SAP Standalone Services (Mature) Services (Total) Hospitals 22 10 32 Operating beds 3,348 1,449 4,797 Occupancy 65% 58% 63% Revenue 9,165 2,552 8 11,724 10,568 22,292 EBITDA (Pre Ind AS 1
Slide 28: Q1 FY20: Segment-wise Performance (3/6)
Q1 FY 20: SEGMENT-WISE PERFORMANCE (3/6) Consolidated Financials (` mn) Healthcare Serv Healthcare Serv Healthcare Serv Group (New & Proton SAP AHLL Consol Group (Mature) Group (Total) Others) Hospitals 31 13 44 Operating beds 5474 1,874 0 7,348 Occupancy 68% 61% 66% Revenue 10,320 3,201 8 13,528 10
Slide 29: Q1 FY20: Hospital Cluster-wise Operational Performance (4/6)
Q1 FY 20: HOSPITAL CLUSTER - WISE OPERATIONAL PERFORMANCE (4/6) Tamilnadu Region AP, Telengana Region Total (8) (Chennai & others) (1) (Hyderabad & others) (2) Particulars Q1 FY 19 Q1 FY 20 yoy (%) Q1 FY 19 Q1 FY 20 yoy (%) Q1 FY 19 Q1 FY 20 yoy (%) No. of Operating beds 7,093 7,348 2,120 2,161 1,34
Slide 30: Q1 FY20: Hospital Cluster-wise Operational Performance (5/6)
Q1 FY 20: HOSPITAL CLUSTER - WISE OPERATIONAL PERFORMANCE (5/6) Karnataka Region Others (4) Significant Subs/JVs/associates (5) (Bangalore & others) (3) Particulars Q1 FY 19 Q1 FY 20 yoy (%) Q1 FY 19 Q1 FY 20 yoy (%) Q1 FY 19 Q1 FY 20 yoy (%) No. of Operating beds 706 770 872 910 2,051 2,163 Inpatie
Slide 31: Q1 FY20: Standalone Pharmacy Operational Performance (6/6)
Q1 FY 20: STANDALONE PHARMACY OPERATIONAL PERFORMANCE (6/6) Q1 FY 20 Revenues Q1 FY 20 EBITDA Batch Particulars Q1 FY 19 Q1 FY 20 yoy (%) ` 10,568 mn ` 587 mn ` 417 mn No of Stores 1,131 1,100 18% yoy growth Q1 FY 20 Revenue/store 3.73 3.96 6.3% Q1 FY 19 Upto FY 12 Batch EBITDA /store 0.27 0.33 20.8
Slide 32: Well-Positioned to Accelerate
WELL-POSITIONED TO 05 ACCELERATE 32
Slide 33: 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 • 31 Hospitals, including units anchor specialties in each market. • Potential to accelerate - in Major Tier 1 cities • Set benchmark standards in cl
Slide 34: Capacitised for Growth (2/2)
CAPACITISED FOR GROWTH (2/2) STRATEGY • 792Primary 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 & Lifesty
Slide 35: Anchored for the Future
ANCHORED FOR THE FUTURE Wi 35)
Slide 36: 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 37: 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 Platform Predictive Health OneApollo • Partnership with Microsoft to develop and
Slide 38: One Apollo
ONE APOLLO Homecare Hospitals Tele Health Pharmacy OneApollo Digital is Integrating Apollo’s Customer interfacing Bus to ensure Apollo Group’s High Customer Customer Engagement & Life cycle Management across the Group White Dental 38
Slide 39: 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 40: Strong Management Team
07 STRONG MANAGEMENT TEAM 40
Slide 41: 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 33 years wi
Slide 42: 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 43: In summary we have over the last 35 years focused on the patient
In summary we have over the last 35 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 44: 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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