Integrated Diagnostics Holdings Plc · LSE:IDHC
Integrated Diagnostics — 9M 2024 Earnings Presentation
63 slides from Integrated Diagnostics's earnings presentation, November 2024
Slide 1: IDH Results Presentation
IDH Results Presentation November 2024
Slide 2: Table of Contents
Table of Contents IDH At a Glance 9M 2024 Results Overview Key Investment Highlights Our Market Our Business Model Financial Position and Performance Growth Strategies Governance 2 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 3: Who We Are (I/II)
Who We Are (I/II) Integrated Diagnostics Holding is a leading, fully-integrated provider of high-quality medical diagnostic services with a footprint spanning Egypt, Jordan, Nigeria, Sudan, and Saudi Arabia An integrated diagnostics provider… Pathology Radiology Immunology Microbiology Haematology E
Slide 4: Who We Are (II/II)
Who We Are (II/II) The Company’s reach, scale, and service quality are unmatched across its markets of operation Track Record Accreditations +40 years CAP & ACR Accredited lab and scan First lab established in 1979 Jordan Patients Test Portfolio c.10 MN +3,000 Egypt Per year Tests Saudi Arabia Tests
Slide 5: Our Service Segments
Our Service Segments IDH’s pathology offering currently contributes the majority of revenue with 95%, while the Company’s radiology services in 9M 2024 recorded a 21% increase over 9M 2023. Pathology – 95% of Revenues1 Radiology – 5% of Revenues1,2 Through IDH’s brands, the Group offers over 3,000 i
Slide 6: Our Geographies
Our Geographies IDH currently operates the largest branch network amongst private providers in Egypt and boasts an established presence in four key markets in the Middle East and Africa Egypt Jordan Nigeria Saudi Arabia +30 +35% -1 -2% 0 +38% 2 790k New branches vs. y-o-y revenue growth New branches
Slide 7: Our Patients
Our Patients IDH serves two principal types of patients: contract and walk-in Around 71% of total revenue generated across the two segments is paid in cash Contract Patients1 Walk-In Patients IDH’s contract clients include institutions who enter into one-year IDH’s walk-in clients, also referred to
Slide 8: 9M 2024 Results Overview
9M 2024 Results Overview 8 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 9: Operating Environment (I/II)
Operating Environment (I/II) IDH delivers particularly strong financial and operational results amid improving conditions in Egypt during the last quarter, despite ongoing challenges in Nigeria The EGP devaluation in March 2024 has led to a stable Inflation slightly increases in Egypt in 3Q USD/EGP
Slide 10: Operating Environment (II/II)
Operating Environment (II/II) IDH’s presence in two strong regional economies, Saudi Arabia and Jordan, enhances its position and provides a strategic advantage by anchoring growth in stable markets Stable inflation in KSA over the past year Declining inflation in Jordan Inflation rate| % Inflation
Slide 11: 9M 2024 Results Snapshot (I/II)
9M 2024 Results Snapshot (I/II) IDH delivers strong top-line growth during the nine-month period with a revenue expansion of 34% y-o-y EGP 4,107 mn EGP 1,571 mn EGP 1,249 mn EGP 724 mn Revenue in 9M 2024 Gross Profit in 9M 2024 EBITDA1 in 9M 2024 Net Profit in 9M 2024 ▲ 34% y-o-y revenue growth ▲ 38
Slide 12: 9M 2024 Results Snapshot (II/II)
9M 2024 Results Snapshot (II/II) IDH delivers strong top-line growth during the nine-month period with a revenue expansion of 34% y-o-y Strong top-line growth… …on the back of higher test volumes… Revenue| EGP mn Test Volumes| mn +25% Revenue CAGR +11% Test Volume CAGR $ 105.8 $ 240.8 $ 154.8 $ 99.4
Slide 13: Continued Growth at Egypt's Radiology Venture
Continued Growth at Egypt’s Radiology Venture Radiology's contribution rose to 4.9% in 9M 2024 versus 4.3% in 9M 2023 Revenues Evolution (EGP, mn) Number of Patients (000’s) 165 108 ▲53% 145 114 ▲27% 9M 2023 9M 2024 9M 2023 9M 2024 Number of Tests (000’s) Business Revenue/Test (EGP) 865 705 ▲23% ▲25
Slide 14: Profitability Overview
Profitability Overview IDH prioritized cost optimization through various strategies, including enhancing fixed asset utilization to reduce depreciation and streamlining headcount to lower direct salary expenses as a percentage of revenue IDH's proactive inventory management and robust supplier The G
Slide 15: Revenue – EBITDA Bridge
Revenue – EBITDA Bridge 9M 2024 IDH Revenue - EBITDA Bridge | EGP mn 898 4,107 1,050 5 80 77 49 113 585 22% 26% 0.1% 2% 2% 1% 3% 14% 1,249 Net Revenue 9M Raw material Total Salries Rent Transportation Maintenance Utilites Marketing and Other EBITDA 9M F24 F24 advertising 9M 2023 IDH Revenue - EBITDA
Slide 16: EBITDA – Net Profit Bridge
EBITDA – Net Profit Bridge 9M 2024 IDH EBITDA – Net Profit Bridge | EGP mn 1,249 265 (21) 85 (143) (355) 724 Interest on Lease Liabilities: EGP 83.1 mn (355) Interest Expenses on Leases: EGP 23.6 mn Bank Charges: EGP 12.4 mn Interest Expenses on Borrowings: EGP 17.8 mn Fast Track Payment: EGP 6.5 mn
Slide 17: Solid Financial Position
Solid Financial Position The Group maintains a solid financial position, with a sound balance sheet owing to its strong cash balance allowing for consistent dividend payouts Consolidated Cash Balance | EGP mn Net Debt Balance* | EGP mn Gross Fixed Assets | M-EGP 60% 361 1,338 2,989 2,565 835 (74) 31
Slide 18: 9M 2024 Capital Expenditure
9M 2024 Capital Expenditure IDH CAPEX recorded EGP 127.71 mn in 9M 2024, including both, core recurring CAPEX items and non-recurring capex related to the expansion of Al-Borg Scan’s network. This figure represented 3.1% of 9M 2024 total revenues. 2.2% 0.3% 0.02% 0.6% % of Group New Branches & Wareh
Slide 19: Fixed Gross Assets Bridge
Fixed Gross Assets Bridge IDH Fixed Gross Assets Bridge by Account | M-EGP 296 2,989 51 23 1 (4) 2,565 1 14 11 31 3.1% of total 9M 2024 revenue (10.3% excluding BG scan and M-EGP 423.7 translation) Balance 31/12/2023 IDH Headquarter WAREHOUSE Mega Lab New branches Renovation Al-Borg Scan Wayak Pharm
Slide 20: Segment Performance
Segment Performance Both IDH’s contract and walk-in segments continue to see revenue growth in 9M 2024 (+34%), driven at the contract segment both by growing volumes (+12%) and average revenue per test (23%), and at the walk-in segment by an increase in average revenue per test (+34%) Walk-in Segmen
Slide 21: Segment Performance
Segment Performance IDH’s contract segment maintained its growth trend, remaining the major contributor to overall revenue and patient volumes in 9M 2024 Revenue Split Patient Split 21% 20% 37% 35% 9M 9M 9M 9M 2023 2024 2023 2024 63% 65% 79% 80% Walk-in Contract Walk-in Contract Walk-in Contract Wal
Slide 22: Regional Performance (I/II)
Regional Performance (I/II) IDH recorded robust revenue growth across Egypt and Jordan in EGP terms. Revenue |M-EGP| Gross Profit |M-EGP| EBITDA |M-EGP| EGYPT +35% +41% +54% 2,500 3,373 1,007 1,417 1,182 82.1% 766 of Consolidated EGP 3,373 mn 40% 31% 35% 567 Branches 42% Revenue 9M 2023 9M 2024 9M 2
Slide 23: Regional Performance (II/II)
Regional Performance (II/II) Patients |‘000| Tests |‘000| Test per Patient |‘000| Revenue per Test |EGP| +7% +10% +3% +23% EGYPT 5,846 6,234 24,366 26,762 4.3 103 126 4.2 9M F23 9M F24 9M F23 9M F24 9M F23 9M F24 9M 2023 9M 2024 -4% 1% +6% +41% JORDAN 286 274 1,858 1,883 6.5 6.9 352 250 9M F23 9M F2
Slide 24: Regional Performance: Local Currency
Regional Performance: Local Currency Revenue | M-LCY Gross Profit | M-LCY EBITDA | M-LCY ▲35% 1,417 1,182 ▲41% Egypt 1,007 766 ▲54% 3,373 2,500 40% 42% 31% 35% 9M 2023 9M 2024 9M 2023 9M 2024 9M 2023 9M 2024 3.1 3.1 2.9 2.8 ▲ 2% Jordan ▼2% ▼2% 10.8 10.6 28% 30% 26% 27% 9M 2023 9M 2024 9M 2023 9M 202
Slide 25: Echo-Lab (Nigeria)
Echo-Lab (Nigeria) Echo-Lab reported a 38% year-on-year revenue increase for the first nine months of 2024 in NGN terms, largely attributed to a 63% rise in the average price per test. However, test volumes declined by 15% year-on-year, totaling 173 thousand tests. This decrease in volume was due to
Slide 26: Continued Ramp up at Al Borg Scan
Continued Ramp up at Al Borg Scan Al Borg Scan maintained its positive momentum from the beginning of the year, achieving continued operational and financial growth in the first nine-month of 2024 EGP 165 MN 29% 16% 15% 13% 9M 2024 revenues 9M 2024 revenue contribution 9M 2024 revenue contribution 9
Slide 27: Outlook and Strategies (I/II)
Outlook and Strategies (I/II) In IDH’s home and largest market of Egypt, the Company’s priorities for the coming year remain unchanged. Starting May, the Company saw a strong acceleration in revenues and volumes which has since carried through into July and August. Pricing Volumes Raw Materials Cost
Slide 28: Outlook and Strategies (II/II)
Outlook and Strategies (II/II) In Egypt, economic recovery has continued into the third quarter of the year. Jordan and Saudi Arabia remain the most stable markets, with IDH expanding its operations in the promising Saudi Arabian market. Meanwhile, Nigeria continues to present a challenging operatin
Slide 29: Investment Highlights
Investment Highlights 29 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 30: Investment Highlights
Investment Highlights IDH is an attractive investment opportunity with compelling fundamentals, present in fast- growing, under-served markets 1 Operating in highly fragmented markets characterised by strong structural growth drivers and high barriers to entry ✓ Deploys an asset-light business model
Slide 31: Fast-Growing, Underserved Markets
Fast-Growing, Underserved Markets 31 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 32: Favorable Industry Dynamics
Favorable Industry Dynamics IDH’s home market of Egypt is underpinned by robust structural growth drivers Lab tests per capita (2023) High Disease Burden Operating in a still under- 23.2 penetrated market The Egyptian population is marked by a high incidence of lifestyle- related medical conditions,
Slide 33: Favorable Industry Dynamics
Favorable Industry Dynamics IDH’s markets are characterised by high barriers to entry Economies of Scale Accreditation of Brand & Reputation Market Reach Key Stakeholder Facilities Relationships IT-enabled platform, Attracting patients Patients are loyal to Fragmented markets Building a scalable cri
Slide 34: IDH is a Consumer-Facing Service Provider
IDH is a Consumer-Facing Service Provider The mechanics of healthcare markets in developing economies are markedly different from those in many Western healthcare industries IDH serves the private healthcare A hospital outpatient clinic or Perceived quality and safety market, where notably patients
Slide 35: Scalable Business Model
Scalable Business Model 35 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 36: Asset-light Business Model
Asset-light Business Model IDH’s “Hub, Spoke and Spike” business model enables the Company to organically expand its reach in highly- fragmented markets with underserved diagnostic services demand Mega Lab: “Hub” • The Mega Lab, the largest automated lab in Egypt, serves as IDH’s diagnostic “Hub,” e
Slide 37: Our Mega Lab
Our Mega Lab IDH’s Mega Lab is the only CAP-accredited facility in Egypt, demonstrating the excellence of IDH’s patient care and confidence in the laboratory’s practices Capabilities Capacity • Mega Lab machines are capable of conducting a wide range of tests. • IDH’s Mega Lab doubled testing capaci
Slide 38: Key Supplier Relationships
Key Supplier Relationships IDH leverages its bargaining power with suppliers to maximize value in a business that is fundamentally about economies of scale. Combined with the long-tenure nature of its supplier contracts, this provides significant protection against short-term price fluctuations. Dyn
Slide 39: Strong Growth and Financial Position
Strong Growth and Financial Position 39 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 40: Key Financial Performance Indicators
Key Financial Performance Indicators Since the Company’s IPO on the LSE in 2015, IDH has delivered consistent top- and bottom-line growth supported by a steady increase in volumes and increasingly favourable pricing across the Group’s service offering Revenues | EGP mn - CAGR Gross Profit, GPM | EGP
Slide 41: Regional Performance (I/II)
Regional Performance (I/II) Across its footprint, the Company deploys tailored expansion strategies which enable it to continue driving growth irrespective of the prevailing macroeconomic environment Revenue |M-EGP| Adjusted EBITDA |M-EGP| CAGR: 18% CAGR: 14% EGYPT 4,108 3,411 2,206 2,894 2,173 2,00
Slide 42: Regional Performance (II/II)
Regional Performance (II/II) Across its footprint, the Company deploys tailored expansion strategies which enable it to continue driving growth irrespective of the prevailing macroeconomic environment Patients | ‘000 Tests | ‘000 CAGR: 5% CAGR: 6% 8,467 7,612 7,994 6,881 29,454 33,372 5,927 6,505 6,
Slide 43: Growth Strategies
Growth Strategies 43 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 44: Future Growth Strategies
Future Growth Strategies IDH’s growth strategies rely on leveraging its competitive advantages to achieve four strategic goals Expand Customer Reach Expand Geographically Beyond opening laboratories in new In addition to organic expansion, the Company geographies, IDH is reaching out to new continue
Slide 45: Expanding Customer Reach – Growing In Egypt
Expanding Customer Reach – Growing In Egypt The Group enjoys ample growth room in Egypt thanks to its market leading position and extensive reach, attractive underlying fundamentals, and favourable regulatory environment Reach and penetration Solid Fundamentals Universal Healthcare Act New growth op
Slide 46: Diversifying Service Offering – Al Borg Scan Ramp-Up
Diversifying Service Offering – Al Borg Scan Ramp-Up IDH’s radiology venture, Al Borg Scan, continues expanding its top line on the back of increased test volumes and average revenue per test 2018 7 branches EGP 492mn 714k Covering Cairo from East to West Revenue Scans Performed Fastest growing chai
Slide 47: Diversifying Service Offering – Al Borg Scan Expansion Updates
Diversifying Service Offering – Al Borg Scan Expansion Updates Al Borg Scan operates seven branches, one of which was inaugurated in 2023. The Group also recently earned the prestigious ACR (American College of Radiology) accreditation for Al Borg Scan’s Nuclear Medicine and ultrasound units. Ration
Slide 48: Al Borg Scan Maintains Growth Trajectory
Al Borg Scan Maintains Growth Trajectory IDH’s Egyptian radiology venture, Al Borg Scan, continues expanding its top-line and expanding its contribution to Egypt revenues, driven by sustained increases in test volumes and higher revenue per test Revenue, % of Egypt revenues | Scans Performed | ‘000
Slide 49: House Call Services (Egypt and Jordan)
House Call Services (Egypt and Jordan) IDH’s house call services, offered in both Egypt and Jordan, is becoming a primary contributor to top-line, averaging 15- 20% compared to a pre-pandemic contribution of c.10% House call services witnessed rising demand during the Covid-19 pandemic Expands Reach
Slide 50: Expanding Customer Reach – State-sponsored Initiatives
Expanding Customer Reach – State-sponsored Initiatives IDH’s nationwide presence and strong brand equity position it well to benefit from state-sponsored campaigns to increase awareness of preventative healthcare with diagnostic testing Duration Revenue Generated 8 months EGP 84 mn Nov ‘18 – Jun ‘19
Slide 51: Expanding Customer Reach – IDH Awareness Campaigns
Expanding Customer Reach – IDH Awareness Campaigns Parallel to state-sponsored initiatives, IDH also runs its own awareness campaigns focusing on specific diseases on a monthly basis and offering discounts on related testing IDH’s PCR Offers and Campaigns Discounts on PCR PCR testing for testing for
Slide 52: Diversifying Service Offering – New Investment in Wayak
Diversifying Service Offering – New Investment in Wayak IDH launches new subsidiary “Wayak” to offer data-driven healthcare services, utilising data analytics and artificial intelligence to capitalise on IDH’s database of over c.13 million patients Wayak Services Medication to be Service provider On
Slide 53: Growing Geographic Footprint– Investment Rationale
Growing Geographic Footprint– Investment Rationale IDH’s regional expansion strategy targets acquisitions in African, Middle Eastern and Asian markets where it can deploy its proven business model and generate accretive value Growing economies and strong Similar healthcare market structure to demogr
Slide 54: Growing Geographic Footprint – Nigeria Expansion
Growing Geographic Footprint – Nigeria Expansion* In December 2017, IDH further expanded its geographical footprint with an investment in Nigeria, a value-accretive acquisition in a large, fragmented and underpenetrated diagnostic services market where our business model is well-suited to capitalise
Slide 55: Nigeria Branch Roll-Out and Renovations
Nigeria Branch Roll-Out and Renovations Opebi Branch Renovation and Rebranding New Victoria Island Branch Area 11 Branch Renovation and Rebranding Benin Branch Renovation & Rebranding 55 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 56: Growing Geographic Footprint – KSA Expansion
Growing Geographic Footprint – KSA Expansion In October 2022, IDH and Biolab signed a joint venture agreement with Izhoor, a company owned by Fawaz Alhokair, to launch a full-fledged pathology diagnostic services provider in Saudi Arabia Deal Structure Deal Specifics The new joint venture will be ow
Slide 57: Strong Leadership & Governance
Strong Leadership & Governance 57 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 58: Governance
Governance A World-Class Board of Directors The majority of members of IDH’s Board of Directors are non-executive and offer significant experience in the healthcare market, MENA region and investment activities Lord St John of Bletso 1 Prof. Dr. Hend El Sherbini Sherif El Zeiny Non-Executive Chairma
Slide 59: Governance
Governance IDH is committed to implementing best practices in corporate governance through the expertise of both the individual Directors and outside parties Anti-Bribery and Anti Corruption Internal Audit Procedures While not required to comply with UK Policy (ABAC) Corporate Governance Code, IDH a
Slide 60: Sustainability
Sustainability Founded on the principle of providing quality medical assistance and services to better the lives of individuals and the community at large, IDH views corporate responsibility initiatives as an extension of its core purpose with the aim of improving communities in which it does busine
Slide 61: Appendix
Appendix 61 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 62: IDH Development Story
IDH Development Story Over 40 years of industry experience, complemented by strategic expansion to develop a strong market position across products and geographies. Today IDH has built a scalable platform that is positioned for further strong growth 1979 1990 2008 2011 2012 2013-14 Establishment of
Slide 63: IDH
INTEGRATED DIAGNOSTICS HOLDINGS IDH
Integrated Diagnostics Holdings — 9M 2024 Earnings Presentation on 6ix