Slide 1: Investor Presentation 1H2018
Investor Presentation 1H2018
Slide 2: Overview of IDH
OVERVIEW OF IDH
Slide 3: IDH at a Glance
IDH at a Glance Our Services Our Accreditations Immunology Radiology Hematology Endocrinology Clinical Chemistry Molecular Biology CytogenEtics Hatopathology Microbiology Our Brands Our Geography Egypt, Jordan and Sudan(1) EGP 866 MN 38% 1,000+ 12,585 1H18 Revenues 1H18 EBITDA Margin diagnostic test
Slide 4: Investment Case
Investment Case Leading diagnostics • IDH enjoys a 50%+ share of the private chain segment of the Egyptian diagnostics market as measured by revenues. service provider • Over its 38-year history, the Company has earned a trusted with a footprint reputation as well as internationally-recognized accre
Slide 5: IDH Development Story
IDH Development Story Over 35 years of industry experience, complemented by strategic expansion to develop a strong market position across products and geographies Establishment Al Borg was IDH Expansion Expansion of Building Creating a Integration A year of Steadiness of MK Lab founded established
Slide 6: Our Market
Our Market The mechanics of the Egyptian healthcare market are markedly different from those in many Western healthcare industries Egypt’s Private Healthcare System IDH serves the private healthcare A hospital outpatient clinic or While physicians ordering Patients then typically obtain market, wher
Slide 7: Our Patients
Our Patients IDH serves two principal types of clients: Corporate and Walk-in Corporate include members of institutions Walk-in also referred to as “self-payers,” such as unions, private insurance are individuals who pay out of Patients Patients companies and corporations who pocket in advance of te
Slide 8: Our Patient Profile
Our Patient Profile Patient Split 29% IDH’s recorded 26% 28% increased walk-in numbers in 1H2018 on account of its 1H18 successful marketing 2017 2016 campaign that targeted the higher- 71% margin walk-in 72% segment 74% ■ Corporate ■ Walk-in 3,225 12,585 2,938 12,018 Number of 2,824 Number of 11,73
Slide 9: Our Geography
Our Geography IDH’s branch network of 405 labs at 1H2018 spans 4 countries(1), the largest of which is Egypt 19 The Company’s Egyptian operations contributed branches 83% of consolidated Revenues in 1H2018 Jordan 351 Branches Egypt EGYPT 83% 82% 1H2018 1H2017 Cairo Region 44% Upper Egypt Region 18%
Slide 10: Our Geography: Nigeria in Focus
Our Geography Nigeria in Focus In December 2017, IDH further expanded its geographical footprint with an investment in Nigeria Nigeria’s Investment Case IDH entered into a joint venture with Man Capital LLP to Key Market Drivers form Dynasty Holding Group (“Dynasty”), which in turn partnered with th
Slide 11: Our Geography: Nigeria in Focus
Our Geography Nigeria in Focus Nigeria‘s integration is well underway and operating according to the Group’s business plan Nigeria contributed revenues of EGP 17 million in 1H2018 with key metrics Value-Building Goals for Operation in Nigeria surpassing budgets despite the operation still being the
Slide 12: Our Geography: Performance
Our Geography Performance In 1H2018, Egypt’s revenues rose The Company’s Egyptian operations contributed 96% of consolidated 28% and represented 83% of the EBITDA in 1H2018. consolidated total Growth in branch network, by country Consolidated Revenues by Country | EGP mn Consolidated Revenues | EGP
Slide 13: Radiology Expansion
Radiology Expansion
Slide 14: Al Borg Scan
Al Borg Scan In August 2018, IDH announced its plans to launch a radiology business in Egypt under the brand name Al Borg Scan EGP 186 MN Total Investment Cost Al Borg Scan will offer a full range of radiology services, including but not limited to magnetic resonance imaging (MRI), computed tomograp
Slide 15: Investment Thesis
Investment Thesis IDH’s expansion into radiology is in line with its strategy to diversify in new medical services Build a One-Stop- Extract Favourable Capitalize on a Growing Leverage Brand Capture Existing Cement a Strong Shop Synergies Market Loyalty Demand Market Position According to market Syn
Slide 16: Investment Case
INVESTMENT CASE 16 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 17: Favorable Industry Dynamics
Favorable Industry Dynamics Structural Growth Drivers IDH, the largest fully-integrated private sector diagnostics service provider in Egypt, enjoys a 50%+ share of the private chain segment of the Egyptian Diagnostics Industry (EDI) as measured by revenues Private Chains in Egypt High Disease Burde
Slide 18: Favorable Industry Dynamics
Favorable Industry Dynamics Highly-Fragmented and Underpenetrated Markets Operating in a still under-penetrated market Beyond the counter-cyclical nature of the healthcare Lab tests per capita (2012) 23.2 industry in general, the Egyptian and other MENA markets are still highly-fragmented and underp
Slide 19: Favorable Industry Dynamics: Barriers to Entry
Favorable Industry Dynamics Barriers to Entry Economies of Scale Accreditation of Facilities Brand & Reputation Market Reach Key Stakeholder Relationships IT-enabled platform, Attracting patients Patients are loyal to Fragmented markets Building a scalable critical mass (higher requires accredited,
Slide 20: Asset-light Business Model
Asset-light Business Model Hub, Spokes and Spikes Mega Lab: “Hub” In February 2018, the Mega Lab • The Mega Lab, the largest automated lab in Egypt, serves as IDH’s diagnostic became the only CAP “Hub,” equipped with the latest technology to provide a full suite of diagnostic accredited laboratory i
Slide 21: Asset-light Business Model
Asset-light Business Model High Capacity and Throughput at State-of-the-Art Mega Lab Capabilities Capacity Procurement • Mega Lab machines are capable of conducting a • Inauguration of IDH’s Mega Lab in 2015 doubled the • Central procurement system ensures coordinated wide range of tests including b
Slide 22: Asset-light Business Model
Asset-light Business Model Key Supplier Relationships IDH’s contracts with its key suppliers of medical testing kits include the provision of the equipment used to analyse the laboratory test results Consolidated COGS Analysis in 1H2018 22% The Company’s primary suppliers of kits are Raw material Si
Slide 23: Competitive Strengths
Competitive Strengths IDH’s competitive strengths have positioned the Company well for future growth Exposure to Resilient Experienced, Entrepreneurial Substantial Expansion Established Business Model Strong Balance Sheet Markets Management Opportunities IDH’s markets are characterized IDH’s Hub, Sp
Slide 24: Future Growth Strategies
Future Growth Strategies IDH’s growth strategies rely on leveraging its competitive advantages to achieve four strategic goals Expand Customer Expand Reach Geographically In addition or organic expansion, the Company Beyond opening laboratories in new continues to seek value-accretive acquisitions g
Slide 25: Operational Highlights
OPERATIONAL HIGHLIGHTS
Slide 26: Operational Highlights
Operational Highlights Resilient Growth Number of Patients Number of Tests Number of Branches Revenues EBITDA (millions) (millions) (branches) (EGP MN) (EGP MN) 6.40 405 1,514 5.82 25.7 383 383 602 5.58 5.79 23.8 24.0 354 22.3 1,171 511 314 288 1,015 435 860 866 374 3.20 329 2.90 12.0 12.6 685 255 2
Slide 27: Operational Highlights: Tactical Marketing
Operational Highlights Tactical Marketing IDH’s tactical marketing programs are focused on driving patient and test volumes, especially in the higher-margin walk-in patient category IDH deploys marketing tools including: Walk-in patients are typically Egypt’s most vulnerable citizens, hurt most Gath
Slide 28: Financial Highlights
FINANCIAL HIGHLIGHTS 28 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 29: Financial Highlights: Key Performance Indicators
Financial Highlights Key Performance Indicators 2Q2018 2Q2017 % change Walk-in Contract Total Walk-in Contract Total Walk-in Contract Total Revenue (EGP ‘000) 181,098 238,621 419,719 131,620 207,232 338,852 38% 15% 24% % of Revenue 43% 57% 100% 39% 61% 100% Patients ('000) 457 1079 1,536 369 1074 1,
Slide 30: Financial Overview: Egyptian Macro Update
Financial Overview Egyptian Macro Update The Egyptian government is implementing policies that will restore the country’s financial health, but not without corporations feeling some of the burden of economic reforms Transportation Utilities Value Added Tax (3% of 1H2018 COGS) (c.2% of 1H2018 COGS) (
Slide 31: Financial Highlights: Revenue Metrics
Financial Highlights Revenue Metrics While patient and test volumes have been challenged recently under difficult macroeconomic conditions in Egypt, IDH’s key revenue metrics demonstrate the impact of the Company’s tactical marketing programs as well as its ability to raise price selectively Group R
Slide 32: Financial Highlights: Income Statement
Financial Highlights Income Statement 30 June 2018 30 June 2017 EGP'000 (Unaudited) (Unaudited) Revenues increased 26% to EGP 866 million in 1H2018, driven Revenue 865,853 685,133 primarily by improved pricing as Cost of sales (446,660) (366,867) the Group capitalised on the inflationary environment
Slide 33: Financial Highlights: Balance Sheet
Financial Highlights Balance Sheet 30 June 31 December EGP'000 2018 2017 (Unaudited) (Audited) Asset-light business model translates into an ASSETS Non-current assets under levered and highly cash-generative balance Property, plant and equipment 539,873 473,786 sheet for strategic flexibility. Intan
Slide 34: Governance Overview
Governance Overview IDH is committed to implementing best practices in corporate governance through the expertise of both the individual Directors and outside parties Internal Audit Procedures While not required to comply Anti-Bribery and Anti Corruption Policy (ABAC) with UK Corporate Governance T
Slide 35: A World-Class Board of Directors
Governance A World-Class Board of Directors The majority of members of IDH’s Board of Directors are independent and offer significant experience in the healthcare market, MENA region and investment activities Lord St John of Bletso 1 Prof. Dr. Hend El Sherbini Hussein Choucri 1,2,3,4 Independent Non
Slide 36: Human Resources Development
Human Resources Development Training IDH views education as an essential means of ensuring quality across its laboratories. We strive to create a diverse, productive culture and a safe working environment in order to empower our people to reach their full potential Training streams Medical / scienti
Slide 37: 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 38: Thank You
INTEGRATED DIAGNOSTICS HOLDINGS IDH Thank You