Mlp Saglik Hizmetleri As Class B · BIST:MPARK
Mlp Saglik Hizmetleri As Class B — MLP Care — BGC Partners Turkey Conference 2019
43 slides from Mlp Saglik Hizmetleri As Class B's conference presentation, May 22, 2019
Slide 1: BGC Partners Turkey Conference
BGC Partners Turkey Conference London May 22, 2019 1
Slide 2: MLP Care: The #1 Private Hospital Group in Turkey
MLP Care: The #1 Private Hospital Group in Turkey 17 Cities 31 Hospitals; 6.000+ 5.900+ Beds; More than the #2 2x the size of 2nd Largest 20.000+ 17.500+ Staff and #3 Competitors Combined Competitor 2.200+ 2.100+ Doctors Addresses All Price Segments 3 JCI Accredited Hospitals 2.6 3.1 Revenues: TL bi
Slide 3: Strategic Priorities and Institutional Performance Management
Strategic Priorities and Institutional Performance Management Our Strategic Priorities Are In Line With The Demand-driven Healthcare System Demand Employee Centric INSTITUTIONAL PERFORMANCE MANAGEMENT (IPM’s) • Revenue Group • Costs Group • Patient Satisfaction Group System Trust Centric Patient Cen
Slide 4: Content
Content 1. Recent Developments & Outlook • Operational and financial updates • Outlook & Prospects 2. Why Invest in MLP Care? • Operates in the Attractive Turkish Healthcare Market • Clear Leader in Private Healthcare Provision • Strong Brand Recognition and Unique Business Model Addressing All Pric
Slide 5: 1. Recent Developments & Outlook
1. Recent Developments & Outlook • Operational Updates • New openings in 2018: The ramp up of Pendik and Mersin hospitals are in line with the plan • Medical tourism and top-up continued to post high growth in Q1 2019 • Financial Updates • Revenue up 25%, Revenue Incl. Managed Hospitals1 up 28% and
Slide 6: Operational Update: New Hospitals
Operational Update Two new hospitals added to our hospital network in 2018 Pendik Mersin Location İstanbul Mersin Opening Date March 2018 May 2018 Key Statistics 62,000 m2 35,000 m2 New hospitals were opened on budget and schedule The ramp up of the hospitals is in accordance with th
Slide 7: Operational Update: Double digit growth in majority of payor types
Operational Update Double digit growth in majority of payor types 76% 79% Other 10% Revenue from PMI, Top-up & Contracted 1% Institutions grew by 38% in Q1 2019 Medical SSI 25% Tourism Medical Tourism grew by 79% in Q1 2019 11% SSI Insurance allows for a wide addressable PMI, Top-up market (c.
Slide 8: Medical tourism revenue grew by 79% in Q1 2019
Operational Update Medical tourism revenue grew by 79% in Q1 2019 Medical Tourism Revenue Volume & Price (TLm) 45.2% 33.4% 27 Diversified and Balanced Geography. Patients comes 20 from: 106 • Europe 35% 78.6% 59 • Middle East and Africa 32% • Former CIS and the rest 33% Q1 2018 Volume & Mix Price
Slide 9: MLP Care benefits from fast growth of Top-up Insurance Market
Operational Update MLP Care benefits from the fast growth of Top-up Insurance Market # of People With Insurance (PMI and Top-up) in Turkey – 000s Top-up insurance Growth (since 2014) CAGR (2014-2018) (Q1 2018-Q1 2019) Cheaper form of PMI to 3,144 3,022 cover SSI patients’ co- 2,214 9.2% 2,671 13.2
Slide 10: Revenue Up 25% in Q1 2019
Financial Update Revenue Up 25% in Q1 2019 Revenue (TLm) EBITDA (TLm) 1 27.9% 29.4% 24.6% 20.5% 200 1,037 150 168 811 933 140 158 100 749 122 50 0 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Revenue growth including revenues of Managed Hospitals is 28% 1 Adj. EBITDA: EBITDA TFRS adjustments that have no cash
Slide 11: All revenue segments posted strong growth in Q1 2019
Financial Update All revenue segments posted strong growth in Q1 2019 Domestic Patient Medical Tourism Ancillary Business Revenues Revenues 82.3% 19.5% 15.1% 78.6% 76.4% 831 126 95 732 106 Q1 2019 Q1 2019 Q1 2019 Q1 2019 Q1 2019 Growth Continued in Q1 2019 Continued to Attract Foreign Strong Growth
Slide 12: Strong improvement in both ARPV and ARPP in Q1 2019
Financial Update Strong improvement in both ARPV and ARPP in Q1 2019 Outpatient Revenues (TLm) Inpatient Revenues (TLm) 550 16.6% 500 14.1% 18.4% 450 8.3% (1.8%) 5.9% 400 31 5 22 48 430 350 302 377 259 300 Q1 2018 Volume & Price Q1 2019 Q1 2018 Volume & Mix Price Q1 2019 Mix 3.500 400 Average Revenu
Slide 13: Smart Cost Management
Financial Update Smart Cost Management Cost of Service and G&A Expenses as a % of Revenues Material costs as a % of revenue increased Adj. EBITDA Margin 18.7% 18.0% due to the inflation adjustment of medicine and increase in share of laboratory services business revenues (with higher material 6.9%
Slide 14: Continued to deleverage balance sheet in Q1 2019
Financial Update Continued to deleverage balance sheet in Q1 2019 FX BASED NET DEBT (in EUR m) NET DEBT 20181 Q1 20191 EUR72m EUR60m (TL437m) (TL378m) 204 28% 35% 65% Percentage 72% TL806m TL983m 72 60 Local Currency Local Currency Hard Currency Hard Currency 2017 2018 Q1 2019 Nominal TL1,243m TL1,3
Slide 15: Natural FX hedging on the EBITDA driven by Medical Tourism Revenue
Financial Update Natural FX hedging on the EBITDA driven by Medical Tourism Revenue Hard Hard Currency as % of TLm Q1 2019 Currency Total Revenues 30 Eylül Share of Medical Tourism Revenue in Domestic Hospital Revenue 732 - - Foreign Medical Tourism 106 106 11% 2018 Total Revenue Ancillary 95 - - in
Slide 16: Total Capex and Maintenance Capex decreased
Financial Update Total Capex and Maintenance Capex decreased Maintenance Capex (TLm) Total Capex (TLm) Operating Cash Flow / EBITDA 3.6% 13.8% 68.5% 1.5% 15.4% 4.3% 27 96 103 14 40 26 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 % of Revenue % of EBITDA Trade payables decreased by TL89m and tra
Slide 17: Outlook & Prospects
Outlook & Prospects We will use our available resources and increase efficiency in 2019. Our targets are: Operational targets • Increasing contribution of Medical Tourism • Accelerate the ramp-up of the new opened hospitals • Enhance patient satisfaction Financial targets • Deleveraging our balance
Slide 18: 2. Why Invest In MLP Care?
2. Why Invest In MLP Care? 1 Operates in the Attractive Turkish Healthcare Market 2 Clear Leader in Private Hospital Provision 3 Strong Brand Recognition and Unique Business Model 4 Clinical Excellence and World Class Service Offering 5 Superior Historical Financial Performance 6 Outstanding Platfor
Slide 19: Operates In The Attractive Turkish Healthcare Market
1 Operates In The Attractive Turkish Healthcare Market Turkey is an attractive healthcare market with a growing elderly population and level of affluence, with significant scope for expansion compared to OECD players Turkish Healthcare Spending to Providers1 (TLbn) Growth in Aging Turkish Population
Slide 20: Private operators have increased their market share
1 Operates In The Attractive Turkish Healthcare Market Private operators have increased their market share, by increasing capacity and by focusing on procedures with higher complexity. Private players now account for 22% of beds, but provide 53% of complex surgeries. Number of Hospital Beds (’000) N
Slide 21: Supportive government policies underpin private hospital expansion
1 Operates In The Attractive Turkish Healthcare Market Supportive government policies have underpinned the expansion of private hospital groups Healthcare system and key participants Universal Healthcare Coverage with Patient Choice Regulation Funding Service Patients Universal healthcare coverage •
Slide 22: Clear Leader in Private Hospital Provision
2 Clear Leader in Private Hospital Provision MLP Care is the largest multi-specialty hospital group in Turkey and the only private player with a truly nationwide network MLP Care network (# of hospitals and locations) National and local leader with a network covering the greatest number of cities
Slide 23: MoH is investing in the PPP program
2 Clear Leader in Private Hospital Provision MoH is investing in the PPP program, but large private players do not expect to see an impact in the near / mid term Highly illustrative schematic of the Turkish Healthcare Sector PPP success factors Top end of the Private Hospital market City hospitals
Slide 24: Strong Brand Recognition And Unique Business Model
3 Strong Brand Recognition And Unique Business Model Addressing Multiple Price Points Two brands and one concept targeting three different price points with consistently outstanding medical service quality Overview and Positioning 31 Total Hospitals in Portfolio Relative Average Price per Payor Type
Slide 25: Clinical Excellence And World Class Service Offering
4 Clinical Excellence And World Class Service Offering MLP Care benefits from a “Virtuous Circle” of best-in-class service, infrastructure and academic affiliations JCI accreditation SRC1 University affiliations The Gold Standard in Healthcare Globally The Global standard for quality surgical care M
Slide 26: Top tier talent and patients attracted to MLP Care
4 Clinical Excellence And World Class Service Offering Top tier talent and patients are attracted to MLP Care’s unrivalled reputation, resulting in a steadily growing market share Ability to attract and retain top-tier physicians… CAGR Key points of attraction Proven track record of physicians recru
Slide 27: Superior Historical Financial Performance
5 Superior Historical Financial Performance EBITDA Growth > Net Sales Growth > CPI (Consumer Price Index) Net Sales (TLm) EBITDA (TLm) %20 %25 CAGR 2014-2018 CAGR 2014-2018 31% 31% 22% 23% 21% 19% 17% 13% 20% 12% 9% 9% 2015 2016 2017 2018 Net Sales Growth EBITDA Growth CPI (Consumer Price Index) 27
Slide 28: Quick and successful ramp up in greenfields and acquisitions
6 Outstanding Platform for Further Growth Quick and successful ramp up in greenfields as well as acquisitions with typical range of 12-18 months to EBITDA-neutral hospitals Example of Greenfield Example of Acquisition Batıkent (Oct-2014) Yıldızlı (Sep-2014) Total Investment TL50m Total Investment Co
Slide 29: Proven track record of greenfield expansions and M&A
6 Outstanding Platform for Further Growth Proven track record of greenfield expansions and M&A Total Hospitals 25 26 27 29 31 At Year End MLP Care has added on average c.400 beds p.a.1 Acquired 6 Opened one 2 New Hospitals Greenfield through greenfield projects since 2014 hospitals managed univers
Slide 30: Several avenues to continue growth trajectory
6 Outstanding Platform for Further Growth MLP Care has several avenues to continue its growth trajectory 1 2 Top line growth via the Growth through favourable insurance scheme revenue diversification MLP Care has increased its market share in PMI (private medical insurance) Self-Pay share of tot
Slide 31: 3. Appendix
3. Appendix • Revenue Breakdown by Payor Type – 2018 • Revenue and EBITDA Figures - 2018 • Revenue Segments - 2018 • Costs Breakdown - 2018 • Total Capex, Maintenance Capex and Operating Cash Flow / EBITDA - 2018 • Historical Financial Statements • Organizational Chart • Capital, Shareholder Structu
Slide 32: Operational Update: Payor types 2018
Operational Update Double digit growth in majority of payor types 56% 76% Other 9% Revenue from PMI, Top-up & Contracted 1% Institutions grew by 34% in 2018 Medical Tourism 11% SSI 29% Medical Tourism grew by 76% in 2018 and 86% in 4Q 2018 y-o-y PMI, Top-up & SSI Insurance allows for a wide ad
Slide 33: Revenue and EBITDA grew above expectations
Financial Update Revenue and EBITDA grew above expectations Revenue (TLm) Adj. EBITDA1 (TLm) 27.7% 29.7% 4.000 21.6% 700 23.5% 3.500 600 2 3.000 3.132 500 2.500 152 2.576 400 2.000 409 300 1.500 1.000 200 500 100 0 0 2017 2018 2017 2018 Comparable Adj. EBITDA is at TL530m without the negative impa
Slide 34: All revenue segments posted strong growth in 2018
Financial Update All revenue segments posted strong growth in 2018 Domestic Patient Medical Tourism Ancillary Business Revenues Revenues 21.1% 91.9% 14.0% 75.9% 56.1% 2.512 330 289 2018 2018 2018 Growth Continued in 2018 Continued to Attract Foreign Strong Growth in Managed Inpatient revenues grew
Slide 35: Adj. EBITDA improves on smart cost management and savings
Financial Update Adj. EBITDA improves on the back of smart cost management and savings Cost of Service and G&A Expenses as a % of Revenues Material costs as a % of revenue increased, Adj. EBITDA Margin 15.9% 16.1% due to the patient mix impact and increase in share of laboratory services business
Slide 36: Trade receivables increased leading to lower operating cash flow
Financial Update Trade receivables increased in line with the strong revenue growth leading to lower operating cash flow Maintenance Capex (TLm) Total Capex (TLm) Operating Cash Flow / EBITDA 131.1% 2.7% 65.7% 2.5% 600,0 100,0 300,0 500,0 80,0 250,0 282 400,0 536 84 200,0 60,0 236 65 150,0 300,0 40,
Slide 37: Historical Balance Sheet
Historical Balance Sheet Unaudited Audited TLm March 31, 2019 December 31, 2018 Cash and cash equivalents 371 223 Trade receivables 949 899 Inventory 83 80 Short term other assets 283 276 Current assets 1,686 1,479 Tangible and intangible fixed assets 1,293 1,305 Deferred tax assets 282 282 Long ter
Slide 38: Historical P&L Statements
Historical P&L Statements TLm Q1 2019 Q1 2018 Revenue 933 749 Cost of service (-) (756) (611) Gross profit 177 138 General administration expenses (-) (72) (60) Other income from operations 63 67 Other expenses from operations (-) (61) (49) Operating income 107 96 Income from investment operations 0
Slide 39: Reconciliation from Reported EBITDA to Adjusted EBITDA
Reconciliation from Reported EBITDA to Adjusted EBITDA TLm Q1 2019 Q1 2018 Net profit / (loss) 3 2 Tax income from operations 8 (32) Depreciation and amortization of tangible and intangible fixed assets 52 44 Total interest expenses, net of interest income and gain on financial derivatives 87 120 Ne
Slide 40: Organizational Chart
Organizational Chart Visionary founder & CEO supported by an outstanding management team, leading the company’s exemplary growth; Significant breadth and depth of experience across the senior management and executive level teams Team Structure Field Organization per Hospital Jale Güney Dr. Deniz Can
Slide 41: Capital, Shareholder Structure & Subsidiaries
Capital, Shareholder Structure* & Subsidiaries *Shareholding structure after public offering (excluding the 6,827k shares purchased by shareholders from publicly traded portion) Usta Group – Elbaşı Group Lightyear Hujori Sancak İnşaat (Founders) Healthcare B.V. Financieringen B.V. Turizm Nakliyat •
Slide 42: Key Historic Milestones
Key Historic Milestones • 2 hospitals • 3 hospitals • TURKVEN • 1 hospital • MPARK • Founders Dr. • Dr. Usta, Adem Muharrem Usta Elbaşı and • Carlyle opened in • 1 hospital acquired opened in Stocks acquired 40% opened in 53.35% and Adem Sancak Group İzmir, opened in Samsun starting to stake in MLP
Slide 43: IR Contact
Disclaimer This presentation may contain certain forward-looking statements concerning MLP Care’s future performance and should be considered as good faith estimates made by the Company. These forward-looking statements reflect management expectations and are based upon currently available data. Act