Fortis Healthcare Ltd. · NSE:FORTIS
Fortis Healthcare — FY2020 Earnings Presentation
46 slides from Fortis Healthcare's earnings presentation, Jun 17, 2020
Slide 1: Cover letter to stock exchanges
Fortis Healthcare Limited Tower-A, Unitech Business Park, Block-F, South City 1, Sector – 41, Gurgaon, Haryana – 122 001 (India) Tel : 0124 492 1033 Fax : 0124 492 1041 Emergency : 105010 Email : secretarial@fortishealthcare.com Website : www.fortishealthcare.com FHL/SEC/2020-21 June 17, 2020 The Na
Slide 2: Earnings Presentation – FY20 and Q4 FY20
Fortis Healthcare Limited Earnings Presentation – FY20 and Q4 FY20 June 17, 2020
Slide 3: Disclaimer
Disclaimer This presentation may not be copied, published, distributed or transmitted. The presentation has been prepared solely by the company. Any reference in this presentation to “Fortis Healthcare Limited” shall mean, collectively, the Company and its subsidiaries. This presentation has been pr
Slide 4: Agenda
Agenda 1. COVID - 19 Impact and mitigation measures 2. Fortis Today 3. FY20 – Performance Highlights • Earnings and Financial Summary - FY 20 and Q4 FY 20 4. Key Value Levers - Hospitals & Diagnostics Business 5. Performance Review FY 20 - Hospitals Business 6. Performance Review FY 20 - Diagnostics
Slide 5: 1. COVID-19 impact and mitigation measures
1. COVID-19 impact and mitigation measures 4
Slide 6: Covid-19: Impact
Covid-19 : Impact Consolidated Occupancy - Hospitals • April Occupancy at 29%; relaxation in lockdown in 90% 73% 72% 70% 71% May seeing a gradual recovery. (May’20 Occ. at 66% 67% 67% 60% 57% 35% & MTD June’20 Occ. at ~ 45%) 45% 35% 30% • Diagnostic volumes drop 75% in April; May seeing 29% lower dr
Slide 7: Covid-19: Initiatives to ensure operations continuity
Covid-19: Initiatives to ensure operations continuity ➢ Flu Clinics for suspected COVID patients. ✓ Approx. 1000 beds dedicated pan India ➢ Flu Kiosks for first level of screening without doctor contact ✓ Fortis Vashi and Fortis Vasant Kunj - Covid dedicated facilities ➢ Focus on Tele/Video consulta
Slide 8: Covid-19: Cost Optimisation Initiatives
Covid-19: Cost Optimisation Initiatives ➢ Approx. 25% reduction in fixed costs primarily through voluntary salary reduction in both medical and non medical manpower ➢ Judicious allocation of annual planned capex till situation witnesses signs of stabilization ➢ Delayed launch of ready to commission
Slide 9: Immediate priorities for business recovery and growth
Immediate priorities for business recovery and growth • Creation of all inclusive packages Enhancing Trust and Transparency • Transparent billing and monitoring Increasing focus • Credit Business • Cash & Community Connect on engagement across customer segments • Emerging Business lines • Internatio
Slide 10: 2. Fortis Today
2. Fortis Today . 42 Fortis
Slide 11: A New Journey - Well positioned for the future
A New Journey - Well positioned for the future ✓ IHH chosen as final investor in July 2018. • Re-constituted Board with strong governance and IHH’s ✓ Infuses INR 4,000 Crs in Nov 2018 for 31.1% stake, becomes global repute largest shareholder with majority Board control • Regained confidence with in
Slide 12: Fortis Today
Fortis Today 400+ ~3,700 ~4,000 9,500+ 28 Facilities* Labs Beds Clinicians CCs & DCs Aspires to be the most trusted healthcare organization in India Accelerating growth Institutionalised framework of Committed to deliver quality momentum through enhanced strong systems , Governance healthcare servic
Slide 13: Specialty Mix – FY2020
Specialty Mix – FY2020 52 Heart Transplants 361 Renal Transplants OPD & Cardiac, 20% Others, 17% IPD others, Ortho, 8% 227 Liver Transplants 17% Renal, 8% 193 Bone Marrow Transplants Onco, 8% Gynae & Obs, 5% Neuro, 9% Approx. 7,000 Knee Implants Pulmo, 3% Gastro, 4% Over 600 Hip Implants Focus on hi
Slide 14: 3. FY20 - Performance Highlights
3. FY20 - Performance Highlights - Earnings and Financial Summary - FY 20 and Q4 FY20 13
Slide 15: FY2020 – Significant Accomplishments
FY2020 – Significant Accomplishments ✓ Turnaround in the hospital business ✓ Diagnostics business strategy being implemented ✓ Investments for growth and expansion in medical specialties, technologies and infrastructure ✓ Cost optimization and productivity ✓ Robust Balance sheet with low debt 14
Slide 16: FY2020 – Performance Highlights
FY2020 – Performance Highlights • Healthy expansion in EBITDA margin from 2.8% to 12.7% in FY 20 ✓ 230 bps expansion due to improvement in operational performance ✓ 610 bps expansion due to savings in BT fees • Occupancy up from 67% in FY19 to 68% in FY20; impacted in March - 57% Hospital Business o
Slide 17: FY2020 – Performance Highlights (cont.)
FY2020 – Performance Highlights ( cont.) • Launch of Oncology facility in Bengaluru; 200 bed Arcot road facility in Chennai ready Business Growth • New medical programs added in Nephrology, Pulmonology and Cardiology and Expansion • Capex spent /committed to the tune of over INR 280 Cr on medical eq
Slide 18: FY2020 – Update on Open Offer
FY2020 – Update on Open Offer • The Supreme Court vide its order in Dec 2018 directed that “Status Quo be maintained with regard to sale of controlling stake in Fortis Healthcare to IHH”. Fortis filed a modification application for the order in Dec 2018 itself. • Pursuant to the Supreme Court order
Slide 19: Consolidated Earnings Summary – FY20
Consolidated Earnings Summary – FY 20 INR Cr Consolidated Revenue 6,000.0 4,469.4 4,632.3 4,000.0 2,000.0 - FY19 FY20 INR Cr EBITDA PBT (before Exceptional items) 800.0 662.2 600.0 400.0 200.0 317.6 165.4 - FY19 FY20 (200.0) (252.1) (400.0) EBITDA includes other income and forex gain /(loss) 18
Slide 20: Consolidated Earnings Summary – FY20
Consolidated Earnings Summary – FY20 • Consolidated Revenues for FY20 grew 3.6% to reach INR 4,632 Crs. • Consolidated EBITDA for FY20 increased 2.1x to INR 662 Crs. o Hospital business revenues stood at INR 3,752 Crs, a growth of 6.4% o The hospital business EBITDA margins stood at 12.7% versus 2.8
Slide 21: Consolidated Earnings Summary – Q4 FY20
Consolidated Earnings Summary – Q4 FY 20 INR Cr Consolidated Revenue 1,400 1,212 1,184 1,169 1,200 1,138 1,113 1,000 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 INR Cr 250 EBITDA PBT (before Exceptional items) 200 194 150 162 162 144 125 100 50 74 0.3 40 44 7 - Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 EBITDA inclu
Slide 22: Consolidated Earnings Summary – Q4FY20
Consolidated Earnings Summary – Q4FY20 • Consolidated Revenues for Q4 declined by 6.0% to INR 1,112.9 Crs. Consolidated EBITDA for Q4 stood at INR 144.2 Crs. o Hospital business revenues stood at INR 913.3 Crs, marginal decline of 0.6% o The hospital business EBITDA was at INR 104.2 Crs vs an EBITDA
Slide 23: Operating Performance – Hospitals Business
Operating Performance – Hospitals Business Particulars ( INR Cr) Q4FY19 Q3FY20 Q4FY20 % Change FY19 FY20 % Change Operating Revenue 918.5 953.5 913.3 -0.6% 3,526.9 3,752.1 6.4% Reported EBITDA 51.2 133.8 104.2 103.5% 98.7 475.6 381.6% Margin 5.6% 14.0% 11.4% 2.8% 12.7% Adj: Non Recurring expenses 45
Slide 24: Operating Performance – Diagnostic Business
Operating Performance – Diagnostic Business Particulars ( INR Cr) Q4FY19 Q3FY20 Q4FY20 % Change FY19 FY20 % Change Operating Revenue (gross) 251.1 249.4 231.9 -7.6% 1,010.2 1,016.3 0.6% Reported EBITDA* 47.4 39.8 33.7 -29.0% 185.8 197.3 6.2% Margin 18.9% 16.0% 14.5% 18.4% 19.4% Adj: Non Recurring ex
Slide 25: Balance Sheet – March 31, 2020
Balance Sheet – March 31, 2020 Balance Sheet (INR Cr) Mar 31, 2019 Dec 31, 2019 Mar 31, 2020 Shareholder’s Equity 7,112 7,262 7,205 Debt 1,971 1,357 1,363 Lease Liabilities (Ind AS 116)* 39 231 231 Total Capital Employed 9,123 8,850 8,799 Net Fixed Assets (includes CWIP) 5,206 5,279 5,285 Goodwill 3
Slide 26: 4. Key Value Levers – Hospitals and Diagnostics Business
4. Key Value Levers – Hospitals and Diagnostics Business 25
Slide 27: Key Value Levers - Hospital Business
Key Value Levers - Hospital Business DIGITIZATION PORTFOLIO ASSESSMENT - Invest in high performing units - New integrated HIS platform across the network - Turnaround high potential units - Apps such as MyFortis and MarTech solutions. - Exit non-performing/ low potential units - Tele and Video consu
Slide 28: Key Value Levers - Diagnostic Business
Key Value Levers - Diagnostic Business IMPROVE B2C SALIENCE INTEGRATED PRODUCT PORTFOLIO - Focus market strategy - Differentiated plan for Specialised, Lifestyle disease - Significant increase in customer touchpoint via and Preventive Health Check segments Franchisee patient service centres (CCs*) -
Slide 29: 5. Performance Review FY20 – Hospitals Business
5. Performance Review FY 20 – Hospitals Business 28
Slide 30: Key Performance Metrics – Hospitals Business
Key Performance Metrics – Hospitals Business ➢ Consistent improvement in all operating parameters Occupancy (%) ARPOB (INR Cr per annum) ALOS (Days) 1.59 67% 68% 3.39 3.24 1.52 FY19 FY20 FY19 FY20 FY19 FY20 1.62 72% 1.61 68% 66% 68% 65% 3.34 3.29 3.17 3.23 3.24 1.57 1.54 1.53 Q2FY20 Q4FY19 Q1FY20 Q3
Slide 31: Key Hospitals Performance – FY20
Key Hospitals Performance – FY20 INR Crore Net Revenue 600 525 FY19 FY20 500 467 426 402 400 334 333 302 319 295 285 300 280 249 250 224 211 193 200 149 122 136 140 100 - FMRI Mohali FEHI BG Road Mulund Noida Shalimar Anandpur Faridabad Jaipur Bagh • International patient revenue at INR 398 Cr, 10.6
Slide 32: Key Hospitals KPIs - FY20
Key Hospitals KPIs - FY20 INR Crore ARPOB 4.00 FY19 FY20 3.10 3.00 2.79 1.95 2.00 1.76 1.69 1.77 1.67 1.83 1.94 1.54 1.56 1.60 1.36 1.48 1.12 1.30 1.03 1.13 1.00 0.83 0.90 - FMRI Mohali FEHI BG Road Mulund Noida Shalimar Anandpur Faridabad Jaipur Bagh Occupancy FY19 FY20 100% 88% 84% 84% 74% 72% 76%
Slide 33: Hospitals Margin Matrix - FY20
Hospitals Margin Matrix - FY20 Revenue EBITDA No of Facilities Operational beds ARPOB (INR Cr) Occupancy contribution >25% 3 14% 456 1.60 73% 20% - 25% 4 30% 816 2.07 69% FY20 15% - 20% 4 23% 770 1.64 71% 10% - 15% 5 14% 662 1.09 75% <10% 8 19% 948 1.46 56% Revenue EBITDA No of Facilities Operationa
Slide 34: Payor Mix – FY20 vs FY19
Payor Mix – FY20 vs FY19 FY20 FY19 ESI, 0.4% ESI, 0.6% TPAs, 29% Cash : TPAs, 27% Cash : Domestic, Domestic, 43% 46% Pvt Corps, 1.3% Pvt Corps, International , 1.4% International , 10% 11% Govt & PSUs, Govt & PSUs, 7% 8% ECHS, 6% ECHS, 5% CGHS, 3% CGHS, 2% 33
Slide 35: Launch of New Medical Programs and Clinical Services – FY20
Launch of New Medical Programs and Clinical Services – FY20 Fortis BG Road, Bengaluru launched a State-of-the-art Cancer Institute offering comprehensive cancer care Fortis Escorts Hospital, Faridabad launched a state-of-the-art and next generation Cath Lab and a Mother & Childcare wing. Forti
Slide 36: Clinical Excellence and Awards & Accolades - FY20
Clinical Excellence and Awards & Accolades - FY20 A team of doctors at Fortis Hospital, B. G. Road, Doctors at Fortis Escorts Heart Institute (FEHI), New Bengaluru, performed South India’s first Hyperthermic Delhi, performed India's first Coronary Shockwave Intra-Vesical Chemotherapy (HIVEC) techniq
Slide 37: 6. Performance Review FY20 – Diagnostics Business
6. Performance Review FY20 – Diagnostics Business 36
Slide 38: SRL Ltd – Pan India Diagnostic Chain
SRL Ltd – Pan India Diagnostic Chain ➢ 4 Reference labs in Delhi, Mumbai, Bangalore and Calcutta with 400* other labs across India ➢ Over 1400 collection centers spread across 29 states and 4 Reference 7 union territories Laboratories ➢ 8200+ pickup points with daily collection of samples ➢ Offering
Slide 39: Diagnostics Business – FY20
Diagnostics Business – FY20 Gross Revenue EBITDA Margin INR Cr ➢ Gross Operating revenue for the years stood at INR 1,016 Cr, 1200 30.0% 1100 1010 1016 +0.6% (+3.5% till YTD Feb’20) 1000 900 800 20.0% ➢ EBITDA margin basis gross revenue stood at 19.4% vs 18.4% in 700 18.4% 19.4% 600 500 FY19 400 10.
Slide 40: Diagnostics Business – Q4 FY20
Diagnostics Business – Q4 FY20 Gross Revenue EBITDA Margin ➢ Gross Operating revenue at INR 231.9 Cr, -7.6%; (+5.2% INR Cr 300 30.0% growth in Jan + Feb’20) 251 232 ➢ EBITDA margin basis gross revenue stood at 14.5% vs 18.9% 200 20.0% 18.9% in Q4FY19 largely due to the impact in March due to Covid.
Slide 41: Key Performance Metrics
Key Performance Metrics Number of Tests and Average Realizations* Direct Cost per test No of Tests (mn) Avg. Realization per test (INR) Direct Cost per test (INR) 8.36 89.3 7.80 84.4 400 8.00 81.9 79.7 80.8 7.40 7.45 6.77 336 342 300 329 327 334 6.00 200 4.00 100 2.00 - - Q4FY19 Q1FY20 Q2FY20 Q3FY20
Slide 42: Revenue Mix
Revenue Mix Geographic Mix* Customer Mix* Corporate, 4% International, 4% International, 4% Collection FY2020 FY2020 Hospitals, Centre, 17% North, 35% 22% West, 28% Lab Walk- Ins, 21% South, 12% East, 21% Direct Radiology, Clients, 25% 7% International, International, Corporate, 5% 5% 5% Collection
Slide 43: 7. Appendix
7. Appendix . 42 Fortis
Slide 44: Group Consolidated P&L – FY20 vs FY19
Group Consolidated P&L – FY20 vs FY19 March 31, 2020 March 31, 2019 Particulars ( INR Cr) Audited Audited Revenue from operations 4,632.3 4,469.4 Other income 52.6 92.4 Total income 4,685.0 4,561.8 Expenses 4,022.8 4,244.1 EBITDA* 662.2 317.6 Margin 14.3% 7.1% Finance costs 205.1 336.8 Depreciation
Slide 45: Group Consolidated P&L – Q4FY20
Group Consolidated P&L – Q4FY20 March 31, 2020 December 31, 2019 March 31, 2019 Particulars ( INR Cr) Audited Unaudited Audited Revenue from operations 1,112.9 1,168.9 1,184.2 Other income 18.4 4.9 10.0 Total income 1,131.3 1,173.8 1,194.2 Expenses 987.1 1,012.0 1,069.2 EBITDA* 144.2 161.9 125.0 Mar
Slide 46: Thank You
For further details please contact: Anurag Kalra / Gaurav Chugh Investor Relations +91-9810109253 / 9958588900 Fortis Healthcare Limited Thank You 45