Cleopatra Hospital Company · EGX:CLHO
Cleopatra Hospital — Q2 2019 Earnings Presentation
61 slides from Cleopatra Hospital's earnings presentation, 2019
Slide 1: Cleopatra Hospital Company Investor Presentation 2Q19
Cleopatra Hospital Company Investor Presentation 2Q19
Slide 2: Table of Contents
Table of Contents 1. At a Glance 2. Key Investment Highlights 3. Recent Business Updates 4. Strategy 2020 5. Expansion Strategy 6. Governance & Shareholder Information Cleopatra Investor Presentation 2Q19 2
Slide 3: Today's Presenters
Today’s Presenters Hassan Fikry Ahmed Badreldin Dr. Ahmed Ezzeldin Corporate Strategy & Investor Non-Executive Chairman Chief Executive Officer Relations Director Cleopatra Investor Presentation 2Q19 3
Slide 4: At a Glance: Revolutionizing Egypt's healthcare industry
At a Glance: Revolutionizing Egypt’s healthcare industry Mission Vision Delivering the finest quality of healthcare in a Become the leading integrated healthcare safe, reliable and caring environment, through provider in Egypt through a platform of world highly trained healthcare providers, state of
Slide 5: At a Glance: Revolutionizing Egypt's healthcare industry
At a Glance: Revolutionizing Egypt’s healthcare industry Cleopatra Hospital Group (CHG) is Egypt’s largest private hospital group by number of its hospital beds and operating hospitals. Over the last five years, the Group has revolutionized the Egyptian healthcare industry by bringing high quality,
Slide 6: At a Glance: CHG financial highlights
At a Glance: CHG financial highlights In 2018, CHG reported solid year-on-year growth in both its top and bottom line, with the EGP 220.0 mn EGP 825.0 mn Group generating revenue EBITDA1 in 1H19 with a Consolidated revenues in 1H19 with growth from all its operating 27% Margin 22% growth y-o-y facil
Slide 7: At a Glance: CHG facilities and staff
At a Glance: CHG facilities and staff Cleopatra Hospital Company, is the largest private hospital group in Egypt and consists of four operational hospitals all in Cairo (2018), namely: 4 (2018) + 2 2 Polyclinics East Cairo Polyclinic is (20191) operational as of February 2019. Cairo Specialized Oper
Slide 8: A network of hospitals located strategically across greater Cairo
At a Glance: A network of hospitals located strategically across greater Cairo 7 4 2 5 Queens Location Mohandesin,Giza Location Heliopolis, Cairo Location Heliopolis # of Beds 121 # of Beds 188 # of Beds 50 8 Al Katib (1) Location Dokki # of Beds 89 IVF Centre 3 Acquisition Location Maadi, Cairo # o
Slide 9: A Scalable Platform with a History of Transformational Acquisitions
A ScalableHospitals, Cleopatra Platform with a History of Transformational Acquisitions | Six Acquisitions to Date CHG CHG signs a partnership unsuccessfully agreement to manage The first asset, Cleopatra CHG acquired Nile Badrawi attempted to and operate a 150-bed CHG signed a definitive CHG acquir
Slide 10: Clearly Defined Core Growth Strategy
Clearly Defined Core Growth Strategy Our core growth strategy is based on six key pillars: Integrating the platform Integrated Cleopatra to achieve higher branding, sales and efficiencies marketing approach Enhancing utilization and Leveraging stronger optimizing existing position with credit capaci
Slide 11: Key Investment Highlights
Key Investment ‘* Highlights 7
Slide 12: Key Investment Highlights
Key Investment Highlights 1 2 3 4 5 Leading position in Leverage on Solid financial Strong management a highly fragmented integrated platform performance with team with market and scale to extract potential for experienced board of synergies enhanced directors profitability Underserved and under-pen
Slide 13: Underserved and Under-penetrated Market with Steady Demand Growth
Underserved and Under-penetrated Market with Steady Demand Growth Supply Gap in Egyptian Healthcare Industry Healthcare Expenditure in Egypt Population (millions) Public vs. Private Healthcare Expenditure | EGP bn CAGR: 2.2 % 102 104 104 106 108 113 118 124 130 100.0 110.0 88.0 90.0 92.0 96.0 98.0 8
Slide 14: Key Investment Highlights
Key Investment Highlights 1 2 3 4 5 Underserved and Leverage on Solid financial Strong management under-penetrated integrated platform performance with team with market with steady and scale to extract potential for experienced board of demand growth synergies enhanced directors profitability Leadin
Slide 15: Leading Position in a Market with High Barriers to Entry
Leading Position in a Market with High Barriers to Entry Largest institutional hospital group in Egypt by …Capturing the largest share of the top 15 large …And by number of hospitals(2).… number of beds(1)….. private hospitals in Cairo 782 (2) 6(2) 6 out of top 13 678 (3) private hospitals in 470 3
Slide 16: Key Investment Highlights
Key Investment Highlights 1 2 3 4 5 Underserved and Leading position in Solid financial Strong management under-penetrated a highly fragmented performance with team with market with steady market potential for experienced board of demand growth enhanced directors profitability Leverage on integrated
Slide 17: CHG's Integration model
CHG’s Integration model Integration, Optimization of Operations Effect on CHG Umbrella Brand Unified Pricing & Unified Financial Optimize operations and Institutionalizing Corporate Centralized Unified Expansion Value Creation Name for Each Positioning Sops & management the Group Governance Corporat
Slide 18: Key Investment Highlights
Key Investment Highlights 1 2 3 4 5 Underserved and Leading position in Leverage on integrated Strong management under-penetrated a highly fragmented platform and scale to team with market with steady market extract synergies experienced board of demand growth directors Solid financial performance w
Slide 19: Solid Financial Performance
Solid Financial Performance While the group continues its focus on enhancing and maintaining margins organically , performance in 2019 reflected strong margins though additions of newly inaugurated and pre-integration assets. Group hospitals progressed with growth in the overall group revenues, gros
Slide 20: Key Revenue Drivers
Key Revenue Drivers Revenue from inpatient admissions and outpatient visits have demonstrated growth y-o-y, at 7% and 11% respectively which reflects the groups volume and case mix strategy enhancement across its revenue streams Group Revenue Contribution by No. Patients | ‘000s No. Patients | ‘000s
Slide 21: Key Revenue Drivers
Key Revenue Drivers Driven by surgeries and ER visits, and increasing revenue per visit of 18% and 13% respectively, revenues from each of the mentioned segments have witnessed a notable growth ER Visits | 000s No. of Surgeries | 000s 260 261 247 257 35 37 36 35 124 121 16 18 2015 2016 2017 2018 H1
Slide 22: Key Revenue Drivers
Key Revenue Drivers Revenue per bed at group hospitals have demonstrated growth as a result of better utilization and case mix strategy. Revenue Progression Cleopatra Hospital | EGP mn Nile Badrawi | EGP mn by Hospital 18% 26% 362 1.9 308 151 1.7 1.0 0.8 119 228 92 H1 2018 H1 2019 H1 2018 H1 201
Slide 23: Key Investment Highlights
Key Investment Highlights 1 2 3 4 5 Underserved and Leading position in Leverage on integrated Solid financial under-penetrated a highly fragmented platform and scale to performance with market with steady market extract synergies potential for demand growth enhanced profitability Strong management
Slide 24: Matrix Organizational Structure
Matrix Organizational Structure CHG has adopted a matrix organizational structure optimizing its operations and managing the employees effectively. Audit Committee Board of Directors Internal Audit Manager Dr. Ahmed Ezz El Din – Chief Executive Officer Chief Financial Officer Chief Operating Officer
Slide 25: Recent Business Updates
Recent Business Updates Cleopatra Investor Presentation 2Q19 25
Slide 26: Renovations & Upgrades: Nile Badrawy Hospital
Recent Business Updates Renovations & Upgrades Nile Badrawy Hospital Renovations • Façade facelift 10th & 11th floor • Inpatient Wards Renovations expansion (2 floors) (20 beds) • Started Electromechanical upgrades • Upgraded all medical equipment • ICU/CCU Renovation & Upgrade • Operating Rooms Ren
Slide 27: Renovations & Upgrades: Cairo Specialized Hospital
Recent Business Updates Renovations & Upgrades Cairo Specialized Hospital Renovations • Façade facelift • Inpatient Wards Renovations Started Electromechanical upgrades • Upgraded all medical equipment • ICU/CCU Renovation & Upgrade • Operating Rooms Renovations & Upgrade • Radiology Department Upgr
Slide 28: Renovations & Upgrades: Al Shorouk Hospital
Recent Business Updates Renovations & Upgrades Al Shorouk Hospital Renovations • New Clinics Building, availing space for 20 more inpatient beds by YE 2019 • Inpatient Wards Renovations Started Electromechanical upgrades • Upgraded all medical equipment • ICU/CCU Renovation & Upgrade • Operating Roo
Slide 29: Revenue Cycle Management
Recent Business Updates Revenue Cycle Management Service Conducted -Price, Description & Classification Revenue Cycle Management standardized -(Pre-)Approval of all services for credit and insurance clients • Since the beginning of 2019 , the group has taken strong steps to introduce a full- Monitor
Slide 30: Business Development - Private Sales Function
Recent Business Updates Business Development - Private Sales Function Sales Team Objectives • Establishing per medical specialty sales teams with an HIGH objective to target more volumes, better case mix and higher Invest Protect referrals Potential • Roadmap starting with role profiles creation, me
Slide 31: Port Said Skills Enhancement Program
Business Updates - Port Said Skills Enhancement Program Project Description SEP is a project designed by CHG in accordance with the Health Insurance Program designed by the Egyptian Government to be launched in June 2019.to provide programs for staff working in medical services in governmental secto
Slide 32: Port Said Skills Enhancement Program
Business Updates - Port Said Skills Enhancement Program Trained 500+ employee Initiated the 1st Orthopedic On the fundamentals of Medical and Surgery Nonmedical Functions In Tadamon Hospital in the past 10 years Designed Hospital Trained Medical Staff On the CHG Medical Forms for Organizational Stru
Slide 33: Partnership with MOH - Skills Enhancement Program
Partnership with MOH - Skills Enhancement Program Skills Enhancement Program Partnership signing with Minister of Health and the Egyptian Prime Minister Cleopatra Investor Presentation 2Q19 33
Slide 34: Partnership with MOH – Three Hospitals Under CHG's Brand
Partnership with MOH – Three Hospitals Under CHG’s Brand Cleopatra Investor Presentation 2Q19 34
Slide 35: Partnership with MOH – Three Hospitals Under CHG's Brand
Partnership with MOH – Three Hospitals Under CHG’s Brand Cleopatra Investor Presentation 2Q19 35
Slide 36: Strategy 2020
Strategy 2020 Cleopatra Investor Presentation 2Q19 36
Slide 37: CHG's Equity Story Pillars | 2019 - 2020
CHG’s Equity Story Pillars | 2019 - 2020 CHG Obstetrics, Dermatology, Services Gynecology, Al Shorouk Reproductive, & Cleopatra East Cairo - Patient & Infertility2 Laser Treatments pricing 2 4 6 Extension Extension 4 Fifth 6 pathway Settlement CoEs & asset Nutrition & Health I II Hospital integratio
Slide 38: 2020 and Beyond Strategy
2020 and Beyond Strategy New Performance Integration Verticals Polyclinics Expansions 2019-2020 2019-2020 2019-2020 2019-2020 2019-2020 • Revenue Growth • Restructuring • Facility • Ramp Up • East Cairo 20-30% including Queens to add Management performance Brownfield new additions new services – • C
Slide 39: Core Theme - Focus on Patient Pathway Capture to Maximize Share of Wallet
Core Theme - Focus on Patient Pathway Capture to Maximize Share of Wallet Increase number of registered patients through increasing the outpatient network, while a focus on patient pathway capture results in increased network revenue. Jobsite Health Clinics Cleopatra Investor Presentation 2Q19 39
Slide 40: The Expansion Strategy
The Expansion Strategy Cleopatra Investor Presentation 2Q19 40
Slide 41: Expansion strategy
Expansion strategy 1 2 3 4 5 6 Building Additional Strategic Acquisitions Brownfield/Greenfield Expanding reach Creating Strategic Capacities in Existing of Operating Hospitals Expansions beyond Greater Cairo entities to serve facilities Group’s scale of operations Creating Feeder networks Cleopatra
Slide 42: Feeder Network Expansion Began with the Launch of CHG's First Two Polyclinics
Feeder Network Expansion Began with the Launch of CHG’s First Two Polyclinics Located in East and West Cairo – The Group Has Recorded Growing Demand at both Facilities Polyclinics act as feeder networks for patient referral for the group hospitals. Specialized across different specialties including
Slide 43: West and East Cairo Polyclinics – The Group's First Two Facilities Launched in 2019
West and East Cairo Polyclinics – The Group’s First Two Facilities Launched in 2019 East Cairo Polyclinic operational as of February 2019 West Cairo Polyclinic operational as of July 2019 Cleopatra Investor Presentation 2Q19 43
Slide 44: Expansion strategy
Expansion strategy 1 2 3 4 5 6 Creating Feeder Strategic Acquisitions Brownfield/Greenfield Expanding reach Creating Strategic networks of Operating Hospitals Expansions beyond Greater Cairo entities to serve Group’s scale of operations Building Additional Capacities in Existing facilities Cleopatra
Slide 45: New Extension for Al-Shorouk Hospital
New Extension for Al-Shorouk Hospital Al Shorouk hospital expansion In Q2 2018, the group signed Vital Konzept, a leading Engineering & Consultancy Firm to start the process of Drawings for the extension in preparation for releasing the project for tendering with expected timeline of completion 18 m
Slide 46: Expansion strategy
Expansion strategy 1 3 3 4 5 6 Creating Feeder Building Additional Brownfield/Greenfield Expanding reach Creating Strategic networks Capacities in Existing Expansions beyond Greater Cairo entities to serve facilities Group’s scale of operations Strategic Acquisitions of Operating Hospitals Cleopatra
Slide 47: Strategic Acquisitions of Operating Hospitals
Strategic Acquisitions of Operating Hospitals El Katib Hospital (Dokki, Giza)(1) During September 2017, CHG signed definitive agreements to acquire the real estate assets and the operational assets of a new hospital in West Cairo 89 Hospital Beds Kidney Specialist offering a complementary service Th
Slide 48: Strategic Acquisitions of Operating Hospitals
Strategic Acquisitions of Operating Hospitals Queens Hospital (Heliopolis, East Cairo) Given OGM 50 Hospital Beds in Hospital current approval, CHG has Heliopolis (Segment focus is on finalized and A area) gynecology and started operating pediatrics Queens hospital as specialties. of March 2019 CHG
Slide 49: Transformational Growth Pipeline | Cementing CHG's Superior Service Offering
Transformational Growth Pipeline | Cementing CHG’s Superior Service Offering A Leading IVF Center Acquisition • CHG signed a Letter of Intent “LOI” to acquire an IVF center located in the heart of Cairo • A highly scalable specialized center that can generate substantial referrals to CHG’s network o
Slide 50: Expansion strategy
Expansion strategy 1 2 3 4 5 6 Creating Feeder Building Additional Strategic Acquisitions Creating Strategic networks Capacities in Existing of Operating Hospitals entities to serve facilities Group’s scale of operations Brownfield/ Expanding Greenfield reach beyond Expansions Greater Cairo Cleopatr
Slide 51: CHG Is Working on Expansions in Brownfield Hospitals in and around Greater Cairo
CHG Is Working on Expansions in Brownfield Hospitals in and around Greater Cairo Brownfield / Greenfield expansion Expanding reach beyond greater Cairo The group is currently assessing Potential hospital is named “ In Bani Suef CHG entered into a Footprint expansion and shortlisting potential New Ca
Slide 52: Expansion strategy
Expansion strategy 1 2 3 4 5 6 Creating Feeder Building Additional Strategic Acquisitions Brownfield/Greenfield Expanding networks Capacities in Existing of Operating Hospitals Expansions reach beyond Greater facilities Cairo Creating Strategic entities to serve Group’s scale of operations Cleopatra
Slide 53: Strategic Initiatives and Entities Created by CHG to Enhance Efficiencies
Strategic Initiatives and Entities Created by CHG to Enhance Efficiencies in Operation As part of the group’s strategy to leverage synergies and expand its service offerings, CHG is now in the process of creating business operation entities: Cleopatra entity for importing Pharmaceutical Cleopatra Ac
Slide 54: Governance & Shareholder Information
Governance & Shareholder Information Cleopatra Investor Presentation 2Q19 54
Slide 55: CHG is lead by a Diversified and Experienced Board of Directors
CHG is lead by a Diversified and Experienced Board of Directors Healthcare Experts Financial and Investment Experts Dr. Mohamed Awad Dr. Ahmed Ezzeldin Tarek Kabil Tag El Din Omar Ezz Al Arab Executive Member & Image Former Minister of Former Minister of Director Group CEO Trade and Industry Health
Slide 56: Key Investor Information
Key Investor Information Cleopatra Hospitals Company’s Care Health Limited’s Key Shareholders Shareholder Structure Care Healthcare DEG, the German Investment A Development Financial An international financial 38% Limited (Malta) and Development Corporation, Institution partly owned by institution,
Slide 57: Appendix: Financial Statements
Appendix : Financial Statements Cleopatra Investor Presentation 2Q19 57
Slide 58: Consolidated Income Statement
Consolidated Income Statement All figures in EGP mn 2Q2019 2Q2018 % change 1H2019 1H2018 % change Revenues 409.1 326.6 25% 825.0 673.8 22% Cost of sales (278.4) (221.0) 26% (540.2) (450.8) 20% Gross profit 130.7 105.7 24% 284.9 223.0 28% Gross Profit Margin 32% 32% 35% 33% General & administrative e
Slide 59: Consolidated Balance Sheet
Consolidated Balance Sheet All figures in EGP mn 31 December 2018 30 June 2019 Non-current assets Fixed assets 560.5 635.4 Intangible assets 241.0 255.1 Payment under investment 143.9 143.6 Total non-current assets 945.4 1,034.1 Current assets Inventory 40.8 46.7 Accounts receivables 302.8 353.6 Oth
Slide 60: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement All figures in EGP mn 30 June 2018 30 June 2019 Cash flow from operating activities: Profit before tax 170.0 143.5 Adjustments for: Depreciation 21.0 29.7 Amortization of intangible assets - - Allowance for impairments of current assets (6.2) 40.9 Provisions 1.7 (2.4
Slide 61: Thank you
Thank you INVESTOR RELATIONS C ONTAC TS SHAREHOLDER INFORMATION Telephone: +2 02 23103771 E GX: CLHO.CA E -mail: ir@cleopatrahos pitals ..com Listed: June 2016 investors.cleopatrahos pitals.com Shares Outstanding: 1.6 billion C leopatra Inves tor P res entation 2Q19 61
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