Max Healthcare Institute Ltd · NSE:MAXHEALTH
Max Healthcare Institute — Investor Presentation (May 2021)
45 slides from Max Healthcare Institute's investor presentation, May 31, 2021
Slide 1: Cover letter to stock exchanges
May 31, 2021 Listing Department, Listing Department, National Stock Exchange of India Limited BSE Limited Exchange Plaza, Plot C-1, Block G, 25th Floor, Bandra Kurla Complex, Phiroze Jeejeebhoy Towers, Bandra (E), Dalal Street, MUMBAI - 400 051 MUMBAI - 400 001 Symbol: MAXHEALTH Scrip Code: 543220 S
Slide 2: Investor presentation
Investor presentation May 31, 2021
Slide 3: Disclaimer
Disclaimer This presentation and the accompanying slides (the “presentation”) contains selected information about the activities of Max Healthcare Institute Limited’s (“Max Healthcare”/“MHIL”/“MHC”/”Company”) as at the date of the presentation. None of MHIL, its directors, promoter, or affiliates, n
Slide 4: Definitions
Definitions Term Description Amount billed to the patients/customers as per contracted/rack rates, as applicable, including the patients Gross Revenue from the economically weaker section (EWS) on discharge basis; Also includes other operating income such as SEIS income, EPCG income, unclaimed balan
Slide 5: Content
Content Company Overview 05 Key Strengths 11 Strategy Going Forward 28 Covid-19 Response 30 Appendix 34 4
Slide 6: Company Overview
By MAX Healthcare Company Overview
Slide 7: Max Healthcare: India's second largest healthcare chain by net revenue
Max Healthcare: India’s second largest healthcare chain by net revenue* • Max Healthcare and Radiant merged their healthcare businesses to create the second largest healthcare chain in Indiaby net revenue* • Listed on BSE & NSE (Ticker: MAXHEALTH/543220) on August 21, 2020; Included in the MSCI Glob
Slide 8: Our Vision
Our Vision We seek to be the most well regarded healthcare provider in India committed to the highest standards of clinical excellence and patient care supported by latest technology and cutting edge research • Quaternary care facilities • Modern infrastructure • Best-in-class clinical outcomes • St
Slide 9: Journey so far
Journey so far Raised INR 1200 Cr Dr. B L Kapur Memorial Dr. Balabhai Nanavati • Radiant-Max Healthcare merger equity through Hospital, Rajendra Hospital, Mumbai(1) and listing on BSE and NSE Qualified Place(1) • Discontinuation of Max Multi Institutional Specialty Centre, Pitampura Placement (QIP)
Slide 10: Ownership structure
Ownership structure Shareholding as of Dec 31, 2020 Shareholding post Qualified Institutional Placement (QIP) 24.75% 29.54% 0.04% 90.45 Cr shares 51.94% 96.59 Cr shares 48.64% 0.04% 23.26% KKR Max Promoters 21.78% Abhay Soi Public & Others(1) • MHIL completed an equity fund raise of INR 1,200 Cr thr
Slide 11: Distinguished Board of Directors
Distinguished Board of Directors CHAIRMAN MR. ABHAY SOI Chairman and MD, MHIL NON-EXECUTIVE DIRECTORS MR. SANJAY NAYAR MS. ANANYA TRIPATHI CEO, KKR India Director, KKR Capstone INDEPENDENT DIRECTORS MR. MAHENDRA GUMANMALJI LODHA MS. HARMEEN MEHTA MR. MICHAEL NEEB MR. KUMMAMURI NARASIMHA MURTHY Chart
Slide 12: Key Strengths
By MAX Healthcare Key Strengths
Slide 13: Key strengths
Key strengths • Quaternary care facilities with comprehensive clinical programs; opportunity 1 Leading hospital brand to partner on asset light models to expand domestic and international reach • ~84% beds in metros – the most attractive hospital markets in India; well 2 Presence in the most attract
Slide 14: Leading hospital brand (1/4)
1 Leading hospital brand (1/4) High end quaternary care facilities, including 3 JCI accredited Complex Robotics Cardiac Neuro Orthopedic Oncology Surgeries Transplants(1) Performed surgeries surgeries(2) surgeries(3) surgeries(4) surgeries(5) FY21 550+ 160+ 23,700+ 7,600+ 13,300+ 7,500+ FY20 800+ 60
Slide 15: Leading hospital brand (2/4)
1 Leading hospital brand (2/4) State-of-the-art infrastructure Robotics Radixact – TomoTherapy System Cath Lab – Artis Zee Pure Advanced robotics provides high precision and Next generation TomoTherapy platform, designed Artis zee floor-mounted system with enables minimal invasive surgery across to
Slide 16: Leading hospital brand (3/4)
1 Leading hospital brand (3/4) Focus on research and academics Research: Academics: Significant strategic partnerships including Deakin University, Max Institute of Medical Excellence (MIME) is the education division Australia and Imperial College London, UK of MHC for medical education & training •
Slide 17: Leading hospital brand (4/4)
1 Leading hospital brand (4/4) Operational Clinical Safety Service Quality Others Excellence Patient Safety Award Best use of six sigma Best customer service ET Best Healthcare by FICCI in Healthcare in Healthcare brand Diamond Award for HIMSS-Elsevier Digital Stroke Ready Centre by Healthcare Award
Slide 18: Presence in the most attractive markets (1/2)
2 Presence in the most attractive markets (1/2) Highest demand supply mismatch, per capita income and insurance penetration leading to Delhi and Mumbai having the highest ARPOB and most profitable hospital markets in India High demand-supply gap in Delhi NCR & Mumbai… …leading to higher ARPOB 3.6 3.
Slide 19: Presence in the most attractive markets (2/2)
2 Presence in the most attractive markets (2/2) Being metro-centric also positions MHC well to capitalize on medical tourism India’s foreign medical tourism industry has Delhi NCR captures highest proportion of Key hubs from domestic hinterland in North been growing India’s foreign medical tourists
Slide 20: Growth opportunity in existing facilities
3A Growth opportunity in existing facilities Opportunity to ramp up occupancy FY21 Occupancy(1) Total bed 538 521 402 378 328 280 250 220 182 200 72 3,371 capacity 74% 69% 69% 71% 63% 68% 66% 68% 65% Headroom to grow 59% 61% 47% occupancy 82% 76% 75% without any 71% 73% 64% 70% 69% 74% 71% 72% 52% i
Slide 21: Valuable land bank
3B Valuable land bank Brownfield capacity plus land banks have lower capital employed per bed, quicker breakeven with lower risk leading to high return on incremental capital employed with higher visibility 5,456 100 85 200 600 1,100 3,371 Brownfield expansion Phase 1- Extension within current premi
Slide 22: Ability to build on capex light adjacencies: MaxLab
3C Ability to build on capex light adjacencies: MaxLab Non-captive Pathology SBU Over 13X revenue growth in 4 years Gross revenue(1) 85+ Partner-run collection centres (INR Lacs) 6,763 +90.7% 4,088 7 Company owned collection centres 2,432 2,514 1,821 1,309 1,054 1,375 511 FY17 FY18 FY19 FY20 FY21 Q1
Slide 23: Ability to build on capex light adjacencies: Digital platform
3C Ability to build on capex light adjacencies: Digital platform Leveraging the Max brand, clinical expertise and network to build a scalable digital business 7X revenue growth in 4 years Rapid growth through scale up of direct to customer services Digital platform as enabler Gross revenue (INR Lacs
Slide 24: Demonstrated track record for M&A and turnarounds
4 Demonstrated track record for M&A and turnarounds MHC performance improvement - 1: Consistent improvement in margins post transaction in June 2019 2: Sharp recovery post Covid-19 impact 19.2% Performance improvement driven by: • ~INR 220 Cr worth of initiatives implemented with 11.9% 11.6% 15.4% 1
Slide 25: Robust financial performance – highlights
5 Robust financial performance – highlights Significant ramp up in EBITDA in FY20 and FY21 through implementation of structural cost saving initiatives and business optimization Growth trajectory was impacted by decline in occupancy and ARPOB due to Covid-19 in H1 FY21 driven by delays in elective s
Slide 26: Robust financial performance in FY20 and FY21 (1/2)
5 Robust financial performance in FY20 and FY21 (1/2) Sharp recovery post Covid-19 impact Gross Revenue (INR Cr) EBITDA(2) (INR Cr) 4,443 628 636 71 38 +1% 3,920 3,861 +12% -13% +66% 356 263 253 1,160 1,159 590 4,371 932 143 610 FY19 FY20 FY21 -22 FY19 FY20 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY
Slide 27: Robust financial performance in FY20 and FY21 (2/2)
5 Robust financial performance in FY20 and FY21 (2/2) ROCE1 recovered to healthy levels in H2 FY21 24.6% 25.6% 12.4% -6.1% Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Further, planned brownfield expansions to be accretive Cost per bed INR 1.3 Cr Current ARPOB per bed INR 50K ARPOB per bed in 5 year (@5-8% growt
Slide 28: Experienced and dynamic management team
6 Experienced and dynamic management team Dr. Sandeep Buddhiraja Mr. Abhay Soi Mr. Atulya Sharma Group Medical Director Chairman and Managing Director Director – Legal, Comp. & Regulatory Affairs Chairman – Institute of Internal Medicine Mr. Yogesh Sareen Mr. Anas Wajid Dr. Vinitaa Jha Senior Direct
Slide 29: Strategy Going Forward
By MAX Healthcare Strategy Going Forward
Slide 30: Key pillars to focus on over the next 2-3 years
Key pillars to focus on over the next 2-3 years • Continue developing high-end tertiary and quaternary programs • Invest in top rated clinicians and retain existing clinicians and senior leadership Optimize • Set up offices globally to facilitate direct to fly international business Existing • Stren
Slide 31: Covid-19 Response
By MAX Healthcare Covid-19 Response
Slide 32: Covid-19: Response and contributions
Covid-19: Response and contributions Key contributions* : Our response : First private hospital to offer a dedicated facility in Delhi for Covid-19 care Operationalized India’s one of the largest vaccination centers Infrastructure spread over 1.65 acres; can operate 50 billing and 40 nursing counter
Slide 33: Covid-19: Performance update
Covid-19: Performance update Post sharp fall in occupancy rate at the start of first wave of Covid-19 at the end of Mar’20, the occupancy Occupancy (%) steadily rose back to its peak levels in Nov’20 87 90 72 75 71 76 70 72 76 77 79 79 71 69 75 In Jan 21 occupancy decreased to ~66% levels with 61 59
Slide 34: End
Ey MAX End Healthcare
Slide 35: Appendix
Appendix 1. Detailed financial and operational metrics 2. Network structure 34
Slide 36: Detailed financial and operational metrics
Appendix 1 Detailed financial and operational metrics 35
Slide 37: P&L Statement for the Network
P&L Statement for the Network Figs in INR Cr FY19 FY20 FY21 Change Amount % NR Amount % NR Amount % NR over LY Gross revenue 3,920 4,371 3,861 (11.7%) Net revenue 3,599 100.0% 4,023 100.0% 3,629 100.0% (9.8%) Direct costs 1,566 43.5% 1,715 42.6% 1,508 41.6% (12.0%) Contribution 2,033 56.5% 2,308 57.
Slide 38: Improving Operational metrics (1/2)
Improving Operational metrics (1/2) ARPOB(1) (INR/OBD) (‘000) Avg. Inpatient Occupancy (%) +5% -720 bps 57 72.1 72.5 76.2 51 51 51 64.9 67.8 69.8 46 47 46 45.1 FY19 FY20 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY19 FY20 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 ALOS(2) (in days) • During Covid-19, while the
Slide 39: Improving Operational metrics (2/2)
Improving Operational metrics (2/2) Inpatient procedures ('000) Day care procedures ('000) +4% -18% 241 249 109 232 93 62 72 80 63 34 12 15 17 18 FY19 FY20 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY19 FY20 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Outpatient consults (‘000) -21% • IP procedures and OP consu
Slide 40: Gross and Net Debt: MHC Network
Gross and Net Debt: MHC Network Sep’20 Dec‘20 Mar‘21 Figs in INR Cr Unsecured 644* 479* - Long term Secured 1,127 1,077 1,066 Gross debt Short term 82 49 62 Cash & cash equivalents (414) (290) (666) Net debt 1,439 1,315 462 Put option 549 552 82 Net debt with Put option 1,988 1,867 544 Net Debt with
Slide 41: Memorandum Consolidation of MHIL and Partner Healthcare Facilities financial results
Memorandum Consolidation of MHIL and Partner Healthcare Facilities financial results for year ended March 31, 2021 MHIL & its MHIL & it's subs Partner Healthcare Facilities ("PHF") Financials subsidiaries & Eliminations MHC Network (Apr & May 20) (IGAAP Audited) Silos & (Certified by (INR Cr) (Pre M
Slide 42: Balance Sheet
Balance Sheet (Includes Managed & Partner Healthcare Facilities) Figs in INR Cr Mar 201 Particulars Sep 202 Mar 212 3,386 Shareholders' Equity 4,293 5,738 1,927 Gross Debt 1,853 1,128 586 Put Option Liability 549 82 244 Lease Liabilities (Ind AS 116) 194 198 3 247 Deferred/Contingent Consideration P
Slide 43: Network structure
Appendix 2 Network structure 42
Slide 44: Network Structure
Network Structure Balaji Society (Max Patparganj) Max Shalimar Bagh Valid till 2065 Max Dehradun Medical Service Agreement with Max Panchsheel Society Immigration centre MHIL Devki Devi Society Max Saket (West) (Max Saket East, SBUs (MaxLab, Onco day care center) Max@Home) Valid till 2064 100.0% 100
Slide 45: About Us
About Us Max Healthcare Institute Limited (MHIL) is India’s second largest private hospital chain operator by revenue in Fiscal 2020. It is committed to the highest standards of medical and service excellence, patient care, scientific and medical education. For further information, please contact: M
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