Cleopatra Hospital Company · EGX:CLHO
Cleopatra Hospital — Cleopatra Hospitals Group — Q3 2022 Earnings Presentation
45 slides from Cleopatra Hospital's earnings presentation, 2022
Slide 1: Cleopatra Hospitals Group Investor Presentation 3Q 2022
Cleopatra Hospitals Group Investor Presentation 3Q’ 2022
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements, including, but not limited to, statements concerning expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating
Slide 3: Contents
CONTENTS 1 Macro Environment & CHG Investment Story 2 Performance Review 3 Business Updates 4 Governance & Shareholder Information 5 Appendix
Slide 4: Our Mission & Values
Our Mission & Values — We put our patients first by providing high quality healthcare services with a focus on patient safety and quality of outcomes while enhancing the quality of life of our patients — We focus on creating sustainable growth with positive measurable impact on our stakeholders and
Slide 5: A Unique Investment Story
A Unique Investment Story • Leading integrated healthcare • Group-wide tenders in provider in Egypt with track pharmaceuticals and medical record of acquiring and consumables that drive scale cost integrating leading operating efficiencies and improve margins hospital assets • Scale volume benefits
Slide 6: A Diversified Healthcare Services Group
A Diversified Healthcare Services Group • Cleopatra Hospitals Group is Egypt’s first and largest private hospital group by number of hospital beds and operating hospitals and consists of seven operational hospitals, 1 brownfield hospital, and two polyclinics in addition to a Other leading IVF Centre
Slide 7: CHG's Journey History & Timeline
CHG’s Journey History & Timeline The Evolution of CHG from a Single Asset into one of the Largest Hospital Platform in the Region The first asset and the Group’s Flagship CHG implements its first CHG announces Cleopatra Hospital, satellite feeder network to CHG signed a Letter of Intent brownfield p
Slide 8: Broad Network Coverage in Greater Cairo
Broad Network Coverage in Greater Cairo Leveraging a growing footprint, CHG continues to penetrate new segments of the population and provide high quality care to currently underserved areas of Greater Cairo Cleopatra Hospitals Group, is the largest private 9 hospital group in Egypt by number of bed
Slide 9: Diversified Service Offering and Revenue Stream
Diversified Service Offering and Revenue Stream CHG delivered a strong third quarter of 2022 with performance exceeding pre-pandemic levels in New Revenue Stream non-COVID-19-related business as of Q4 2022 71% 3% 18% 5% 3% Physical Therapy, Long Term Care and OUTPATIENT IVF - Fertility Solutions Reh
Slide 10: Clearly Defined Core Growth Strategy
Clearly Defined Core Growth Strategy Integrating the platform to Leveraging payor and achieve higher efficiencies supplier relationships Geographic expansion in Egypt Enhancing utilization and linked to following optimizing existing capacity Establish centers of while expanding capacities and the ma
Slide 11: Healthcare Provider of Choice
Healthcare Provider of Choice Creating a one-stop-shop that is seamlessly integrated across all our assets comes as a result of the Group’s persistence in keeping our patients at the center of everything we do, while at the same time ensuring to drive value to all CHG’s key stakeholders. With that f
Slide 12: CHG 3Q2022 Financial Highlights
CHG 3Q2022 Financial Highlights CHG reports a strong third quarter with robust growth in the Group’s core business lines despite no contribution from Covid-19 related income; Margins remained in line with the group’s historical EGP 661 mn ↑15% Consolidated revenues in 3Q2022 Non-COVID-19 related hig
Slide 13: 9M 2022 in Review
9M 2022 in Review Cleopatra Investor Presentation 3Q2022 13
Slide 14: Financial Performance in 3Q2022
Financial Performance in 3Q2022 Consolidated Group Revenues reported EGP 661mn in 3Q22, growing 6% versus the same period in 2021. This performance resulted in consolidated revenues of EGP 1,902mn in 9M 2022, entirely closing the gap from the previous quarter’s year-to-date decline considering the h
Slide 15: Direct vs. Indirect COVID Contribution
Direct vs. Indirect COVID Contribution Indirect COVID revenues include both, revenues generated by suspected COVID-19 patients at its regular facilities, as well as tests performed as part of the extraordinary protocols introduced during the pandemic (for example, chest CTs for all surgical patients
Slide 16: Patient Volumes Recovery Journey
Patient Volumes Recovery Journey The Group’s East and West Cairo polyclinics continue to outperform management’s expectations on all fronts, the Group’s polyclinics generated EGP 61mn in revenue during 9M 2022, recording growth of 12% compared to the same period in 2021. This growth comes on the bac
Slide 17: Group Revenue Contribution in 9M 2022
Group Revenue Contribution in 9M 2022 Cleopatra (CHC), Cairo Specialized (CSH), and Al Shorouk Hospitals (ASH) all witnessed consistent y-o-y growth in the 9M22 supported by expanding volumes and increasingly optimized case mix. NBH managed to close the gap in comparison to their performance in 2021
Slide 18: Financial Performance of Flagship Hospitals
Financial Performance of Flagship Hospitals Limited impact from the EGP devaluations in 2022 as the Group’s integration model framework enables CHG to maneuver and offset negative inflationary effects. CHG’s supply chain team had taken a decision starting Q4 of last year to build strategic stocks at
Slide 19: Key Revenue Drivers (i)
Key Revenue Drivers (i) CHG reported revenues of EGP 1,902 million in the nine months of 2022, flat against last year’s figure. This performance entirely closes the gap from the previous quarter’s year-to-date decline considering the high base effect of Covid-19 related serviced throughout last year
Slide 20: Key Revenue Drivers (ii)
Key Revenue Drivers (ii) Inpatients, Outpatients, and surgical procedures conducted continued to witness strong volume growth in line with management’s strategy to strengthen its presence in its core business hospitalization segments at 9%, 10%, 11% respectively year-to-date. CHG’s overall Cases Ser
Slide 21: Transformation Review
Transformation Review Cleopatra Investor Presentation 3Q2022 21
Slide 22: CHG's Expansions Progress
CHG’s Expansions Progress Expansionary Projects 2021 2022 2023 2024 Sky Hospital – Management agreement terms and Completion of hospital’s remaining Hospital’s first year of operations (25 Brownfield Project conditions were signed and works years management contract) with the announced • Outpatient
Slide 23: Market & Competition Analysis
Market & Competition Analysis Investment & Strategy Expand geographical presence in new underserved areas Patient Focused Marketing and product development Volume driven strategy aiming to attract both patients and cities (New Cairo , October) through Hospitals, with emphasis on patient experience,
Slide 24: Expanding CHG's Geographic Footprint
Expanding CHG’s Geographic Footprint Location 6th October 6th October location 2021 Location New Cairo # of Beds ~200 Project Completion 2024 Cleopatra Investor Presentation 3Q2022 24
Slide 25: Haven Hospital
Haven Hospital Facility Overview Legal Arrangement Current Service Offering Capex • 18-year usufruct • The largest operating • Estimated at EGP agreement with Haven facility in the Group 200mn, investments will Hospital’s owners with today, standing at be geared towards an option for renewal at c.30
Slide 26: CHG's Strategic Development Approach
CHG’s Strategic Development Approach Patient Operational Business Model Experience Efficiency Enhancements Systems Organic Volumes Digital Transformation & Processes & COEs Human Resources Further developing Focusing efforts on further establishing the Transformational personnel Leveraging technolog
Slide 27: The Group's Centers of Excellence
The Group’s Centers of Excellence Defining Centers of Excellence Select Examples of CHG’s Centers of Excellence Competitive Defined Scope & Sales Nursing & Residents Advantage & Focus Team Differentiation Consumables Medical Equipment & Payor Recognition Planning Technology Medical & Branding & Mark
Slide 28: Robotic Surgeries CoE
Robotic Surgeries CoE Advantages Vision On June 8, CHG became the first private healthcare provider in Egypt to introduce a robotic surgery unit within their network. Robotic surgeries are Increased Precision / Reduced a major step forward in the performance of advanced and complicated Risk Of surge
Slide 29: Oncology Center of Excellence
Oncology Center of Excellence Advantages Vision Management successfully concluded an agreement with one of Egypt’s leading Oncology practices, setting up a one of its kind Oncology Center of 360-degree One-stop of patients’ shop with Excellence across the Group’s hospitals. The agreement entails set
Slide 30: Nephrology Center of Excellence
Nephrology Center of Excellence Advantages Vision CHG’s management successfully finalized an agreement with one of the nation’s top Nephrology practices. By virtue of this agreement, Cleopatra 360-degree One-stop of patients’ shop with Hospitals Group will now expand its service offering with regard
Slide 31: Expanding CHG's Digitalization Agenda
Expanding CHG’s Digitalization Agenda The Group recognizes digitalisation as a key driver for future growth. Over the last few years, CHG has embarked on a digital transformation strategy, which aims to introduce the latest digital solutions available to enhance all aspects of the Group’s day-to-day
Slide 32: Digital Transformation Approach
Digital Transformation Approach Cleopatra Investor Presentation 3Q2022 32
Slide 33: Leveraging on Clinysis' Successful Roll-Out
Leveraging on Clinysis’ Successful Roll-Out Patients’ Engagement Platforms Website Social Media CHG Mobile App CHG Video Call App Appointment booking is also available Allows patients to book appointments on CHG’s mobile app across all of its online at all CHG hospitals and clinics. facilities. Cent
Slide 34: CHG's Forward-Looking Digitalization Agenda
CHG’s Forward-Looking Digitalization Agenda Big Data Management AI - Radiology (Clinical, Operational, Utilize AI for efficient reporting Financial) Providing consolidated reports across branches, deliver Valuable insights to the whole group & measure overall group performance. Patient Relationship
Slide 35: Governance & Shareholder Information
Governance & Shareholder Information Cleopatra Investor Presentation 3Q2022 35
Slide 36: Governance (I)
Governance (I) The Group’s Board of Directors provides the necessary oversight and combination of expertise to thoroughly oversee the Group’s corporate governance framework, a cornerstone of the Group’s long-term success and value creation. Board of Directors The Group’s board of directors includes
Slide 37: Governance (II)
Governance (II) OPERATIONS ABC No Referral Fees Medical Council • CHG has a zero-tolerance approach to bribery and • CHG does not pay any referral fees or kickbacks to • CHG recently launched a group-wide medical council corruption with a clear anti-bribery and anti-corruption physicians and instead
Slide 38: CLHO Trading Analysis
CLHO Trading Analysis CHG’s 2022 Price Performance (Rebased to 100) 130 30,000,000 17.7x 13.3x 110 25,000,000 EV/EBITDA 8.9x 9.1x Valuation 90 20,000,000 Multiples (x) 15,000,000 70 10,000,000 FY 2019 FY 2020 FY 2021 Q3 2022 50 5,000,000 36.3x 30 - 25.6x P/E 17.7x 15.9x Valuation Multiples (x) CLHO
Slide 39: Appendix
Appendix Cleopatra Investor Presentation 3Q2022 39
Slide 40: Balance Sheet and Leverage
Balance Sheet and Leverage Balance Sheet Summary Cash Flow Bridge for 9M 2022 EGPM Cash Flow Bridge in EGPM Balance Sheet Summary Dec-21 Sep-22 Cash 846 364 Inventory 51 91 Debtors & other Debt balance 576 595 Current Assets 1,473 1,050 Intangible Assets 426 424 Non-Current Assets 1,534 1,684 Total
Slide 41: Cash Conversion Cycle
Cash Conversion Cycle Days Inventory Outstanding (DIO) Days Credit Sales Outstanding (DSO) DIO DSO 95 59 83 77 35 33 Sep-21 Dec-21 Sep-22 Sep-21 Dec-21 Sep-22 Days Payables Outstanding (DPO) Cash Conversion Cycle DPO Cash Conversion Cycle 124 30 102 101 16 8 Sep-21 Dec-21 Sep-22 Sep-21 Dec-21 Sep-22
Slide 42: Consolidated Income Statement
Consolidated Income Statement All figures in EGP mn 3Q2021 3Q2022 % change 9M 2021 9M 2022 % change Revenues 623.8 660.5 6% 1,900.6 1,902.2 0% Cost of sales (414.2) (438.9) 6% (1,210.2) (1,266.5) 5% Gross profit 209.7 221.6 6% 690.4 635.7 -8% Gross Profit Margin 34% 34% 36% 33% General & administrat
Slide 43: Consolidated Balance Sheet
Consolidated Balance Sheet All figures in EGP mn 31 December 2021 30 September 2022 Non-current assets Fixed assets 1,351.7 1,508.7 Intangible assets 425.5 424 Right of use 174.7 156.5 Payment under investment 5.7 16.7 Investment in associates 2.2 2.2 Total non-current assets 1,959.8 2,108.1 Current
Slide 44: Consolidated Cashflow Statement
Consolidated Cashflow Statement All figures in EGP mn 30 September 2021 30 September 2022 Cash flow from operating activities: Profit before tax 389.4 336.9 Adjustments for: Depreciation 83.5 97.4 Amortization of intangible assets 11.9 11.9 Allowance for impairment of current assets 33.3 (31.6) Prov
Slide 45: Thank you
Thank you INVESTOR RELATIONS CONTACTS SHAREHOLDER INFORMATION Telephone: +2 01000077893 EGX: CLHO.CA E-mail: waleed.hamed@cleohc.com Listed: June 2016 https://www.cleopatrahospitals.com/en/investors/ Shares Outstanding: 1.6 billion Cleopatra Investor Presentation 3Q2022 45
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