AfroCentric Investment Corporation Limited · JSE:ACT
AfroCentric Investment — FY2022 Earnings Presentation
29 slides from AfroCentric Investment's earnings presentation, Sep 14, 2022
Slide 1: 14 September 2022
14 SEPTEMBER 2022
Slide 2: Chairman: Dr Anna Mokgokong
CHAIRMAN: AfroCentric Group Dr Anna Mokgokong
Slide 3: Group CEO: Ahmed Banderker
GROUP CEO Ahmed Banderker
Slide 4: Summary View of Results
SUMMARY VIEW OF RESULTS Year ended 30 June 2022 SERVICE RETAIL TOTAL R’m R’m R’m Revenue 4 319 4 403 8 722 Growth to prior year 12.7% 3.8% 8% Operating profit 708 336 1 044 Growth to prior year (2.4%) 9.7% 1.2%
Slide 5: Context
CONTEXT Global and local influences POSITIVE RATE ECONOMICS CHRONIC CARE GLOBAL OF COVID AND INFLATION IMPACTED BY SUPPLY CHAIN RECEDING PANDEMIC INTERRUPTIONS Ensuring But care has been affordability Now monitoring and Some minor pharma interrupted… managing incidents, but managing with • Impact of
Slide 6: Covid Impact on Medical Schemes
COVID IMPACT ON MEDICAL SCHEMES Membership and delayed healthcare costs 7 LARGEST OPEN SCHEMES Principal members 0.7% -2.0% 1.3% Beneficiaries 2018 0.3% 2019 -2.0% 2020 0.4% 2021 Claims per member per month* 5.7% 2.3% 15.2% 21% 20% 19% 14% 14% 13% 9% 2018 2019 2020 2021 Average solvency* 29.46% 8.8%
Slide 7: Covid Impact on Pharma
COVID IMPACT ON PHARMA Care interrupted - Chronic conditions and medication sales Decline in dispensing of Chronic and HIV related medicines MOZITEC AND SUPIROBAN SALES in South Africa’s courier channel during data period MAT July 2022 Schedule 3-6 only FY20 vs FY21 vs FY22 120 R70 100 R60 80 R50 60
Slide 8: Covid-19 Vaccines – Giving Back
COVID-19 VACCINES – GIVING BACK AfroCentric Group participated in SA National Vaccination programme TOTAL VACCINES 210 503 ADMINISTERED R30 MILLION WORTHWHILE INVESTMENT (R25m in 2022) 83.4% 16.6% The number of lives saved, and reduced downstream costs for our administered schemes. INSURED UNINSURED
Slide 9: Cluster Financials
CLUSTER FINANCIALS Growing profit diversification REVENUE OPERATING PROFIT 5 YR 5 YR R’000 CAGR R’000 CAGR 20% 13.8% 1 200 000 10 000 000 9 000 000 1.2%* 8% 1 000 000 8 000 000 18% 30% 32% 7 000 000 800 000 6 000 000 29% 29% 52.5% 50.5% 5 000 000 600 000 19% 4 000 000 3 000 000 49.5% 400 000 47.5% 2
Slide 10: Medscheme – Operational Effectiveness
MEDSCHEME – OPERATIONAL EFFECTIVENESS MEMBERSHIP +37 612 GEMS lives 3.8 million lives in 2022 EFFECTIVENESS GAINS AUTOMATION DIGITAL HEADCOUNT PER RATE UTILISATION MEMBER • 141 000 automated HBM Up >40% at ~ 1.2 million driven by • 200 headcount improvement pre-authorisations 0.82 per 1000 lives (5.
Slide 11: Pharma Savings for Client Schemes
PHARMA SAVINGS FOR CLIENT SCHEMES Chronic, Acute, HIV and Oncology Medicine INTEGRATED MEDICINE DELIVERY MODEL Methodologies employed Risk transfer and fee for service solutions Medical Scheme Case Study Programme implementation Effective pharmacy network management 2019 – Chronic and acute medicine
Slide 12: Sanlam Partnership
SANLAM PARTNERSHIP New Sanlam structure Sanlam investment into new business capability for AfroCentric Open Schemes and Corporate Wellness Solutions RETAIL DISTRIBUTION CORPORATE • Healthcare accreditation drive • AfroCentric Corporate Wellness for Sanlam Advisors Solutions rebranded to Sanlam and i
Slide 13: Sanlam Partnership: Corporate Solutions
SANLAM PARTNERSHIP AfroCentric Corporate Solutions CORPORATE WELLNESS SOLUTIONS • Sanlam GAP Cover • Sanlam Primary Care • Sanlam Employee Assistance Programme AfroCentric Corporate Solutions • Sanlam COVID-19 Screening and Vaccinations offer a wide range of healthcare • Sanlam Primary Care Clinics
Slide 14: Sanlam Partnership: Key Projects
SANLAM PARTNERSHIP Key Projects Integrated Primary Care Sanlam GAP Core Clinics & Primary Care and “Free-to-member” Insurance solution for options launched corporates Integrated Sanlam Wellness Primary Care Insurance offering comprising of Onsite solutions tailor-made for Sanlam Clinics, Mental Well
Slide 15: Segmental Review and Financial Highlights
SEGMENTAL REVIEW AND FINANCIAL HIGHLIGHTS GROUP CFO Hannes Boonzaaier
Slide 16: Segmented Operating Profit and Diversification Drive
SEGMENTED OPERATING PROFIT AND DIVERSIFICATION DRIVE Sustained Performance - Operating profit (Rm) Revenue YOY movement 1200 1 032 1 045 3.8% 1000 875 CAGR increase in Retail cluster revenue. Affected largely by non adherence to 30% 32% chronic medication 800 678 29% 600 623 17% + 13.8% 11% Healthca
Slide 17: Normalised Trading View Excluding Non-Recurring Items
NORMALISED TRADING VIEW EXCLUDING NON-RECURRING ITEMS Non-recurring events which occurred during the period to date: Vaccination programme investment (R25m) Impact of non adherence to chronic medication as at 31 December (R22m) NORMALISED TRADING VIEW Normalised trading As reported Normalised tradin
Slide 18: Year View of Profit Before Tax
4 YEAR VIEW OF PROFIT BEFORE TAX Amortisation Increase Increase OPERATING PROFIT NET FINANCE COSTS DEPRECIATION / AMORTISATION YOY Increase (R'm) (%) R'm 1 032 1 045 R'm 17 R'm Administration 875 -27 -25% 1% 17% Systems 687 18% 21% 231 29% 195 Dossiers and PPA 2019 2020 2021 2022 164 intangible asse
Slide 19: Scheme Membership
SCHEME MEMBERSHIP • Overall, membership is under pressure due to affordability and profile of members. • Steady growth from GEMS, but notable losses from various Closed Schemes. SCHEME MEMBERSHIP DISTRIBUTION OF BENEFICIARIES BY LARGE SCHEMES (‘million) (‘000) 2500 1% 3,9 4% -2% 1% -1% 2073 3,8 1990
Slide 20: Segmented Financial Reporting Structure - Services
SEGMENTED FINANCIAL REPORTING STRUCTURE - SERVICES Medical Aid administration, Risk management & Technology: Concentrating on improving the operational delivery model of services REVENUE OPERATING COSTS R'm R'm Annotations 4 319 3 611 3 838 3 878 3 834 3 198 3 258 3 109 2 911 2 355 Revenue increase
Slide 21: Scripts Dispensed - Retail
SCRIPTS DISPENSED - RETAIL Scripts dispensed Price pressure and non-adherence to scripts 1400000 Increased non adherence by chronic patients post COVID-19 decreasing chronic medicine sold and dispensed, with continued 1200000 reduction in the single-exit price, especially on ARV’s. 142 842 169 022 1
Slide 22: Retail Cluster Operating Profit
RETAIL CLUSTER OPERATING PROFIT Operating profit (Rm) Resilient performance with profits up 10% 400 ∆ 10 % Retail cluster diversification strategy yielding results in a 350 336 challenging operating environment • Operating profits up 10% to R336m from R306m in 2021 300 306 60 CAGR • Retail cluster p
Slide 23: Segmented Financial Reporting Structure – Retail
SEGMENTED FINANCIAL REPORTING STRUCTURE – RETAIL PHARMA: Performance supported by diverse customer base in private and public sector. Outlook REVENUE OPERATING COSTS Outlook remains optimistic with strategic Capitation Income Capitation Income growth initiatives focused on realizing 5 000 4,403 5 00
Slide 24: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION SIGNIFICANT MOVEMENTS WORKING CAPITAL R'm 2022 2021 2020 2021 2022 INVENTORY (R’m) TRADE AND OTHER PAYABLES (R’m) 76 298 361 1 558 1 518 776 199 422 437 139 1 407 651 432 613 1 375 Goodwill Intangible Cash Borrowings Deferred - 100 200 300 400 500 - 200 400 600 800 as
Slide 25: Group Performance – Investor Dashboard
GROUP PERFORMANCE – INVESTOR DASHBOARD 5 YR CAGR 20% CASH GENERATION Total Revenue (R’m) 10 000 9 000 8 000 7 000 6 000 5 000 1 013 4 000 1 102 3 000 663 2 000 939 450 1 000 0 552 2016 2017 2018 2019 2020 2021 2022 775 491 651 386 396 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021
Slide 26: Group Performance – Investor Dashboard
GROUP PERFORMANCE – INVESTOR DASHBOARD 5 Yr CAGR 5% 5 Yr CAGR 4% 15 20 400 70 18 14,5 16 350 60 14 14 300 50 12 250 13,5 40 10 200 13 30 8 150 6 12,5 20 100 4 10 12 50 2 0 0 11,5 0 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022 Normalised Headline Earnings (R’m) Normalised HEP
Slide 27: Group Performance – Investor Dashboard
GROUP PERFORMANCE – INVESTOR DASHBOARD 700 40 600 35 30 2016 2017 2018 2019 2020 2021 2022 500 25 3 589 3 634 3 674 3 714 3 754 3 735 3 790 1% 400 20 300 2 033 4 187 6 428 8 697 10 262 13 542 13 911 21% 15 200 10 Membership (lives managed) (‘000) 100 5 Scripts dispensed (‘000) 0 0 2016 2017 2018 201
Slide 28: Q&A's
Q&A’s AfroCentric GROUP
Slide 29: Thank You
THANK YOU 14 SEPTEMBER 2022
AfroCentric Investment — FY2022 Earnings Presentation on 6ix