Slide 1: IDH Results Presentation
IDH Results Presentation September 2023
Slide 2: Table of Contents
Table of Contents IDH At a Glance 1H 2023 Results Overview Key Investment Highlights Our Market Our Business Model Financial Position and Performance Growth Strategies Governance 2 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 3: Who We Are (I/II)
Who We Are (I/II) Integrated Diagnostics Holding is a leading, fully-integrated provider of high-quality medical diagnostic services with a footprint spanning Egypt, Jordan, Nigeria, Sudan, and Saudi Arabia An integrated diagnostics provider… Pathology Radiology Immunology Microbiology Haematology E
Slide 4: Who We Are (II/II)
Who We Are (II/II) The Company’s reach, scale, and service quality are unmatched across its markets of operation Track Record Accreditations +40 years Sole CAP & ACR Accredited lab and scan First lab established in 1979 in Africa Jordan Patients Test Portfolio c.10 MN +3,000 Egypt Per year Tests Sau
Slide 5: Our Service Segments
Our Service Segments IDH’s pathology offering currently contributes the lion share of revenue and patients. The Company’s radiology services are quickly gaining momentum with their contribution to IDH’s top-line doubling in the last twelve months Pathology – 94% of Revenues1 Radiology – 6% of Revenu
Slide 6: Our Geographies
Our Geographies IDH currently operates the largest branch network amongst private providers in Egypt and boasts an established presence in four key markets in the Middle East and Africa Egypt Jordan Nigeria Sudan 1979 531 2011 27 2018 12 2011 18 First began Branches (51% in Acquisition Branches Acqu
Slide 7: Our Patients
Our Patients IDH serves two principal types of patients: contract and walk-in Around 70% of total revenue generated across the two segments is paid in cash Contract Patients1 Walk-In Patients IDH’s contract clients include institutions who enter into one-year IDH’s walk-in clients, also referred to
Slide 8: IDH Post Covid-19: A new chapter (I/II)
IDH Post Covid-19 : A new chapter (I/II) During the Covid-19 era, IDH successfully transformed its business, expanding its service offering and delivery capabilities, and setting the foundation for a new chapter of sustainable growth, testament to its business agility and resilience Test Offering an
Slide 9: IDH Post Covid-19: A new chapter (II/II)
IDH Post Covid-19: A new chapter (II/II) During the Covid-19 era, IDH successfully transformed its business, expanding its service offering and delivery capabilities, and setting the foundation for a new chapter of sustainable growth, testament to its business agility and resilience Improved Efficie
Slide 10: 1H 2023 Results Overview
1H 2023 Results Overview 10 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 11: A Turbulent Operating Environment
A Turbulent Operating Environment IDH continues to post impressive financial and operational results despite difficult economic circumstances across its markets A weakening Egyptian pound | EGP:USD Record-high inflation eating at patients’ purchasing power 30.9 36.5% 30.9 30.9 30.9 30.8 30.7 35.7% 3
Slide 12: Results Snapshot
Results Snapshot IDH reports sustained growth in traditional offering showcasing the fundamental strength and potential of the business EGP 1,872 mn EGP 658 mn EGP 462 mn EGP 211 mn Revenue1 in 1H 2023 Gross Profit in 1H 2023 EBITDA2 in 1H 2023 Net Profit in 1H 2023 ▲ 40% y-o-y conventional revenue
Slide 13: Sustainable Growth Despite Seasonality
Sustainable Growth Despite Seasonality IDH’s conventional business stood 85% above pre-pandemic levels in 1H 2023 showcasing the strength and potential of its underlying business Conventional revenues continue growing solidly supported by higher Conventional revenue per test currently stands 48% abo
Slide 14: Continued Growth at Egypt's Radiology Venture
Continued Growth at Egypt’s Radiology Venture Al Borg Scan, Egypt’s radiology venture, continues posting impressive top-line growth on the back of increased test volumes and higher average revenue per test Sustained growth in radiology revenues… …on the back of increased test volumes… (Scans perform
Slide 15: Profitability Overview
Profitability Overview Lower profitability down the income statement largely reflects increases in salary and wage expenses, increases in IDH’s marketing expenses to support the rollout of new branches, and increased inflationary pressures as a result of a weakened EGP IDH recorded only a modest ris
Slide 16: Non-Recurring Items in 1H-2023
Non-Recurring Items in 1H-2023 IDH booked higher EBITDA profitability than reported figures due to several one-off expenses recorded during the period Normalized EBITDA EGP 483 mn 26% margin One-offs +EGP 12 million +EGP 2 million +EGP 1 million EGP 8 million Losses on expired Information Strategy T
Slide 17: Revenue – EBITDA Bridge
Revenue – EBITDA Bridge 1H 2023 IDH Revenue - EBITDA Bridge | M-EGP 1H 2023 Raw Material Wages & Salaries Advertising Provisions USD linked Others 1H 2023 EBITDA One Offs 1H 2023 Revenue Expenses Adjusted EBITDA 1H 2022 IDH Revenue - EBITDA Bridge | M-EGP 20% 21% 3% 1% 1% 17% 36% 36% 1H 2022 Raw Mat
Slide 18: EBITDA – Net Profit Bridge
EBITDA – Net Profit Bridge 1H 2023 IDH EBITDA – Net Profit Bridge | M-EGP Earnings Before Tax | M-EGP Income & Deferred Tax, Effective Tax Rate | M-EGP, % 650 (211) 32% 51 309 (98) 32% 25% 11 160 88 28% 1H 2022 1H 2023 1H 2022 1H 2023 Income Tax Deferred Tax 18 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 19: Solid Financial Position
Solid Financial Position The Group maintains a robust financial position, with a liquid balance sheet thanks to a strong cash generation profile allowing for consistent dividend payouts Consolidated Cash Balance | EGP mn Net Debt Balance* | EGP mn Gross Fixed Assets | M-EGP -18% +9% 816 666 2,208 2,
Slide 20: 1H 2023 Capital Expenditure
1H 2023 Capital Expenditure IDH CAPEX recorded EGP 203.8m in 1H FY23, including both, core recurring CAPEX items and non-core non-recurring items. This figure represented 10.9% of 1H FY23 total revenues. 6.3% 1.2% 0.08% 0.7% 1.8% 0.8% % of Net New Branches & Currency Revenue Warehouse IDH HQ Others
Slide 21: Fixed Gross Assets Bridge
Fixed Gross Assets Bridge IDH Fixed Gross Assets Bridge by Account | M-EGP M-EGP 204 10.9% of total 1H 2023 revenue (8.3% excluding BG scan and translation) IDH Fixed Gross Assets Bridge by Region | M-EGP 21 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 22: Segment Performance
Segment Performance Both IDH’s contract and walk-in segments witnessed significant conventional revenue growth in 1H 2023. Conventional revenue growth at IDH’s contract segment was dual driven by increases in test volumes and average revenue per test, while walk-in segment revenues were entirely dri
Slide 23: Segment Performance
Segment Performance IDH’s contract segment maintained its growth trend, remaining the major contributor to overall revenue and patient volumes in 1H 2023 Revenue Split Patient Split 21% 36% 33% 44% 1H 2022 1H 2023 1H 2022 1H 2023 56% 64% 67% 79% Walk-in Corporate Walk-in Corporate Walk-in Corporate
Slide 24: Regional Performance (I/II)
Regional Performance (I/II) IDH booked strong conventional revenue growth, with operations from its two biggest markets, Egypt and Jordan, continuing to post significant top-line expansion Revenue |M-EGP| Gross Profit |M-EGP| EBITDA |M-EGP| EGYPT 728 1,524 384 ▼1% 1,514 ▼20% 584 622 ▼35% 407 80.9% 1
Slide 25: Regional Performance (II/II)
Regional Performance (II/II) Patients | ‘000 Tests | ‘000 Test per Patient | ‘000 Revenue per Test | ‘000 ▼3% ▲6% 15,109 107 ▼7% 100 14,192 Egypt 419 3,755 916 ▲14% 15,109 ▲9% 4.1 ▲17% 100 3,651 13,276 86 3.8 1H 2022 1H 2023 1H 2022 1H 2023 1H 2022 1H 2023 1H 2022 1H 2023 1,594 ▼73% ▼26% ▲2% 502 1,1
Slide 26: Regional Performance: Local Currency
Regional Performance: Local Currency Revenue | M-LCY Gross Profit | M-LCY EBITDA | M-LCY ▼1% 728 ▼20% 622 584 Egypt ▼35% 407 1,524 1,514 48% 39% 41% 27% 1H 2022 1H 2023 1H 2022 1H 2023 1H 2022 1H 2023 4 4 ▼50% ▼60% Jordan 2 ▼60% 2 14 26% 26% 7 1H 2022 1H 2023 1H 2022 1H 2023 1H 2022 1H 2023 -3% -10%
Slide 27: Continued Growth at Echo-Lab (Nigeria)
Continued Growth at Echo-Lab (Nigeria) IDH’s Nigerian operations reported year-on-year revenue growth of 19% in NGN terms in 1H 2023. Top-line growth was supported by a 18% year-on-year increase in average revenue per test (in local currency terms) in part reflecting the rising demand for the genera
Slide 28: Continued Ramp up at Al Borg Scan
Continued Ramp up at Al Borg Scan Robust revenue growth continued to be supported by higher test and patient volumes as the four new branches rolled out since September 2021 continue to ramp up. In August, Al-Borg Scan obtained ACR accreditation for its Nuclear Medicine and Ultrasound units. EGP 63
Slide 29: Sudan's Conflict Continues to Impact Operations
Sudan’s Conflict Continues to Impact Operations Sudanese Conflict Updates On April 15, 2023, violent conflict erupted between two rival groups in Sudan: the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF). As of 22 July 2023, between 3,000 to 10,000 people had been killed and 6,000 to
Slide 30: Outlook and Strategies (I/II)
Outlook and Strategies (I/II) In IDH’s home and largest market of Egypt, the Company’s priorities for the remainder of the year remain unchanged. Starting May, the Company saw a strong acceleration in revenues and volumes which has since carried through into July and August. Pricing Volumes Raw Mate
Slide 31: Outlook and Strategies (II/II)
Outlook and Strategies (II/II) Similar to Egypt, Jordan has seen a sustained acceleration starting in May and carrying through into July and August. Meanwhile, IDH is gearing up to launch its first two Saudi branches in December Jordan - Double-digit growth in LCU terms driven by solid volumes FY 20
Slide 32: Investment Highlights
Investment Highlights 32 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 33: Investment Highlights
Investment Highlights IDH is an attractive investment opportunity with compelling fundamentals, present in fast- growing, under-served markets 1 Operating in highly fragmented markets characterised by strong structural growth drivers and high barriers to entry ✓ Deploys an asset-light business model
Slide 34: Fast-Growing, Underserved Markets
Fast-Growing, Underserved Markets 34 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 35: Favorable Industry Dynamics
Favorable Industry Dynamics IDH’s home market of Egypt is underpinned by robust structural growth drivers Lab tests per capita (2012) High Disease Burden Operating in a still under- 23.2 penetrated market The Egyptian population is marked by a high incidence of lifestyle- related medical conditions,
Slide 36: Favorable Industry Dynamics
Favorable Industry Dynamics IDH’s markets are characterised by high barriers to entry Economies of Scale Accreditation of Brand & Reputation Market Reach Key Stakeholder Facilities Relationships IT-enabled platform, Attracting patients Patients are loyal to Fragmented markets Building a scalable cri
Slide 37: IDH is a Consumer-Facing Service Provider
IDH is a Consumer-Facing Service Provider The mechanics of healthcare markets in developing economies are markedly different from those in many Western healthcare industries IDH serves the private healthcare A hospital outpatient clinic or Perceived quality and safety market, where notably patients
Slide 38: Scalable Business Model
Scalable Business Model 38 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 39: Asset-light Business Model
Asset-light Business Model IDH’s “Hub, Spoke and Spike” business model enables the Company to organically expand its reach in highly- fragmented markets with underserved diagnostic services demand Mega Lab: “Hub” • The Mega Lab, the largest automated lab in Egypt, serves as IDH’s diagnostic “Hub,” e
Slide 40: Our Mega Lab
Our Mega Lab IDH’s Mega Lab is the only CAP-accredited facility in Egypt, demonstrating the excellence of IDH’s patient care and confidence in the laboratory’s practices Capabilities Capacity • Mega Lab machines are capable of conducting a wide range of tests. • IDH’s Mega Lab doubled testing capaci
Slide 41: Key Supplier Relationships
Key Supplier Relationships IDH leverages its bargaining power with suppliers to maximize value in a business that is fundamentally about economies of scale. Combined with the long-tenure nature of its supplier contracts, this provides significant protection against short-term price fluctuations. Dyn
Slide 42: Strong Growth and Financial Position
Strong Growth and Financial Position 42 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 43: Key Financial Performance Indicators
Key Financial Performance Indicators Since the Company’s IPO on the LSE in 2015, IDH has delivered consistent top- and bottom-line growth supported by a steady increase in volumes and increasingly favourable pricing across the Group’s service offering Revenues | EGP mn - CAGR Gross Profit, GPM | EGP
Slide 44: Key Financial Performance Indicators (USD)
Key Financial Performance Indicators (USD) IDH has successfully delivered positive top- and bottom-line growth in USD terms since listing on the LSE despite several devaluations and a difficult operating environment USD/EGP 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 01/07/2016 01/11/2018 01/11/2019 01/01
Slide 45: Regional Performance (I/II)
Regional Performance (I/II) Across its footprint, the Company deploys tailored expansion strategies which enable it to continue driving growth irrespective of the prevailing macroeconomic environment Revenue |M-EGP| EBITDA* |M-EGP| CAGR: 18% CAGR: 14% EGYPT 4,108 2,206 2,894 EGYPT 1,251 1,613 1,903
Slide 46: Regional Performance (II/II)
Regional Performance (II/II) Across its footprint, the Company deploys tailored expansion strategies which enable it to continue driving growth irrespective of the prevailing macroeconomic environment Patients | ‘000 Tests | ‘000 CAGR: 5% CAGR: 5% 8,467 7,612 6,881 5,927 6,505 6,301 26 28 30 30 80.3
Slide 47: Growth Strategies
Growth Strategies 47 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 48: Future Growth Strategies
Future Growth Strategies IDH’s growth strategies rely on leveraging its competitive advantages to achieve four strategic goals Expand Customer Reach Expand Geographically Beyond opening laboratories in new In addition to organic expansion, the Company geographies, IDH is reaching out to new continue
Slide 49: Expanding Customer Reach – Growing In Egypt
Expanding Customer Reach – Growing In Egypt The Group enjoys ample growth room in Egypt thanks to its market leading position and extensive reach, attractive underlying fundamentals, and favourable regulatory environment Reach and penetration Solid Fundamentals Universal Healthcare Act New growth op
Slide 50: Diversifying Service Offering – Al Borg Scan Ramp-Up
Diversifying Service Offering – Al Borg Scan Ramp-Up IDH’s radiology venture, Al Borg Scan, continues expanding its top line on the back of increased test volumes and average revenue per test 2018 6 branches EGP 235 mn 398 k Covering Cairo from East to West Revenue Scans Performed Fastest growing ch
Slide 51: Diversifying Service Offering – Al Borg Scan Expansion Updates
Diversifying Service Offering – Al Borg Scan Expansion Updates Al Borg Scan operates six branches, two of which were inaugurated in 2022. The Group also recently earned the prestigious ACR (American College of Radiology) accreditation for Al Borg Scan’s Nuclear Medicine and ultrasound units. Rationa
Slide 52: Al Borg Scan Maintains Growth Trajectory
Al Borg Scan Maintains Growth Trajectory IDH’s Egyptian radiology venture, Al Borg Scan, continues expanding its top-line and expanding its contribution to Egypt revenues, driven by sustained increases in test volumes and higher revenue per test Revenue, % of Egypt revenues | Scans Performed | ‘000
Slide 53: House Call Services (Egypt and Jordan)
House Call Services (Egypt and Jordan) IDH’s house call services, offered in both Egypt and Jordan, is becoming a primary contributor to top-line, averaging 15- 20% compared to a pre-pandemic contribution of c.10% House call services witnessed rising demand during the Covid-19 pandemic Expands Reach
Slide 54: Expanding Customer Reach – State-sponsored Initiatives
Expanding Customer Reach – State-sponsored Initiatives IDH’s nationwide presence and strong brand equity position it well to benefit from state-sponsored campaigns to increase awareness of preventative healthcare with diagnostic testing Duration Revenue Generated 8 months EGP 84 mn Nov ‘18 – Jun ‘19
Slide 55: Expanding Customer Reach – IDH Awareness Campaigns
Expanding Customer Reach – IDH Awareness Campaigns Parallel to state-sponsored initiatives, IDH also runs its own awareness campaigns focusing on specific diseases on a monthly basis and offering discounts on related testing IDH’s PCR Offers and Campaigns Discounts on PCR PCR testing for testing for
Slide 56: Diversifying Service Offering – New Investment in Wayak
Diversifying Service Offering – New Investment in Wayak IDH launches new subsidiary “Wayak” to offer data-driven healthcare services, utilising data analytics and artificial intelligence to capitalise on IDH’s database of over c.13 million patients Wayak Services Medication to be Service provider On
Slide 57: Growing Geographic Footprint – Investment Rationale
Growing Geographic Footprint– Investment Rationale IDH’s regional expansion strategy targets acquisitions in African, Middle Eastern and Asian markets where it can deploy its proven business model and generate accretive value Growing economies and strong Similar healthcare market structure to demogr
Slide 58: Growing Geographic Footprint – Nigeria Expansion
Growing Geographic Footprint – Nigeria Expansion In December 2017, IDH further expanded its geographical footprint with an investment in Nigeria, a value-accretive acquisition in a large, fragmented and underpenetrated diagnostic services market where our business model is well-suited to capitalise
Slide 59: Nigeria Branch Roll-Out and Renovations
Nigeria Branch Roll-Out and Renovations Opebi Branch Renovation and Rebranding New Victoria Island Branch Area 11 Branch Renovation and Rebranding Benin Branch Renovation & Rebranding 59 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 60: Growing Geographic Footprint – KSA Expansion
Growing Geographic Footprint – KSA Expansion In October 2022, IDH and Biolab signed a joint venture agreement with Izhoor, a company owned by Fawaz Alhokair, to launch a full-fledged pathology diagnostic services provider in Saudi Arabia Deal Structure Deal Specifics The new joint venture will be ow
Slide 61: Strong Leadership & Governance
Strong Leadership & Governance 61 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 62: Governance
Governance A World-Class Board of Directors The majority of members of IDH’s Board of Directors are independent and offer significant experience in the healthcare market, MENA region and investment activities Lord St John of Bletso 1 Prof. Dr. Hend El Sherbini Hussein Choucri 1,2,3 Independent Non-E
Slide 63: Governance
Governance IDH is committed to implementing best practices in corporate governance through the expertise of both the individual Directors and outside parties Anti-Bribery and Anti Corruption Internal Audit Procedures While not required to comply with UK Policy (ABAC) Corporate Governance Code, IDH a
Slide 64: Sustainability
Sustainability Founded on the principle of providing quality medical assistance and services to better the lives of individuals and the community at large, IDH views corporate responsibility initiatives as an extension of its core purpose with the aim of improving communities in which it does busine
Slide 65: Appendix
Appendix 65 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 66: IDH Development Story
IDH Development Story Over 40 years of industry experience, complemented by strategic expansion to develop a strong market position across products and geographies. Today IDH has built a scalable platform that is positioned for further strong growth 1979 1990 2008 2011 2012 2013-14 Establishment of
Slide 67: IDH
INTEGRATED DIAGNOSTICS HOLDINGS IDH