Mlp Saglik Hizmetleri As Class B · BIST:MPARK
Mlp Saglik Hizmetleri As Class B — MLP Care — HSBC GEMs Investor Forum 2018, New York
39 slides from Mlp Saglik Hizmetleri As Class B's conference presentation, Jun 5, 2018
Slide 1: HSBC GEMs Investor Forum 2018, New York
HSBC GEMs Investor Forum 2018, New York 4 – 5 June 2018
Slide 2: Disclaimer
Disclaimer This presentation may contain certain forward-looking statements concerning MLP Care’s future performance and should be considered as good faith estimates made by the Company. These forward-looking statements reflect management expectations and are based upon currently available data. Act
Slide 3: Overview of MLP Care
VA MEDICALPARK MEDICALPARK V1/nospiTaL Overview of MLP Care
Slide 4: MLP Care: The #1 Private Hospital Group in Turkey
MLP Care: The #1 Private Hospital Group in Turkey 17 Cities 31 Hospitals; 5.900+ Beds; More than the #2 2x the size of 2nd Largest 17.000+ Staff and #3 Competitors Combined Competitor 2.000+ Doctors Addresses All Price Segments 3 JCI Accredited Hospitals Revenues:2.6 billion TL 1 in the Turkish Mark
Slide 5: Attractive double-digit historical growth
Attractive double-digit historical growth Net Sales (TLm) EBITDA¹ (TLm) EBITDAR¹ (TLm) %19 %25 %26 CAGR 2014-2017 CAGR 2014-2017 CAGR 2014-2017 • Acquisition of 6 • Openings of VM hospitals • 2 brand new • Opening of a Medical Park (2 of which are in hospitals in • Opening of a University Hospital P
Slide 6: MLP Care is the Leading Private Hospital Group in Turkey
MLP Care is the Leading Private Hospital Group in Turkey 1 Operates in the Attractive Turkish Healthcare Market 2 Clear Leader in Private Hospital Provision 3 Strong Brand Recognition and Unique Business Model Addressing All Price Points 4 Clinical Excellence and World Class Service Offering 5 Super
Slide 7: Operates in the Attractive Turkish Healthcare Market
1 Operates in the Attractive Turkish Healthcare Market Turkey is an attractive healthcare market with a growing elderly population and level of affluence, with significant scope for expansion compared to OECD players Turkish Healthcare Spending to Providers1 (TLbn) Growth in Aging Turkish Population
Slide 8: Operates in the Attractive Turkish Healthcare Market: private share
1 Operates in the Attractive Turkish Healthcare Market Private operators have increased their market share, by increasing capacity and by focusing on procedures with higher complexity. Private players now account for 21% of beds, but provide 53% of complex surgeries. Number of Inpatient Visits (m) N
Slide 9: Supportive government policies and healthcare system
1 Operates in the Attractive Turkish Healthcare Market Supportive government policies have underpinned the expansion of private hospital groups Healthcare system and key participants Universal Healthcare Coverage with Patient Choice Regulation Funding Service Patients Universal healthcare coverage (
Slide 10: Clear Leader in Private Hospital Provision
2 Clear Leader in Private Hospital Provision MLP Care is the largest multi-specialty hospital group in Turkey and the only private player with a truly nationwide network Bed concentration in İstanbul: • MLP: 40% • Acibadem: 67% National and local leader with a network covering the • Memorial: 34%
Slide 11: MoH investing in PPP program
2 Clear Leader in Private Hospital Provision MoH is investing in the PPP program, but large private players do not expect to see an impact in the near / mid term Highly illustrative schematic of the Turkish Healthcare Sector PPP success factors Top end of the Private Hospital market City hospitals
Slide 12: Strong Brand Recognition and Unique Business Model
3 Strong Brand Recognition and Unique Business Model Addressing Multiple Price Points Three concepts targeting three different price points with consistently outstanding medical service quality Concept Overview and Positioning 31 Total Hospitals in Portfolio Relative Average Price per Payor Type 3 P
Slide 13: Balanced portfolio covering multiple payor types
3 Strong Brand Recognition and Unique Business Model Addressing Multiple Price Points Business model results in a balanced portfolio covering multiple payor types 1Q2018 Revenue Breakup by Payor Type 14% 67% Other 7% Medical 1% SSI Insurance provides access to the majority of Turkey’s Tourism 8% p
Slide 14: Clinical Excellence and World Class Service Offering
4 Clinical Excellence and World Class Service Offering MLP Care benefits from a “Virtuous Circle” of best-in-class service, infrastructure and academic affiliations JCI accreditation SRC1 University affiliations The Gold Standard in Healthcare Globally The Global standard for quality surgical care M
Slide 15: Top tier talent and growing market share
4 Clinical Excellence and World Class Service Offering Top tier talent and patients are attracted to MLP Care’s unrivalled reputation, resulting in a steadily growing market share Ability to attract and retain top-tier physicians… CAGR Key points of attraction Proven track record of physicians recru
Slide 16: Financial Performance
VA MEDICALPARK MEDICALPARK V1/nospiTaL Financial Performance 16
Slide 17: Strong results in 1Q 2018
5 Superior Operational and Financial Performance Strong results in 1Q 2018 Double digit revenue growth accross all segments Expansion in EBITDA margin Significant decline in leverage ratio Bottomline turned into positive Two new greenfield hospitals: Pendik and Mersin 17
Slide 18: Net Sales, Adj. EBITDAR and Adj. EBITDA 1Q 2018
5 Superior Operational and Financial Performance Strong results in 1Q 2018 Net Sales (TLm) Adj. EBITDAR¹ (TLm) Adj. EBITDA¹ (TLm) %18.2 %25.5 %29.7 Net Sales grew by 18.2%, contributed by double digit revenue growth across all segments Both EBITDA & EBITDAR margins improved, driven by improved o
Slide 19: Domestic, medical tourism and ancillary revenues
5 Superior Operational and Financial Performance A B C Domestic Patient Medical Tourism Ancillary Business Revenues Revenues TL 54 m TL 636 m TL 59 m 14.4% growth y-o-y 15.4% growth y-o-y 67.3% growth y-o-y Growth Continued in 1Q Continued to attract Generating higher Foreign Patients revenues Inp
Slide 20: Outpatient and inpatient revenues
5 Superior Operational and Financial Performance Outpatient Revenues (TLm) 600 Inpatient Revenues (TLm) 500 400 377 337 259 300 214 200 100 0 1Q2017 1Q2018 1Q2017 1Q2018 TL45m (21.1%) Outpatient TL40m (11.7%) Inpatient Revenue Revenue Growth Contributed by; Growth Contributed by; Volume: (TL31m) (10
Slide 21: Mature and developing hospitals' revenue
5 Superior Operational and Financial Performance Mature Hospitals’ Revenue1 (TLm) Developing Hospitals’ Revenue1 (TLm) 200 639 180 160 542 140 126 120 100 80 60 60 40 20 0 1Q2017 1Q2018 1Q2017 1Q2018 TL97m (17.9%) Growth in Mature TL66m (111.4%) Growth in Developing Hospitals’ Revenue Contributed by
Slide 22: Cost Savings and Smart Cost Management
5 Superior Operational and Financial Performance Cost Savings and Smart Cost Management Cost of Service and G&A Expenses as a % of Material costs as a % of Revenues revenue declined, helped by Adj. EBITDA 17.0% 18.7% Margin the patient mix impact and decline in share of laboratory services busines
Slide 23: Leverage Ratio Significantly Declined
5 Superior Operational and Financial Performance Leverage Ratio Significantly Declined 2.000 4,0 1.800 3.4 3,5 1.600 3,0 1.400 Net Debt Currency Breakdown 2,5 1.200 1,381 2.1 1.000 2,0 December 31, March 31, 800 929 1,5 2017 2018 600 1,0 EUR + USD 67% 46% 400 200 0,5 TL 33% 54% - 0,0 December 31,201
Slide 24: Investments Continued in the First Quarter of 2018
5 Superior Operational and Financial Performance Investments Continued in the First Quarter of 2018 Maintenance Capex (TL Million) Capex of New Hospitals (TL Million) 3.6 % 3.6 % 87 64 23 27 1Q2017 1Q2018 1Q2017 1Q2018 % of Sales 24
Slide 25: Outstanding Platform for Growth
Outstanding Platform for Growth 25
Slide 26: Quick ramp up in greenfields and acquisitions
6 Outstanding Platform for Further Growth Quick and successful ramp up in greenfields as well as acquisitions with typical range of 12-18 months to EBITDA-neutral hospitals Example of Greenfield Example of Acquisition Batıkent (Oct-2014) Yıldızlı (Sep-2014) Total Investment TL50m Total Investment Co
Slide 27: Proven track record of greenfield expansions and M&A
6 Outstanding Platform for Further Growth Proven track record of greenfield expansions and M&A Total Hospitals 25 26 27 29 31 33 35 At Year End MLP Care has added on average c.400 beds p.a.1 Acquired 6 Opened one 2 New Hospitals Two potential Bed Greenfield through greenfield projects since 2014 h
Slide 28: Several avenues to continue growth trajectory
6 Outstanding Platform for Further Growth MLP Care has several avenues to continue its growth trajectory 1 2 Top line growth via the Growth through favourable insurance scheme revenue diversification MLP Care has increased its market share in PMI over the years, growing its Expand premium servic
Slide 29: Appendix
VA MEDICALPARK MEDICALPARK V1/nospiTaL Appendix 29
Slide 30: Growth across Mature and Developing hospitals
Superior Operational and Financial Performance Robust growth and financial performance seen across Mature and Developing hospitals… General Overview Mature Hospitals Developing Hospitals Breakdown of Beds - 2017 Revenue2 (millionTL) / Growth (%) Revenue2 (millionTL) / Growth (%) 14% 8% 17% 176% 78%
Slide 31: Smart Cost Management
Superior Operational and Financial Performance Smart Cost Management Hospital Cost Comparison as % of Sales Adjusted EBITDA 14,5% 15,9% Margin 8,7% 8,1% Material: Slight increase due to change in 4,3% the revenue mix 4,2% 7,0% 7,3% Doctor: Flat as doctor cost is ca. 95% variable 20,2% 18,6% Pe
Slide 32: Strong cash flow generation
Superior Operational and Financial Performance Strong cash flow generation Maintenance Capex 1 (TLm) Capex of New Hospitals (TLm) Free Cash Flow (TLm) 63% 73% 2.6% %2.6 2.6% %2.6 % of Sales Remained flat as a percentage of Continued new hospital Strong free cash flow generation revenues at 2.6
Slide 33: Historical P&L Statements
Historical P&L Statements 2016 2017 1Q2017 1Q2018 TLm FY FY Revenue 2,160 2,576 634 749 Cost of service (-) (1,854) (2,171) (534) (611) Gross Profit 306 405 100 138 General administration expenses (-) (127) (215) (43) (60) Other income from operations 198 380 115 67 Other expenses from operations (-
Slide 34: Historical Balance Sheet
Historical Balance Sheet 2016 2017 2018 TLm Dec 31 Dec 31 Mar 31 Cash and cash equivalents 111 218 247 Trade receivables 724 750 791 Inventory 45 51 69 Short term other assets 136 142 161 Current assets 1,016 1,161 1,268 Fixed assets 1,173 1,220 1,275 Deferred tax assets 146 197 233 Long term other
Slide 35: Reconciliation from Reported EBITDA to Adjusted EBITDA
Reconciliation from Reported EBITDA to Adjusted EBITDA TLm 2016 2017 1Q2017 1Q2018 Net Profit / (Loss) (49) (133) (17) 2 Tax Income from Operations (14) (38) (9) (32) Depreciation and Amortization of Tangible and Intangible Fixed Assets 153 175 41 44 Total Interest Expenses, Net of Interest Income a
Slide 36: Cost Comparison as a % of Sales
Cost Comparison as a % of Sales Mature Hospitals Developing Hospitals 81% 80% 94% 94% 20% 21% 30% 30% 13% 13% 6% 7% 23% 21% 19% 18% 24% 24% 29% 28% 21% 21% 15% 17% 2016 2017 2016 2017 Material Doctor Personnel Rent Other Material Doctor Personnel Rent Other 36
Slide 37: Reconciliation from Contribution to Adjusted EBITDA
Reconciliation from Contribution to Adjusted EBITDA TLm 2016 2017 Hospital Contribution Mature 319 392 Developing 18 27 A Total Hospital Contribution 337 418 Other Ancillary Business Contribution¹ Other Ancillary Business Revenues 133 185 Other Ancillary Business Costs (114) (149) B Total Other Anci
Slide 38: Capital, Shareholder Structure & Subsidiaries
Capital, Shareholder Structure* & Subsidiaries *Shareholding structure after public offering Usta Group – Elbaşı Group Lightyear Hujori Sancak İnşaat (Founders) Healthcare B.V. Financieringen B.V. Turizm Nakliyat • Muharrem Usta Free Float (Amsterdam, (Amsterdam, ve Dış. Tic. A.Ş • • İzzet Usta Sali
Slide 39: IR Contact
IR Contact Dr. Deniz Can Yücel Head of Investor Relations T +90 212 227 5555 (Ext: 1148) E deniz.yucel@mlpcare.com 39