Babylon Holdings Limited · OTC:BBLNF
Babylon — Investor Day (May 2022)
66 slides from Babylon's investor day presentation, May 23, 2022
Slide 1: Capital Markets Day May 2022
1 Capital Markets Day 23 May 2022 Putting an accessible and affordable quality health service in the hands of every person on Earth
Slide 2: Disclaimer: Use of Non-IFRS Financial Measures
Disclaimer Use of Non-IFRS Financial Measures This presentation includes certain financial measures to evaluate Babylon’s projected financial and operating performance, and measures calculated based on these measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Claims Expense Ratio and
Slide 3: Agenda
Agenda 1.30 pm Welcome & Agenda - Charlie Steel, CFO 1.35pm Building Babylon: An Overview - Dr Ali Parsa, Founder & CEO 2.05pm Babylon’s Technology: Our Competitive Advantage - Steve Davis, CTO & Saurabh Johri, PhD, CSO 2.25pm Our Product: An Integrated End to End Experience - Yon Nuta, CPO 2.45pm B
Slide 4: Building Babylon: An Overview
Building Babylon: An Overview Dr Ali Parsa, Founder & CEO
Slide 5: We Are at the Dawn of the Transformation of the Healthcare Sector
We Are at the Dawn of the Transformation of the Healthcare Sector 5 Transformation of one of the largest sectors of the world economy has the potential to give birth to some of the most valuable and impactful companies Health Care Proactive Continuous Virtual Personalized Patient-centric AI Enhanced
Slide 6: The Winners Will be Those That Re-engineer a Superior Value Proposition
The Winners Will be Those That Re-engineer a Superior “Value Proposition” Value Cost Quality Accessibility ● Digital first, mobile native ● Delivering healthcare people need, through devices they already have Clinical Quality Rapid standardization: ● Right expertise ● Right treatment ● Right rehabili
Slide 7: Babylon is Creating an Integrated, Digital First, Healthcare Experience
Babylon is Creating an Integrated, Digital First, Healthcare Experience Real-Time Insights Intelligent Health Goals Remote Patient Monitoring Reward, Alert, Intervene 24/7 Health Assistance Virtual Multi Speciality Care Local In-Person Network Hospitalization Support Digital-First Pharmacy Chronic C
Slide 8: Our Model Rationalises the Structure and Cost of Healthcare Delivery
Our Model Rationalises the Structure and Cost of Healthcare Delivery Digital Triage Digital Care Plan Data Healthcheck Insight Plans Health Assessment Goals Care Monitor Monitor $000’s $’s 8
Slide 9: Babylon's Business Model Has Three Revenue Drivers
Babylon’s Business Model Has Three Revenue Drivers What Who How 9 How Much Initial FFS arrangements provides client entry point Fee For Service $10s Take Patient Budgets Capture Cost Savings Babylon 360 $1000s Babylon Cloud Services License Our Technology Digital Triage Digital Care Plan Data Health
Slide 10: We Have Proven The Benefits of Our Operating Model in the UK
Notes: (1) Based on an evaluation by Ipsos Mori of NHS data, comparing newly registered patients at our Babylon GP at Hand (NHS) service to patients newly registered at London GP Practices. London, UK is used as the comparator as Babylon GP at Hand is based in this area. (2) Based on UK data, specifi
Slide 11: We Are Bringing this Digital First Model to the US
We Are Bringing this Digital First Model to the US As in the transformation of sectors like retail, a digital model offers the benefits of scalability, accessibility and automation 11 Mostly bricks and mortar Single handers/small partnerships Single Neighborhood Primarily Episodic Manual processes Low
Slide 12: Demand for Babylon's Services Suggests Product-Market Fit
Notes: (1) Babylon data related to first US VBC deal (Oct 2020). (2) Represents total US VBC members as at Q1-22 rounded to the nearest 1000. (3) Based on US Segment Revenue from audited financials as per the Form F-1 filed with the SEC on April 29, 2022. (4) 2022 full year projected revenue as of May
Slide 13: Our Technology Platform Enables Us to Rapidly Scale
Notes: (1) Audited financials through December 31, 2021. (2) Calculated using $1bn 2022 revenue guidance (3) 2022 full year projected revenue as of May 12, 2022, as reported in Babylon’s first quarter 2022 earnings release, filed with the SEC on Form 6-K on May 12, 2022. Babylon is not reaffirming its pr
Slide 14: Our Performance is Accelerating as We Learn from Each Contract
14 Our Performance is Accelerating as We Learn from Each Contract Notes: (1) Missouri data from Weeks 1 to 13 from launch taken as straight line average due to incomplete data. (2) Calculated by comparing % of high risk sign ups per weeks since initial outreach.
Slide 15: Improvements in Margins and Performance
Notes: (1) Home State Health VBC household penetration, October 2020 to March 2022. Babylon defines household penetration as obtaining a sign up from at least one individual that lives in a household in its covered population, meaning at least one individual in the household has created a profile (thr
Slide 16: Operational Leverage and Increased Scale Underpins the Route to Profitability
16 Notes: (1) See appendix slide titled ‘Adjusted EBITDA Reconciliation and Calculation of Adjusted EBITDA Margin’ for additional detail. (2) 2022 full year projected revenue as of May 12, 2022, as reported in Babylon’s first quarter 2022 earnings release, filed with the SEC on Form 6-K on May 12, 202
Slide 17: Babylon's Business Model Has Structural Advantages
Babylon’s Business Model Has Structural Advantages Highly scalable Digitization of Manual Processes and Physical Pathways AI driven Platform operating leverage - Scalability with minimal capital outlay - Accelerated speed to market - Flexible market distribution 2 states at US launch to 8 states acr
Slide 18: Scale is the Key to Profitability
Scale is the Key to Profitability 18 Blended BCS & B360 Revenue ($m) Blended Gross Margin 1,000 2,000 3,000 4,000 5,000 10.0% (200) (150) (100) (50) 0 12.5% (175) (100) (25) 50 125 15.0% (150) (50) 50 150 250 17.5% (125) 0 125 250 375 20.0% (100) 50 200 350 500 Gradually increasing operating costs 30
Slide 19: We are Trading at a Significant Discount to Peers
We are Trading at a Significant Discount to Peers Source: Public filings. Market data as of May 20, 2023E based on FactSet consensus estimates. Notes: (1) FY21 revenue based on FactSet consensus revenue. (2) Growth represents 2021A-2023E Revenue CAGR. 19 2021A-2023E Revenue CAGR Digital and Telehealth
Slide 20: Babylon's Technology: Our Competitive Advantage
Babylon’s Technology: Our Competitive Advantage Steve Davis, Chief Technology Officer & Saurabh Johri, PhD, Chief Science Officer
Slide 21: Our Lives Have Already Been Influenced by Other Technology Companies
21 As a Human Our Lives Have Already Been Influenced by Other Technology Companies Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 21 Industry leaders have influenced h
Slide 22: Babylon Took a Similar Approach Following Industry Leaders
22 Babylon Took a Similar Approach Following Industry Leaders Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 22 Purpose-built Platform The Technology 1 Real-time Uni
Slide 23: Health Graph: The foundation of our innovation
23 Health Graph | The foundation of our innovation Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 23
Slide 24: Health Graph: How we collect the data
24 Health Graph | How we collect the data Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 24 Health Graph | How we collect the data AI
Slide 25: Health Graph: Real-time data fabric
25 Health Graph | Real-time data fabric Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 25
Slide 26: AI Platform: Rapid iteration of AI models
26 AI Platform | Rapid iteration of AI models to predict and prevent Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 26
Slide 27: AI Platform: Rapid iteration of AI models
27 AI Platform | Rapid iteration of AI models to predict and prevent Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 27
Slide 28: Health IQ: Disease and risk prediction models
28 Health IQ | Growing library of disease and risk prediction models Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 28
Slide 29: Health IQ: Disease and risk prediction models
29 Health IQ | Growing library of disease and risk prediction models Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 29
Slide 30: Health IQ: Disease and risk prediction models
30 Health IQ | Growing library of disease and risk prediction models Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 30
Slide 31: Advisor: Health IQ predictions driving better health outcomes
31 Advisor | Health IQ predictions driving better health outcomes Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 31 .. .. .. .. .. .. .. Babylon Risk Predictions (i.
Slide 32: Advisor: NLP Capabilities
32 Advisor | NLP Capabilities Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 32
Slide 33: Our Product: An Integrated End to End Experience
Our Product: An Integrated End to End Experience Yon Nuta, Chief Product Officer
Slide 34: Babylon Prototype
34 Babylon Prototype Note: Some features or elements of features may be under active development, have not been commercialized and we cannot guarantee if / when the product will be delivered to members. 34
Slide 35: Babylon's Clinical Model: Transforming Delivery
Babylon’s Clinical Model: Transforming Delivery Darshak Sanghavi, MD, Chief Medical Officer
Slide 36: We Are Reengineering the Healthcare Continuum
We Are Reengineering the Healthcare Continuum Digital Triage Digital Care Plan Data Healthcheck Insight Plans Health Assessment Goals Care Monitor Monitor 36
Slide 37: Becoming A Single Gateway for Our Members' Health Needs
Becoming A Single Gateway for Our Members’ Health Needs Real-Time Insights Intelligent Health Goals Most Appropriate Care Plan Remote Patient Monitoring Rewards 24/7 Health Assistance Virtual Multi Speciality Care Local In-Person Network Hospitalization Support Digital-First Pharmacy Chronic Care Ma
Slide 38: Babylon's Care Team Is Assembled Based On Member Needs
Babylon’s Care Team Is Assembled Based On Member Needs A wraparound virtual care team provides a 24/7 seamless member experience, across chat, email and audio/video calls, tailored to the members’ needs. ● Health advisors and coordinators ● Member support managers ● Primary care physicians ● Registe
Slide 39: Real-life Member Case Study
Real-life Member Case Study Amy(1) Rural Midwest member, in late 20s Health Assessment Jan 2021: Initial digital assessment ● Chronic back pain ● Chronic gynecological pain caused by previous childbirth Jan 2021: Virtual PCP/Insight ● History of PCOS, food sensitivities, abnormal labs including thyr
Slide 40: Our Data Enabled Approach: Deep Dive
Our Data Enabled Approach | Deep Dive Daphne to format
Slide 41: Telehealth Clinical Programs and Population Health Management
Telehealth Clinical Programs (Provider-driven) Population Health Management (CareTeam-driven) Clinical Playbook Babylon Specialty Offerings Timely access to a virtual specialty consult Integrated Behavioral Health Focus on collaboration with other providers 24/7 Primary Care Longitudinal, prevention
Slide 42: Formula for Achieving B360 Margin in the U.S.
Formula for Achieving B360 Margin in the U.S. Adjustment Factor for Member Engagement 24/7 Primary Care Integrated Behavioral Health Babylon Specialty Offerings (eConsults, network navigation) Chronic Condition Management Episode Management (TCM, NICU) 24/7 Health Assistance (High Risk, Personal Care
Slide 43: Our Care Management Initiatives Address the Top Conditions in Our Population
Spend by CMS Chronic Condition Warehouse defined chronic conditions(1) Masked claims are mostly SUDs and STDs % spend(3) 8% 7% 7% 6% 6% 5% 5% 5% 5% 3% 3% % members(3) 3% 5% 10% 5% 7% 7% 4% 3% 2% 6% 2% Our Care Management Initiatives Address the Top Conditions in Our Population Currently addressed On
Slide 44: Our Clinical Initiatives Target Key Focus Areas
Our Clinical Initiatives Target 5 Key Focus Areas Which Have High Spending Impact Iowa Georgia HSH Magnolia Commentary Maternity • Spend is concentrated around childbirth in non-expansion states, rather than pre- or postnatal care Behavioural health • Anxiety and depression are top spend drivers for
Slide 45: Deep Dive: Chronic Condition Management
Deep Dive: Chronic Condition Management Lifetime support of chronic conditions to improve longevity and inhibit unnecessary progression of disease Chronic condition management supported by monitoring, proactive analytics, and patient education, outreach, and intervention ● Identification and stratific
Slide 46: Example Sample Engagement
Example Sample Engagement Diabetes Type 2 Diabetes Twice daily reminder for glucose testing, automated test strips refills, automated insulin/diabetic drug refills, patient visibility into out of range glucose results Mental Health Depression, Anxiety Care journey engagement assisted by digital and cl
Slide 47: Chronic Condition Management: DayToDay App
Chronic Condition Management | Guiding Members Through Our DayToDay App High touch, end to end presence and support provided by care team To guide patient to do everything they have to do today Goal oriented monitoring to motivate patients around their care and prevent issues Better risk management
Slide 48: Fireside Chat
Fireside Chat Misty Zelk, MD, Babylon Physician & Darshak Sanghavi, MD, CMO
Slide 49: Our Financials: How We Create Value
Our Financials: How We Create Value Charlie Steel, Chief Financial Officer
Slide 50: Babylon's Business Model Has Three Revenue Drivers
Babylon’s Business Model Has Three Revenue Drivers What Who How 50 How Much Initial FFS arrangements provides client entry point Fee For Service $10s Take Patient Budgets Capture Cost Savings Babylon 360 $1000s Babylon Cloud Services License Our Technology Digital Triage Digital Care Plan Data Healt
Slide 51: Our Technology Platform Enables Us to Rapidly Scale
51 Notes: (1) Audited financials through December 31, 2021. (2) Calculated using $1bn 2022 revenue guidance. (3) 2022 full year projected revenue as of May 12, 2022, as reported in Babylon’s first quarter 2022 earnings release, filed with the SEC on Form 6-K on May 12, 2022. Babylon is not reaffirming it
Slide 52: Digital Only Interactions Drive Down Our Cost of Care Delivery
52 …with Human Resources Being the Main Driver of Healthcare Costs, Digital Only Interactions Drive Down Our Cost of Care Delivery… Notes: (1) Rounded to nearest millions. (2) Total Appointments include Face to Face and Virtual Appointments.
Slide 53: Utilisation Rates in the U.S. are Increasing
53 …and Utilisation Rates in the U.S. are Increasing to Reach the Steady State Levels Seen in our Mature Markets… • Over 90% clinician utilisations rates in our most mature markets • US utilisation has ramped up to almost 60% as our appointment volume increases to fill our existing clinician capacity
Slide 54: Clinical Care Delivery Expense Margin is Reducing
54 Notes: (1) Clinical Care Delivery Expense Margin is Clinical Care Delivery Expense divided by the sum of Value Based Care Revenue and Clinical Services Revenue. …and Clinical Care Delivery Expense Margin is Reducing as Our Care Model Scales • Over two-thirds reduction in Clinical Care Delivery Ex
Slide 55: With Mature Cohorts We Are Beginning To See The Impact Of Engagement
With Mature Cohorts We Are Beginning To See The Impact Of Up-Front Engagement, Efficiency and Scale Notes: (1) Clinical Care Delivery Expense Margin is Clinical Care Delivery Expense divided by the sum of Value Based Care Revenue and Clinical Revenue 55 Notes: (1) Home State Health VBC household penet
Slide 56: Operational Leverage and Increased Scale Underpins the Route to Profitability
56 128ppt SG&A margin and 125ppt technology margin improvement since Q3 2020 Notes: (1) Technology costs is Research & development expenses and Platform & application expenses. Technology costs and SG&A costs as percentages of revenue have been calculated excluding the one-off $28.4m revenue from Q1
Slide 57: Steady Margin Improvement
Notes: (1) See appendix slide titled ‘Adjusted EBITDA Reconciliation and Calculation of Adjusted EBITDA Margin’ for additional detail. (2) 2022 full year projected revenue as of May 12, 2022, as reported in Babylon’s first quarter 2022 earnings release, filed with the SEC on Form 6-K on May 12, 2022.
Slide 58: Scale is the Key to Profitability
Scale is the Key to Profitability 58 Blended BCS & B360 Revenue ($m) Blended Gross Margin 1,000 2,000 3,000 4,000 5,000 10.0% (200) (150) (100) (50) 0 12.5% (175) (100) (25) 50 125 15.0% (150) (50) 50 150 250 17.5% (125) 0 125 250 375 20.0% (100) 50 200 350 500 Gradually increasing operating costs 30
Slide 59: 2022 Full-Year Guidance
2022 Full-Year Guidance(1) 59 Revenue Guidance Adjusted EBITDA Guidance Long Term Profitability Guidance Funding Guidance Full year revenue guidance of $1.0bn Adjusted EBITDA guidance to be a maximum loss of $(295)m at $1.0bn revenue Adjusted EBITDA and cash flow breakeven no later than 2025 Sufficient
Slide 60: Q&A
30 Q&A
Slide 61: Thank you!
30 Thank you!
Slide 62: Risk Factors Summary
• We have a history of incurring losses, may not be able to achieve or maintain profitability, anticipate increasing expenses in the future and may require additional capital to support business growth. Additional financing may not be available on favorable terms or at all. • Our historical operating
Slide 63: Risk Factors Summary (continued)
•Failure to adequately expand our direct sales force will impede our growth. •We may invest in or acquire other business and we may have difficulty integrating any such acquisitions successfully. We may also enter into collaborations and strategic alliances with third parties that may not result in th
Slide 64: Appendix
Appendix 8
Slide 65: Adjusted EBITDA Reconciliation and Calculation of Adjusted EBITDA Margin
Adjusted EBITDA Reconciliation and Calculation of Adjusted EBITDA Margin 65 65 Note: See "Item 5. Operating and Financial Review and Prospects--A. Operating Results--Key Business and Financial Metrics--EBITDA and Adjusted EBITDA" in our Form 20-F filed with the SEC on March 30, 2022. We are not able
Slide 66: Adjusted Claims Expense Ratio Reconciliation
We believe that Adjusted Claims Expense Ratio and Adjusted Claims Margin are useful metrics for investors to understand and evaluate our operating results and ongoing profitability because they permit investors to evaluate our Claims Expense as a percentage of our Value-based care revenue. We believe