Integrated Diagnostics Holdings Plc · LSE:IDHC
Integrated Diagnostics — 9M 2019 Earnings Presentation
40 slides from Integrated Diagnostics's earnings presentation, January 2020
Slide 1: 9M2019 Results Presentation
9M2019 Results Presentation January 2020
Slide 2: Agenda and Today's Presenters
Agenda: • 9M2019 Results • Growth Strategies • Expanding Customer Reach • “Wayak” Investment • Al Borg Scan Updates • Nigeria Updates Today’s Presenters Dr. Hend El Sherbini Omar Bedewy Sherif El Ghamrawi Chief Executive Chief Financial Investor Relations Officer Officer Director 2 INTEGRATED DIAGNO
Slide 3: Results Snapshot
Results Snapshot Rapid top-line growth reaching 20% with strong gross profit margin and EBITDA profitability Revenue Split EGP 1,649 mn EGP 793 mn Revenue in 9M 2019 Gross Profit in 9M 2019 ▲20% y-o-y ▲17% y-o-y / 48% margin IDH revenue by geography IDH revenue by type (9M2019) (9M2019) EGP 686 mn E
Slide 4: Revenue Growth Drivers
Revenue Growth Drivers Revenue growth in 9M2019 was driven by higher patient, test volumes and improved pricing Revenue Growth Drivers | EGP mn, % +20% 1,648 1,377 10 47 10 (4) (3) 211 9M2018 Egypt without BG-Scan BG-Scan 100M Campaign Jordan Sudan Nigeria 9M2019 Revenue growth in 9M2019 was primari
Slide 5: Segment Performance
Segment Performance Revenue mix skewed toward the contract segment due to higher campaign-related volumes Contract Segment Walk-In Segment Total 9M2018 9M2019 Change 9M2018 9M2019 Change 9M2018 9M2019 Change Revenue (EGP ‘000) 796,313 967,730 22% 581,037 680,645 17% 1,377,350 1, 648,376 20% % of Rev
Slide 6: A Focus on the 100 Million Healthy Lives Campaign
A Focus on the 100 Million Healthy Lives Campaign The campaign was launched in November 2018 and ended in June 2019, and has directly benefited our business by increasing awareness and driving up our tests per patient ratio IDH 9M2019 Patient Volumes | ‘000 IDH 9M2019 Tests per Patient | ‘000 +11% +
Slide 7: A Ramp-up of Operations at Al Borg Scan
A Ramp-up of Operations at Al Borg Scan Al Borg Scan Revenue & EBITDA Progression | EGP mn 1.45 1.37 1.18 1.13 1.08 1.06 0.84 0.80 0.94 0.90 0.70 0.34 0.17 0.14 0.15 0.16 -0.01 0.12 0.30 0.35 0.01 -0.82 -0.93 -0.53 Revenue EBITDA -1.89 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 J
Slide 8: Regional Performance
Regional Performance Strong growth led by Egypt; Sudan delivers solid EBITDA growth Revenues | EGP mn EBITDA* | EGP mn / % +24% +24% EGYPT Strong revenue growth in Egypt on the back of rising test volumes 85.5% EGP 1,410 mn 1,410 639 1,141 516 across segments and the ramp up 45% 390 Branches 45% of
Slide 9: Sudan Delivers Revenue and EBITDA Growth in SDG terms
Sudan Delivers Revenue and EBITDA Growth in SDG terms Sudan 9M2019 Revenues Bridge| SDG mn +52% 28 68 -5 45 -11% 62% 9M2018 Volume Price 9M2019 Revenues Revenues increased 52% y-o-y owing to the significant prices increase. Gross profit Gross profit margin increased by 4.7% reaching 37.8% due to a s
Slide 10: Strong Group Profitability
Strong Group Profitability Steady increase in operational efficiency combines with sustained cost-cutting measures to deliver strong Group profitability IDH COGS Breakdown | EGP mn / % of Revenue IDH SG&A Breakdown | EGP mn / % of Revenue +23% +17% IDH’s consolidated 698 856 IDH’s revenue growth 185
Slide 11: Strong Group Profitability
Strong Group Profitability IDH’s net profit margin stood at a healthy 20% despite higher interest and tax expenses IDH Interest Expenses| EGP mn / % of Revenue IDH Taxes | EGP mn / % of Revenue +375% IDH’s effective tax rate +22% The adoption of IFRS increased from 29% in 16 led to interest on 10.2
Slide 12: Summary Balance Sheet
Summary Balance Sheet 31 December 30 September EGP'000 2018 2019 ASSETS Non-current assets Property, plant and equipment 705,779 765,577 Intangible assets and goodwill 1,672,462 1,663,738 Adoption of IFRS 16 added EGP 265 million in Equity-Accounted Investees - 6,479 right-of-use assets as of 30 Sep
Slide 13: Summary Cash Flow Statement
Summary Cash Flow Statement EGP'000 30 September 2018 30 September 2019 Profit for the period before tax 503,120 544,945 Net cash flow from operating activities grew from Net cash from operating activities before WC 544,043 672,189 EGP 544 million in 9M2018 to EGP 672 million in the first nine month
Slide 14: Growth Strategies
Growth Strategies 14 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 15: Expanding Customer Reach
Expanding Customer Reach 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 Duration “100 Million Healthy “Egypt’s Women are Lives” campaign 8mo Egypt’s Health
Slide 16: Expanding Customer Reach
Expanding Customer Reach 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 Monthly Disease Awareness Campaign Plans IDH implements monthly campaigns targeting specific dise
Slide 17: New Investment in Wayak
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 Diagnostics Discounted services Cu
Slide 18: "Wayak" Investment Thesis
“Wayak” Investment Thesis Wayak Investment Thesis Extract Favorable Synergies EMR Building Synergies will arise from IDH's current business with the ability to drive IDH will build a systemized electronic record of Egypt’s patients in order to additional pathology and radiology tests, and/or reduce
Slide 19: Al Borg Scan Expansion Updates
Al Borg Scan Expansion Updates In October 2018, IDH inaugurated its first radiology business in Egypt under the brand name Al Borg Scan Rationale Key Service Offering & Suppliers Leverage the strong relationship between the Al Borg brand and its Al Borg Scan’s Mohandeseen branch offers a full range
Slide 20: Delivering on Our Strategies – Nigeria Expansion
Delivering on Our Strategies – 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 21: Nigeria Expansion Updates
Nigeria Expansion Updates Operational progress in Nigeria expansion with existing branches being refurbished and renovated and with loss-making branches being relocated or closed Branch Renovations & Rebranding Operational Milestones Rebranded the company to Echo-Lab (from Echo-Scan), which launched
Slide 22: 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 22 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 23: Nigeria Recently Acquired Equipment I/II
Nigeria Recently Acquired Equipment I/II Victoria Island Branch Opebi Branch 23 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 24: Nigeria Recently Acquired Equipment II/II
Nigeria Recently Acquired Equipment II/II Garki Branch Benin Branch 24 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 25: Outlook & Guidance
Outlook & Guidance Management is pleased with the strong performance in 9M2019 and remains confident in the attractive underlying trends in the healthcare industries across IDH’s footprint Continued Leverage the Continue to Explore Attractive Expansion of Branch Group’s Brands and +20% Full-Year Rev
Slide 26: Q&A
INTEGRATED DIAGNOSTICS HOLDINGS IDH Q&A
Slide 27: Appendix
Appendix 27 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 28: Who We Are
Who We Are Integrated Diagnostics Holding is a leading, fully-integrated provider of high-quality medical diagnostic services with a footprint spanning Egypt, Jordan, Sudan and Nigeria Our Services Our Patients Immunology Radiology Hematology Walk-In Patients Endocrinology Clinical Chemistry Molecul
Slide 29: Our Geography
Our Geography IDH’s branch network of 442 labs at 9M2019 spans 4 countries, the largest of which is Egypt 19 The Company’s Egyptian operations contributed branches 86% of consolidated Revenues in 1H2019 390 Jordan Branches EGYPT Egypt 85.5% 1979 9M2019 Cairo Region 44% Upper Egypt Region 18% JORDAN
Slide 30: Favorable Industry Dynamics
Favorable Industry Dynamics Structural Growth Drivers Powerful structural growth drivers underpin Egypt’s healthcare growth story, including an ever-expanding population, rising lifestyle diseases, favorable government regulation and increased medical tourism Lab tests per capita (2012) 23.2 High Di
Slide 31: Asset-light Business Model
Asset-light Business Model Hub, Spokes and Spikes 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
Slide 32: Our Mega Lab
Our Mega Lab State-of-the-Art Equipment with High Capacity and Throughput Capabilities Capacity Procurement • Mega Lab machines are capable of conducting a • Inauguration of IDH’s Mega Lab in 2015 doubled the • Central procurement system ensures coordinated wide range of tests including basic blood
Slide 33: Key Supplier Relationships
Key Supplier Relationships IDH leverages its bargaining power with suppliers to maximize value in a business that is fundamentally about COGS economy of scale Dynamics of Supplier Relationships • The majority of testing equipment is provided at no upfront cash cost in return for which IDH agrees to
Slide 34: Human Resources Development
Human Resources Development Training IDH views education as an essential means of ensuring quality across its laboratories. We strive to create a diverse, productive culture and a safe working environment in order to empower our people to reach their full potential Training streams Medical / scienti
Slide 35: IDH is a Consumer-Facing Service Provider
IDH is a Consumer-Facing Service Provider The mechanics of the Egyptian healthcare market are markedly different from those in many Western healthcare industries Egypt’s Private Healthcare System IDH serves the private healthcare A hospital outpatient clinic or While physicians ordering Patients the
Slide 36: Tactical Marketing Campaigns
Tactical Marketing Campaigns IDH’s tactical marketing programs are focused on driving patient and test volumes, especially in the higher-margin walk-in patient category IDH deploys marketing tools including: Walk-in patients are typically Egypt’s most vulnerable citizens, hurt most Gatherings for ph
Slide 37: Governance
Governance Overview IDH is committed to implementing best practices in corporate governance through the expertise of both the individual Directors and outside parties Internal Audit Procedures While not required to comply Anti-Bribery and Anti Corruption Policy (ABAC) with UK Corporate Governance T
Slide 38: A World-Class Board of Directors
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 1,2,3,4 Independent Non
Slide 39: 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 40: Investment Highlights
Investment Highlights IDH is an attractive investment opportunity with compelling fundamentals, present in fast-growing, under-served markets Formidable playing field with structural growth drivers, 1 high barriers to entry and a highly fragmented market Established business model with strong brand
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