Mlp Saglik Hizmetleri As Class B · BIST:MPARK
Mlp Saglik Hizmetleri As Class B — MLP Care — Non-Deal Roadshow (August 2019)
44 slides from Mlp Saglik Hizmetleri As Class B's roadshow presentation, Aug 22, 2019
Slide 1: Raiffeisen Centrobank Non-deal Roadshow Tallinn – Stockholm
Raiffeisen Centrobank Non-deal Roadshow Tallinn – Stockholm August 22 - 23, 2019 1
Slide 2: MLP Care: The #1 Private Hospital Group in Turkey
MLP Care: The #1 Private Hospital Group in Turkey 17 Cities 31 Hospitals; 6.000+ 5.900+ Beds; More than the #2 2x the size of 2nd Largest 20.000+ 17.500+ Staff and #3 Competitors Combined Competitor 2.200+ 2.100+ Doctors Addresses All Price Segments 3 JCI Accredited Hospitals 2.6 3.1 Revenues: TL bi
Slide 3: Content
Content 1. Recent Developments & Outlook Operational and Financial Updates Outlook & Prospects 2. Why Invest in MLP Care? Operates in the Attractive Turkish Healthcare Market Clear Leader in Private Hospital Provision Strong Brand Recognition and Unique Business Model Addressing Multiple P
Slide 4: Recent Developments & Outlook
1. Recent Developments & Outlook Operational Updates The ramp up of Pendik and Mersin hospitals are in line with the plan Medical tourism and top-up continued to post high growth in H1 2019 Financial Updates Revenue up 24% with a 16.5% Adj. EBITDA margin in H1 2019 Double digit growth in maj
Slide 5: Operational Update: Two new hospitals added in 2018
Operational Update Two new hospitals added to our hospital network in 2018 Pendik Mersin Location İstanbul Mersin Opening Date March 2018 May 2018 Key Statistics 62,000 m2 35,000 m2 Contrary to the negative EBITDA effect of TL11.5 million in the first six months of last year, Pendik an
Slide 6: Operational Update: Double digit growth in majority of payor types
Operational Update Double digit growth in majority of payor types 50% 70% Other 10% Revenue from PMI, Top-up & Contracted 4% Institutions grew by 42% in Q2 2019 Medical SSI 25% Tourism Medical Tourism grew by 62% in Q2 2019 12% SSI Insurance covers c.98% of the total population (up by 6% in Q2
Slide 7: Operational Update: Medical tourism revenue grew by 70%
Operational Update Medical tourism revenue grew by 70% in H1 2019 Medical Tourism Revenue Volume & Price (TLm) 41.7% 28.2% 52 Diversified and Balanced Geography. Patients comes 35 from: 213 Europe 125 69.9% 35% 33% Middle East and Africa 32% Former CIS and the H1 2018 Volume & Mix Price & Fx H1 20
Slide 8: Operational Update: People with Top-up Insurance Exceeds 1 million
Operational Update # of People with Top-up Insurance Exceeds 1 million # of People With Insurance (PMI and Top-up) in Turkey – 000s Top-up insurance Growth (since 2014) CAGR (2014-2018) (H1 2018-H1 2019) Cheaper form of PMI to 3,144 3,178 cover SSI patients’ co- 2,214 9.2% 2,927 8.6% pay costs 920
Slide 9: Financial Update: Revenue Up 24% in H1 2019
Financial Update Revenue Up 24% in H1 2019 Revenue (TLm) EBITDA (TLm) 1 26.3% 33.2% 24.0% 2.500 24.6% 37.6% 22.0% 500 2.000 2,027 450 23.4% 400 20.6% 427 1,822 49.6% 1.500 350 300 408 990 250 20.7% 301 1.000 200 889 150 283 500 100 133 50 125 0 0 Q2 2019 H1 2019 Q2 2019 H1 2019 H1 2019 (IFRS 16) 1 A
Slide 10: Financial Update: All revenue segments posted strong growth
Financial Update All revenue segments posted strong growth in H1 2019 Domestic Patient Medical Tourism Ancillary Business Revenues Revenues 19.5% 75.8% 50.0% 19.4% 16.8% 69.9% 69.9% 28.1% 1,431 62.1% 213 178 18.5% 699 107 83 Q2 2019 H1 2019 Q2 2019 H1 2019 Q2 2019 H1 2019 Growth Continued in Q2 2019
Slide 11: Financial Update: Strong improvement in ARPV and ARPP
Financial Update Strong improvement in both ARPV and ARPP in H1 2019 Outpatient Revenues (TLm) Inpatient Revenues (TLm) 17.7% 16.2% 16.8% 12.4% 0.9% 3.8% 28 90 4 83 583 848 495 730 H1 2018 Volume & Mix Price H1 2019 H1 2018 Volume & Mix Price H1 2019 Average Revenue Per Visit (ARPV) Average Revenue
Slide 12: Financial Update: Smart Cost Management results in profitability growth
Financial Update Smart Cost Management results in profitability growth Cost of Service and G&A Expenses as a % of Revenues Material costs as a % of revenue increased Adj. EBITDA Margin 17.0% 16.5% due to the inflation adjustment of medicine and increase in share of laboratory services 6.6% busines
Slide 13: Financial Update: Continued to deleverage balance sheet
Financial Update Continued to deleverage balance sheet in H1 2019 FX BASED NET DEBT (in EUR m) NET DEBT 20181 H1 20191 EUR72m EUR73m (TL437m) (TL477m) 204 35% 34% 65% 66% Percentage TL806m TL931m 72 73 Local Currency Local Currency Hard Currency Hard Currency 2017 2018 H1 2019 Nominal TL1,243m TL1,4
Slide 14: Financial Update – Excluding IFRS 16
Financial Update – Excluding IFRS 16 Natural FX hedging on the EBITDA driven by Medical Tourism Revenue Hard Hard Currency as % TLm H1 2019 (TLm) Currency of total revenues Domestic Hospital Revenue 1,431 -- 30 Eylül Share of Medical Tourism Revenue in Foreign Medical Tourism Ancillary 213 178 213 -
Slide 15: Financial Update – Including IFRS 16
Financial Update – Including IFRS 16 Natural FX hedging on the EBITDA driven by Medical Tourism Revenue Hard Hard Currency as % of TLm H1 2019 (TLm) Currency total revenues 1,431 -- 30 Eylül Share of Medical Tourism Revenue in Domestic Hospital Revenue Foreign Medical Tourism 213 213 12% 2018 Total
Slide 16: Financial Update: Total Capex and Maintenance Capex decreased
Financial Update Total Capex and Maintenance Capex decreased Maintenance Capex (TLm) Total Capex (TLm) 2.9% 11.4% 1.7% 200 4.5% 43 150 167 30 100 50 82 - H1 2018 H1 2019 H1 2018 H1 2019 % of Revenue % of Revenue Tightly controlled spending on maintenance and total capex in H1 2019 16
Slide 17: Financial Update: Cash Flow improved in Q2 2019
Financial Update Cash Flow improved in Q2 2019 Operating Cash Flow / Adj. EBITDA Free Cash Flow 92.1% 123.5% 65.7% 63.1% 332 15.4% 123 230 109 190 164 63 26 50 (14) H1 2018 2018 Q1 2019 Q2 2019 H1 2019 H1 2018 2018 Q1 2019 Q2 2019 H1 2019 % of EBITDA Trade payables decreased by TL24m and trade rec
Slide 18: Outlook & Prospects
Outlook & Prospects We will increase efficiency by using our available resources Operational targets Increase contribution of Medical Tourism Accelerate the ramp-up of the new opened hospitals Increase efficiency of the business through digitalization (invoicing/collection improvement, headcou
Slide 19: Why Invest in MLP Care?
2. Why Invest in MLP Care? 1 Operates in the Attractive Turkish Healthcare Market 2 Clear Leader in Private Hospital Provision 3 Strong Brand Recognition and Unique Business Model 4 Clinical Excellence and World Class Service Offering 5 Superior Historical Financial Performance 6 Outstanding Platfor
Slide 20: 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 21: Operates In The Attractive Turkish Healthcare Market
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 22% of beds, but provide 53% of complex surgeries. Number of Hospital Beds (’000) N
Slide 22: Supportive government policies have underpinned private hospital expansion
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 23: 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 MLP Care network (# of hospitals and locations) National and local leader with a network covering the greatest number of cities
Slide 24: MoH is investing in the 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 25: Strong Brand Recognition And Unique Business Model
3 Strong Brand Recognition And Unique Business Model Addressing Multiple Price Points Two brands and one concept targeting three different price points with consistently outstanding medical service quality Overview and Positioning 31 Total Hospitals in Portfolio Relative Average Price per Payor Type
Slide 26: 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 27: Top tier talent and patients attracted to MLP Care
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 28: Superior Historical Financial Performance
5 Superior Historical Financial Performance EBITDA Growth > Net Sales Growth > CPI (Consumer Price Index) Net Sales (TLm) EBITDA (TLm) 20% 25% CAGR 2014-2018 CAGR 2014-2018 31% 31% 22% 23% 21% 19% 17% 13% 20% 12% 9% 9% 2015 2016 2017 2018 Net Sales Growth EBITDA Growth CPI (Consumer Price Index) 28
Slide 29: Outstanding Platform for Further Growth
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 30: 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 At Year End MLP Care has added on average c.400 beds p.a.1 Acquired 6 Opened one 2 New Hospitals Greenfield through greenfield projects since 2014 hospitals managed univers
Slide 31: MLP Care has several avenues to continue its growth
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 (private medical insurance) Self-Pay share of tot
Slide 32: Appendix
3. Appendix Revenue Breakdown by Payor Type – 2018 Revenue and EBITDA Figures - 2018 Revenue Segments - 2018 Costs Breakdown - 2018 Total Capex, Maintenance Capex and Operating Cash Flow / EBITDA - 2018 Historical Financial Statements Organizational Chart Capital, Shareholder Structu
Slide 33: Operational Update: Revenue Breakdown by Payor Type 2018
Operational Update Double digit growth in majority of payor types 56% 76% Other 9% Revenue from PMI, Top-up & Contracted 1% Institutions grew by 34% in 2018 Medical Tourism 11% SSI 29% Medical Tourism grew by 76% in 2018 and 86% in 4Q 2018 y-o-y PMI, Top-up & SSI Insurance allows for a wide ad
Slide 34: Financial Update: Revenue and EBITDA grew above expectations
Financial Update Revenue and EBITDA grew above expectations Revenue (TLm) Adj. EBITDA1 (TLm) 4.000 21.6% 700 23.5% 3.500 600 3.000 3,132 500 2.500 505 2,576 400 2.000 409 300 1.500 1.000 200 500 100 0 0 2017 2018 2017 2018 Comparable Adj. EBITDA is at TL530m without the negative impact of new hosp
Slide 35: Financial Update: All revenue segments posted strong growth in 2018
Financial Update All revenue segments posted strong growth in 2018 Domestic Patient Medical Tourism Ancillary Business Revenues Revenues 14.0% 75.9% 56.1% 2,512 330 289 2018 2018 2018 Growth Continued in 2018 Continued to Attract Foreign Strong Growth in Managed Inpatient revenues grew 11.9% Patie
Slide 36: Adj. EBITDA improves on smart cost management
Financial Update Adj. EBITDA improves on the back of smart cost management and savings Cost of Service and G&A Expenses as a % of Revenues Material costs as a % of revenue increased, Adj. EBITDA Margin 15.9% 16.1% due to the patient mix impact and increase in share of laboratory services business
Slide 37: Trade receivables increased in line with revenue growth
Financial Update Trade receivables increased in line with the strong revenue growth leading to lower operating cash flow Maintenance Capex (TLm) Total Capex (TLm) Operating Cash Flow / EBITDA 131.1% 2.7% 65.7% 2.5% 600,0 100,0 300,0 500,0 80,0 250,0 282 400,0 536 84 200,0 60,0 236 65 150,0 300,0 40,
Slide 38: Historical Balance Sheet
Historical Balance Sheet Reviewed Reviewed Audited TLm June 30, 20191 June 30, 2019 December 31, 2018 Cash and cash equivalents 260 260 223 Trade receivables 981 981 899 Inventory 89 89 80 Short term other assets 269 269 276 Current assets 1,599 1,599 1,479 Tangible and intangible fixed assets 1,281
Slide 39: Historical P&L Statements
Historical P&L Statements TLm Reviewed Reviewed Reviewed H1 20191 H1 2019 H1 2018 Q2 20191 Q2 2019 Q2 2018 Revenue 1,822 1,822 1,470 889 889 720 Cost of service (-) (1,401) (1,500) (1,231) (694) (744) (619) Gross profit 422 322 239 195 144 101 General administration expenses (-) (143) (144) (123) (7
Slide 40: Reconciliation from Reported EBITDA to Adjusted EBITDA
Reconciliation from Reported EBITDA to Adjusted EBITDA TLm H1 20191 H1 2019 H1 2018 Q2 20191 Q2 2019 Q2 2018 Net profit / (loss) (25) (39) (8) (39) (42) (10) Tax income from operations (3) (6) (46) (9) (15) (14) Depreciation and amortization of tangible and intangible fixed assets 129 105 90 65 53 4
Slide 41: Organizational Chart
Organizational Chart Visionary founder & CEO supported by an outstanding management team, leading the company’s exemplary growth; Significant breadth and depth of experience across the senior management and executive level teams Team Structure Field Organization per Hospital Jale Güney Dr. Deniz Can
Slide 42: Capital, Shareholder Structure & Subsidiaries
Capital, Shareholder Structure* & Subsidiaries *Shareholding structure after public offering (excluding the 6,827k shares purchased by shareholders from publicly traded portion) Usta Group – Elbaşı Group Lightyear Hujori Sancak İnşaat (Founders) Healthcare B.V. Financieringen B.V. Turizm Nakliyat •
Slide 43: Key Historic Milestones
Key Historic Milestones • 2 hospitals • 3 hospitals • TURKVEN • 1 hospital • MPARK • Founders Dr. • Dr. Usta, Adem Muharrem Usta Elbaşı and • Carlyle opened in • 1 hospital acquired opened in Stocks acquired 40% opened in 53.35% and Adem Sancak Group İzmir, opened in Samsun starting to stake in MLP
Slide 44: IR Contact
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