Integrated Diagnostics Holdings Plc · LSE:IDHC
Integrated Diagnostics — 9M 2020 Earnings Presentation
39 slides from Integrated Diagnostics's earnings presentation, November 2020
Slide 1: 9M2020 Results Presentation
9M2020 Results Presentation November 2020
Slide 2: Contents
Contents: • 9M2020 Results • Covid-19 Response Measures • Growth Strategies • Expanding Customer Reach • “Wayak” Investment • Al Borg Scan Updates • Nigeria Updates • Appendix 2 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 3: Results Snapshot
Results Snapshot Group reports top- and bottom-line growth in 9M 2020, supported by a strong and broad-based recovery in the third quarter of the year 9M 2019 figures included the impact of the 100 Million Healthy EGP 1,670 mn EGP 830 mn Lives campaign in Egypt. Excluding the campaign, the Group’s R
Slide 4: Quarterly Revenue Progression
Quarterly Revenue Progression IDH witnessed a sharp recovery starting in June 2020, which carried through into the third quarter of the year Revenue Change| Year-on-Year 23% 1% -8% -13% 1Q 2020 2Q 2020 3Q 2020 9M 2020 The year-to-date performance was supported by a strong third IDH’s house call serv
Slide 5: Regional Performance
Regional Performance Local currency revenue expanded in Jordan, Nigeria and Sudan as restrictions were lifted and traffic normalized Revenues | EGP mn EBITDA* | EGP mn / % EGYPT Revenue from Egypt came in largely 1,410 1,407 636 636 unchanged versus last year, as a strong 84.2% third quarter helped
Slide 6: COVID-19 Impact on Regional Operations I/II
COVID-19 Impact on Regional Operations I/II Across IDH’s countries of operation, the Group witnessed a progressive easing of Covid-19- related measures during the quarter, with all branches operating normally starting in mid-July and through to the end of the third quarter 25th of March 29th of Marc
Slide 7: COVID-19 Impact on Regional Operations II/II
COVID-19 Impact on Regional Operations II/II Top-line growth was supported by IDH’s Covid-19-related* test offering in Egypt and Jordan, which continues to witness strong demand in both countries Covid-19 Testing Contribution to IDH Revenue 9M20 9% 4% Covid-19- EGYPT related* Testing EGP 1,407 mn ex
Slide 8: Segment Performance
Segment Performance Revenue and patient mix normalized from higher campaign-related contract volumes last year Revenue Split Patient Split 9M 2019 9M 2020 9M 2019 9M 2020 28% 32% 41% 45% 55% 59% 68% 72% Walk-in Corporate Walk-in Corporate Walk-in Corporate Walk-in Corporate 8 INTEGRATED DIAGNOSTICS
Slide 9: Segment Performance
Segment Performance During 2019 management had analysed the segmentation of Egypt’s patient base leading to a reclassification between walk-ins and contract volumes. Contract Segment Walk-In Segment Total 9M2020 9M2019 Change 9M2020 9M2019 Change 9M2020 9M2019 Change Revenue (EGP ‘000) 921 968 -5% 7
Slide 10: 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 IDH 9M 2020 Patient Volumes | ‘000 IDH 9M 2020 Tests per Patient | ‘000 -14% -5% 5,587 4.1 The awareness 4,792 3.9 224 10.9 campaign added 224 Excluding the impact of thousand patients
Slide 11: Continued Ramp up at Al Borg Scan
Continued Ramp up at Al Borg Scan Al-Borg Scan launched a second branch in Cairo in February 2020, progress continues toward the launch of a third branch Al Borg Scan Revenue Progression | EGP mn 2.83 2.69 2.32 2.19 1.45 1.53 1.47 1.37 1.39 1.37 1.37 1.18 1.13 1.08 1.17 1.06 0.84 0.94 0.90 0.70 0.80
Slide 12: Group Profitability Remained Intact
Group Profitability Remained Intact Gross profit margin expanded to 50%, supported by lower raw material costs and lower wages and salaries; EBITDA margin up marginally despite higher cautionary provisions IDH COGS Breakdown | EGP mn / % of Revenue IDH SG&A Breakdown | EGP mn / % of Revenue -2% +16%
Slide 13: Group Profitability Remained Intact
Group Profitability Remained Intact Revenue growth trickled down to the Group’s bottom-line which expanded 4% year-on-year in 9M 2020 with a stable margin versus last year IDH Interest Expenses| EGP mn / % of Revenue IDH Taxes | EGP mn / % of Revenue 10% Tax expenses recorded 1% The increase in 48.5
Slide 14: Covid-19 Internal Protocols and Preventative Measures
Covid-19 Internal Protocols and Preventative Measures In light of the recent covid-19 global outbreak, IDH, in line with World Health Organization (WHO) guidelines, has implemented detailed internal protocols to guarantee the safety of its staff and patients and safeguard its operations. IDH’s respo
Slide 15: Growth Strategies
Growth Strategies 15 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 16: 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 Revenue Generated “100 Million Healthy Lives” campaign The largest health campaign
Slide 17: 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 18: 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 19: Al Borg Scan Expansion Updates
Al Borg Scan Expansion Updates In February 2020, operations commenced at Al Borg Scan’s second branch in Cairo. The Group is actively working towards obtaining ACR (American College of Radiology) accreditation for Al Borg Scan’s branches, a process it expects to conclude by next year. In parallel, A
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. In parallel, the Group is actively seeking to optimise its offering, pushing its radiology and pathology services. Branc
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: Appendix
Appendix 25 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 26: 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 27: Our Geography
Our Geography IDH’s branch network of 471 labs at 9M2020 spans 4 countries, the largest of which is Egypt 19 The Company’s Egyptian operations contributed branches 84% of consolidated revenues in 9M2020 419 Jordan Branches EGYPT Egypt 84.2% 1979 9M2020 Cairo Region 47.5% Upper Egypt Region 16.5% JOR
Slide 28: 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 29: 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 ID
Slide 30: 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 31: 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 32: 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 33: 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 34: 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 p
Slide 35: 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 36: 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 37: 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 38: 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
Slide 39: IDH
INTEGRATED DIAGNOSTICS HOLDINGS IDH
Integrated Diagnostics Holdings — 9M 2020 Earnings Presentation on 6ix