Integrated Diagnostics Holdings Plc · LSE:IDHC
Integrated Diagnostics — H1 2020 Earnings Presentation
40 slides from Integrated Diagnostics's earnings presentation, September 2020
Slide 1: 1H2020 Results Presentation
1H2020 Results Presentation September 2020
Slide 2: Contents
Contents: • 1H2020 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 Resilient performance despite Covid-19, with top-line declining by a modest 10% amid severe operational disruptions during April and May 1H 2019 figures included the impact of the 100 Million Healthy EGP 950 mn EGP 446 mn Lives campaign in Egypt. Excluding the campaign, the Group’s
Slide 4: Monthly Revenue Progression
Monthly Revenue Progression IDH witnessed a sharp recovery beginning June 2020, with revenue for the month increasing by approximately 38% versus the same month last year Revenue Change| Year-on-Year 38% -8% -22% -49% 1Q 2020 Apr-20 May-20 Jun-20 Revenue in April and May 2020 declined by around 49%
Slide 5: Regional Performance
Regional Performance Local currency revenue expanded in Jordan and Nigeria despite COVID-19; Sudan remained largely flat even with continued branch closures Revenues | EGP mn EBITDA* | EGP mn / % EGYPT ▼12% Revenue from Egypt declined 12% ▼19% year-on-year in 1H 2020, on account of 911 805 411 84.8%
Slide 6: COVID-19 Impact on Regional Operations
COVID-19 Impact on Regional Operations Lockdowns and curfews imposed across IDH’s geographies to contain the spread of Covid-19 impacted patient volumes at IDH’s branches 25th of March 29th of March 23rd of April 31st of May 27th of June • Nighttime curfew • All labs resumed • Ramadan started • Work
Slide 7: Segment Performance
Segment Performance Revenue and patient mix normalized from higher campaign-related contract volumes last year Revenue Split Patient Split 1H 2019 1H 2020 1H 2019 1H 2020 26% 33% 39% 47% 53% 61% 67% 74% Walk-in Corporate Walk-in Corporate Walk-in Corporate Walk-in Corporate 7 INTEGRATED DIAGNOSTICS
Slide 8: 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 1H2020 1H2019 Change 1H2020 1H2019 Change 1H2020 1H2019 Change Revenue (EGP ‘000) 506,700 647,05
Slide 9: 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 1H 2020 Patient Volumes | ‘000 IDH 1H 2020 Tests per Patient | ‘000 -21% -8% 3,677 4.2 The awareness 224 2,890 Excluding the impact of 3.9 10.9 campaign added 224 the Campaign, tes
Slide 10: 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 1.45 1.53 1.47 1.37 1.39 1.37 1.37 1.18 1.13 1.17 1.08 1.06 0.94 0.90 0.84 0.80 0.75 0.70 1.28 0.34
Slide 11: Group Profitability Remained Intact
Group Profitability Remained Intact Gross profit margin remained stable at 47%, supported by lower raw material costs and lower wages and salaries; EBITDA impacted by cautionary provisions IDH COGS Breakdown | EGP mn / % of Revenue IDH SG&A Breakdown | EGP mn / % of Revenue -11% +29% SG&A/sales reac
Slide 12: Group Profitability Remained Intact
Group Profitability Remained Intact IDH’s net profit was partially impacted by the exclusion of provisions from taxable income IDH Interest Expenses| EGP mn / % of Revenue IDH Taxes | EGP mn / % of Revenue 19% -28% It is important to note The increase in 30.9 36.7 131.8 that the provision for 95.0 i
Slide 13: Summary Balance Sheet
Summary Balance Sheet Strong and liquid balance sheet with over EGP 719 million in cash balances as of 30 June 2020 30 June 31 December EGP'000 2020 2019 Adoption of IFRS 16 added EGP 289 million in Assets right-of-use assets as of 30 June 2020. Non-current assets Property, plant and equipment 760,7
Slide 14: Summary Cash Flow
Summary Cash Flow Given the Group’s strong liquidity position and management’s confidence in its financial outlook, the Board of Directors approved a cash dividend of US$ 28.0 million EGP'000 30 June 2019 30 June 2020 Profit for the period before tax 347,328 269,661 Net cash flow from operating acti
Slide 15: 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 16: Growth Strategies
Growth Strategies 16 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 17: 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 18: 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 19: 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 20: Al Borg Scan Expansion Updates
Al Borg Scan Expansion Updates In February 2020, operations commenced at Al Borg Scan’s second branch in Cairo 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 of radiology millions of
Slide 21: 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 22: 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 Hiring new management staff Rebranded the company to Echo-Lab (fro
Slide 23: 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 23 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 24: Nigeria Recently Acquired Equipment I/II
Nigeria Recently Acquired Equipment I/II Victoria Island Branch Opebi Branch 24 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 25: Nigeria Recently Acquired Equipment II/II
Nigeria Recently Acquired Equipment II/II Garki Branch Benin Branch 25 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 26: Appendix
Appendix 26 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 27: 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 28: Our Geography
Our Geography IDH’s branch network of 462 labs at 1H2020 spans 4 countries, the largest of which is Egypt 19 The Company’s Egyptian operations contributed branches 85% of consolidated revenues in 1H2020 410 Jordan Branches EGYPT Egypt 84.8% 1979 1H2020 Cairo Region 46.6% Upper Egypt Region 16.8% JOR
Slide 29: 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 30: 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 31: 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 32: 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 33: 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 34: 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 35: 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 36: 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 37: Governance
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 38: 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 39: 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 40: IDH
INTEGRATED DIAGNOSTICS HOLDINGS IDH
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