Integrated Diagnostics Holdings Plc · LSE:IDHC
Integrated Diagnostics — FY2018 Earnings Presentation
29 slides from Integrated Diagnostics's earnings presentation, March 2019
Slide 1: FY2018 Results Presentation
FY2018 Results Presentation March 2019
Slide 2: Agenda and Today's Presenters
Agenda: • IDH Today • FY2018 Results • Future Growth Today’s Presenters Dr. Hend El Sherbini Omar Bedewy Sherif El Ghamrawi Chief Executive Chief Financial Investor Relations Officer Officer Director 2 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 3: IDH Today
IDH Today 3 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 4: 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 5: Our Geography
Our Geography IDH’s branch network of 423 labs at FY2018 spans 4 countries, the largest of which is Egypt 19 The Company’s Egyptian operations contributed branches 84% of consolidated Revenues in FY2018 371 Jordan Branches EGYPT Egypt 84.0% 1979 FY2018 Cairo Region 44% Upper Egypt Region 18% JORDAN
Slide 6: 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 7: 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 8: 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 9: FY2018 Results
FY2018 Results 9 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 10: Financial Highlights
Financial Highlights Strong Financial Performance IDH’s performance in 2018 demonstrates our Group’s ability to deliver sustained, double-digit growth with strong margins Revenue Breakup EGP 1,921 mn EGP 948 mn In revenue in FY2018 Gross Profit in FY2018 ▲27% y-o-y ▲30% y-o-y / 49% margin IDH revenu
Slide 11: Financial Highlights: Results Driven by Organic Operational Growth
Financial Highlights Results Driven by Organic Operational Growth FY2018 FY2017 % change Walk-in Contract Total Walk-in Contract Total Walk-in Contract Total Revenue (EGP ‘000) 779,969 1,141,483 1,921,452 591,463 922,794 1,514,257 32% 24% 27% % of Revenue 41% 59% 100% 39% 61% 100% Patients ('000) 1,
Slide 12: Consistent Growth Trajectory
Financial Highlights IDH’s Results Build on a Consistent Growth Trajectory in Excess of Market Challenges Number of Patients Number of Tests Number of Branches Revenues EBITDA (millions) (millions) (branches) (EGP MN) (EGP MN) 423 7.00 383 762 6.40 28.8 354 1,921 5.79 5.82 25.7 5.58 23.8 24.0 314 60
Slide 13: Key Income Statement Considerations
Financial Highlights key Income Statement Considerations EGP'000 31 December 2018 31 December 2017 Raw materials cost-cutting Revenue 1,921,452 1,514,257 initiatives led to its decrease as a Cost of sales (973,072) (748,703) percentage of revenues from 21% Gross profit 948,380 729,554 in FY2017 to 1
Slide 14: Balance Sheet Strength
Financial Highlights Balance Sheet Strength 31 December 31 December EGP'000 2018 2017 ASSETS Asset-light business model translates into an Non-current assets Property, plant and equipment 705,779 473,786 under-levered and highly cash-generative balance Intangible assets and goodwill 1,672,463 1,658,
Slide 15: Future Growth
Future Growth 15 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 16: Future Growth Strategies
Future Growth Strategies IDH’s growth strategies rely on leveraging its competitive advantages to achieve four strategic goals Expand Customer Expand Reach Geographically In addition or organic expansion, the Company Beyond opening laboratories in new continues to seek value-accretive acquisitions g
Slide 17: 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 18: Delivering on Our Strategies – Al Borg Scan
Delivering on Our Strategies – Al Borg Scan In October 2018, IDH launched its radiology business in Egypt under the brand name Al Borg Scan EGP 186 mn 6 Investment Cost Operational Branches by 2020 Al Borg Scan offers a full range of radiology services, including but not limited to magnetic resonanc
Slide 19: Outlook & Guidance
Outlook & Guidance Continued Leverage the c.40% EBITDA Continue to Explore Attractive Expansion of Branch Group’s Brands and +20% Full-Year Revenue margin from Opportunities to Underlying Industry Network with c.20- Network to Growth in 2019 established Expand into New Trends 30 new branches in Intr
Slide 20: Q&A
INTEGRATED DIAGNOSTICS HOLDINGS IDH Q&A
Slide 21: Appendix
Appendix 21 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 22: 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 23: 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 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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
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