Cleopatra Hospital Company · EGX:CLHO
Cleopatra Hospital — FY2018 Earnings Presentation
46 slides from Cleopatra Hospital's earnings presentation, 2019
Slide 1: Cleopatra Hospital Company Investor Presentation FY2018
Cleopatra Hospital Company Investor Presentation FY2018 Cleopatra Investor Presentation FY18 1
Slide 2: At a Glance: Revolutionizing Egypt's healthcare industry
At a Glance: Revolutionizing Egypt’s healthcare industry Cleopatra Hospital Group (CHG) is Egypt’s largest private hospital group by number of its hospital beds and operating hospitals. Over the last five years, the Group has revolutionized the Egyptian healthcare industry by bringing high quality,
Slide 3: At a Glance: CHG financial highlights
At a Glance: CHG financial highlights EGP 404.8 mn EGP 1456.1 mn EBITDA2 in FY18 with a Consolidated revenues in FY18 with In 2018, CHG reported solid year- 28% margin 29% growth y-o-y on-year growth in both its top and bottom line, with the Group generating revenue growth from all four of its opera
Slide 4: At a Glance: CHG facilities and staff
At a Glance: CHG facilities and staff 4 (2018) + 2 (2019 ) 1 2 Polyclinics East Cairo polyclinic is operational as Cleopatra Hospital Company, is the largest Operational hospitals of February 2019. While West Cairo private hospital group in Egypt and consists across our platform Polyclinic will kick
Slide 5: A network of hospitals located strategically across greater Cairo
At a Glance: A network of hospitals located strategically across greater Cairo QUEENS Location Heliopolis, Location Mohandesin,Giza Location Heliopolis, Cairo # of Beds 50 # of Beds 121 # of Beds 188 Al Katib (1) Location Dokki # of Beds(2) 89 Location Maadi, Cairo # of Beds 152 Operating hospitals
Slide 6: Clearly Defined Growth Strategy
Clearly Defined Growth Strategy Our growth strategy is based on six key pillars: Integrating Enhancing Expanding Build up and Leveraging Establish the platform utilization hospital exploitation stronger centers of to achieve and capacities of Cleopatra position with excellence higher optimizing and
Slide 7: Key Investment Highlights
Key Investment Highlights
Slide 8: Key Investment Highlights
Key Investment Highlights 1 Underserved and under- penetrated market with steady demand 2 3 4 5 growth Leading Leverage on Solid financial Strong position in a integrated performance management highly platform and with potential team with fragmented scale to extract for enhanced experienced market s
Slide 9: Supply Gap in Egyptian Healthcare Industry
Supply Gap in Egyptian Healthcare Industry Hospital Beds (/1,000 people) | 2017 Population (millions) 10.5 110.0 96.0 98.0 100.0 88.0 90.0 92.0 83.0 86.0 4.6 3.5 2.5 2.2 1.8 1.8 1.3 1.1 1.1 2013 2014 2015 2016 2017 2018 2019e 2020e 2025e Healthcare Expenditure per Capita (USD) | 2017 • Based on a st
Slide 10: Healthcare Expenditure in Egypt
Healthcare Expenditure in Egypt Public vs. Private Healthcare Expenditure | EGP bn Total value of healthcare insurance premiums | EGP mn 1% 22% 16% 26% 27% 102 104 104 106 108 113 118 124 130 70.9 73.8 65.6 68.1 62.9 63.3 63.2 63.6 63.5 934 735 506 584 53.1 56.2 414 38.8 40.2 41.1 42.4 44.
Slide 11: Healthcare Demand in Egypt
Healthcare Demand in Egypt Number of Hospital beds | 000s Distribution of healthcare expenditure 128 125 40% 29 38% 31 38% 62% 98 94 40% 2011 2015 OOP Corporate Insurance Public Private Public Private Private Inpatient Distribution | Cairo Vs. Rest of Egypt • Insurance and Corporate spending account
Slide 12: Lifestyle Disease Profile in Egypt
Lifestyle Disease Profile in Egypt Hepatitis C Prevalence (000 cases) | 2012 Cancer Prevalence in Egypt | 000 cases 6,023 65.3 67.5 69.8 63.0 3.1 3.2 3.3 3.0 8.3 8.6 8.9 8.0 8.9 8.0 8.3 8.6 3,403 17.7 16.0 16.6 17.1 28.0 29.0 30.0 31.0 1,473 1,215 254 2013 2015 2020 2025 43 25 16 7 6 Liver Breast Di
Slide 13: Key Investment Highlights
Key Investment Highlights 2 Leading position in a highly fragmented 1 market 3 4 5 Underserved Leverage on Solid financial Strong and under- integrated performance management penetrated platform and with potential team with market with scale to extract for enhanced experienced structural synergies p
Slide 14: Leading Position in a Market with High Barriers to Entry
Leading Position in a Market with High Barriers to Entry Largest institutional hospital group in Egypt by Capturing the largest share of the top 15 large …And by number of hospitals(1) … number of beds… private hospitals in Cairo (1) (1) 782 6 6 out of top 13 (2) (2) private hospitals 470 388 3 3 in
Slide 15: Key Investment Highlights
Key Investment Highlights 3 Leverage on integrated platform and scale to extract 1 2 synergies 4 5 Underserved Leading Solid financial Strong and under- position in a performance management penetrated highly with potential team with market with fragmented for enhanced experienced structural market p
Slide 16: CHG's Integration model
CHG’s Integration model Integration, Optimization of Operations Effect on CHG Umbrella Centralized Unified Brand Unified Pricing Unified Value • Optimize Corporate Expansion Name for Institutionalizi Governance Corporate Authority Strategy Each & Positioning Financial Sops Creation operations and Of
Slide 17: Key Investment Highlights
Key Investment Highlights 4 Solid financial performance with potential for enhanced 1 2 3 profitability 5 Underserved Leading Leverage on Strong and under- position in a integrated management penetrated highly platform and team with market with fragmented scale to extract experienced structural mark
Slide 18: Solid Financial Performance
Solid Financial Performance While Cleopatra hospital remains the main revenue contributor to the group, the rest of the group hospitals progressed with growth in the overall group revenues, gross profit and EBITDA Group Revenue | EGP mn Revenue Breakdown | 2018 CAGR: 25% 17% Cleopatra CSH 47% 1,45
Slide 19: Key Revenue Drivers
Key Revenue Drivers Revenue from inpatient admissions and outpatient visits have demonstrated double-digit growth y-o-y, at 25% and 21% respectively Group Revenue Contribution by No. Outpatients | ‘000s No. Inpatients | ‘000s Segment (2018 ) 620 543 574 49.9 50 478 47.8 16% 20% 45.8 5% 4% 14% Outpat
Slide 20: Key Revenue Drivers
Key Revenue Drivers Driven by surgeries and ER visits, and increasing revenue per visit of 29% and 25% respectively, revenues from each of the mentioned segments have witnessed a notable growth ER Visits | 000s No. of Surgeries | 000s 254 261 247 257 35 37 36 35 2015 2016 2017 2018 2015 2016 2017 20
Slide 21: Key Revenue Drivers
Key Revenue Drivers Average revenue per bed also demonstrated double-digit growth, which, combined with similar growth in revenue per surgery and ER, outpatient and inpatient visits, has driven exceptional growth in revenues across our portfolio Average Revenue/Bed | EGP mn Revenue Progression by Ho
Slide 22: Key Investment Highlights
Key Investment Highlights 5 Strong management team with experienced 1 2 3 4 board of directors Resilient and Leading Leverage on Solid financial underpenetrate position in a integrated performance d market with highly platform and with potential structural fragmented scale to extract for enhanced de
Slide 23: Led by an experienced Management Team with Matrix Organizational Structure
Led by an experienced Management Team with Matrix Organizational Structure CHG has adopted a matrix organizational structure optimizing its operations and managing the employees effectively. The group has appointed the following directors: 2015 2016 2017 2018 • Polyclinics Building the foundation •
Slide 24: Led by an experienced Management Team with Matrix Organizational Structure
Led by an experienced Management Team with Matrix Organizational Structure Strong matrix organizational structure is being implemented at CHG to smooth and improve operations efficiency Audit Committee Board of Directors Dr. Ahmed Ezz El Din Chief Executive Officer Ola Ahmed Internal Audit Manager K
Slide 25: The Expansion Strategy
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Slide 26: Expansion Strategy
Expansion Strategy 1 2 3 4 5 6 Creating Feeder Building Strategic Brownfield/Green Expanding reach Creating Strategic networks Additional Acquisitions of field Expansions beyond Greater entities to serve Capacities in Operating Cairo Group’s scale of Existing Hospitals operations facilities
Slide 27: Expansion Strategy
Expansion Strategy 1 Creating Feeder networks 2 3 4 5 6 Building Strategic Brownfield/Green Expanding reach Creating Strategic Additional Acquisitions of field Expansions beyond Greater entities to serve Capacities in Operating Cairo Group’s scale of Existing Hospitals operations facilities
Slide 28: Feeder network started by the first polyclinics in East and West Cairo
Feeder network started by the first 2 polyclinics to present in East and West Cairo Polyclinics act as feeder networks for patient referral for the group hospitals. Specialized across different specialties including internal medicine, dentistry, radiology, ENT, cardiology, orthopedic, gynecology and
Slide 29: Feeder network: 5th settlement Polyclinic operational by February 2019
Feeder network started by the first 2 polyclinics to present in East and West Cairo 5th settlement (East Cairo) Polyclinic operational by February 2019
Slide 30: Expansion Strategy
Expansion Strategy 2 Creating Feeder Building networks Additional Capacities in Existing 6 1 3 4 5 facilities Creating Feeder Strategic Brownfield/Green Expanding reach Creating Strategic networks Acquisitions of field Expansions beyond Greater entities to serve Operating Cairo Group’s scale of Hosp
Slide 31: New extension for Al-Shorouk hospital
New extension for Al- Shorouk hospital Al Shorouk hospital expansion • In Q2 2018 , the group signed Vital Konzept , a leading Engineering & Consultancy Firm to start the process of Drawings for the extension in preparation for releasing the project for tendering with expected timeline of completion
Slide 32: Expansion Strategy
Expansion Strategy 3 Strategic Acquisitions of Operating Hospitals 1 2 4 5 6 Creating Feeder Building Brownfield/Green Expanding reach Creating Strategic networks Additional field Expansions beyond Greater entities to serve Capacities in Cairo Group’s scale of Existing operations facilities
Slide 33: Strategic Acquisitions of Operating Hospitals: Al Katib
Strategic Acquisitions of Operating Hospitals Al Katib Hospital (Dokki, West Cairo) (1) Kidney Specialist 89 Hospital Beds offering a complementary service • The hospital is also undergoing an additional expansion in order to reach 108 beds, as is expected to contribute around EGP 35mn of EBITDA to
Slide 34: Strategic Acquisitions of Operating Hospitals: Queens
Strategic Acquisitions of Operating Hospitals Queens Hospital (Heliopolis, East Cairo) • Given OGM approval, CHG has finalized and started operating Queens hospital as of March 2019 • 50 Hospital Beds in Heliopolis (Segment A area) • Hospital current focus is on gynecology and pediatrics specialties
Slide 35: Expansion Strategy
Expansion Strategy 4 5 Brownfield/ Expanding reach Greenfield beyond Greater Expansions Cairo 1 2 3 6 Creating Feeder Building Strategic Creating Strategic networks Additional Acquisitions of entities to serve Capacities in Operating Group’s scale of Existing facilities Hospitals operations
Slide 36: Expansions in brownfield hospitals and outside of Cairo
CHG is working on expansions in brownfield hospitals and outside of Cairo Brownfield / Greenfield expansion Expanding reach beyond greater Cairo • The group is currently assessing and shortlisting potential • In Bani Suef governorate (Upper Egypt) an underserved Brownfield acquisitions in areas wher
Slide 37: Expansion Strategy
Expansion Strategy 6 Creating Strategic entities to serve Group’s scale of 1 2 3 4 5 operations Creating Feeder Building Strategic Brownfield/Green Expanding reach networks Additional Acquisitions of field Expansions beyond Greater Capacities in Operating Cairo Existing facilities Hospitals
Slide 38: Strategic initiatives and entities created by CHG
Strategic initiatives and entities created by CHG to enhance efficiencies in operation As part of the group’s strategy to leverage synergies and expand its service offerings , CHG is now in the process of creating business operation entities: Cleopatra entity for Pharmaceutical Cleopatra Academy for
Slide 39: Governance & Shareholder Information
Governance & Shareholder Information
Slide 40: Diversified and Experienced Board of Directors
CHG is lead by a Diversified and Experienced Board of Directors Healthcare Experts Financial and Investment Experts Lobna El Dessouky Dr. Mohamed Awad Dr. Ahmed Ezzeldin Tarek Kabil Adjunct Professor Tag El Din Executive Member & Former Minister of Senior Advisor for Former Minister of Group CEO Tra
Slide 41: Key Investor Information
Care Health Limited’s Key Shareholders Key Investor DEG, the German Investment and Development Corporation, is a subsidiary of KFW, aiming at promoting Information business initiative in developing and emerging market countries as a contribution to sustainable growth and improved living conditions o
Slide 42: Appendix I: Financial Statements & Management Commentary
Appendix I: Financial Statements & Management Commentary
Slide 43: Consolidated Income Statement
Consolidated Income Statement All figures in EGP mn 4Q2018 4Q2017 % change FY2018 FY2017 % change Revenues 394.0 27% 1456.1 1126.8 29% 309.6 Cost of sales (245.5) (215.7) 14% (942.5) (788.2) 20% Gross profit 148.6 93.9 58% 513.6 338.6 52% Gross Profit Margin 38% 30% 35% 30% General & administrative
Slide 44: Consolidated Balance Sheet
Consolidated Balance Sheet All figures in EGP mn 31 December 2017 31 December 2018 Non-current assets Fixed assets 472.5 560.5 Intangible assets 241.0 241.0 Payment under investment 143.6 143.9 Total non-current assets 857.1 945.4 Current assets Inventory 30.1 40.8 Accounts receivables 185.4 302.8 O
Slide 45: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement All figures in EGP mn 31 December 2017 31 December 2018 Cash flow from operating activities: Profit before tax 155.4 408.0 Adjustments for: Depreciation 34.6 46.8 Amortization of intangible assets 5.4 - Allowance for impairments of current assets (21.9) (4.4) Provisi
Slide 46: Thank you
T hank you INVE S T O R RE L A T IO NS S HA R E HO L DE R C O NT A C T S INF O R MAT IO N Telephone: +2 02 23103771 E G X : C L HO .C A E -mail: ir@cleopatrahos pitals ..com Listed: J une 2016 investors.cleopatrahos pitals.com S hares Outstanding: 1.6 billion
Cleopatra Hospital Company — FY2018 Earnings Presentation on 6ix