Healthcare Global Enterprises Ltd. · NSE:HCG
Healthcare Global Enterprises — Q2 FY2025 Earnings Presentation
48 slides from Healthcare Global Enterprises's earnings presentation, Nov 9, 2024
Slide 1: Exchange cover letter: Investor Presentation
November 09, 2024 National Stock Exchange of India Limited, BSE Limited, Compliance Department, Compliance Department, Exchange Plaza, Bandra Kurla Complex, Phiroze Jeejeebhoy Towers, Bandra (East), Mumbai - 400051, Dalal Street, Mumbai - 400001, Maharashtra, India Maharashtra, India Dear Sir/Madam,
Slide 2: Healthcare Global Enterprises Limited Investor Presentation November 2024
HEALTHCARE GLOBAL ENTERPRISES LIMITED I NV ESTOR P R ESENTATI ON November 2024
Slide 3: Safe Harbor
SAFE HARBOR This presentation and its contents are confidential and are not for release, publication or distribution, in whole or in part, directly or indirectly, in or into or from the United States of America, Canada, Australia, Japan or any jurisdiction where such distribution is unlawful. This p
Slide 4: Largest Pan-India Oncology Hospital Chain
Largest Pan-India Oncology Hospital Chain LARGEST GEOGRAPHICAL REACH… 2 Center of Excellence (CoE) 10 19 ~55% 19 Cancer Care Centers 1 Number of Number of Addressable market3 3 Multi-specialty hospitals states covered5 cities covered5 (population) 6 Day care centers 26 16/18 3.7L+ Jaipur No. of cent
Slide 5: Redefining Cancer Care in India
Redefining Cancer Care in India Largest oncology focused Strong commercial engine driving hospital chain with 1 5 digital and brand transformation a pan India network Focused factory approach and Successful playbook of smart Tumor board, pioneered by Dr. Ajai, 2 6 acquisitions and driving sustained
Slide 6: Industry Opportunity
Industry Opportunity LARGE AND GROWING ONCOLOGY MARKET IN INDIA INDIA IS A SIGNIFICANTLY UNDER-COVERED CANCER INDUSTRY INRbn Population coverage by cancer registries1 CAGR 13-14% CAGR 12% 3% 97% 1% 89% 3% 3% 1% 41% 10% P C R A R E 1 in every 9 people in India to potentially suffer from cancer by 202
Slide 7: Low early-stage diagnosis and skewness of CCC towards metros are key problems
Low early-stage diagnosis and skewness of CCC towards metros are key problems LOW EARLY-STAGE DIAGNOSIS IN INDIA… … LEADING TO HIGH MORTALITY TO INCIDENCE RATIO 81% 88% 91% 71% 73% 70% 61% 51% 52% 56% 29% 31% 30% 31% 26% 25% 28% 33% 19% 17% 22% 23% 15% 8% Breast Cancer Head and Neck Lung Cancer Brea
Slide 8: Global case studies reinforce the need for single specialty cancer hospitals
Global case studies and research reinforces the need to create single specialty hospitals for cancer care ✓ ✓ ✓ Objective of independently focusing on cancer Announced collaboration with Beth Israel Terminated partnership with Brigham and care rather than operating within a large health Deaconess Me
Slide 9: HCG positioned as Destination for Cancer Care
HCG has positioned itself as ‘Destination for Cancer Care’ with superior clinical and non -clinical expertise… DIAGNOSTICS TREATMENT POST CARE Genomics and Digital PET Preventive Oncology Medical Oncology Radiation Oncology Surgical Molecular Imaging Psychological Preventive Oncology Molecular and H
Slide 10: Underpinned by state-of-the-art technological expertise
…Underpinned by state -of-the-art technological expertise TRACK RECORD OF BEING 1st TO LAUNCH State-of-the-art Equipment in each modality Diagnostics ADVANCED TECHNOLOGY IN INDIA 17 Total PET AI-based 2022 CTs RIS PACS Digital PET CT Digital Digital Tomosynthesis Skyra Tesla Molecular / Ethos / Path
Slide 11: Tumor Board approach
“ T u m o r B o a rd a p p ro a c h ” – P ione e r in s c ie nt if ic d is c ou rse -le d innov a t ion w it h r ig ht c a s e s e le c t ion a nd le a r ning me t hod olog y Spearheaded by Dr. Ajai, who also heads 17+ years of nation wide, Supplemented by multiple IRC1 of 30+ oncologists for clinic
Slide 12: Case Study: Better clinical outcomes vs leading international peers
Case Study:HCG has been able to achieve better clinical outcomes compared to leading int’l cancer focused peers owing to its focused approach TREATMENT ADMINISTERED AND OUTCOMES – HCG VS. MD ANDERSON COVERAGE BY HARVARD OUTCOME: 5-YEAR SURVIVAL GLOBALLY COMPARABLE OUTCOMES N=729 N=2,451 TNBC Non-TNB
Slide 13: Case Study: Leveraging Genomics to drive better outcomes
Case Study : Leveraging “Genomics” to drive better outcomes 1st in Asia to complete 120+ clinical runs (1k+ patients) 1,000+ 1,735+ of Comprehensive Genomic Profiling Patient samples processed Total number of genomic with TSO500 alterations detected in cohort PRECISION Give the right diagnosis at th
Slide 14: HCG has decoded the oncology business model across metros and non-metros
HC G ha s s uc c essfully d ec od ed t he onc ology bus iness mod el r es ult ing in r ob us t p e r for mance a c r oss b ot h me t r os & non -me t r os 6 NON-METRO CENTERS WITH 15%+ ROCE STRONG PERFORMANCE ACROSS METROS AND NON-METROS Key Parameters Metros Non-metros Surgeries 9k4 19k4 All Non-Me
Slide 15: Geographic Presence
Established market leading positions across 16 of 18 cities HCG COMMANDS MARKET LEADERSHIP IN ~90% OF METROS & NON-METROS THE CITIES IT IS PRESENT IN2 # of cancer 12 4 2 centers : 211,2 Geographic Presence MULTIPLE METROS # of cancer centers : 8 2 2 4 Peer 1 # of cancer centers : 14 Peer 2 1 2 <5 CI
Slide 16: Key strategic initiatives undertaken in recent years
Key strategic initiatives undertaken in recent years Phase I Phase II Furthering dominance in Strengthening management team Improved Capital Allocation Optimization initiatives Turnaround existing markets ✓ ✓ Footprint optimisation: New CEO Exit from Kochi; tactical delay in Delhi Meaningful cost sa
Slide 17: Driving higher growth in market leading centers
Driving higher growth in market leading centers Centre of Excellence Upcoming Centre of Excellence Premier non-metro center KR HCC Cuttack Revenue FY18 FY20 FY24 FY18 FY20 FY24 FY18 FY20 FY24 ⚫ Engaged seasoned Regional Head ⚫ Strong Doctor Partner alignment ⚫ Strong Doctor Partner alignment ⚫ Stren
Slide 18: Significant focus on turnaround and profitability of key centers
Significant focus on turnaround and profitability of key centers Nagpur Jaipur Borivali Revenue FY20 FY24 FY20 FY24 FY20 FY24 EBITDA (IND AS) FY20 FY24 FY20 FY24 FY20 FY24 ⚫ Improving mix of clinical strength across modalities ⚫ Engaged COO with proven track record ⚫ New regional head appointed in O
Slide 19: Huge untapped potential across established and emerging centers
Huge untapped potential exists across key established and emerging centers Bengaluru South Mumbai • One of the most attractive micro-markets with the best flywheel of existing market share, • Customized philosophy to crack the hardest micro market in healthcare, anchored around quality of physicians
Slide 20: South Mumbai: Strategy to crack competitive micro-market
South Mumbai: Strategy in place to crack the most competitive micro-market in Indian healthcare ◼ Anchored around investments in high quality local and global talent, full-time specialist doctors and multi-modal treatment approach ◼ Well setup to breakeven in upcoming quarter and on the path to scal
Slide 21: Kolkata: EBITDA breakeven demonstrated
Kolkata: EBITDA breakeven already demonstrated, paving the way for further profitable ramp up Specific factors that delayed ramp up Turnaround already visible through leading indicators of patient Focused action plan to implement specific initiatives of the Kolkata center flow metrics FY20 FY24 ? Co
Slide 22: Articulating HCG's RoCE journey till date
Articulating HCG’s RoCE journey till date ESTABLISHED CENTERS EMERGING CENTERS HCG(1) Consistent growth in established Market leadership Acquired / established in recent years centers Track record of consistent profitability Substantial investment outlay recently Key metros scaled up 18 CCCs + 6 Day
Slide 23: Breakdown of FY24 ROCE
Breakdown of FY24 ROCE Insert footnote RoCE FOR KEY CENTERS (CONTRIBUTING OVERALL ROCE VIEW TO 75%+ EBITDA MARGINS) 29% 28% 21% 17% 10% 2% Yet to breakeven Established Overall Emerging Bangalore Vintage 1 Vintage 2 Vintage 3 Vintage 4 (10+ years) (~7-8 years) (~5 years) (Nascent) (3)% ◼ Established
Slide 24: Case studies of smart acquisitions and sustained growth
Case studies of smart acquisitions and driving sustained growth post integration Time-tested and highly replicable model of consistent revenue growth and profitability across geographies HCC Cuttack Acquisition 20131 2008 year Situation at ⚫ Primarily ⚫ Outside of ⚫ Single digit ⚫ Primarily ⚫ Single
Slide 25: Potential to grow faster than market over the next 5 years
Potential to grow faster than market over the next 5 years Well defined inorganic levers of expansion as a Greenfield expansions to drive natural industry consolidator future growth Complementary adjacencies to Higher patient value capture unlock newer avenues through advanced technology and of grow
Slide 26: Massive potential to drive attractive returns going forward
Massive potential to drive attractive returns going forward Margin Improvement Capital Efficiency ✓ Ongoing measures to improve ✓ Asset light expansion through pay per realization on the back of more use model for equipment and advanced technologies operationalization of day care beds ✓ Ongoing valu
Slide 27: Brand & Digital Marketing – Story so far & way forward
Brand & Digital Marketing – Story so far & way forward Current Future September 24 3-5 years ✓ SEO based revamped website – Feb 2022 & ✓ Microsite for International Aspire to get 25% of Sept 2023 ✓ Gujarati & Arabic Language options on ✓ Content addition on website based on SEO overall revenue throu
Slide 28: Digital Marketing - Journey so far
Digital Marketing - JOURNEY SO FAR Digital Revenues Digital revenue % of Topline 3.8% 13.5% 725 4.7x 5,378 4,035 155 155 725 Q2FY23 Q2FY25 Q2FY23 Q2FY25 Topline in Cr Digital Revenue in Cr Metro vs Non-Metro Source wise Digital Revenues 725 21% 9% 2% 1 9% 2% 1 2% 29% 24% 533 19% 155 59% 58% 64% 124
Slide 29: Q2 & H1FY25 Financial & Operational Highlights
Q2 & H1FY25 FINANCIAL & SUBASENI LENKA, CANCER WINNER OPERATIONAL HIGHLIGHTS I am eternally thankful to Dr. Panda and other specialists at HCG Panda Cancer Hospital, as the specialists were able to treat my condition the right way, the first time 28 www.hcgoncology.com www. h c g o n c o l o g y. c
Slide 30: Acquisition of MG Hospital, Vishakhapatnam
Acquisition of MG Hospital, Vishakhapatnam Consummated acquisition of MG hospital in Vizag. Part of HCG network effective 2nd October 2024 About MG Hospital Consideration • Established in 2005, #1 private comprehensive cancer care player in Vizag with ~30% market share • MG Hospital - Enterprise Val
Slide 31: Financial Highlights Q2FY25
Financial Highlights Q2FY25 Rs in M n REVENUE R E V E N U E - H C G C e n t e r s (1) REVENUE - Milann Centers #Proforma #Proforma +14% Revenue +15% Revenue -11% 5,535 5,834 5,378 5,677 177 4,870 4,693 158 Q2FY24 Q2FY25 Q2FY25# Q2FY24 Q2FY25 Q2FY25# Q2FY24 Q2FY25 ADJUSTED EBITDA PROFIT AFTER TAX PRO
Slide 32: Financial Highlights H1FY25
Financial Highlights H1FY25 Rs in M n REVENUE R E V E N U E - H C G C e n t e r s (1) REVENUE - Milann Centers #Proforma #Proforma +14% Revenue +15% Revenue -11% 10,791 11,393 10,490 11,092 340 9,477 9,136 302 H1FY24 H1FY25 H1FY25# H1FY24 H1FY25 H1FY25# H1FY24 H1FY25 ADJUSTED EBITDA PROFIT AFTER TAX
Slide 33: Improved Performance Leading to Profitability
Improved Performance Leading to Profitability 1.6x 4,607 4,870 4,699 4,946 5,256 5,535 3,520 3,581 3,646 4,079 4,200 4,247 4,422 Revenue (INR mn) Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 1.6x 864 941 929 1,042 632 636 652 740 760 773 778 765 804 EBITDA (Excl. ESO
Slide 34: Growth Across HCG Centers
Growth Across HCG Centers Established Centers Emerging Centers* ~1.3x g r o w t h i n l a s t 9 q u a r t e r s ~1.9x g r o w t h i n l a s t 9 q u a r t e r s REVENUE +13% +32% 4,637 4,848 530 4,085 4,290 4,117 4,330 446 475 3,750 3,756 3,893 403 417 371 358 285 324 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY
Slide 35: Strong Operating Metrics with Significant Capacity Headroom
Strong Operating Metrics with Significant Capacity Headroom Key Driver Metric Indicator % Revenue Q ’ Q ’ 5 H ’ H ’ 5 +9.9% +9.1% 196 215 Lead indicator of Volume Growth; key 18%* 100 109 OPD F f (‘ ) operating metric tracked by HCG; has correlation to OPD Footfalls +15.1% +13.9% 84 73 Key indicator
Slide 36: HCG – Q2FY25 Operational Metrics
HCG – Q2FY25 Operational Metrics # ESTABLISHED EMERGING CENTERS ESTABLISHED CENTERS TOTAL AOR (%) CENTERS AOR (%) A O R ^* ( % ) ROCE (%) 65.6% 67.1% 48.6% 15.8% 65.8% in Q2FY24 68.3% in Q2FY24 40.6% in Q2FY24 15.7% in Q2FY24 • Operational efficiency has reduced the ALOS from 2.05 days to 2.00 20 bp
Slide 37: HCG – Cluster Wise Revenue Break Up
HCG – Cluster Wise Revenue Break Up C LU ST E R Q2FY25 Q2FY24 Y-o-Y H1FY25 H1FY24 Y-o-Y K A R N ATA K A * 1,631 1,574 4% 3,194 3,078 4% G U J A R AT 1,344 1,215 11% 2,687 2,351 14% MAHARASHTRA 893 713 25% 1,712 1,372 25% EAST INDIA 646 535 21% 1,262 1,022 24% ANDHRA PRADESH 398 349 14% 770 684 13% T
Slide 38: Milann – Implementing Strategic Initiatives
Milann – Implementing Strategic Initiatives BENGALURU (5 Centers) Growth Growth Particulars Q2FY25 Q2FY24 H1FY25 H1FY24 Y-o-Y Y-o-Y M S Ramaiah Nagar New 1,437 1,265 13.6% 2,797 2,477 12.9% Registrations Shivananda Indiranagar IVF Cycles 348 465 -25.2% 703 879 -20.0% Whitefield Sarjapur JP Nagar Rev
Slide 39: Capital Expenditure & Net Debt
Capital Expenditure & Net Debt CAPITAL EXPENDITURE (Rs. Mn.) NET DEBT (Rs. Mn.) NET DEBT 30 th Sept 2024 30 th June 2024 HCG CENTERS H1FY25 H1FY24 Bank Debt ( 1) 7,073 6,771 Established Vendor Finance ( 2) 280 306 1,283 741 Centers Other Debt 38 38 Emerging Centers 41 19 Less: Cash & Cash Equivalent
Slide 40: Q2 & H1 FY25 Consolidated Profit & Loss Account
Q2 & H1 FY25 Consolidated Profit & Loss Account Profit and Loss (in Rs. Mn.) Q2FY25 Q2FY24 Y-o-Y Q1FY25 Q-o-Q H1FY25 H1FY24 Y-o-Y Revenues from Operations 5,524.7 4,859.6 5,246.9 10,771.6 9,456.7 Income from Govt. Grant 10.7 9.8 8.9 19.6 19.5 Total Revenue from Operations 5,535.4 4,869.4 13.7% 5,255
Slide 41: Consolidated Balance Sheet
Consolidated Balance Sheet B alan ce Sh eet - Eq u ity & Liab ili t ie s (in Rs. M n .) Sep t -24 M ar -24 B alan ce Sh eet - Assets (Rs. M n .) Sep t -24 M ar -24 E q u ity Sh are Cap ital 1,393. 9 1,392. 9 Non -Cur r ent Assets Oth er E q u ity 7,224. 0 6,864. 9 Prop erty, Plan t An d E q u ip men
Slide 42: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement Cash Flow Statement (in Rs. Mn) H1FY25 FY24 Net Profit Before Tax 466.4 677.2 Adjustments For: Non - Cash Items / Other Investment Or Financial Items 1,686.4 2914.0 Operating Profit Before Working Capital Changes 2,152.8 3,591.2 Changes In Working Capital -797.9 -271
Slide 43: Historical Financial Highlights
HISTORICAL FINANCIAL SHANKAR, CANCER WINNER HIGHLIGHTS The days I was at HCG, I felt like I was sleeping at home. They never stop caring for you. The doctors and nurses are always finding ways to make this difficult journey as comfortable as possible 42 www.hcgoncology.com www. h c g o n c o l o g y
Slide 44: Historical Profit & Loss Account
Historical Profit & Loss Account Profit and Loss (in Rs. Mn.) FY24 FY23 FY22 FY21 FY20 CAGR Revenues from Operations 19,079 16,914 13,948 10,092 10,923 Income from Govt. Grant 43 30 30 43 33 Total Revenue from Operations 19,121 16,944 13,978 10,134 10,956 15% Costs of Goods Sold 4,754 4,241 3,549 3,
Slide 45: Historical Balance Sheet
Historical Balance Sheet Balance Sheet - Equity & Liabilities (in Rs. Mn.) Mar-24 Mar-23 Mar-22 Mar-21 Mar-20 Equity Share Capital 1,393 1,391 1,390 1,254 887 Other Equity 6,865 7,214 7,313 5,718 2,926 Equity Attributable To Equity Holders Of The Company 8,258 8,605 8,703 6,972 3,813 Non-Controlling
Slide 46: Historical Balance Sheet
Historical Balance Sheet Balance Sheet - Assets (in Rs. Mn.) Mar-24 Mar-23 Mar-22 Mar-21 Mar-20 Non-Current Assets Property, Plant And Equipment 10,147 9,718 9,315 8,531 9,271 Capital Work in Progress 832 182 217 300 461 Rights-of-use Assets 4,907 3,813 4,045 4,114 5,776 Goodwill 2,229 1,812 1,813 9
Slide 47: Historical Cash Flow Statement
Historical Cash Flow Statement Cash Flow Statement (in Rs. Mn) Mar-24 Mar-23 Mar-22 Mar-21 Mar-20 Net Profit Before Tax 677 449 878 -2,287 -1,193 Adjustments For: Non - Cash Items / Other Investment Or Financial 2,914 2,753 1,666 3,619 2,988 Items Operating Profit Before Working Capital Changes 3,59
Slide 48: Thank You
THANK YOU Company: HealthCare Global Enterprises Limited Investor Relation Advisors: Strategic Growth Advisors CIN: L15200KA1998PLC023489 CIN: U74140MH2010PTC204285 For updates and specific queries, please visit Mr. Sagar Shroff / Mr. Ayush Haria www.hcgoncology.com sagar.shroff@sgapl.net / ayush.ha
HealthCare Global Enterprises — Q2 FY2025 Earnings Presentation on 6ix