Medplus Health Services Ltd. · NSE:MEDPLUS
Medplus Health Services — Q2 FY2023 Earnings Presentation
35 slides from Medplus Health Services's earnings presentation, Nov 11, 2022
Slide 1: Second Quarter FY2023 Investor Presentation
SECOND QUARTER FY2023 INVESTOR PRESENTATION Corporate information Performance update Financial results NOVEMBER 2022
Slide 2: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by MedPlus Health Services Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for
Slide 3: Executive Summary: Q2FY23
Executive Summary Executive Summary: Q2FY23 1 Revenue Growth 4 Stable operating performance of mature Revenue has grown by 21.2% vs Q2 FY22 stores (>12m) ₹ 433mn Operating EBITDA 9.7% Store Level EBITDA margin 60.0% Store Level Operating ROCE 2 Accelerated store expansion Gross addition of 362 store
Slide 4: The MedPlus Story
The MedPlus Story Overview MedPlus caters to the healthcare and 2006 16 years c.830m+ household needs of Started in Hyderabad A Trusted Brand Bills Cut Since Inception the neighborhoods we operate in We are omni- 3,328 stores 7 454 channel: Digital and Stores States Cities neighborhood stores MedPlu
Slide 5: MedPlus – Leader In The Attractive Pharmacy Space
MedPlus – Leader In The Attractive Pharmacy Space Overview Fastest Growing Retail Segment Large Headroom to Grow 30% Pharmacy 25% 25% Food & Grocery 22% Jewellery 21% 20% Apparel 16% 16% 0% 20% 40% 60% 80% 100% 15% 14% Organized Retail Unorganized 10% 8% Better Unit Economics 5% Pharmacy: High reven
Slide 6: Cluster Based Network Enables Profitable Omni-Channel Service
Cluster Based Network Enables Profitable Omni-Channel Service Overview Stores As On Sep-22 Strong Cluster Based Network Strong network of 3,328 stores across Metros, Tier-One, Tier-Two and beyond. 3,328 stores 2- hour delivery Ability to service 100% market – acute + chronic Online only players cann
Slide 7: Scale Allows A Large Private Label Basket: 920+ SKUs
Scale Allows A Large Private Label Basket: 920+ SKUs Overview Pharma and Related Non-Pharma Pharma Over 638 products covering Chronic, Acute, OTC & Other Pharmaceutical products Non-Pharma Over 284 products covering, packaged food, baked goods, dry goods, cleaning products, cosmetics and toiletries
Slide 8: Poised for Growth
Poised for Growth Overview Key Pillars Of Growth MedPlus has an established base of operations in seven key states. Therefore, we will: Growth in existing clusters and • Further grow in cities where we have market leadership. Metro and Tier - One followed A by Tier - Two and beyond develop new clust
Slide 9: Q2 FY2023 Highlights (1/2)
Results Update Q2 FY2023 Highlights (1/2) ₹ 11,206m Revenue ₹ 2,428m Gross Margin • ₹ 1,959m increase over Q2FY22. • 21.7% gross margin (1.6% yoy, 0.5% 21.2% yoy qoq) • ₹ 1,270m increase over Q1FY23. 12.8% qoq • 2.7% increase in private label over Q2FY22 348 Store Net Additions Stores > 12 months •
Slide 10: Q2 FY2023 Highlights (2/2)
Results Update Q2 FY2023 Highlights (2/2) Revenue, ₹m Gross Margin Operating EBITDA EBITDA, ₹m 11,206 21.7% 706 689 688 21.3% 653 21.2% 628 Consolidated 9,937 9,659 9,247 9,335 20.8% 4.0% 3.9% 3.1% 20.1% 374 2.5% 366 2.2% 295 283 222 11,100 21.4% 724 745 21.3% 698 669 669 9,850 9,596 21.0% 4.1% Phar
Slide 11: 1,002 Stores Added In Last 12 Months
Results Update 1,002 Stores Added In Last 12 Months As On Sep-21 As On Mar-22 As On Sep-22 Presence 2,326 2,748 3,328 We are present in stores stores stores key 7 states, accounting for c.38.4% of India’s population2. The key urban centers are: Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, Nagpur,
Slide 12: Stores Added In Last Quarter
Results Update 348 Stores Added In Last Quarter Q2 FY23 Openings Q2 FY23 Closures Q2 FY23 Closure Reasons 13.5 We opened 362 1 362 14 stores in Q2FY23. stores stores There were 14 closures 3 5.1 10.4 10 Relocation Franchisee withdrawn Others Average age (years) 1. Color index for pie-chart as below:
Slide 13: Young Store Network: 33% Less Than 24 Months Old
Results Update Young Store Network: 33% Less Than 12 Months Old Pharmacy: Count Pharmacy: Age Structure of Stores1 Stores 2,326 2,477 2,748 2,980 3,328 Openings 4,000 24% 25% 27% 30% 33% Maintaining an 3,500 increasing pace of 348 10% 11% store openings 3,000 13% 232 15% 271 16% 2,500 151 161 2,000
Slide 14: Profitable Older Stores: 12+ Months
Results Update Profitable Older Stores: 12+ Months Store Level Revenue Growth1 Store Level EBITDA Margin Store Level Operating ROCE2,3 61.4% 61.0% 10.3% 10.0% 60.0% 7.8% 10.0% 58.9% 4.2% 2.8% 9.7% 9.7% 55.9% 9.5% -8.7% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY
Slide 15: Revenue Mix: Increasing Share Of Private Label
Results Update Revenue Mix: Increasing Share Of Private Label Revenue Mix: By Product Category Revenue Mix3: By Location of Stores 6.1% 2.5% 2.3% 2.4% 2.2% Product mix 4.6% 4.9% 4.6% 5.0% 7% 8% 8% 9% 9% 4.9% 7.3% 8.1% 8.1% 8.9% Trend of 6.2% increasing share 21% 21% 22% 11.4% 11.1% 10.5% 10.8% 22% 2
Slide 16: Omni-channel: Profitable With Negligible Acquisition Costs
Results Update Omni-channel: Profitable With Negligible Acquisition Costs Channel Revenue Channel Delivery Pincodes1 and Delivery Hubs 740 9.0% 100% Hubs 352 377 392 391 453 724 Home Delivery Omni-Channel 8.0% 720 1,877 Our online 80% 1,769 presence grows 7.0% 1,681 on the back of 700 693 1,556 1,57
Slide 17: Income Statement
Results Update Income Statement Snapshot of Income Statement, ₹m Q2FY23 vs. Q2FY23 vs. 6m FY23 vs. Q2FY22 Q1FY23 Q2FY23 6m FY22 6m FY23 Q2FY22 (yoy) Q1FY23(qoq) 6m FY22 (yoy) Revenue 9,247.4 9,936.5 11,206.3 21.2% 12.8% 18,799.2 21,142.8 12.5% Gross Margin 1,856.9 2,103.1 2,427.6 30.7% 15.4% 3,971.9
Slide 18: Income Statement: Business Segments
Results Update Income Statement: Business Segments Snapshot of Income Statement, ₹m Q1FY23 Q2FY23 Pharmacy Pharmacy Diagnostic Others Total Diagnostic Others Total Retail Retail Revenue 9,850.0 31.5 55.0 9,936.5 11,099.6 57.7 49.0 11,206.2 COGs and Expenses 9,576.3 83.4 55.2 9,714.8 10,764.0 110.4 4
Slide 19: Operating EBITDA Deep Dive
Results Update Operating EBITDA Deep Dive Operating EBITDA Bridge: From 12+ Months Stores to Consolidated, ₹m Operating EBITDA Q2FY23 18
Slide 20: Balance Sheet
Results Update Balance Sheet Snapshot of Balance Sheet, ₹m Sep-21 Mar-22 Jun-22 Sep-22 Assets Non Current Assets PPE and CWIP 1,152.0 1,823.2 2,108.1 2,532.1 Intangible assets 466.4 477.0 476.7 473.6 Right-of-use asset 4,643.1 5,891.6 6,528.5 6,837.8 Others 1,326.2 1,431.6 1,492.9 1,602.1 Total Non
Slide 21: Capital Productivity
Results Update Capital Productivity Working Capital Cycle, days ROCE2: Operating EBIT/ Avg. Capital Employed NWC (days) 16.9% 59 62 63 66 61 15.8% Year 1 Stores 47 48 47 45 111 days 43 10.5% inventory (on Year 1 stores 39 38 39 38 revenue) 36 6.8% Stores Older 5.5% Than 12 months 22 23 23 22 23 37 d
Slide 22: Cash Management
Results Update Cash Management Cash Management, Q2FY23, ₹m Operating Cash Flow ₹ 237m Free Cash Flow ₹ -756m PBT+ Inc. in Taxes Capex Payment Interest Interest Proceeds Decrease D&A+ Int. Working of lease received paid from in cash of Lease Capital liabilities issue of and cash Liability1 shares equ
Slide 23: Appendix
Appendix A. Diagnostics: Special Update B. Board and key management C. Glossary 22
Slide 24: Diagnostics: Underpenetrated Space
Special Update Diagnostics: Underpenetrated Space Diagnostics Consumption, tests per ‘000 p.a. MRI and CT Consumption, tests per ‘000 p.a. Market Size 407 c. US$10b 20,958 Diagnostics market in India c. 43% is Radiology Estimated current 192 10,000 size of high-end 144 radiology demand is c. US$ 2b
Slide 25: Diagnostics: Room For National Full-Service Player
Special Update Diagnostics: Room For National Full-Service Player Current State of Market • Standalone centers tend to provide limited services • Hospitals can cater to the diagnostics needs of a smaller catchment • Regional chains are unable to scale • National chains have mostly refrained from exp
Slide 26: Diagnostics: Low Insurance Penetration
Special Update Diagnostics: Low Insurance Penetration High Share of Out-of-Pocket Expenditure in Healthcare Healthcare: Share of Out-of-Pocket Expenditure • India has a high share of out-of-pocket in the healthcare basket: 63% (i.e. 3.5x global average) • Patients are constantly seeking avenues to r
Slide 27: Overview of MedPlus Advantage
Special Update Overview of MedPlus Advantage Recap: Why pricing is important? MedPlus Advantage Plans • Customers for diagnostics services are typically out-of-pocket … • … unlike some other (e.g. UK, Sri Lanka) where the primary source of funding for healthcare is the MedPlus Advantage - Plans Gove
Slide 28: Network Overview: Hyderabad
Special Update Network Overview: Hyderabad Hyderabad: Full Service Diagnostic Centers, 51 Hyderabad: Collection Centers, 101 Network Map The network comprises evenly spaced Full Service Diagnostic Centers2, supported by a wide matrix of Collection Centers (CoCo model) Notes: 1. Three operational and
Slide 29: Facility Overview
Special Update Facility Overview Hyderabad: Full Service Diagnostic Centers Hyderabad: Collection Centers 3 45 sq. ft. within existing store 1 2 Integrated facilities with Advanced Machines and Doctor Consultation (1) & (2) Front façade, (3) Reception, (4) Pharmacy, (5) Optical, (6) Sample Collectio
Slide 30: Plans Sold
Special Update Plans Sold Location of Plans Sold (Upto 31-Oct-22) Type of Plans Sold (Upto 31-Oct-22) B2B Plans Plans Sold 1% 51.1k Plans sold, with an average Others value of ₹1,292 Family 11% 14% 89.7k underlying members Diagnostic Center Single Adult Total Plans Total Plans 47% 24% 51.1k 51.1k Ph
Slide 31: Price Benchmarking (1/2)
Special Update Price Benchmarking (1/2) Radiology: MedPlus and Hyderabad Peers MedPlus Advantage Price Regional Regional Local List Price: Hyderabad (₹/ test) Peer-One Peer-Two Peer Advanced 3T MRI Brain 2,100 2.7x 1.7x 4.0x Radiology 3T MRI L-Spine 2,100 2.0x 1.7x 4.0x 3T MRI Pelvis 2,100 3.6x 2.1x
Slide 32: Price Benchmarking (2/2)
Special Update Price Benchmarking (2/2) Pathology: MedPlus and National Peers MedPlus Advantage National National National Regional Regional Online List Price: Local Price Peer- Peer- Peer- Peer- Peer- Aggreg- Hyderabad Peer (₹/ test) One Two Three One Two ator HbA1c 120 2.9x 4.9x 5.0x 4.8x 3.3x 4.9
Slide 33: Board and Key Management
B. Board and Key Management Appendix Committed Board Experienced Management Team Gangadi Madhukar Reddy Anish Kumar Saraf Atul Gupta Dr. Bhaskar Reddy Dr. Surendranath Mantena Founded MedPlus and has MD at Warburg Pincus Investment partner at COO–Outlet Operations COO–MedPlus Mart led it since incep
Slide 34: Glossary
C. Glossary Appendix Term Description Metro: Bengaluru, Chennai (and Avadi), Hyderabad, Kolkata (and Howrah), Mumbai (and Thane) City Categorization Tier One: Ahmednagar, Baramati, Kharagpur, Nagpur, Nashik, Panruti, Pune, Ranaghat, Vijayawada, Visakhapatnam (internal) Tier Two: Hundred and Nine cit
Slide 35: MedPlus Health Services Limited
MEDPLUS HEALTH SERVICES LIMITED www.medplusindia.com COMPANY SECRETARY Shilpi Keswani cs@medplusindia.com INVESTOR RELATIONS Prasad Reddy/ Tanushree Chaurasia ir@medplusindia.com MEDIA AND PRESS ENQUIRIES marketing@medplusindia.com
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