Mlp Saglik Hizmetleri As Class B · BIST:MPARK
Mlp Saglik Hizmetleri As Class B — MLP Care — HSBC GEMs Investor Forum 2018 - London
40 slides from Mlp Saglik Hizmetleri As Class B's conference presentation, Sep 4, 2018
Slide 1: HSBC GEMs Investor Forum 2018 - London
HSBC GEMs Investor Forum 2018 - London 3 – 4 September 2018
Slide 2: Disclaimer
Disclaimer This presentation may contain certain forward-looking statements concerning MLP Care’s future performance and should be considered as good faith estimates made by the Company. These forward-looking statements reflect management expectations and are based upon currently available data. Act
Slide 3: Overview of MLP Care
VA MEDICALPARK MEDICALPARK V1/nospiTaL Overview of MLP Care
Slide 4: MLP Care: The #1 Private Hospital Group in Turkey
MLP Care: The #1 Private Hospital Group in Turkey 17 Cities 31 Hospitals; 5.900+ Beds; More than the #2 2x the size of 2nd Largest 17.500+ Staff and #3 Competitors Combined Competitor 2.100+ Doctors Addresses All Price Segments 3 JCI Accredited Hospitals Revenues:2.6 billion TL 1 in the Turkish Mark
Slide 5: Attractive double-digit historical growth
Attractive double-digit historical growth Net Sales (TLm) EBITDA¹ (TLm) EBITDAR¹ (TLm) %19 %25 %26 CAGR 2014-2017 CAGR 2014-2017 CAGR 2014-2017 • Acquisition of 6 • Openings of VM hospitals • 2 brand new • Opening of a Medical Park (2 of which are in hospitals in • Opening of a University Hospital P
Slide 6: MLP Care is the Leading Private Hospital Group in Turkey
MLP Care is the Leading Private Hospital Group in Turkey 1 Operates in the Attractive Turkish Healthcare Market 2 Clear Leader in Private Hospital Provision 3 Strong Brand Recognition and Unique Business Model Addressing All Price Points 4 Clinical Excellence and World Class Service Offering 5 Super
Slide 7: Operates in the Attractive Turkish Healthcare Market
1 Operates in the Attractive Turkish Healthcare Market Turkey is an attractive healthcare market with a growing elderly population and level of affluence, with significant scope for expansion compared to OECD players Turkish Healthcare Spending to Providers1 (TLbn) Growth in Aging Turkish Population
Slide 8: Operates in the Attractive Turkish Healthcare Market
1 Operates in the Attractive Turkish Healthcare Market Private operators have increased their market share, by increasing capacity and by focusing on procedures with higher complexity. Private players now account for 22% of beds, but provide 53% of complex surgeries. Number of Hospital Beds (’000) N
Slide 9: Operates in the Attractive Turkish Healthcare Market
1 Operates in the Attractive Turkish Healthcare Market Supportive government policies have underpinned the expansion of private hospital groups Healthcare system and key participants Universal Healthcare Coverage with Patient Choice Regulation Funding Service Patients Universal healthcare coverage (
Slide 10: Clear Leader in Private Hospital Provision
2 Clear Leader in Private Hospital Provision MLP Care is the largest multi-specialty hospital group in Turkey and the only private player with a truly nationwide network Bed concentration in İstanbul: • MLP: 40% • Acibadem: 67% National and local leader with a network covering the • Memorial: 34%
Slide 11: Clear Leader in Private Hospital Provision
2 Clear Leader in Private Hospital Provision MoH is investing in the PPP program, but large private players do not expect to see an impact in the near / mid term Highly illustrative schematic of the Turkish Healthcare Sector PPP success factors Top end of the Private Hospital market City hospitals
Slide 12: Strong Brand Recognition and Unique Business Model Addressing Multiple Price Points
3 Strong Brand Recognition and Unique Business Model Addressing Multiple Price Points Three concepts targeting three different price points with consistently outstanding medical service quality Concept Overview and Positioning 31 Total Hospitals in Portfolio Relative Average Price per Payor Type 3 P
Slide 13: Strong Brand Recognition and Unique Business Model Addressing Multiple Price Points
3 Strong Brand Recognition and Unique Business Model Addressing Multiple Price Points Double Digit Growth in Majority of Payor Types Revenue Breakdown by Payor Type – H1 2018 31% Revenue from PMI, Top-up & 63% Other 8% Contracted Institutions grew by 6x in the last five years Medical (1%) Tourism
Slide 14: Clinical Excellence and World Class Service Offering
4 Clinical Excellence and World Class Service Offering MLP Care benefits from a “Virtuous Circle” of best-in-class service, infrastructure and academic affiliations JCI accreditation SRC1 University affiliations The Gold Standard in Healthcare Globally The Global standard for quality surgical care M
Slide 15: Clinical Excellence and World Class Service Offering
4 Clinical Excellence and World Class Service Offering Top tier talent and patients are attracted to MLP Care’s unrivalled reputation, resulting in a steadily growing market share Ability to attract and retain top-tier physicians… CAGR Key points of attraction Proven track record of physicians recru
Slide 16: Financial Performance
VA MEDICALPARK MEDICALPARK V1/nospiTaL Financial Performance 16
Slide 17: Superior Operational and Financial Performance
5 Superior Operational and Financial Performance Strong growth continues with H1 revenues growing at 17.7% and Comparable EBITDA at 24.9% despite the global headwinds and early presidential elections Secular growth trend in foreign medical tourism and top-up continues (63.5% and 96.4% yoy growth
Slide 18: Solid Financial Performance in Q2 2018 and H1 2018
5 Solid Financial Performance in Q2 2018 and H1 2018 Comparable EBITDA growth was 25% in H1 2018 Revenue (TLm) Adj. EBITDA¹ (TLm) 17.7% 24.9% 19.4% 17.3% 262 1,470 8.4% 250 720 110 2 Q2 2018 H1 2018 Q2 2018 H1 2018 H1 2018 (1) EBITDA has been adjusted for TFRS adjustments that have no cash impact on
Slide 19: Strong Growth in All Revenue Segments in H1 2018
5 Strong Growth in All Revenue Segments in H1 2018 Domestic Patient Medical Tourism Ancillary Business Revenues Revenues 13.4% 63.5% 30.6% 11.4% 60.2% 48.0% 1,226 125 119 589 66 65 Q2 2018 H1 2018 Q2 2018 H1 2018 Q2 2018 H1 2018 Growth Continued in H1 2018 Continued to attract Foreign Generating hig
Slide 20: Domestic Hospital Business Revenue up 13.4%
5 Domestic Hospital Business Revenue up 13.4% Outpatient Revenues (TLm) Inpatient Revenues (TLm) 19.0% 9.9% 34.9% 2.9% 740 11.8% 495 6.8% 145 720 19 730 700 46 (66) 416 680 660 665 640 620 600 H1 2017 Volume Price H1 2018 H1 2017 Volume Price H1 2018 Average Revenue Per Visit (ARPV) Average Revenue
Slide 21: Cost Savings and Smart Cost Management
5 Cost Savings and Smart Cost Management Cost Savings and Smart Cost Management Cost of Service and G&A Expenses as a % of Revenues Material costs as a % of revenue Adj. EBITDA Margin 16.8% 17.0% declined, helped by the patient mix impact and decline in share of laboratory services business revenu
Slide 22: FX Exposure Mitigated by Hedging
5 FX Exposure Mitigated by Hedging FX Exposure Mitigated by Hedging FX BASED NET DEBT (in EUR m) NET DEBT 204 Before Hedging After Hedging 29% 45% 55% 104 71% 81 Percentage 53 Local Currency Local Currency Hard Currency Hard Currency 2017 Q1 2018 H1 2018 H1 2018 (Before (After Nominal TL957m TL957m
Slide 23: FX Position of Income Statement
FX Position of Income Statement Hard After Hard Currency as % of Hedging TLm H1 2018 Currency Total Revenues Transaction Domestic Hospital Revenue 1,226 - - - Foreign Medical Tourism 125 125 9% 9% Ancillary 119 - - - Total revenues 1,470 125 9% 9% Material (328) (33) (2%) (2%) Doctor (334) - - - Per
Slide 24: Investments Continued and Operating Cash Flow Slightly Declined
5 Investments Continued and Operating Cash Flow Slightly Declined Investments Continued and Operating Cash Flow Slightly Declined Maintenance Capex (TLm) Total Capex (TLm) Operating Cash Flow / EBITDA 127.0% 2.9% 12.7% 92.1% 2.8% 11.4% 200,0 43 150,0 266 167 230 35 159 100,0 50,0 - H1 2017 H1 2018 H
Slide 25: Outstanding Platform for Growth
Outstanding Platform for Growth 25
Slide 26: Outstanding Platform for Further Growth
6 Outstanding Platform for Further Growth Quick and successful ramp up in greenfields as well as acquisitions with typical range of 12-18 months to EBITDA-neutral hospitals Example of Greenfield Example of Acquisition Batıkent (Oct-2014) Yıldızlı (Sep-2014) Total Investment TL50m Total Investment Co
Slide 27: Proven track record of greenfield expansions and M&A
6 Outstanding Platform for Further Growth Proven track record of greenfield expansions and M&A Total Hospitals 25 26 27 29 31 33 35 At Year End MLP Care has added on average c.400 beds p.a.1 Acquired 6 Opened one 2 New Hospitals Two potential Bed Greenfield through greenfield projects since 2014 h
Slide 28: MLP Care has several avenues to continue its growth trajectory
6 Outstanding Platform for Further Growth MLP Care has several avenues to continue its growth trajectory 1 2 Top line growth via the Growth through favourable insurance scheme revenue diversification MLP Care has increased its market share in PMI (private medical insurance) Self-Pay share of tot
Slide 29: Appendix
VA MEDICALPARK MEDICALPARK V1/nospiTaL Appendix 29
Slide 30: Top-up Insurance Market Continues to Grow
Top-up Insurance Market Continues to Grow and positively impacts MLP Care’s revenues # of People With Insurance (PMI and Top-up) in Turkey – 000s Growth CAGR (2014-2017) (H1 2017-H1 2018) 2,678 2,703 2,927 2,214 2,281 6.9% 2,478 18.1% 134 405 676 782 64 119.1% 517 51.2% 2,026 (1.9%) 9.4% 2,150 2,147
Slide 31: Medical Tourism Continues to Grow over 60%
Medical Tourism Continues to Grow over 60% Medical Tourism Revenue (TLm) Diversified and Balanced Geography: 19.3%1 • Europe 40% 23.8% 15 125 • Middle East and Africa 30% 34 • Former CIS and the rest 30% Strong marketing through offices / 77 63.5% affiliations in 15 countries with Medical Park a
Slide 32: Positive Effects of the Amendment of SUT Prices
Positive Effects of the Amendment of SUT Prices As of July 5, 2018, Healthcare Applications Complex surgeries in private sector 1 Comminuque of the Social Security Institution («SUT») prices are amended. 48% 36% • The prices of inpatient procedures 19% 17% 16% 15% 14% 14% especially more complex p
Slide 33: Superior Operational and Financial Performance
Superior Operational and Financial Performance Robust growth and financial performance seen across Mature and Developing hospitals… General Overview Mature Hospitals Developing Hospitals Breakdown of Beds - 2017 Revenue2 (millionTL) / Growth (%) Revenue2 (millionTL) / Growth (%) 14% 8% 17% 176% 78%
Slide 34: Smart Cost Management
Superior Operational and Financial Performance Smart Cost Management Hospital Cost Comparison as % of Sales Adjusted EBITDA 14,5% 15,9% Margin 8,7% 8,1% 4,3% 4,2% 7,0% Material: Slight increase due to change in 7,3% the revenue mix 20,2% 18,6% Doctor: Flat as doctor cost is ca. 95% variable Pe
Slide 35: Strong cash flow generation
Superior Operational and Financial Performance Strong cash flow generation Maintenance Capex 1 (TLm) Capex of New Hospitals (TLm) Free Cash Flow (TLm) 63% 73% 2.6% %2.6 2.6% %2.6 % of Sales Remained flat as a percentage of Continued new hospital Strong free cash flow generation revenues at 2.6
Slide 36: Cost Comparison as a % of Sales
Cost Comparison as a % of Sales Mature Hospitals Developing Hospitals 81% 80% 94% 94% 20% 21% 30% 30% 13% 13% 6% 7% 23% 21% 19% 18% 24% 24% 29% 28% 21% 21% 15% 17% 2016 2017 2016 2017 Material Doctor Personnel Rent Other Material Doctor Personnel Rent Other 36
Slide 37: Historical P&L Statements
Historical P&L Statements TLm FY 2016 H1 2018 FY 2017 H1 2017 Revenue 2,160 2,576 1,248 1,470 Cost of service (-) (1,854) (2,171) (1,055) (1,231) Gross Profit 306 405 193 239 General administration expenses (-) (127) (215) (83) (123) Other income from operations 198 380 162 157 Other expenses from o
Slide 38: Historical Balance Sheet
Historical Balance Sheet 2016 2017 2018 TLm Dec 31 Dec 31 June 30 Cash and cash equivalents 111 218 372 Trade receivables 724 750 787 Inventory 45 51 75 Short term other assets 136 142 171 Current assets 1,016 1,161 1,404 Fixed assets 1,173 1,220 1,290 Deferred tax assets 146 197 257 Long term other
Slide 39: Reconciliation from Reported EBITDA to Adjusted EBITDA
Reconciliation from Reported EBITDA to Adjusted EBITDA TLm 2016 2017 H1 2017 H1 2018 Net Profit / (Loss) (49) (133) (20) (8) Tax Income from Operations (14) (38) (8) (46) Depreciation and Amortization of Tangible and Intangible Fixed Assets 153 175 84 90 Total Interest Expenses, Net of Interest Inco
Slide 40: IR Contact
IR Contact Dr. Deniz Can Yücel Head of Investor Relations T +90 212 227 5555 (Ext: 1148) E deniz.yucel@mlpcare.com http://investor.mlpcare.com/en/ 40