Integrated Diagnostics Holdings Plc · LSE:IDHC
Integrated Diagnostics — H1 2024 Earnings Presentation
62 slides from Integrated Diagnostics's earnings presentation, September 2024
Slide 1: IDH Results Presentation
IDH Results Presentation September 2024
Slide 2: Table of Contents
Table of Contents IDH At a Glance 1H 2024 Results Overview Key Investment Highlights Our Market Our Business Model Financial Position and Performance Growth Strategies Governance 2 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 3: Who We Are (I/II)
Who We Are (I/II) Integrated Diagnostics Holding is a leading, fully-integrated provider of high-quality medical diagnostic services with a footprint spanning Egypt, Jordan, Nigeria, Sudan, and Saudi Arabia An integrated diagnostics provider… Pathology Radiology Immunology Microbiology Haematology E
Slide 4: Who We Are (II/II)
Who We Are (II/II) The Company’s reach, scale, and service quality are unmatched across its markets of operation Track Record Accreditations +40 years CAP & ACR Accredited lab and scan First lab established in 1979 Jordan Patients Test Portfolio c.10 MN +3,000 Egypt Per year Tests Saudi Arabia Tests
Slide 5: Our Service Segments
Our Service Segments IDH’s pathology offering currently contributes the lion share of revenue and patients with 94%. The Company’s radiology services in 1H 2024 recorded a 18% increase over 1H 2023. Pathology – 94% of Revenues1 Radiology – 6% of Revenues1,2 Through IDH’s brands, the Group offers ove
Slide 6: Our Geographies
Our Geographies IDH currently operates the largest branch network amongst private providers in Egypt and boasts an established presence in four key markets in the Middle East and Africa Egypt Jordan Nigeria Saudi Arabia +20 +37% -1 -4% 12 -33% 2 339k New branches vs. Year-on-year revenue New branche
Slide 7: Our Patients
Our Patients IDH serves two principal types of patients: contract and walk-in Around 70% of total revenue generated across the two segments is paid in cash Contract Patients1 Walk-In Patients IDH’s contract clients include institutions who enter into one-year IDH’s walk-in clients, also referred to
Slide 8: 1H 2024 Results Overview
1H 2024 Results Overview 8 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 9: A Turbulent Operating Environment
A Turbulent Operating Environment IDH continues to post impressive financial and operational results despite difficult economic circumstances across its markets Devaluation of the EGP in March 2024 led to a free float, with Despite the devaluation, inflation rates continue to stabilize the EGP/USD r
Slide 10: 1H 2024 Results Snapshot (I/II)
1H 2024 Results Snapshot (I/II) IDH recorded positive consolidated revenue growth, even when including significant contributions from Covid-19 testing in the comparable period EGP 2,498 mn EGP 925 mn EGP 668 mn EGP 480 mn Revenue in 1H 2024 Gross Profit in 1H 2024 EBITDA1 in 1H 2024 Net Profit2 in 1
Slide 11: 1H 2024 Results Snapshot (II/II)
1H 2024 Results Snapshot (II/II) A 33% year-on-year growth in revenues driven by higher test volumes and an increase in average revenue per test Solid top-line growth… …driven by higher test volumes… +27% Revenue CAGR +12% Test Volume CAGR 2,498 2,293 16.5 17.8 16.3 16.0 1,954 1,872 1.4 2.6 1,105 61
Slide 12: Continued Growth at Egypt's Radiology Venture
Continued Growth at Egypt’s Radiology Venture Strong results from IDH's Egyptian radiology venture have increased its revenue contribution to Egypt, rising to 5.0% in 1H2024 compared to 4.2% in 1H2023 Revenues Evolution (mn) Number of Patients (000’s) 104 63 ▲65% ▲35% 92 68 1H 2023 1H 2024 1H 2023 1
Slide 13: Profitability Overview
Profitability Overview IDH prioritized cost optimization through various strategies, including enhancing fixed asset utilization to reduce depreciation and streamlining headcount to lower direct salary expenses as a percentage of revenue IDH’s strong relationships with suppliers enabled the Company
Slide 14: Revenue – EBITDA Bridge
Revenue – EBITDA Bridge 1H 2024 IDH Revenue - EBITDA Bridge | EGP mn 21.5% 26% 0.1% 2% 2% 1% 3% 17% 1H 2023 IDH Revenue - EBITDA Bridge | EGP mn 21.5% 28% 0.3% 2% 3% 1% 3% 16% 14 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 15: EBITDA – Net Profit Bridge
EBITDA – Net Profit Bridge 1H 2024 IDH EBITDA – Net Profit Bridge | EGP mn Interest on Lease Liabilities: EGP 53.8mn Interest Expenses on Leases: EGP 12.6 mn Bank Charges: EGP 6.3 mn Interest Expenses on Borrowings: EGP 12.2 mn Fast Track Payment: EGP 3.7 mn Earnings Before Tax | EGP mn Income & Def
Slide 16: Solid Financial Position
Solid Financial Position The Group maintains a solid financial position, with a sound balance sheet owing to its strong cash balance allowing for consistent dividend payouts Consolidated Cash Balance | EGP mn Net Debt Balance* | EGP mn Gross Fixed Assets | M-EGP 50% 1,254 2,921 2,554 (35) 835 (361)
Slide 17: 1H 2024 Capital Expenditure
1H 2024 Capital Expenditure IDH CAPEX recorded EGP 63.31 mn in 1H 2024, including both, core recurring CAPEX items and non-recurring capex related to the expansion of Al-Borg Scan’s network. This figure represented 2.5% of 1H 2024 total revenues. 2.0% 0.5% 0.02% 0.1% % of Group New Branches & Revenu
Slide 18: Fixed Gross Assets Bridge
Fixed Gross Assets Bridge IDH Fixed Gross Assets Bridge by Account | M-EGP 14.7% of total 1H 2024 revenue (2.5% excluding BG scan and M-EGP 366.8 translation) IDH Fixed Gross Assets Bridge by Region* | M-EGP 3% n/a 77% -42% 818% * The percent represents the share of fixed gross assets from each regi
Slide 19: Segment Performance
Segment Performance Both IDH’s contract and walk-in segments continue to see revenue growth in 1H 2024 (+33%), driven at the contract segment both by growing volumes (+11%) and average revenue per test (23%), and at the walk-in segment by an increase in average revenue per test (+33%) Walk-in Segmen
Slide 20: Segment Performance
Segment Performance IDH’s contract segment maintained its growth trend, remaining the major contributor to overall revenue and patient volumes in 1H 2024 Revenue Split Patient Split 21% 20% 36% 35% 1H 1H 1H 1H 2023 2024 2023 2024 64% 65% 79% 80% Walk-in Contract Walk-in Contract Walk-in Contract Wal
Slide 21: Regional Performance (I/II)
Regional Performance (I/II) IDH booked strong conventional revenue growth, with operations from its two biggest markets, Egypt and Jordan, continuing to post significant top-line expansion Revenue* |M-EGP| Gross Profit* |M-EGP| EBITDA* |M-EGP| EGYPT +37% +47% +63% 1,514 2,069 663 82.8% 584 584 407 E
Slide 22: Regional Performance (II/II)
Regional Performance (II/II) Patients |‘000| Tests |‘000| Test per Patient |‘000| Revenue per Test |EGP| +6% +10% +3% +25% EGYPT 3,651 3,887 16,548 15,109 4.3 100 125 4.1 1H 2023 1H 2024 1H 2023 1H 2024 1H 2023 1H 2024 1H 2023 1H 2024 -6% -2% +4% +36% JORDAN 183 172 6.4 6.7 334 1,180 1,154 246 1H 20
Slide 23: Regional Performance: Local Currency
Regional Performance: Local Currency Revenue | M-LCY Gross Profit | M-LCY EBITDA | M-LCY ▲37% 857 663 584 ▲47% Egypt 2,069 407 ▲63% 1,514 39% 41% 27% 32% 1H 2023 1H 2024 1H 2023 1H 2024 1H 2023 1H 2024 1.8 1.7 1.6 1.5 ▼4% Jordan ▼4% ▼7% 6.8 6.5 26% 26% 24% 23% 1H 2023 1H 2024 1H 2023 1H 2024 1H 2023
Slide 24: Continued Growth at Echo-Lab (Nigeria)
Continued Growth at Echo-Lab (Nigeria) Echo-Lab posted a 37% year-on-year increase in revenues in NGN terms, driven by a 65% year-on-year increase in average price per test. Test volumes were down 17% year-on-year, recording 113 thousand tests due to the ongoing economic volatility in the country af
Slide 25: Continued Ramp up at Al Borg Scan
Continued Ramp up at Al Borg Scan Al-Borg Scan sustained its robust growth momentum throughout 1H 2024, recording an impressive 65% year-on-year revenue growth EGP 104 MN 28% 16% 15% 13% 1H 2024 revenues 1H 2024 revenue contribution 1H 2024 revenue contribution 1H 2024 revenue contribution 1H 2024 r
Slide 26: Outlook and Strategies (I/II)
Outlook and Strategies (I/II) In IDH’s home and largest market of Egypt, the Company’s priorities for the coming year remain unchanged. Starting May, the Company saw a strong acceleration in revenues and volumes which has since carried through into July and August. Pricing Volumes Raw Materials Cost
Slide 27: Outlook and Strategies (II/II)
Outlook and Strategies (II/II) In Egypt, economic recovery has continued into the second quarter. Jordan and Saudi Arabia remain the most stable markets, with IDH ramping up operations in Saudi Arabia’s promising market. Nigeria changing policies. Jordan – Stable operations in a stable market FY 202
Slide 28: Investment Highlights
Investment Highlights 28 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 29: Investment Highlights
Investment Highlights IDH is an attractive investment opportunity with compelling fundamentals, present in fast- growing, under-served markets 1 Operating in highly fragmented markets characterised by strong structural growth drivers and high barriers to entry ✓ Deploys an asset-light business model
Slide 30: Fast-Growing, Underserved Markets
Fast-Growing, Underserved Markets 30 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 31: Favorable Industry Dynamics
Favorable Industry Dynamics IDH’s home market of Egypt is underpinned by robust structural growth drivers Lab tests per capita (2023) High Disease Burden Operating in a still under- 23.2 penetrated market The Egyptian population is marked by a high incidence of lifestyle- related medical conditions,
Slide 32: Favorable Industry Dynamics
Favorable Industry Dynamics IDH’s markets are characterised by high barriers to entry Economies of Scale Accreditation of Brand & Reputation Market Reach Key Stakeholder Facilities Relationships IT-enabled platform, Attracting patients Patients are loyal to Fragmented markets Building a scalable cri
Slide 33: IDH is a Consumer-Facing Service Provider
IDH is a Consumer-Facing Service Provider The mechanics of healthcare markets in developing economies are markedly different from those in many Western healthcare industries IDH serves the private healthcare A hospital outpatient clinic or Perceived quality and safety market, where notably patients
Slide 34: Scalable Business Model
Scalable Business Model 34 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 35: Asset-light Business Model
Asset-light Business Model 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’s diagnostic “Hub,” e
Slide 36: Our Mega Lab
Our Mega Lab IDH’s Mega Lab is the only CAP-accredited facility in Egypt, demonstrating the excellence of IDH’s patient care and confidence in the laboratory’s practices Capabilities Capacity • Mega Lab machines are capable of conducting a wide range of tests. • IDH’s Mega Lab doubled testing capaci
Slide 37: Key Supplier Relationships
Key Supplier Relationships IDH leverages its bargaining power with suppliers to maximize value in a business that is fundamentally about economies of scale. Combined with the long-tenure nature of its supplier contracts, this provides significant protection against short-term price fluctuations. Dyn
Slide 38: Strong Growth and Financial Position
Strong Growth and Financial Position 38 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 39: Key Financial Performance Indicators
Key Financial Performance Indicators Since the Company’s IPO on the LSE in 2015, IDH has delivered consistent top- and bottom-line growth supported by a steady increase in volumes and increasingly favourable pricing across the Group’s service offering Revenues | EGP mn - CAGR Gross Profit, GPM | EGP
Slide 40: Regional Performance (I/II)
Regional Performance (I/II) Across its footprint, the Company deploys tailored expansion strategies which enable it to continue driving growth irrespective of the prevailing macroeconomic environment Revenue |M-EGP| Adjusted EBITDA |M-EGP| CAGR: 18% CAGR: 14% EGYPT 4,108 3,411 2,206 2,894 2,173 2,00
Slide 41: Regional Performance (II/II)
Regional Performance (II/II) Across its footprint, the Company deploys tailored expansion strategies which enable it to continue driving growth irrespective of the prevailing macroeconomic environment Patients | ‘000 Tests | ‘000 CAGR: 5% CAGR: 6% 8,467 7,612 7,994 6,881 29,454 33,372 5,927 6,505 6,
Slide 42: Growth Strategies
Growth Strategies 42 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 43: Future Growth Strategies
Future Growth Strategies IDH’s growth strategies rely on leveraging its competitive advantages to achieve four strategic goals Expand Customer Reach Expand Geographically Beyond opening laboratories in new In addition to organic expansion, the Company geographies, IDH is reaching out to new continue
Slide 44: Expanding Customer Reach – Growing In Egypt
Expanding Customer Reach – Growing In Egypt The Group enjoys ample growth room in Egypt thanks to its market leading position and extensive reach, attractive underlying fundamentals, and favourable regulatory environment Reach and penetration Solid Fundamentals Universal Healthcare Act New growth op
Slide 45: Diversifying Service Offering – Al Borg Scan Ramp-Up
Diversifying Service Offering – Al Borg Scan Ramp-Up IDH’s radiology venture, Al Borg Scan, continues expanding its top line on the back of increased test volumes and average revenue per test 2018 7 branches EGP 430 mn 644 k Covering Cairo from East to West Revenue Scans Performed Fastest growing ch
Slide 46: Diversifying Service Offering – Al Borg Scan Expansion Updates
Diversifying Service Offering – Al Borg Scan Expansion Updates Al Borg Scan operates seven branches, one of which was inaugurated in 2023. The Group also recently earned the prestigious ACR (American College of Radiology) accreditation for Al Borg Scan’s Nuclear Medicine and ultrasound units. Ration
Slide 47: Al Borg Scan Maintains Growth Trajectory
Al Borg Scan Maintains Growth Trajectory IDH’s Egyptian radiology venture, Al Borg Scan, continues expanding its top-line and expanding its contribution to Egypt revenues, driven by sustained increases in test volumes and higher revenue per test Revenue, % of Egypt revenues | Scans Performed | ‘000
Slide 48: House Call Services (Egypt and Jordan)
House Call Services (Egypt and Jordan) IDH’s house call services, offered in both Egypt and Jordan, is becoming a primary contributor to top-line, averaging 15- 20% compared to a pre-pandemic contribution of c.10% House call services witnessed rising demand during the Covid-19 pandemic Expands Reach
Slide 49: Expanding Customer Reach – State-sponsored Initiatives
Expanding Customer Reach – State-sponsored Initiatives IDH’s nationwide presence and strong brand equity position it well to benefit from state-sponsored campaigns to increase awareness of preventative healthcare with diagnostic testing Duration Revenue Generated 8 months EGP 84 mn Nov ‘18 – Jun ‘19
Slide 50: Expanding Customer Reach – IDH Awareness Campaigns
Expanding Customer Reach – IDH Awareness Campaigns Parallel to state-sponsored initiatives, IDH also runs its own awareness campaigns focusing on specific diseases on a monthly basis and offering discounts on related testing IDH’s PCR Offers and Campaigns Discounts on PCR PCR testing for testing for
Slide 51: Diversifying Service Offering – New Investment in Wayak
Diversifying Service Offering – New Investment in Wayak IDH launches new subsidiary “Wayak” to offer data-driven healthcare services, utilising data analytics and artificial intelligence to capitalise on IDH’s database of over c.13 million patients Wayak Services Medication to be Service provider On
Slide 52: Growing Geographic Footprint– Investment Rationale
Growing Geographic Footprint– Investment Rationale IDH’s regional expansion strategy targets acquisitions in African, Middle Eastern and Asian markets where it can deploy its proven business model and generate accretive value Growing economies and strong Similar healthcare market structure to demogr
Slide 53: Growing Geographic Footprint – Nigeria Expansion
Growing Geographic Footprint – 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 54: Nigeria Branch Roll-Out and Renovations
Nigeria Branch Roll-Out and Renovations Opebi Branch Renovation and Rebranding New Victoria Island Branch Area 11 Branch Renovation and Rebranding Benin Branch Renovation & Rebranding 54 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 55: Growing Geographic Footprint – KSA Expansion
Growing Geographic Footprint – KSA Expansion In October 2022, IDH and Biolab signed a joint venture agreement with Izhoor, a company owned by Fawaz Alhokair, to launch a full-fledged pathology diagnostic services provider in Saudi Arabia Deal Structure Deal Specifics The new joint venture will be ow
Slide 56: Strong Leadership & Governance
Strong Leadership & Governance 56 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 57: Governance
Governance A World-Class Board of Directors The majority of members of IDH’s Board of Directors are non-executive and offer significant experience in the healthcare market, MENA region and investment activities Lord St John of Bletso 1 Prof. Dr. Hend El Sherbini Sherif El Zeiny Non-Executive Chairma
Slide 58: Governance
Governance IDH is committed to implementing best practices in corporate governance through the expertise of both the individual Directors and outside parties Anti-Bribery and Anti Corruption Internal Audit Procedures While not required to comply with UK Policy (ABAC) Corporate Governance Code, IDH a
Slide 59: 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
Slide 60: Appendix
Appendix 60 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 61: IDH Development Story
IDH Development Story Over 40 years of industry experience, complemented by strategic expansion to develop a strong market position across products and geographies. Today IDH has built a scalable platform that is positioned for further strong growth 1979 1990 2008 2011 2012 2013-14 Establishment of
Slide 62: IDH
INTEGRATED DIAGNOSTICS HOLDINGS IDH
Integrated Diagnostics Holdings — H1 2024 Earnings Presentation on 6ix