Shalby Ltd. · NSE:SHALBY
Shalby — Q1 FY2021 Earnings Presentation
38 slides from Shalby's earnings presentation, Sep 5, 2020
Slide 1: Shalby Multi-Specialty Hospitals – Exchange Submission Letter
SHALBY MULTI-SPECIALTY —— HOSPITALS —— September 5, 2020 Shalby/SE/2020-21/54 The Listing Department Corporate Service Department National Stock Exchange of India Ltd BSE Limited Mumbai 400 051. Mumbai 400 001. Scrip Code : SHALBY Scrip Code: 540797 Through : https://www.connect2nse.com/LISTING/ Thr
Slide 2: Earnings Presentation Q1 FY2021
Earnings Presentation Q1 FY2021 SHALBY LIMITED (BSE CODE: 540797 I SHALBY, NSE CODE: SHALBY) A leader in Joint Replacement surgeries in India with an established chain of multi-specialty tertiary care hospitals.
Slide 3: Content
CONTENT 01 Q1 FY2021 PERFORMANCE HIGHLIGHTS 02 HOSPITAL BUSINESS UPDATE 03 SHALBY BUSINESS MODEL 04 ANNUAL PERFORMANCE HIGHLIGHTS 2
Slide 4: Q1 FY2021 Performance Highlights
Q1 FY2021 PERFORMANCE HIGHLIGHTS
Slide 5: Q1 FY2021 Performance Highlights
Q1 FY2021 PERFORMANCE HIGHLIGHTS Q1 FY2021 performance impacted due to the Covid-19 crisis Lower patient count, number of surgeries and bed occupancy impacted financial performance In Patient Count (Nos.) Surgeries Count 3,664 843 Revenues Operating EBITDA 9,799 in Q1 FY20 6,146 in Q1 FY20 Rs. 408 m
Slide 6: Management Commentary and Group Structure Simplification
Q1 FY2021 PERFORMANCE HIGHLIGHTS Commenting on performance Chairman & Managing Director Shalby Group Structure Simplification Dr. Vikram Shah Said: Step 1 As expected our first quarter FY 2021 financial performance was • Shalby Ltd acquired 100% of Slaney from significantly impacted by the pandemic
Slide 7: Revenue, EBITDA, PBT and PAT Trends
Q1 FY2021 PERFORMANCE HIGHLIGHTS Total Revenue (Rs. Mn) EBITDA (Rs. Mn) and Margin 314 301 1,340 1,279 1,232 1,160 243 23.4% 23.6% 19.7% 129 11.1% 408 (25) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 PBT (Rs. Mn) and Margin PAT (Rs. Mn) and Margin 210 199 17.7% 13
Slide 8: Patient Counts, ARPOB and Surgery Count
Q1 FY2021 PERFORMANCE HIGHLIGHTS In Patients Day Care Out Patients 10,682 6,726 87,575 9,799 9,838 6,356 83,187 80,501 8,711 5,701 74,333 4,945 3,763 3,664 32,305 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 ARPOB (Rs.) Surge
Slide 9: Revenue Mix, Occupancy and ALOS
Q1 FY2021 PERFORMANCE HIGHLIGHTS Revenue Mix by Care % of Revenue from Arthroplasty 52% 42% 43% 42% 12% 12% 13% 13% 16% 83% 82% 82% 83% 77% 12% Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 In Patient Day Care Out Patient Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 No of Bed Occupied Occupancy Rate ALOS 457 4
Slide 10: Revenue by Hospital Specialty
Q1 FY2021 PERFORMANCE HIGHLIGHTS Revenue by Hospital Specialty 52% 27% 15% 14% 12% 10% 8% 7% 8% 7% 9% 7% 9% 6% 5% 4% Arthroplasty Critical Care & Orthopaedic Cardiac Science Nephrology Oncology Neurology Others General Medicine Q1 FY20 Q1 FY21 Number of Surgeries by Specialty Revenues by End Patient
Slide 11: Operating Expenses and Cost Mix
Q1 FY2021 PERFORMANCE HIGHLIGHTS Total Operating Expenses (Rs. Mn) Total Costs Mix (Rs. Mn) D&A Expenses 1,027 977 988 1,031 8% 9% 8% 8% 7% 17% 9% 9% 15% Other Expenses 15% 15% 15% 14% 2% 2% 5% 14% 2% 17% Employee Benefit Expenses 433 2% 68% Purchase and Change in 66% 63% 60% 50% Inventory Operative
Slide 12: Q1 FY2021 Income Statement
Q1 FY2021 PERFORMANCE HIGHLIGHTS Particulars (in Rs. Million) Q1 FY21 Q1 FY20 Q4 FY20 FY 20 FY 19 YoY Growth Revenue from Operations 384 1,318 1,055 4,839 4,624 4.6% Other Income 24 23 105 177 94 89.4% Total Income 408 1,340 1,160 5,016 4,718 6.3% Expenses COGS 272 777 698 2,931 2,839 3.2% % of Reve
Slide 13: Operational Metrics
Q1 FY2021 PERFORMANCE HIGHLIGHTS Operational Metrics Q1 FY21 Q1 FY20 Q4 FY20 FY 20 FY 19 YoY Growth In Patient Count 3,664 9,799 8,711 39,030 36,311 7.5% (Nos.) Day Care Patient Count 3,763 6,356 4,945 23,728 19,674 20.6% (Nos.) Out Patient Count 32,305 87,575 74,333 3,25,596 2,96,197 9.9% (Nos.) Su
Slide 14: Hospital Business Update
SHALBY MULTI-SPECIALTY ——HOSPITALS— HOSPITAL BUSINESS UPDATE
Slide 15: Our Regional Presence
OUR REGIONAL PRESENCE Existing 11 Units (2012 beds) Upcoming 2 Units (288 beds) 50 Outpatient Clinics across 15 states in India ➢ National Presence ➢ International Presence (in Africa) PUNJAB ▪ Mohali – 145 beds RAJASTHAN ▪ Jaipur – 237 beds GUJARAT ▪ Ahmedabad o SG – 201 beds o Krishna – 220 beds o
Slide 16: Santa Cruz and Nashik Development Update
HOSPITAL BUSINESS UPDATE Santa Cruz Development Update Nashik Development Update Business Model: Revenue Sharing Business Model: Revenue Sharing Bed Capacity: 175 Bed Capacity: 113 Operating and Management Term: 30 + 30 years Operating and Management Term: 30 years Operationalization Year: FY 2024 O
Slide 17: SG Group, Krishna and Naroda Hospitals
HOSPITAL BUSINESS UPDATE Catchment: Ahmedabad and surrounding areas of Gujarat, Commencement 2007 | 13 Years Rajasthan and Mumbai No. of beds / Occupancy 201 | 50.3% • Transfer of Covid-19 positive patients to other Shalby units SG • Optimum utilization of manpower Type of Arrangement Leased – Fixed
Slide 18: Jabalpur, Surat, Vapi and Indore Hospitals
HOSPITAL BUSINESS UPDATE Commencement 2017 | 3 Years Catchment: South Gujarat, North Maharashtra (including Mumbai) No. of beds / Occupancy 243 | 39.1% Surat • Conducted multiple awareness sessions for corporates like Type of Arrangement Freehold Reliance, L&T and Shell about Covid-19 dos and don’ts
Slide 19: Mohali, Jaipur and Zynova Hospitals
HOSPITAL BUSINESS UPDATE Commencement 2017 | 2+ Years Catchment: Punjab, Uttrakhand Mohali No. of beds / Occupancy 145 | 24.7% • Top 2 floors of the hospital dedicated for Covid-19 patients Type of Arrangement Freehold • Major specialties like arthroplasty, urology and medicine showing recovery in Q
Slide 20: Shalby Business Model
SHALBY MULTI-SPECIALTY ——HOSPITALS— SHALBY BUSINESS MODEL
Slide 21: Group Structure and Transaction Details
SHALBY BUSINESS MODEL Dr. Vikram Shah and Family Shah Family Trust Zodiac Mediquip 10.1% 40.1% 29.2% Shalby Limited Transaction Details Subsidiaries Step 1 • Shalby Ltd acquired 100% of Slaney from Vrundavan – 100% Discontinued goa operations Zodiac Mediquip • Cash consideration of Rs. 11.21 million
Slide 22: Experienced Board of Directors
SHALBY BUSINESS MODEL Experienced Board of Directors Dr. Vikram Shah Chairman and Managing Director Mr. Shyamal Joshi Non-Executive Director Over two and a half decades of professional healthcare experience across UK, USA and India, Dr. Shah has been serving as Director of the Department of Knee Ass
Slide 23: Senior Management
SHALBY BUSINESS MODEL Senior Management Mr. Shanay Shah Mr. Muraarie Rajan Principal Advisor President 25 years experience in corporate strategy, mergers and acquisitions and fund raising. With over six years of experience in the healthcare industry, Mr. Shah is involved in Worked at Wolfensohn & Co
Slide 24: Greenfield, Brownfield, Leased and Freehold Hospital Model
SHALBY BUSINESS MODEL Greenfield 907 Beds Brownfield 977 Beds Acquisition 366 Beds Franchise Franchise Lower capital requirement New Growth Area 2017 Year 2015 Year Naroda 267 Beds Jabalpur 233 Beds Leased 2007 Year 2017 Year SG 201 Beds Mohali 145 Beds Santa Cruz 2024 Year 2023 Year 175 Beds Nashik
Slide 25: Positive EBITDAR Margin Within 3 Years of Operations
SHALBY BUSINESS MODEL Shalby Hospitals generates positive EBITDAR Margin within 3 years of its operations 33% 13% 15% Avg. EBITDAR Margin Avg. EBITDAR Margin Avg. EBITDAR Margin Naroda SG Group Indore Jaipur Nashik Krishna Jabalpur Surat Group Mohali Santa Cruz 8+ Years 5+ Years 3+ Years 2+ Years Pi
Slide 26: EBITDA Margin by Hospital Group
SHALBY BUSINESS MODEL Each hospital group makes a positive contribution at the Shalby level where corporate costs are 4.7% of total revenue ARPOB Rs. 51,231 27,843 21,382 22,635 31,517 24,427 16,801 40% 35.6% 35% 30% 25.9% EBITDA % 25% 24.5% 23.2% Hospital and Other EBITDA Margins 20% 14.7% 15% 19.7
Slide 27: EBITDAR Margins vs Bed Occupancy
SHALBY BUSINESS MODEL Shalby is able to operate hospitals profitability at EBITDA and EBITDAR levels even at a bed occupancy of 30% Jaipur, Surat and Naroda which have been operational for less than 5 years are currently ramping up 30.5% Min. Occupancy 45.0% 40.0% SG Group, 36.0% 35.0% EBITDAR Margi
Slide 28: Annual Performance Trends
SHALBY MULTI-SPECIALTY ——HOSPITALS— ANNUAL PERFORMANCE TRENDS
Slide 29: Shalby Financial Case
SHALBY FINANCIAL CASE Over last two years, Total Revenue increased by 14.0% and EBITDA by 6.1% CAGR with EBITDA margins at 19.7% Increasing number of patients across all care formats reflects Shalby’s strong brand recognition: In Patients 7.5%, Day Care 20.6% and Out Patients 9.9% Number of beds occ
Slide 30: Revenue, EBITDA, PBT and PAT Annual Trends
ANNUAL PERFORMANCE TRENDS Total Revenue increased by 14.0% and EBITDA by 6.1% CAGR with margins at 19.7% Total Revenue (Rs. Mn) EBITDA (Rs. Mn) and Margin 14.0% 6.1% CAGR 22.7% CAGR 19.7% 19.4% 5,042 991 4,715 3,880 916 881 FY 18 FY 19 FY 20 FY 18 FY 19 FY 20 PBT (Rs. Mn) and Margin PAT (Rs. Mn) and
Slide 31: Patient Numbers, ARPOB and Surgery Count
ANNUAL PERFORMANCE TRENDS Increasing number of patients across all care formats reflects Shalby’s strong brand recognition In Patients Day Care Out Patients 23,728 3,25,596 39,030 7.5% 19,674 20.6% 2,96,197 9.9% 36,311 Y-o-Y Y-o-Y 2,22,970 Y-o-Y 27,771 5,196 FY 18 FY 19 FY 20 FY 18 FY 19 FY 20 FY 18
Slide 32: Revenue Mix, Beds Occupied and Occupancy Rate
ANNUAL PERFORMANCE TRENDS Number of beds occupied increased by 8.9% y-o-y and occupancy rate of 38% Hospital Revenue Mix by Care % of Revenue from Arthroplasty 11% 55% 12% 13% 45% 45% 2% 4% 5% 88% 84% 83% FY 18 FY 19 FY 20 FY 18 FY 19 FY 20 In Patient Day Care Out Patient No. of Beds Occupied Occupa
Slide 33: Operating Expense Optimization
ANNUAL PERFORMANCE TRENDS Ongoing optimization of doctor cost and centralized sourcing of medical instruments, devices and consumables Total Operating Expenses (Rs. Mn) Total Costs ex Finance Cost (Rs. Mn) 4,051 D&A Expenses 3,799 7% 8% 8% 2,999 10% 8% 10% Other Expenses 14% 16% 15% 12% 10% 12% Empl
Slide 34: Cash Flow Statement FY2020 and FY2019
ANNUAL PERFORMANCE TRENDS Cash Flow Statement (Rs. Mn) – FY2020 4 • Mat tax outflow of Rs. 107 mn, Tax (176) receivables created of Rs. 95 mn 360 (202) • Maintenance capex of 3.9% of (198) Total Income 567 553 (109) • Net other investment activity of (215) Rs. (161) mn 31 • Interest received of Rs.
Slide 35: ROE, ROCE, Cash Conversion and Capital Structure
ANNUAL PERFORMANCE TRENDS Strong EBITDA to Cash Flow conversion rate of 55.9%. Unlevered balance sheet results in lower Return on Equity ROE ROCE 7.7% 7.3% 6.9% 5.8% 5.2% 4.1% 3.5% FY 18 FY 19 FY 20 FY20 Adjusted FY 18 FY 19 FY 20 CFO to EBITDA Capital Structure 55.9% 47.4% Figures in Rs Million FY
Slide 36: Annual Income Statement
ANNUAL PERFORMANCE TRENDS Particulars (in Rs. Million) FY 18 FY 19 FY 20 CAGR Revenue from Operations 3,780 4,623 4,869 13.5% Other Income 100 93 174 31.7% Total Income 3,880 4,715 5,042 14.0% Expenses COGS 2,219 2,833 2,953 15.4% % of Revenue from Operations 59% 61% 61% Employee Benefit Expenses 45
Slide 37: Annual Operational Metrics
ANNUAL PERFORMANCE TRENDS Operational Metrics FY 18 FY 19 FY 20 CAGR In Patient Count 27,771 36,311 39,030 18.6% (Nos.) Day Care Patient Count 5,196 19,674 23,728 113.7% (Nos.) Out Patient Count 2,22,970 2,96,197 3,25,596 20.8% (Nos.) Surgeries Count 17,554 19,908 19,835 6.3% ARPOB 31,564 31,296 30,
Slide 38: Disclaimer and Contact Details
DISCLAIMER and CONTACT DETAILS No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as