Cleopatra Hospital Company · EGX:CLHO
Cleopatra Hospital — 1H 2018 Earnings Presentation
38 slides from Cleopatra Hospital's earnings presentation, 2018
Slide 1: Cleopatra Hospital Company Investor Presentation 1H18
Cleopatra Hospital Company Investor Presentation 1H18
Slide 2: At a Glance
At a Glance 4 EGP 674 mn Operational hospitals Consolidated revenues in 1H18 across our platform with 29% growth y-o-y • Cleopatra Hospital Company (the “Group” or “CHC”), is the largest private 643 hospital group in Egypt and consists of four operational hospitals all in Cairo, namely: Patient beds
Slide 3: Presence in Attractive Catchment Areas Across Greater Cairo
Presence in Attractive Catchment Areas Across Greater Cairo Location Mohandesin, Giza Location Heliopolis, Cairo Built-up Area 5,270 sqm Built-up Area 7,380 sqm Date Established 1996 West Cairo Acquisition(1)(2) Date Established 1984 # of Beds 121 # of Beds(2) 182 Location Dokki, Giza Built-up 6,500
Slide 4: Clearly Defined Growth Strategy
Clearly Defined Growth Strategy Our growth strategy is based on six key pillars: Integrating the Enhancing Expanding Strengthening Leveraging Establish platform to utilization and hospital unified brand stronger centers of achieve higher optimizing capacities and position with excellence and efficie
Slide 5: Our Value Proposition
Our Value Proposition
Slide 6: Key Investment Highlights
Key Investment Highlights 1 2 3 4 5 6 Resilient and Leading position Capitalizing on Leverage on Solid financial Seasoned underpenetrated in a highly established integrated performance management market with fragmented brand equity & platform and with potential team with strong structural market wit
Slide 7: Resilient & Underpenetrated Market with Demand Growth
Healthcare Expenditure (EGP bn) Resilient & Underpenetrated 194 Public Private 178 163 Market with Demand Growth 149 137 131 113 117 96 98 107 83 90 81 83 70 53 60 55 59 65 71 77 30 36 43 50 Operating in an underpenetrated and growing market 2012 2013 2014 2015 2016f 2017f 2018f 2019f 2020f Hospital
Slide 8: Prevalence of Diseases in Egypt
Prevalence of Diseases in Egypt Lifestyle Diseases Cancer Prevalence (2012) (‘000 cases) Estimated Incidence Prevalence (1-year) Prevalence (3-years) 931 Hepatitis C Prevalence (2012) (‘000 cases) 6,023 492 358 208 3,403 146 145 105 83 59 54 34 26 21 17 17 14 12 10 9 9 7 6 6 6 4 3 2 1,473 1,215 254
Slide 9: Leading Position in a Market with High Barriers to Entry
Leading Position in a Market with High Barriers to Entry Largest institutional hospital group in Egypt by number …Capturing the largest share of the top 10 large private …And by number of hospitals(1) … of beds(1)… hospitals in Cairo 4 643 3(4) 41% 200(2) 300 (3) 4 out of top 10 145(2) 241(4) 1(2) 1
Slide 10: Capitalizing on Established Brand Equity & Subsidiary Track Record
Capitalizing on Established Brand Equity & Subsidiary Track Record Individual Subsidiary Track Record Est. 1976 Est. 1984 Est. 1996 Est. 1985 • Reputable brand in East Cairo area • Most Reputable brand in East Cairo area • Reputable brand in West Cairo area • Reputable brand in West Cairo area • 40
Slide 11: Leverage on Integrated Platform and Scale to Extract Synergies
Leverage on Integrated Platform and Scale to Extract Synergies • Centralized functions including quality control, IT, HR, finance, legal, business development, • Shared cost benefits Institutionalized Engineering Project Management, Supply Chain and • Standardized and Group Management Nursing improv
Slide 12: Solid Financial Performance
Solid Financial Group Revenue Contribution by Hospital (1H 2018 ) Performance* 18% While Cleopatra Driven By : maintains biggest Group Revenues (EGP mn) Volume , Case Mix , share , group 18% 45% Price Increases & hospitals share is Segment Utilization progressing as a result of integration 30% *19%
Slide 13: Key Revenue Drivers
Key Revenue Drivers Maintaining a healthy volume growth while creating a better case mix & applying smart price increases across all segments. Although CSH was partially closed to renovate Operating Rooms & ICU Revenue per Inpatient (EGP) Revenue per Outpatient (EGP) Number of Inpatients (‘000s) Out
Slide 14: Key Revenue Drivers (Cont'd)
Key Revenue Drivers (Cont’d) Average Revenue per Bed (EGP mn) Cleopatra CSH * 1.7 0.7 35% 0.6 1.3 13% Allowing group hospitals to benefit from integration of a comprehensive medical platform thus increasing utilization and 1H17 1H18 1H17 1H18 occupancy. NBH ASH 0.8 1.0 36% 0.6 30% 0.7 1H17 1H18 1H17
Slide 15: Led by a Seasoned Management Team with Clear Organizational Structure
Led by a Seasoned Management Team with Clear Organizational Structure Audit Committee Board of Directors Ola Ahmed Internal Audit Manager Dr. Ahmed Ezz El Din – Chief Executive Officer Khaled Hassan – Chief Financial Officer Prof. Moharam El Badawy Mohamed Eweiss Chief Operating Officer (West Cairo)
Slide 16: Key Achievements since IPO
Key Achievements since IPO Cleopatra Investor Presentation 1H18 16
Slide 17: Integration, Optimization of Operations
Key Group Achievements Since 2016’ IPO Integrating and Capitalizing on Infrastructure / Service Quality / Optimize Capacity Institutionalizing the Economies of Scale Technology Offering and Patient Flow Group Upgrade Standard Procurement Department Internal Audit ERP / HIS NBH and CSH Nurse Training
Slide 18: Infrastructure Upgrades & Investments
Key Group Achievements Since 2016’ Investing in upgrading our hospitals ▪ As Part of CHG’s strategy, the Group’s is working towards renovating and upgrading all group hospitals: ▪ Civil Upgrades ▪ Electromechanical Upgrades ▪ Patient Experience areas ▪ Inpatient rooms Infrastructure Upgrades & Inves
Slide 19: The Expansion Strategy
The Expansion Strategy Cleopatra Investor Presentation 1H18 19
Slide 20: The Expansion Strategy
The Expansion Strategy Creating Building Strategic Expanding Strategic Creating Additional Brownfield/ entities to reach Acquisitions Feeder Capacities in Greenfield serve beyond of Operating networks Existing Expansions Group’s Greater Cairo Hospitals facilities scale of operations 1 2 3 4 5 6 Cleo
Slide 21: The Expansion Strategy: Polyclinics
The Expansion Strategy Present – Q1 2019 2019 - 2022 The East Cairo Polyclinic Status : Clinics across all specialties fully equipped with latest technology Civil Work 2019 ; Pipeline Completed with 2 more +300 Operational by locations 12 Clinics ER / Pharmacy / Ambulance Slots YE 2018/Q1 2019 Creat
Slide 22: The Expansion Strategy: Al Shorouk and Bani Suef
The Expansion Strategy Al Shorouk Expansion Bani Suef Hospital In Q2 2018 , the group signed Vital ▪ CHG entered into a JV with Taaleem Konzept , a leading Engineering & (Al Nahda Universities) to complete Consultancy Firm to start the process of and finish a 200 bed hospital in Drawings for the ext
Slide 23: The Expansion Strategy: West Cairo Hospital Acquisition
The Expansion Strategy KPI Growth(2) West Cairo Hospital (1) +21,000 +4,000 +5,000 Outpatient visits Inpatients ER Patients ▪ During September 2017, CHG signed definitive In 2016, with 118% growth vs. In 2016, with 52% growth vs. In 2016, with 85% growth vs. agreements to acquire the real estate ass
Slide 24: The Expansion Strategy: Pipeline Opportunities
The Expansion Strategy (1) Pipeline Opportunities CHG New Entities • The group is currently assessing and shortlisting potential Brownfield acquisitions in areas where the group does not have presence or in areas that • As part of the group’s are underserved . strategy to leverage synergies and expa
Slide 25: Our Forward Looking Strategy
Our Forward Looking Strategy
Slide 26: Enhancing Referral Pathways & Cross Asset Integration
Enhancing Referral Pathways & Cross Asset Integration Maximizing Referrals ? Diagnostic Services (Lab, Rad, etc.) referral rates ER need to be set ER & OPD constitute main hospital gateways Immediate Admission 140 Quality KPIs to evaluate consultant and medical teams performance Focusing on OPD refe
Slide 27: Marketing Strategy targeting all stakeholders
Marketing Strategy targeting all stakeholders Indirect influence Driven by Consultant place of practice Direct influence Patient place of treatment Driver of Patient place of treatment (Volumes) Social Media Pricing Brand strength Presence Credit contracts (Volumes) Credit contracts (Volumes) Patien
Slide 28: Enhancing Utilization and Optimizing Existing Capacity
Enhancing Utilization and Optimizing Existing Capacity 2018 CAPEX Plan (EGP mn) Optimization of Existing Space and Services Medical Civil IT PolyClinic 239 • Enhancing efficiency of underperforming assets 41 through proper management and targeted 33 investments, with Cleopatra itself showing potenti
Slide 29: Establish Centers of Excellence (CoEs) to drive higher margins
Establish Centers of Excellence (CoEs) to drive higher margins • The Group is laying the groundwork to expand its Centers of Excellence (CoEs) network, focusing on the provision of tertiary services based on each asset’s unique strengths • COEs will enable the Group to minimize capex since there wil
Slide 30: Achieve Joint Commission International (JCI) Accreditation
Achieve Joint Commission International (JCI) Accreditation The quality council is in charge of creating a unified quality policies and procedures structure, tailored to match each hospital’s characteristics; reviewing policies and procedures’ implementation Key Initiatives and preparing benchmark au
Slide 31: Governance & Shareholder Information
Governance & Shareholder Information
Slide 32: CHC is Backed by an Experienced Board of Directors
CHC is Back by an Experienced Board of Directors Well Structured BoD(1) Healthcare Experts Financial and Investment Experts Dr. Mohamed Nabil Dr. Ahmed Sameh Mohsen General Omar Awad Dr. Tarek Zahed Kamhawy Lobna El Ezzeldin Founder / Previous Ahmed Badreldin Kinawy Omar Ezz Al Arab Tag El Din Non-E
Slide 33: Key Investor Information
Care Health Limited’s Key Shareholders Key Investor Information The Abraaj Group is a leading investor operating in the growth markets of Asia, Africa, Latin America and the Middle East, currently manages c. US$ 9.5 billion across 20 sector and country-specific funds DEG, the German Investment and D
Slide 34: Appendix I: Financial Statements & Management Commentary
Appendix I: Financial Statements & Management Commentary
Slide 35: Consolidated Income Statement
Consolidated Income Statement Year – on - Year All figures in EGP mn 2Q17 2Q18 change 1H17 1H18 change Revenues 261.8 326.6 25% 523.9 673.8 29% Cost of sales (189.4) (221.0) 17% (370.2) (450.8) 22% Gross profit 72.4 105.7 46% 153.7 223.0 45% Gross Profit Margin 28% 32% 29% 33% G&A Expenses (35.1) (3
Slide 36: Consolidated Balance Sheet
Consolidated Balance Sheet All figures in EGP mn 30 June 2018 31 December 2017 All figures in EGP mn 30 June 2018 31 December 2017 Non-current liabilities Non-current assets Long term debt 190.6 276.3 Fixed assets 496.1 472.5 Share Base Payment 39.4 24.8 Intangible assets 241.0 241.0 Deferred tax li
Slide 37: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement All figures in EGP mn 30 June 2018 30 June 2017 All figures in EGP mn 30 June 2018 30 June 2017 Cont’d Cash flow from operating activities: Change in trade and other payables 11.8 19.2 Profit before tax 170.0 69.3 Net cash flow from operating activities 73.8 36.5 Adj
Slide 38: Thank you
Thank you INVESTOR RELATIONS CONTACTS SHAREHOLDER INFORMATION Telephone: +2 02 23103771 EGX: CLHO.CA E-mail: ir@cleopatrahospitals..com Listed: June 2016 investors.cleopatrahospitals.com Shares Outstanding: 1.6 billion
Cleopatra Hospital Company — 1H 2018 Earnings Presentation on 6ix