Cleopatra Hospital Company · EGX:CLHO
Cleopatra Hospital — 9M 2018 Earnings Presentation
39 slides from Cleopatra Hospital's earnings presentation, 2018
Slide 1: Cleopatra Hospital Company Investor Presentation 9M18
Cleopatra Hospital Company Investor Presentation 9M18
Slide 2: At a Glance
At a Glance 4 EGP 1062 mn Operational hospitals Consolidated revenues in 9M18 across our platform with 30% growth y-o-y • Cleopatra Hospital Company (the “Group” or “CHC”), is the largest private hospital group in Egypt and consists of four operational hospitals all in Cairo, namely: 643 EGP 283 mn
Slide 3: Presence in Attractive Catchment Areas Across Greater Cairo
Presence in Attractive Catchment Areas Across Greater Cairo Mohandesin, Location Heliopolis, Cairo Location Giza El Kaitb Hospital East Cairo Hospital Built-up Area 7,380 sqm Built-up Area 5,270 sqm Acquisition(1)(2) Acquisition(1)(2) Date Established 1984 Date Established 1996 # of Beds(2) 182 Loca
Slide 4: Clearly Defined Growth Strategy
Clearly Defined Growth Strategy Our growth strategy is based on six key pillars: Integrating Enhancing Expanding Strengthening Leveraging Establish the platform to utilization and hospital unified brand stronger centers of achieve optimizing capacities and position with excellence higher existing fe
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 for team with strong structural market
Slide 7: Resilient & Underpenetrated Market with Demand Growth
Healthcare Expenditure (EGP bn) 194 Public Private 178 Resilient & Underpenetrated 137 149 163 Market with Demand Growth 83 96 113 131 81 83 90 98 107 117 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 Source:
Slide 8: Prevalence of Diseases in Egypt
Prevalence of Diseases in Egypt Lifestyle Diseases Cancer Prevalence (2012) (‘000 cases) 931 Estimated Incidence Prevalence (1-year) Prevalence (3-years) 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 643 4 41 3(4) % 200(2) 300(3) 241(4) 4 out of top 10 145(2) 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, • Shared cost HR, finance, legal, business development, benefits Institutionalized Engineering Project Management, Supply Chain • Standardized and Group Management and Nursing improv
Slide 12: Solid Financial Performance
Group Revenue Contribution by Hospital (9M 2018 ) Solid Financial 17% Performance* While Cleopatra Group Revenues (EGP mn) Driven By : maintains biggest 17% Volume , Case Mix share , group hospitals 46% , Price Increases & share is progressing as 30% 30% Segment Utilization a result of integration 1
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 Revenue per Outpatient Rooms & ICU Revenue per Inpatient (EGP) (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 * 2.7 1.10 1.00 2.0 39% 16% Allowing group hospitals to benefit from integration of a comprehensive medical platform thus increasing 9M17 9M18 9M17 9M18 utilization and occupancy. NBH ASH 1.2 1.5 1.0 33% 29% 1.2 9M17 9M18 9M
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 9M18 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 Technology Offering and Patient Flow Group Scale Upgrade Standard Integration, Optimization of Operations Internal Audit Procurement Departm
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 Infrastructure Upgrades & Investments ▪ Inpatient
Slide 19: The Expansion Strategy
The Expansion Strategy Cleopatra Investor Presentation 9M18 19
Slide 20: The Expansion Strategy
The Expansion Strategy Creating Building Expanding Strategic Strategic Creating Additional reach Brownfield/ entities to Acquisitions Feeder Capacities in beyond Greenfield serve of Operating networks Existing Greater Expansions Group’s Hospitals facilities Cairo 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 Clinics across all specialties fully equipped with latest technology Status : 2019 ; Pipeline Civil Work with 2 more +300 Completed ER / Pharmacy / Operational by locations 12 Clinics Slots Ambulance Q1 2019 Creating 2 X-
Slide 22: The Expansion Strategy
The Expansion Strategy Cleopatra Investor Presentation 9M18 22
Slide 23: 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 Konzept , a leading Engineering & Taaleem (Al Nahda Universities) Consultancy Firm to start the process of to complete and finish a 200 bed Drawings for the extension in pr
Slide 24: The Expansion Strategy: El Katib Hospital
The Expansion Strategy KPI Growth(2) El Katib 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 asset
Slide 25: The Expansion Strategy: Pipeline Opportunities
The Expansion Strategy Pipeline Opportunities(1) CHG New Entities • As part of the group’s strategy to leverage synergies and expand its service offerings , CHG is • The group is currently assessing and shortlisting potential Brownfield now in the process of acquisitions in areas where the group doe
Slide 26: Our Forward Looking Strategy
Our Forward Looking Strategy
Slide 27: 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 28: 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 29: 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 30: 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 31: 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 32: Governance & Shareholder Information
Governance & Shareholder Information
Slide 33: 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 Omar Ezz Al Lobna El Ezzeldin Founder / Ahmed Badreldin Kinawy Tag El Din Non-Executive Previ
Slide 34: Key Investor Information
Care Health Limited’s Key Shareholders Key Investor The Abraaj Group is a leading investor operating in the growth markets of Asia, Africa, Latin America and the Middle East, Information currently manages c. US$ 9.5 billion across 20 sector and country- specific funds DEG, the German Investment and
Slide 35: Appendix I: Financial Statements & Management Commentary
Appendix I: Financial Statements & Management Commentary
Slide 36: Consolidated Income Statement
Consolidated Income Statement All figures in EGP mn 3Q2018 3Q2017 % change 9M2018 9M2017 % change Revenues 388.3 293.2 32% 1062.1 817.1 30% Cost of sales (246.3) (202.3) 22% (697.0) (572.4) 22% Gross profit 142.1 91.0 56% 365.1 244.7 49% Gross Profit Margin 37% 31% 34% 30% General & administrative e
Slide 37: Consolidated Balance Sheet
Consolidated Balance Sheet All figures in EGP mn 31 December 2017 30 September 2018 Non-current assets Fixed assets 472.5 516.7 Intangible assets 241.0 241.0 Payment under investment 143.6 143.6 Total non-current assets 857.1 901.3 Current assets Inventory 30.1 35.6 Accounts receivables 185.4 299.0
Slide 38: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement All figures in EGP mn 30 September 2017 30 September 2018 Cash flow from operating activities: Profit before tax 111.4 288.3 Adjustments for: Depreciation 24.0 32.6 Amortization of intangible assets 4.0 - Allowance for impairments of current assets 7.3 (3.6) Provisio
Slide 39: Thank you
T hank you INVE S T O R R E L A T IO NS SHAR E HO L DE R C O NT A C T S INF O R MAT IO N T elephone: +2 02 23103771 E G X : C L HO .C A E -mail: ir@cleopatrahos pitals ..com Lis ted: J une 2016 inves tors .cleopatrahos pitals .com S hares O uts tanding: 1.6 billion
Cleopatra Hospital Company — 9M 2018 Earnings Presentation on 6ix