Healthcare Global Enterprises Ltd. · NSE:HCG
Healthcare Global Enterprises — Q1 FY23 Earnings Presentation
48 slides from Healthcare Global Enterprises's earnings presentation, Aug 10, 2022
Slide 1: Exchange filing cover letter
August 10, 2022 National Stock Exchange of India Limited, BSE Limited, Compliance Department, Compliance Department, Exchange Plaza, Bandra Kurla Complex, Phiroze Jeejeebhoy Towers, Bandra (East), Mumbai - 400051, Dalal Street, Mumbai - 400001, Maharashtra, India Maharashtra, India Dear Sir/Madam, S
Slide 2: Investor Presentation August 2022
HEALTHCARE GLOBAL ENTERPRISES LIMITED I NV ESTOR P R ESENTATI ON August 2022
Slide 3: Safe Harbor
SAFE HARBOR This presentation and its contents are confidential and are not for release, publication or distribution, in whole or in part, directly or indirectly, in or into or from the United States of America, Canada, Australia, Japan or any jurisdiction where such distribution is unlawful. This p
Slide 4: Overview
OVERVIEW One of the Largest 1 provider of Cancer care in India under “HCG” brand Comprehensive cancer diagnosis and treatment services (offering radiation therapy, medical oncology and surgery) 22 2 comprehensive cancer centers (including Kenya) FERTILITY TREATMENT MULTI SPECIALITY • Integrated repr
Slide 5: Our Journey
OUR JOURNEY Acquired the 1 st privately Bangalore Institute of Company’s name changed to owned comprehensive cancer 1 st Comprehensive HCG Ahmedabad, 1 st Oncology commences HealthCare Global center in Karnataka Cancer Care Center in privately owned operations Enterprises Pvt. Ltd. 1st private cance
Slide 6: Execution Focused
EXECUTION FOCUSED Laser sharp focus on leadership in Oncology Penetrate key regions through organic and in India MARKETS inorganic opportunities Deliver margin improvement, cash flow Transform processes & outcomes with generation & strong return on capital OPERATIONS technology, digital & data resou
Slide 7: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS FAVORABLE INDUSTRY DYNAMICS Oncology growing faster than market QUALITY Infra, technology, talent, outcomes meeting global standards LEADING ONCOLOGY NETWORK No.1 market position in 12+ cities FOCUSED CARE MODEL Independent comprehensive cancer centers STRONG TEAM & BOARD M
Slide 8: Business Model
BUSINESS MODEL SARITA DEVI, CANCER WINNER I chose the hospital that said my cancer could be treated over the hospital that said I only had six months 7 www. h c g e l . c o m
Slide 9: Oncology Incidence in India
ONCOLOGY INCIDENCE IN INDIA INCIDENCES IN INDIA TO GROW TO ~2MN INCIDENCE ACROSS COUNTRIES CASES BY FY24 Under Reporting of Cancer in India 1 Incidence of new cancer cases (‘000) 2 E s t i m a te d i n c i d e n c e o f c a n c e r i n 2 0 1 5 ( m n ) 3.4 +4.4% 1,975 1.6 – 2.2 1.7 0.9 1.1 +4.7% 1,59
Slide 10: Key Drivers of Oncology Opportunity
KEY DRIVERS OF ONCOLOGY OPPORTUNITY DEMOGRAPHIC EXPOSURE TO RISK NARROWING INADEQUATE CHANGES FACTORS DIAGNOSIS GAP INFRASTRUCTURE In cid e n ce s in cre a se s wit h a ge in g - To b acco u se , alco h o l co n su mp t io n , Gro win g aware n e ss an d gre ate r AVAILABILITY OF PET-CT p o p u lat
Slide 11: Oncology Opportunity: Growing Faster Than Market
ONCOLOGY OPPORTUNITY: GROWING FASTER THAN MARKET ONCOLOGY EXPECTED TO GROW FASTER THAN GROWTH IN ONCOLOGY MORTALITY A CAUSE FOR THE OVERALL HEALTHCARE MARKET CONCERN & NEEDS FOCUSED INTERVENTION Cancer Care Market in India (Rs. Bn.) Causes of Deaths in India * 165 +13% 16% 28% 12% 115 8% Communicalb
Slide 12: Sustainable Business Model in Oncology
SUSTAINALBE BUSINESS MODEL IN ONCOLOGY Oncologist promoted with local collaborations have Largest oncology brand & network with hybrid built strong legacy as a Premier Oncology presence (metros / Tier 2,3 towns) pan -India Institution Latest technology driven excellence at delivering Integrated onco
Slide 13: Quality Focused
QUALITY FOCUSED SHANKAR, CANCER WINNER The days I was at HCG, I felt like I was sleeping at home. They never stop caring for you. The doctors and nurses are always finding ways to make this difficult journey as comfortable as possible 12 www. h c g e l . c o m
Slide 14: Leadership Across Advanced & Precision Technologies
LE A DERSHIP A C ROSS A DVA NC ED & P RE C ISION T E C HNOLOG IES / SP E C A ILSED P ROC EDURES DIAGNOSTICS TOTAL PET CTs : 17 DIGITAL PET C T : 1 DIGITAL PATHOLOGY: MOLECULAR / GENOMICS ACROSS NETWORK LAB: 1 RADIOTHERAPY TOTAL LINACs : 31 CYBERKNIFE : 2 VERSAHD : 5 TOMOTHERAPY: 5 MEDICAL / SURGICAL
Slide 15: Unique Oncologist Business Model
UNIQUE ONCOLOGIST BUSINESS MODEL INSTITUTION - FIRST LOYALTY AND SUSTAINABILITY Exclusive engagement with flexibility on pay - Access to best practices, leading out structures (payroll, consultant, fee -for- technologies, complex cases & large patient service) volumes Expert clinicians ATTRACT PARTN
Slide 16: Quality, Research & Academics Ecosystem
QUALITY, RESEARCH & ACADEMICS ECOSYSTEM QUALITY & RESEARCH INITIATIVES I n n o vat i o n @ H C G HCG ACADEMICS • Grant s b y M in ist ry o f AY USH an d D ST Life of a Laryngectomy person Is marked ONCOLOGY by many problems including no voice • Ora l p re se ntatio ns at : Har vard Un ive rsit y, AS
Slide 17: Focus on Expertise & Excellence in Oncology
FOCUS ON EXPERTISE & EXCELLENCE IN ONCOLOGY COVERAGE BY HARVARD Multi- disciplinar y Tumor Board UNIQUE BUSINESS MODEL GLOBALLY COMPARABLE OUTCOMES Molecular SURVIVAL RATE COST Robotic Imaging / Surger y Nuclear Medicine DRIVING OUTCOMES Molecular Cyberknife, Diagnostics / SRS/SBRT Genomics STUDY FI
Slide 18: Clinical Milestones
CLINICAL MILESTONES Asia's first bloodless Bone Marrow Transplant We introduced biological reconstruction to treat HCG has conducted the largest number of Breast was performed by our experts bone cancer in India Conservation Surgeries in India Cyberheart – First hospital in India India's first Compu
Slide 19: Market Leadership
MARKET LEADERSHIP ARJUN MANDAL, CANCER WINNER I wholeheartedly thank Dr. Aftab and HCG team for diligently handling my case and helping me recover without any difficulties. I am delighted to say that today I am leading a healthy and cancer - free life 18 www. h c g e l . c o m
Slide 20: India's Premier Cancer Care Network
INDIA’S PREMIER CANCER CARE NETWORK HC G NETW OR K Center of Excellence (CoE) 1 Comprehensive Cancer Center (21) 2 1,979 1,737 31 LINEAR CAPACITY BEDS 3 OPERATIONAL BEDS 3 ACCELERATORS Jaipur Ranchi 17 300+ 80 Ahmedabad OPERATION Baroda Kolkata PET-CT ONCOLOGISTS SCANNERS THEATRES Bhavnagar Nagpur C
Slide 21: India's Premier Cancer Care Network
INDIA’S PREMIER CANCER CARE NETWORK No. 1 in Andhra Pradesh No. 1 in Gujarat 3 centers; 155 beds 5 centers; 403 beds New Centers No. 1 in Karnataka Existing Centers 7 centers; 514 beds No. 1 in Odisha & Jharkhand Scaling in W. Bengal Jaipur 3 centers; 239 beds Ranchi Ahmedabad Baroda Kolkata Top 3 i
Slide 22: Unmatched Presence in Non Metro Markets
UNMATCHED PRESENCE IN NON METRO MARKETS COMPREHENSIVE CANCER CENTERS THE ‘BHARAT’ OPPORTUNITY: GAPS IN RURAL HEALTHCARE MARKET N O N - M E T RO C E N T E RS BEDS (#) MARKET POSITION NASHIK 206 No. 1 Over 60% of population has access to Accounts for 70% communicable less than 30% of hospitals, beds a
Slide 23: Specialization Driving Competitive Advantages
SPECIALIZATION DRIVING COMPETITIVE ADVANTAGES M U LT I S P E C I A L I T Y PARAMETERS DRIVING EXCELLENCE IN ONCOLOGY HCG MODEL MODEL Dedicated / Independent and ‘built -to-suit ’ facilities Established A bs e nt Comprehensive/integrated oncology service offerings(end -to-end) Established Lacking Att
Slide 24: Significant Scale, Focus & Presence Over Peers
SIGNIFICANT SCALE, FOCUS & PRESENCE OVER PEERS SCALE OF OPERATIONS & INFRASTRUCTURE No. of comprehensive cancer centers in India 21 11 10 8 5 6 6 5 2 3 1 1 HCG Apollo Max Fortis NH Omega American Onco. Medanta Manipal Aster DM KIMS Sterling FOCUS OF BUSINESS PRESENCE / CATCHMENT WITH COMPREHENSIVE C
Slide 25: Sustainability
SUSTAINABILITY SUBASENI LENKA, CANCER WINNER I am eternally thankful to Dr. Panda and other specialists at HCG Panda Cancer Hospital, as the specialists were able to treat my condition the right way, the first time 24 www. h c g e l . c o m
Slide 26: Demonstrated Track Record Over the Years
DEMONSTRATED TRACK RECORD OVER THE YEARS TOTAL REVENUES TOTAL EBITDA Rs. Mn. Rs. Mn. 13,978 2,380 +16% 10,956 9,787 10,134 1,722 8,307 1,188 1,252 7,001 1,050 5,842 1,266 848 FY16 FY17 FY18 FY19 FY20 FY21* FY22 FY16 FY17 FY18 FY19 FY20 FY21 FY22 E BIT DA , p o st - co r p o rate exp e n se s; * F Y
Slide 27: On High Growth Trajectory
ON HIGH GROWTH TRAJECTORY 4,081 3,520 3,581 3,646 3,231 2,479 2,740 2,981 ~1.7x f r o m REVENUE Rs. 2,479 Mn. in Q2 FY21 to Rs. 4,081 Mn. in Q1 FY23 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 722 617 619 633 EBITDA 378 394 512 ~2.4x f r o m 300 Rs. 300 Mn. in Q2 FY21 to Rs. 722 Mn. in Q
Slide 28: Growth Across HCG Centers
GROWTH ACROSS HCG CENTERS Existing Centers New Centers^ ~1.6x g r o w t h i n l a s t 8 q u a r t e r s ~1.9x g r o w t h i n l a s t 8 q u a r t e r s REVENUE# 2,979 929 2,596 2,628 2,663 785 826 2,304 2,418 750 2,100 693 1,890 509 535 479 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2F
Slide 29: Strong Growth & Leadership Strategy
STRONG GROWTH & LEADERSHIP STRATEGY EXISTING CENTRES NEW CENTRES • Singular organization focus driving growth • Stabilize o p e rations an d d rive st ro ng ramp -up • Optimization measures to improve margin • Clinical engagement to bring best talent and establish quality as per benchmarks • Cohesiv
Slide 30: Promoters with Strong Pedigree
PROMOTERS WITH STRONG PEDIGREE ONCOLOGY DOMAIN KNOWLEDGE AND EXPERIENCE IN INDIA/USA • Dr. Ajai Kumar founded HCG to realise his vision of making advanced cancer care accessible to all. He has been the driving fo rce behind HCG’s growth since its inception. He has served as the CEO from 2005 to Jan
Slide 31: Responsibility & Governance Focused
RESPONSIBILITY & GOVERNANCE FOCUSED • Managing energy needs as an integral part of operational strategy to ensure efficient SETTING ESG BENCHMARK Energy Optimization energy utilization and emission reduction • Establishing an environmental policy • Constantly monitor and record our energy consumptio
Slide 32: Q1 FY23 Financial & Operational Highlights
Q1 FY23 FINANCIAL & SUBASENI LENKA, CANCER WINNER OPERATIONAL HIGHLIGHTS I am eternally thankful to Dr. Panda and other specialists at HCG Panda Cancer Hospital, as the specialists were able to treat my condition the right way, the first time 31 www. h c g e l . c o m
Slide 33: Financial Highlights Q1 FY23
FINANCIAL HIGHLIGHTS Q1 FY23 REVENUE R E V E N U E - H C G C e n t e r s (1) REVENUE - Milann Centers +26% +26% +43% 4,081 3,908 173 3,231 3,110 121 Q1FY22 Q1FY23 Q1FY22 Q1FY23 Q1FY22 Q1FY23 EBITDA EBITDA MARGIN PROFIT BEFORE TAX PBT MARGIN +41% +180 bps 104 2.6% 722 737* 15.9% 17.7% 512 512 -89 -2.
Slide 34: HCG - Q1FY23 Operational Metrics
HCG - Q1FY23 OPERATIONAL METRICS 3,429.6 2,935.1 2,987.2 2,979.7 2,481.2 2,552.1 ONCOLOGY 2,215.6 REVENUE 1,657.2 1,992.8 ~2.1x i n c r e a s e i n o u r Oncology Business Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 558.3 508.8 478.2 410.8 425.1 375.7 393.5 357.6 NON-ONCOLOGY 216.
Slide 35: HCG - Q1FY23 Operational Metrics
HCG - Q1FY23 OPERATIONAL METRICS # EXISITING CENTERS NEW CENTERS EXISITING CENTERS TOTAL AOR (%) AOR (%) A O R ^* ( % ) ROCE (%) 64.6% 64.0% 66.1% 19.0% 57.8% in Q1FY22 59.4% in Q1FY22 53.5% in Q1FY22 15.4% in FY22 680 bps 460 bps 1,260 bps 360 bps ROCE pre-corporate a l l o ca t i o n s s ta n d s
Slide 36: HCG - Cluster Wise Revenue Break Up
HCG - CLUSTER WISE REVENUE BREAK UP # C LU ST E R Q1FY23 Q1FY22 Y-o-Y Q4FY22 Q-o-Q K A R N ATA K A 1,373.0 1,110.7 23.6% 1,262.2 8.8% G U J A R AT 1,000.8 868.8 15.2% 912.9 9.6% MAHARASHTRA 600.1 546.6 9.8% 528.7 13.5% EAST INDIA 387.4 252.2 53.6% 301.3 28.6% ANDHRA PRADESH 296.8 242.2 22.6% 281.3 5
Slide 37: Digital Initiatives
DIGITAL INITIATIVES I n t ro d u c i n g C e nt ra l i s e d C a l l C e nt re & C u s to m e r M a n a ge m e nt Sys t e m to i n c r e a s e e f f i c i e n c i e s a n d c u sto m e r s a t i s fa c t i o n N e w Pa t i e nt Mo b i l e A p p u n d e r d e v e l o p m e n t f o r e a s e o f a c c
Slide 38: Key Initiatives
KEY INITIATIVES P R O D U C T I VI T Y E N H A N C E ME N T M A N P O W E R O P T I M I Z AT I O N M u l t i p l e i n i t i a t i v e s ta ke n & a r e 1 4 C o m p a ny i s i n p ro c e s s o f u n d e r i m p l e m e n t a t i o n fo r i m p l e m e n t i n g va r i o u s i n c r e a s i n g t h e
Slide 39: Milann - Implementing Strategic Initiatives
MILANN – IMPLEMENTING STRATEGIC INITIATIVES BENGALURU (5 Centers) Growth Growth Particulars Q1FY23 Q1FY22 FY22 FY21 Y-o-Y Y-o-Y New Registrations 1,612 676 138.5% 4,633 3,578 30% M S Ramaiah Nagar Shivananda IVF Cycles 538 311 73.0% 1,747 1,450 21% Indiranagar Revenues Whitefield 172.7 121.0 42.7% 6
Slide 40: Capital Expenditure & Net Debt
CAPITAL EXPENDITURE & NET DEBT CAPITAL EXPENDITURE (Rs. Mn.) NET DEBT (Rs. Mn.) For 3 months 30 th June 31 st March 30 th June NET DEBT HCG CENTERS ending FY22 2022 2022 2021 th 30 June 2022 Bank Debt (1) 3,510 3,543 4229 Vendor Finance (2) 336 333 401 Existing Centers 122 458 Other Debt 26 34 31 Le
Slide 41: Q1FY23 Consolidated Profit & Loss Account
Q1FY23 CONSOLIDATED PROFIT & LOSS ACCOUNT Profit and Loss (in Rs. Mn.) Q1 FY23 Q1 FY22 Y-o-Y Q4 FY22 Q-o-Q Revenues from Operations 4,073.1 3,224.2 3,638.9 Income from Govt. Grant 7.4 7.2 7.4 Total Revenue from Operations 4,080.5 3,231.4 26% 3,646.3 12% Cost of Goods Sold 978.0 831.4 910.2 Employee
Slide 42: Historical Financial Highlights
HISTORICAL FINANCIAL SHANKAR, CANCER WINNER HIGHLIGHTS The days I was at HCG, I felt like I was sleeping at home. They never stop caring for you. The doctors and nurses are always finding ways to make this difficult journey as comfortable as possible 41 www. h c g e l . c o m
Slide 43: Historical Profit & Loss Account
HISTORICAL PROFIT & LOSS ACCOUNT Profit and Loss (in Rs. Mn.) FY22 FY21 FY20 FY19 CAGR Revenues from Operations 13,948 10,092 10,923 9,760 Income from Govt. Grant 30 43 33 27 Total Revenue from Operations 13,978 10,134 10,956 9,787 13% Costs of Goods Sold 3,549 3,632 3,645 3,581 Employee Cost 2,337
Slide 44: Historical Balance Sheet
HISTORICAL BALANCE SHEET Balance Sheet - Equity & Liabilities (in Rs. Mn.) Mar-22 Mar-21 Mar-20 Mar-19 Equity Share Capital 1,390 1,254 887 879 Other Equity 7,313 5,718 2,926 3,933 Equity Attributable To Equity Holders Of The Company 8,703 6,972 3,813 4,811 Non-Controlling Interests 134 168 385 619
Slide 45: Historical Balance Sheet
HISTORICAL BALANCE SHEET Balance Sheet - Assets (in Rs. Mn.) Mar-22 Mar-21 Mar-20 Mar-19 Non-Current Assets Property, Plant And Equipment 9,315 8,531 9,271 8,026 Capital Work in Progress 217 300 461 1,440 Rights-of-use Assets 4,045 4,114 5,776 0 Goodwill 1,813 963 1,093 1,093 Other Intangible Assets
Slide 46: Historical Cash Flow Statement
HISTORICAL CASH FLOW STATEMENT Cash Flow Statement (in Rs. Mn) Mar-22 Mar-21 Mar-20 Mar-19 Net Profit Before Tax 878 -2,287 -1,193 -334 Adjustments For: Non - Cash Items / Other Investment Or Financial Items 1,666 3,619 2,988 2,463 Operating Profit Before Working Capital Changes 2,543 1,333 1,795 2,
Slide 47: Key Takeaways
KEY TAKEAWAYS BRAND IN ONCOLOGY Leveraging the existing brand created over the years to command pricing power and choice of preference GROWTH IN ONCOLOGY Oncology cases to grow multi -fold with increasing awareness; higher cases reported & treated; and adoption of technology and diagnosis for early
Slide 48: Thank You
THANK YOU Company: Healthcare Global Enterprises Limited Investor Relation Advisors: Strategic Growth Advisors CIN: L15200KA1998PLC023489 CIN: U74140MH2010PTC204285 For updates and specific queries, please visit Mr. Sagar Shroff / Mr. Deven Dhruva www.hcgel.com sagar.shroff@sgapl.net / deven.dhruva@
HealthCare Global Enterprises — Q1 FY23 Earnings Presentation on 6ix