AfroCentric Investment Corporation Limited · JSE:ACT

AfroCentric Investment — H1 2021 Earnings Presentation

24 slides from AfroCentric Investment's earnings presentation, 2021

  1. Slide 1: Afrocentric Investor Day: Unaudited Interim Results

    AFROCENTRIC INVESTOR DAY Unaudited Interim Results For the period July 2020 to December 2020

  2. Slide 2: Agenda

    AGENDA 2 01 Business highlights 02 Strategic priorities 03 Segment financial performance 04 Group performance

  3. Slide 3: Interim Financial Review: Group Strategic Position

    Interim Financial Review Group Strategic Position Group CEO| Ahmed Banderker

  4. Slide 4: Financial Highlights

    FINANCIAL HIGHLIGHTS 4 4 FINANCIAL HIGHLIGHTS HEALTHCARE REVENUE SERVICES PHARMA CLUSTER OPERATING PROFIT OPERATING PROFIT 25.3% 16.4% 20.9% PROFIT HEADLINE GROUP BEFORE TAX EARNINGS EBITDA 19.1% 10.9% 18.0%

  5. Slide 5: Living Our Purpose Through the Pandemic

    LIVING OUR PURPOSE THROUGH THE PANDEMIC 5 Core purpose Enhancing the quality of life of our stakeholders CLIENTS SHAREHOLDERS EMPLOYEES Hospital tariff savings of Operating profit increased Approximately 5 500 R414 million by 16.5% employee complement Value of managed care Sustained net cash positio

  6. Slide 6: Group Strategy Framework

    GROUP STRATEGY FRAMEWORK 6 Strategic Pillars Strategic Levers Pharma Cluster Grow and Strengthen Existing Businesses Primary Care, Primary Health Our clients and membership Insurance & Occupational growth Health Diversify Business Mix with New Products and Services Service Model Our People Optimal S

  7. Slide 7: Our strategy informs our business model

    PERFORMANCE OVERVIEW 7 Our strategy informs our business model for sustained value MEDICAL AID ADMINISTRATION, RISK PHARMACEUTICAL CLUSTER CORPORATE SOLUTIONS MANAGEMENT AND Our diversified business TECHNOLOGY model and growth strategy enables us to achieve sustainable Resilience in membership Proje

  8. Slide 8: Impact of COVID-19 and Looking Ahead

    IMPACT OF COVID-19 AND LOOKING AHEAD 8 THIRD WAVE HOSPITAL MEDSCHEME EXPERIENCE ADMISSION PROJECTIONS 6 000 Wave 2 Wave 3 >635K TESTS CONDUCTED Peak: 43% Peak: 50% 5 000 higher higher Wave 1 4 000 Peak >R500M PAID FOR TESTS 3 000 Wave 3 Peak: 38% lower 2 000 Wave 3 Wave 4 start start >61k CUMULATIVE

  9. Slide 9: Sustainability During the Pandemic

    SUSTAINABILITY DURING THE PANDEMIC 9 MEDICAL AID BENEFICIARIES PHARMACY DIRECT SCRIPTS GROWTH IN MULTIVITAMINS ~3.9M beneficiaries ~1M monthly scripts UNIT COMPARISON (July to Dec) 1% GROWTH IN BENEFICIARIES 19% GROWTH IN ANNUAL SCRIPTS 3,9m 12,0m 2019 10,0m 3,8m 8,0m 221,026 3,7m 6,0m 4,0m 3,6m 2,0

  10. Slide 10: Robust Results from Our Thoughtful Strategy

    ROBUST RESULTS FROM OUR THOUGHTFUL STRATEGY 10 DIVERSIFIED ACROSS STRONG MARKET POSITION COMPLEMENTARY HEALTHCARE MULTIPLE GROWTH DRIVERS SERVICES - Reengineering 50 year old - Differentiated business model - Positioning start ups for success Medscheme with growing exposure across the healthcare val

  11. Slide 11: Interim Financial Review: Trading Statement Highlights

    Interim Financial Review Trading Statement Highlights Group CFO| Hannes Boonzaaier

  12. Slide 12: Financial Focus Points

    FINANCIAL FOCUS POINTS 12 1. REVENUE DIVERSIFICATION Diversifying into other revenue streams through our various subsidiaries. Pharmaceutical companies contributed 56% in revenue through organic and acquisitive growth, as well as 30% continuation to operating profit 2. GROWTH IN PHARMACEUTICAL Growt

  13. Slide 13: Sustained performance beyond our successful five-year growth initiative

    HIGHLIGHTS FOR THE PERIOD JULY 2020 TO DECEMBER 2020 13 Sustained performance 10.9% HEADLINE EARNINGS GROWTH beyond our successful five-year growth initiative Dec 2020 Highlights with operating profit CAGR over 6 year of 20% 25.3% 13% TOTAL PROFIT AFTER TAX REVENUE GROWTH GROWTH

  14. Slide 14: Three Year View of Profit Before Tax

    THREE YEAR VIEW OF PROFIT BEFORE TAX 14 OPERATING PROFIT * NET CASH FINANCE INCOME/ (COST) DEPRECIATION/AMORTISATION R'm 18% R'm R'm 35% 20 R461.6m 469 398 2018 2019 2020 295 Group EBITDA (82) 2018 2019 2019 2019 2020 2020 (106) 2018 2019 2020 23% (131) (2019 - R391.3 m) * Operating profit stated af

  15. Slide 15: Focus Area | Profitability

    FOCUS AREA | PROFITABILITY 15 REVENUE GROWTH CONTRIBUTORS OPERATING PROFIT GROWTH CONTRIBUTORS 2019/2018 2020/2019 2019/2018 2020/2019 Pharmacy Direct 17.2% 9.4% Pharmacy Direct 61.1% 8.5% Activo 100.0% 14.4% Activo 100.0% 11.0% Scriptpharm 715.7% 178.4% Scriptpharm 415.8% 76.2% Admin 1.3% 4.0% Admi

  16. Slide 16: Segmented Financial Reporting Structure: Medical Aid Administration

    SEGMENTED FINANCIAL REPORTING STRUCTURE 16 MEDICAL AID ADMINISTRATION, RISK PHARMACEUTICAL CLUSTER CORPORATE SOLUTIONS MANAGEMENT & TECHNOLOGY REVENUE OPERATING COSTS R'm R'm ANNOTATIONS 4.0% R 1 693 1.6% Revenue pressure due to 1.3% R 1 380 option mix and buy downs 0.9% R 1 628 R 1 359 R 1 607 R 1

  17. Slide 17: Segmented Financial Reporting Structure: Pharmaceutical Cluster

    SEGMENTED FINANCIAL REPORTING STRUCTURE 17 MEDICAL AID ADMINISTRATION, RISK PHARMACEUTICAL CLUSTER CORPORATE SOLUTIONS MANAGEMENT & TECHNOLOGY REVENUE OPERATING COSTS ANNOTATIONS R'm R'm 48.6% 51.3% Pharmacy Direct increased 2 205 2 049 DOH volumes for State 111.9% 1 483 103.5% patients 1 355 700 66

  18. Slide 18: Allegra Interpharm Switching Volumes

    ALLEGRA INTERPHARM SWITCHING VOLUMES 18 2019 2020 2 200 000 2 000 000 1 800 000 1 600 000 1 400 000 1 200 000 Level 5 Level 4 Level 3 Level 2 Level 1 1 000 000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 18.8m versus 2020 20.2m switches”

  19. Slide 19: IT Assets and Value

    - 100 200 400 500 600 700 800 300 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 IT ASSETS AND VALUE Oct-18 Nov-18 Hardware IT ASSETS CARRYING VALUE (R'MIL) Dec-18 Jan-19 Feb-19 Mar-19 Software Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Developed software Oct-19 Nov-19 Dec-19 Jan-20 F

  20. Slide 20: IT Assets Capex Per Month

    - 10 20 30 40 50 60 70 80 90 (20) (10) Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Hardware Sep-18 Oct-18 IT ASSETS AND VALUE Fraud Software License Nov-18 Dec-18 IT ASSETS CAPEX PER MONTH (R'MIL) Jan-19 Feb-19 Software Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Devel

  21. Slide 21: Driving Startup Ventures to Profitability

    DRIVING STARTUP VENTURES TO PROFITABILITY 21 EssentialMed MMed Scriptpharm ACS (Health Insurance) (Surgicals/Consumables) (Pharma Managed Care) (Corporate Solutions) R'm R'm R'm R'm 9,4 8,6 8,6 3,9 3,8 33,4 5,1 21,9 13,1 2018 2019 2020 2021* 3,1 2,4 0,4 2018 2019 2020 2021* 2018 2019 2020 2021* 2018

  22. Slide 22: Statement of Financial Position

    STATEMENT OF FINANCIAL POSITION 22 R'm R'm 2019 2020 Dec-19 Jun-20 Dec-20 1 405 560 516 1 251 504 441 331 392 357 343 298 648 452 Inventory Trade payables Trade receivables Net working capital 330 298 263 206 -362 -534 -565 Land and Buildings Intangible Assets Cash Borrowings LAND AND BUILDINGS CASH

  23. Slide 23: Group Performance - Investor Dashboard

    GROUP PERFORMANCE - INVESTOR DASHBOARD 23 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 6 Year CAGR 2016 2017 2018 2019 2020 Total Revenue R'm 1,810 2,038 2,307 3,111 3,898 22.0% Operating Profit R'm 259 284 295 398 469 17.6% Operating Profit Margin % 14 14 13 13 12 Comprehensive Headline earnings R'm 153 177

  24. Slide 24: Thank You

    THANK YOU Unaudited Interim results For the period July 2020 to December 2020

Afrocentric Investment — H1 2021 Earnings Presentation on 6ix