Cleopatra Hospital Company · EGX:CLHO
Cleopatra Hospital — Q3 2017 Earnings Presentation
41 slides from Cleopatra Hospital's earnings presentation, 2017
Slide 1: Cleopatra Hospital Company Investor Presentation 3Q17
Cleopatra Hospital Company Investor Presentation 3Q17
Slide 2: At a Glance
At a Glance 4 +20 Operational hospitals Years of subsidiary track record across our platform • Cleopatra Hospital Company (the “Group” or “CHC”), is the largest private 635 +2,000 hospital group in Egypt and consists of four operational hospitals all in Cairo, namely: Patient beds including 400 Tota
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 Date Established 1984 # of Beds 120 # of Beds(2) 167 West Cairo Acquisition(1)(2) Location Dokki, Giza Built-up Area
Slide 4: Our Value Proposition
Our Value Proposition
Slide 5: 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 market with established integrated performance management market with high barriers to brand equity & platform and with potential team with structural entry
Slide 6: 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 7: 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 8: 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 of …Capturing the largest share of the top 10 large private …And by number of hospitals(1) … beds(1)… hospitals in Cairo 4 635 3(4) 41% 200(2) 300 (3) 4 out of top 10 145(2) 241(4) 1(2) 1
Slide 9: 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 • Reputable brand in East Cairo area • Reputable brand in West Cairo area • Reputable brand in West Cairo area • 40 years
Slide 10: Leverage on Integrated Platform and Scale to Extract Synergies
Leverage on Integrated Platform and Scale to Extract Synergies • Centralized functions including quality control, IT, Institutionalized HR, finance, legal, business development and Group Management supply chain • Shared cost benefits • Bottom-up business planning • Standardized and improved quality
Slide 11: Solid Financial Performance
Solid Financial Group Revenue Contribution by Hospital (3Q 2017 ) Performance* 18% Group Revenues (EGP mn) 31% 817 18% 43% 747 864 625 139 16% 638 16% 543 17% 139 103 103 145 118 114 128 114 179 99 107 149 186 21% 87 123 135 114 332 380 273 355 243 290 Cleopatra CSH NBH Al Shorouk 2013 2014 2015 201
Slide 12: Key Revenue Drivers
Key Revenue Drivers Revenue per Inpatient (EGP) Revenue per Outpatient (EGP) Number of Inpatients (‘000s) Outpatient Visits (‘000s) 32% 607.2 5,999 554.8 7% 46.9 45.8 48.8 472.3 4,521 514 489 517 211 35.2 35.2 198 2014 2015 2016 9M16 1H16 9M17 1H17 9M16 1H16 9M17 1H17 9M16 9M17 2014 2015 2016 1H16 9
Slide 13: 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 14: Key Achievements since IPO
Key Achievements since IPO Cleopatra Investor Presentation 3Q17 14
Slide 15: Key Group Achievements Since 2016 IPO
Key Group Achievements Since 2016’ IPO Integrating and Capitalizing on Infrastructure / Service Quality / Optimize Capacity Institutionalizing the Group Economies of Scale Technology Upgrade Offering and Patient Flow Integration, Optimization of Standard Internal Audit Procurement Department NBH and
Slide 16: Key Group Achievements Since IPO (Cont'd): Expansion and Acquisitions
Key Group Achievements Since 2016’ IPO (Cont’d) Al Shorouk Expansion Cleopatra Expansion Broadening Group’s Reach and Expanding its Capacity Through ▪ The Group received several proposals ▪ The Group is still involved in an for the construction of Al Shorouk administrative lawsuit for rezoning the e
Slide 17: Our Forward Looking Strategy
Our Forward Looking Strategy
Slide 18: 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 19: Integrating the Platform to Achieve Higher Efficiencies
Integrating the platform to Achieve Higher Efficiencies Institutionalizing Attracting Upgrading Centralized Comprehensive Group Insurance & Equipment and Procurement Service Platform Management Corporate Clients Facilities Cleopatra Investor Presentation 3Q17 19
Slide 20: Enhancing Utilization and Optimizing Existing Capacity
Enhancing Utilization and Optimizing Existing Capacity 2017 CAPEX Plan (EGP mn) Optimization of Existing Space and Services Medical Civil IT PolyClinic 140 • Enhancing efficiency of underperforming assets 14 through proper management and targeted 21 investments, with Cleopatra itself showing potenti
Slide 21: Expanding the Group's Feeder Network
Expanding the Group’s Feeder Network Expand patient access through ambulatory outpatient center offering Market opportunity Ambulatory Clinics are a relatively underdeveloped but high-margin offering in Egypt, with significant expansion avenues Objective This acts as the hub hospital(s), to These po
Slide 22: Strengthening Unified Brand
Strengthening Unified Brand Creating an Umbrella Brand Synonymous with Quality Patient Care Phase I – Corporate Positioning Phase II – Promoting Umbrella Brand Target – Unified Group Brand Identity ✓ Upgrade equipment / standardize quality of ✓ Creating the Group’s brand identity all services across
Slide 23: Leveraging Stronger Position with Insurance and Contract Clients
Leveraging Stronger Position with Insurance and Contract Clients MetLife Insurance Pricing Classification MetLife Gold Card MetLife Silver Card MetLife Green Card MetLife Orange Card • Hospitals included • 2nd tier hospitals • 3rd tier hospitals • Cheapest insurance solely in this group are included
Slide 24: 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 25: 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 and preparing Key Initiatives benchmark au
Slide 26: Governance & Shareholder Information
Governance & Shareholder Information
Slide 27: 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 Dr. Ahmed Sameh Mohsen Nabil Kamhawy General Omar Awad Dr. Tarek Zahed Lobna El Ezzeldin Founder / Previous Former Head of Ahmed Badreldin Kinawy Omr Ezz Al Arab Ta
Slide 28: Key Investor Information
Key Investor Care Health Limited’s Key Shareholders 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 29: Appendix I: Financial Statements & Management Commentary
Appendix I: Financial Statements & Management Commentary
Slide 30: Consolidated Income Statement
Consolidated Income Statement All figures in EGP mn FY15 FY16 change 9M16 9M17 change Revenues 411.5 864.4 110% 626.6 817.1 30% Cost of sales -271.8 -614 126% -439.5 -572.7 30% Gross profit 139.8 250.4 79% 187.1 244.5 31% Gross Profit Margin 34% 29% 30% 30% G&A Expenses -40.7 -107.5 164% -81.8 -116.
Slide 31: Consolidated Balance Sheet
Consolidated Balance Sheet 30 September 31 December 30 September All figures in EGP mn 31 December 2016 All figures in EGP mn 2017 2016 2017 Non-current liabilities Non-current assets Long term debt 326.0 296.6 Fixed assets 396.7 468.7 Share Base Payment - 11.4 Intangible assets 246.4 242.4 Deferred
Slide 32: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement All figures in EGP mn FY15 FY16 9M17 All figures in EGP mn FY15 FY16 9M17 Cont’d Cash flow from operating activities: Cash flow from investment activities: Profit before tax 96.0 119.9 111.4 Proceeds from sale of fixed assets 0.0 - 1.0 Adjustments for: Depreciation F
Slide 33: Appendix II: Management Bios
Appendix II: Management Bios
Slide 34: Management Biographies - 1/3
Management Biographies - 1/3 1. Dr. Ahmed Ezz El-Din, Group Chief Executive Officer Dr. Ahmed Ezz El-Din brings over 35 years of healthcare experience to the group and a deep insight into healthcare businesses in Egypt. Prior to assuming his role as the Group’s CEO, Dr. Ezz El-Din was the Director o
Slide 35: Management Biographies - 2/3
Management Biographies - 2/3 6. Dr. Khaled El-Noury, Nile Badrawi Hospital (NBH) Managing Director Dr. Khaled El-Noury joined the Group in 2015 and assumed the roles of NBH’s Managing Director and the Group’s Quality Director. He brings over 35 years of experience having previously held the position
Slide 36: Management Biographies - 3/3
Management Biographies - 3/3 11. Dr. Sherif Abd El-Fattah, Supply Chain Director Dr. Sherif Abd El-Fattah has over 20 years of hands-on experience in supply chain management and operations management in the medical field, having previously held positions including Supply Chain Director, Deputy Gener
Slide 37: Appendix III: Use of Proceeds for Rights Issue
Appendix III: Use of Proceeds for Rights Issue Cleopatra Investor Presentation 3Q17 37
Slide 38: Key Terms and Use of Proceeds – Rights Issue
Key Terms and Use of Proceeds – Rights Issue CHG’s Rights Issue • On the 30th of September 2017, CHG’s EGM convened and approved an EGP 700mn capital increase at par value of EGP 0.5 • The EGM also approved the trading of subscription rights with existing shareholders having the right to either subs
Slide 39: 170 Beds Hospital Acquisition
Positive Operational Impact on CHG(1) 170 Beds Hospital H1 2017 Pro-forma Cases Served (‘000s) Acquisition 466 c.15 c.63 544 CHG (Actual) West Cairo Acquisition(2) Target(2) CHG (Pro-Forma) • CHG aims to expand from capital cities to Tier 2 cities to H1 2017 Pro-forma # of Beds reach an underserved
Slide 40: Deleverage CHG's Balance Sheet by Fully Repaying MTL1
Deleverage CHG’s Balance Sheet by Fully Repaying MTL1 Facility Overview – MTL 1 Rationale Lender Commercial ▪ CHG’s interest expenses are calculated Corridor Rate (%) International Bank as a spread over the corridor rate 21.0% 19.25% ▪ Hence, CHG has witnessed a 1,010 BPs cumulative significant incr
Slide 41: Thank you
Thank you INVESTOR RELATIONS DIRECTOR SHAREHOLDER INFORMATION Hoda Yehia Telephone: +202 26340115 EGX: CLHO.CA E-mail: hoda.yehia@cleohc.com Listed: June 2016 investors.cleopatrahospitals.com Shares Outstanding: 200 million
Cleopatra Hospital Company — Q3 2017 Earnings Presentation on 6ix