Integrated Diagnostics Holdings Plc · LSE:IDHC
Integrated Diagnostics — H1 2019 Earnings Presentation
40 slides from Integrated Diagnostics's earnings presentation, September 2019
Slide 1: 1H2019 Results Presentation
1H2019 Results Presentation September 2019
Slide 2: Agenda and Today's Presenters
Agenda: • 1H2019 Results • Growth Strategies • Expanding Customer Reach • “Wayak” Investment • Al Borg Scan Updates • Nigeria Updates Today’s Presenters Dr. Hend El Sherbini Omar Bedewy Sherif El Ghamrawi Chief Executive Chief Financial Investor Relations Officer Officer Director 2 INTEGRATED DIAGNO
Slide 3: Results Snapshot
Results Snapshot Strong top-line growth reaching 23% with good gross profit margin and EBITDA profitability Revenue Split EGP 1,061 mn EGP 498 mn Revenue in 1H 2019 Gross Profit in 1H 2019 ▲23% y-o-y ▲19% y-o-y / 47% margin IDH revenue by geography IDH revenue by type (1H2019) (1H2019) EGP 440 mn EG
Slide 4: Revenue Growth Drivers
Revenue Growth Drivers Revenue growth in 1H2019 was driven by higher patient and test volumes Revenue Growth Drivers | EGP mn, % +23% 143 47 6 7 1,061 866 (4) (4) 17% 1% 5% 1% -0.5% -0.4% 1H2018 Rev Egypt without BG-Scan BG-Scan 100M Camp. Jordan Sudan Nigeria 1H2019 Rev Revenue growth in 1H2019 was
Slide 5: Segment Performance
Segment Performance Revenue mix skewed toward the contract segment due to higher campaign-related volumes Contract Segment Walk-In Segment Total 1H2018 1H2019 Change 1H2018 1H2019 Change 1H2018 1H2019 Change Revenue (EGP ‘000) 506,021 647,050 28% 359,832 413,914 15% 865,853 1,060,964 23% % of Revenu
Slide 6: A Focus on the 100 Million Healthy Lives Campaign
A Focus on the 100 Million Healthy Lives Campaign The campaign was launched in November 2018 and ended in June 2019, and has directly benefited our business by increasing awareness and driving up our tests per patient ratio IDH 1H2019 Patient Volumes | ‘000 IDH 1H2019 Tests per Patient | ‘000 +14% +
Slide 7: A Ramp-up of Operations at Al Borg Scan
A Ramp-up of Operations at Al Borg Scan Al Borg Scan Revenue & EBITDA Progression | EGP mn 1.18 1.13 1.08 0.84 0.94 0.90 0.70 0.80 0.34 0.17 0.14 0.15 0.16 -0.01 0.12 -0.82 -0.53 -0.93 Revenue EBITDA -1.89 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 EGP 6 mn 11 k EGP 547 EG
Slide 8: Regional Performance
Regional Performance Strong organic growth in Egypt and strengthening profitability in Jordan and Sudan Revenues | EGP mn EBITDA* | EGP mn / % +27% +30% EGYPT Strong organic growth in Egypt and 911 411 growing contribution from Al Borg 85.9% EGP 911 mn 715 316 Scan 44% 45% 372 Branches 1H2018 1H2019
Slide 9: Sudan Delivers Price-driven Growth in SDG terms
Sudan Delivers Price-driven Growth in SDG terms Sudan 1H2019 Revenues Bridge| SDG mn +38% 16 -5 41 30 -16% 54% 1H2018 Volume Price 1H2019 Revenues Revenues increased 38% y-o-y owing to the significant prices increase. Gross profit Gross profit margin increased by 1.9% reaching 35.8% due to a signifi
Slide 10: Strong Group Profitability
Strong Group Profitability Cost-cutting initiatives and increased operational efficiency helped deliver strong Group profitability IDH COGS Breakdown | EGP mn / % of Revenue IDH SG&A Breakdown | EGP mn / % of Revenue +26% +12% IDH’s consolidated 447 563 9.4% IDH’s revenue growth 120 134 3.8% COGS gr
Slide 11: Strong Group Profitability
Strong Group Profitability IDH’s net profit margin stood at a healthy 20% despite higher interest and tax expenses IDH Interest Expenses| EGP mn / % of Revenue IDH Taxes | EGP mn / % of Revenue The adoption of IFRS +368% IDH’s effective tax rate +47% 16 led to interest on 6.6 30.9 increased from 29%
Slide 12: Summary Balance Sheet
Summary Balance Sheet 31 December 30 June EGP'000 2018 2018 ASSETS Adoption of IFRS 16 added EGP 269 million in Non-current assets right-of-use assets as of 30 June 2019. Property, plant and equipment 705,779 765,135 Meanwhile, property, plant and equipment Intangible assets and goodwill 1,672,463 1
Slide 13: Summary Cash Flow Statement
Summary Cash Flow Statement EGP'000 30 June 2018 30 June 2019 Profit for the period before tax 304,035 347,328 Net cash flow from operating activities grew from Net cash from operating activities before WC 331,650 430,572 EGP 160 in 1H2018 to EGP 225 million in the first half of 2019, reflecting the
Slide 14: Growth Strategies
Growth Strategies 14 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 15: Expanding Customer Reach
Expanding Customer Reach IDH’s nationwide presence and strong brand equity position it well to benefit from state- sponsored campaigns to increase awareness of preventative healthcare with diagnostic testing Duration Duration “100 Million Healthy “Egypt’s Women are Lives” campaign 8mo Egypt’s Health
Slide 16: Expanding Customer Reach
Expanding Customer Reach Parallel to state-sponsored initiatives, IDH also runs its own awareness campaigns focusing on specific diseases on a monthly basis and offering discounts on related testing IDH Monthly Disease Awareness Campaign Plans IDH implements monthly campaigns targeting specific dise
Slide 17: New Investment in Wayak
New Investment in Wayak IDH launches new subsidiary “Wayak” to offer data-driven healthcare services, utilising data analytics and artificial intelligence to capitalise on IDH’s database of over c.13 million patients Wayak Services Medication to be Service provider Diagnostics Discounted services Cu
Slide 18: "Wayak" Investment Thesis
“Wayak” Investment Thesis Wayak Investment Thesis Extract Favorable Synergies EMR Building Synergies will arise from IDH's current business with the ability to drive IDH will build a systemized electronic record of Egypt’s patients in order to additional pathology and radiology tests, and/or reduce
Slide 19: Al Borg Scan Expansion Updates
Al Borg Scan Expansion Updates In October 2018, IDH inaugurated its first radiology business in Egypt under the brand name Al Borg Scan Rationale Key Service Offering & Suppliers Leverage the strong relationship between the Al Borg brand and its Al Borg Scan’s Mohandeseen branch offers a full range
Slide 20: Delivering on Our Strategies – Nigeria Expansion
Delivering on Our Strategies – Nigeria Expansion In December 2017, IDH further expanded its geographical footprint with an investment in Nigeria, a value-accretive acquisition in a large, fragmented and underpenetrated diagnostic services market where our business model is well-suited to capitalise
Slide 21: Nigeria Expansion Updates
Nigeria Expansion Updates Operational progress in Nigeria expansion with existing branches being refurbished and renovated and with loss-making branches being relocated or closed Branch Renovations & Rebranding Operational Milestones Rebranded the company to Echo-Lab (from Echo-Scan), which launched
Slide 22: Nigeria Branch Roll-Out and Renovations
Nigeria Branch Roll-Out and Renovations Opebi Branch Renovation and Rebranding New Victoria Island Branch Area 11 Branch Renovation and Rebranding Benin Branch Renovation & Rebranding 22 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 23: Nigeria Recently Acquired Equipment I/II
Nigeria Recently Acquired Equipment I/II Victoria Island Branch Opebi Branch 23 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 24: Nigeria Recently Acquired Equipment II/II
Nigeria Recently Acquired Equipment II/II Garki Branch Benin Branch 24 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 25: Outlook & Guidance
Outlook & Guidance Management is pleased with the strong performance in 1H2019 and remains confident in the attractive underlying trends in the healthcare industries across IDH’s footprint Continued Leverage the Continue to Explore Attractive Expansion of Branch Group’s Brands and +20% Full-Year Rev
Slide 26: Q&A
INTEGRATED DIAGNOSTICS HOLDINGS IDH Q&A
Slide 27: Appendix
Appendix 27 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 28: Who We Are
Who We Are Integrated Diagnostics Holding is a leading, fully-integrated provider of high-quality medical diagnostic services with a footprint spanning Egypt, Jordan, Sudan and Nigeria Our Services Our Patients Immunology Radiology Hematology Walk-In Patients Endocrinology Clinical Chemistry Molecul
Slide 29: Our Geography
Our Geography IDH’s branch network of 424 labs at 1H2019 spans 4 countries, the largest of which is Egypt 19 The Company’s Egyptian operations contributed branches 86% of consolidated Revenues in 1H2019 372 Jordan Branches EGYPT Egypt 85.9% 1979 1H2019 Cairo Region 44% Upper Egypt Region 18% JORDAN
Slide 30: Favorable Industry Dynamics
Favorable Industry Dynamics Structural Growth Drivers Powerful structural growth drivers underpin Egypt’s healthcare growth story, including an ever-expanding population, rising lifestyle diseases, favorable government regulation and increased medical tourism Lab tests per capita (2012) 23.2 High Di
Slide 31: Asset-light Business Model
Asset-light Business Model Hub, Spokes and Spikes IDH’s “Hub, Spoke and Spike” business model enables the Company to organically expand its reach in highly-fragmented markets with underserved diagnostic services demand Mega Lab: “Hub” • The Mega Lab, the largest automated lab in Egypt, serves as IDH
Slide 32: Our Mega Lab
Our Mega Lab State-of-the-Art Equipment with High Capacity and Throughput Capabilities Capacity Procurement • Mega Lab machines are capable of conducting a • Inauguration of IDH’s Mega Lab in 2015 doubled the • Central procurement system ensures coordinated wide range of tests including basic blood
Slide 33: Key Supplier Relationships
Key Supplier Relationships IDH leverages its bargaining power with suppliers to maximize value in a business that is fundamentally about COGS economy of scale Dynamics of Supplier Relationships • The majority of testing equipment is provided at no upfront cash cost in return for which IDH agrees to
Slide 34: Human Resources Development
Human Resources Development Training IDH views education as an essential means of ensuring quality across its laboratories. We strive to create a diverse, productive culture and a safe working environment in order to empower our people to reach their full potential Training streams Medical / scienti
Slide 35: IDH is a Consumer-Facing Service Provider
IDH is a Consumer-Facing Service Provider The mechanics of the Egyptian healthcare market are markedly different from those in many Western healthcare industries Egypt’s Private Healthcare System IDH serves the private healthcare A hospital outpatient clinic or While physicians ordering Patients the
Slide 36: Tactical Marketing Campaigns
Tactical Marketing Campaigns IDH’s tactical marketing programs are focused on driving patient and test volumes, especially in the higher-margin walk-in patient category IDH deploys marketing tools including: Walk-in patients are typically Egypt’s most vulnerable citizens, hurt most Gatherings for ph
Slide 37: Governance
Governance Overview IDH is committed to implementing best practices in corporate governance through the expertise of both the individual Directors and outside parties Internal Audit Procedures While not required to comply Anti-Bribery and Anti Corruption Policy (ABAC) with UK Corporate Governance T
Slide 38: A World-Class Board of Directors
Governance A World-Class Board of Directors The majority of members of IDH’s Board of Directors are independent and offer significant experience in the healthcare market, MENA region and investment activities Lord St John of Bletso 1 Prof. Dr. Hend El Sherbini Hussein Choucri 1,2,3,4 Independent Non
Slide 39: Sustainability
Sustainability Founded on the principle of providing quality medical assistance and services to better the lives of individuals and the community at large, IDH views corporate responsibility initiatives as an extension of its core purpose with the aim of improving communities in which it does busine
Slide 40: Investment Highlights
Investment Highlights IDH is an attractive investment opportunity with compelling fundamentals, present in fast-growing, under-served markets Formidable playing field with structural growth drivers, 1 high barriers to entry and a highly fragmented market Established business model with strong brand
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