Shalby Ltd. · NSE:SHALBY
Shalby — Investor Presentation (June 2021)
42 slides from Shalby's investor presentation, Jun 7, 2021
Slide 1: Cover letter to stock exchanges on investor presentation disclosure
-HOSPITALS - June 7,2021 The List~ngDepartment Corporate Service Department National Stock Exchange of India Ltd BSE Limited Mumbai 400 051. Mumbai 400 001. Scrip Code :SHALBY Scrip Code: 540797 Through : https://www.connect2nse.corn/LISTING/ Through : htt~://list~nn.bse~nd~a.corn - Sub: lnvestor Pr
Slide 2: Investor Presentation June 2021
Investor Presentation June 2021 SHALBY LIMITED (BSE CODE: 540797 I SHALBY, NSE CODE: SHALBY) A leader in Joint Replacement surgeries in India with an established chain of multi-specialty tertiary care hospitals.
Slide 3: Agenda
AGENDA 01 BUSINESS OVERVIEW 02 FINANCIAL PERFORMANCE 03 STRATEGIC DIRECTION 04 SHALBY IMPLANT BUSINESS 05 APPENDIX 2
Slide 4: Business Overview
SHALBY MULTI-SPECIALTY ——HOSPITALS— BUSINESS OVERVIEW
Slide 5: Our Regional Presence
OUR REGIONAL PRESENCE Shalby has developed strong brand recognition in its core markets and is well positioned for further expansion ➢ National Presence ➢ International Presence (in Africa) PUNJAB ▪ Mohali – 145 beds RAJASTHAN ▪ Jaipur – 237 beds GUJARAT ▪ Ahmedabad o SG – 201 beds o Krishna – 220 b
Slide 6: Annual Performance Trends
ANNUAL PERFORMANCE TRENDS Significant impact of Covid-19 on the key operational parameters in FY21 In Patients Day Care Out Patients 23,728 3,25,596 2,96,197 39,030 19,674 19,668 36,311 2,61,562 28,847 FY 19 FY 20 FY 21 FY 19 FY 20 FY 21 FY 19 FY 20 FY 21 ARPOB (In Rs.) Surgery Count 31,296 30,457 2
Slide 7: Annual Performance Trends
ANNUAL PERFORMANCE TRENDS Arthroplasty contribution to total revenue and bed occupancy levels declined due to Covid-19 pandemic especially during first half of the year Hospital Revenue Mix by Care % of Revenue from Arthroplasty 12% 45% 45% 13% 12% 23% 84% 83% 85% FY 19 FY 20 FY 21 FY 19 FY 20 FY 21
Slide 8: Hospital Specialties
HOSPITALS SPECIALTIES Revenue by Hospital Specialty 50% 45% 40% 33% 30% 23% 20% 11% 12% 10% 9% 8% 9% 10% 10% 6% 6% 4% 4% 5% 5% 0% Arthroplasty Critical Care & Orthopaedic Cardiac Science Nephrology Oncology Neurology Others General Medicine FY 20 FY 21 Number of Surgeries by Specialty Revenues by En
Slide 9: Business Model
BUSINESS MODEL Greenfield 907 Beds Brownfield 977 Beds Acquisition 366 Beds Franchise Franchise Lower capital requirement New Growth Area 2017 Year 2015 Year Naroda 267 Beds Jabalpur 233 Beds Leased 2007 Year 2017 Year SG 201 Beds Mohali 145 Beds Santa Cruz 2024 Year 2023 Year 175 Beds Nashik 146 Be
Slide 10: Our Business Model – Optimising Capex and Opex
BUSINESS MODEL Our Business Model – Optimising Capex and Opex Optimize capex Operational planning with Efficiency due Inhouse to ▪ Lowest Capex and Opex per bed projects better capex due to optimal use of real-estate team planning ▪ Equipment planning and utilities planning ▪ In-house planning teams
Slide 11: Hospital Maturity Profile
HOSPITAL MATURITY PROFILE Shalby Hospitals generates positive EBITDAR Margin within 3 years of its operations 30% 18% 24% Avg. EBITDAR Margin Avg. EBITDAR Margin Avg. EBITDAR Margin Naroda SG Group Indore Jaipur Nashik Krishna Jabalpur Surat Group Mohali Santa Cruz 8+ Years 5+ Years 3+ Years 2+ Year
Slide 12: Hospital Business Update
HOSPITAL BUSINESS UPDATE Santa Cruz Development Update Nashik Development Update Business Model: Revenue Sharing Business Model: Revenue Sharing Bed Capacity: 175 Bed Capacity: 146 Operating and Management Term: 30 + 30 years Operating and Management Term: 30 years Operationalization Year: FY 2024 O
Slide 13: Experienced Board of Directors
EXPERIENCED BOARD OF DIRECTORS Dr. Vikram Shah Chairman and Managing Director Mr. Sushobhan Dasgupta Non – Executive Director Over two and a half decades of professional healthcare experience across UK, USA and India, Dr. Shah has been serving as Director of the Department of Knee With over 30 years
Slide 14: Senior Management
SENIOR MANAGEMENT Senior Management Mr. Sushobhan Dasgupta Mr. Shanay Shah Vice Chairman and Global President President With over 30 years experience in the field of healthcare, he has worked in several developed & emerging markets across several businesses and disciplines in the With over seven yea
Slide 15: Organisation Structure
ORGANISATION STRUCTURE Chairman Unit CAO Vice Chairman and Clinical Applications Global President Corporate development Accounts Advisor to Group VP President CFO CHRO CIO HR CMD COO Projects Hospitality Cluster COO CORPORATE SUB-FUNCTIONS IT/Systems Billing Unit CAO Pharmacy Admin/Operations/Eng. Q
Slide 16: Financial Performance
SHALBY MULTI-SPECIALTY ——HOSPITALS— FINANCIAL PERFORMANCE
Slide 17: Financial Performance
FINANCIAL PERFORMANCE Total Revenue (Rs. Mn) Total EBITDA (Rs. Mn) and Margin % 204 21.7% bps Margins 5,042 991 4,715 916 955 4,400 19.7% 19.4% FY 19 FY 20 FY 21 FY 19 FY 20 FY 21 Improved margins and profitability driven by Significant impact on FY21 surgeries and topline due to an increase in occu
Slide 18: Financial Performance
FINANCIAL PERFORMANCE Total PBT (Rs. Mn) and Margin % Total PAT (Rs. Mn) and Margin % 120 567 bps 424 551 Margins 504 9.6% 317 276 6.7% 12.5% 5.5% 11.3% 10.7% FY 19 FY 20 FY 21 FY 19 FY 20 FY 21 Improved margins and profitability driven by an increase in occupancy levels coupled with cost rationaliz
Slide 19: Hospital Investment Journey
HOSPITAL INVESTMENT JOURNEY Return on Capital Employed currently reflects real estate investments and a relatively younger maturity portfolio Shalby Branding Phase Investment Phase 2 Hospitals with 228 beds Added 8 Hospitals with 1,734 new beds Current Phase IV Occupancy of Phase I – Capex Rs. 4 mn*
Slide 20: Hospital Margin Profile
HOSPITAL MARGIN PROFILE Each hospital group makes a positive contribution at the Shalby level ARPOB Rs. 43,307 26,125 22,051 24,224 27,982 19,025 21,764 25,672 40% 34.5% 35% 33.7% 30% EBITDA % 24.5% 25% 23.3% 24.2% Hospital and Other EBITDA Margins 20% 18.5% 16.4% 15% 22.35% 10.6% EBITDA Margins 10%
Slide 21: Hospital Margin Profile
HOSPITAL MARGIN PROFILE Shalby is able to operate hospitals profitability at EBITDA and EBITDAR levels even at a bed occupancy of 20% Jaipur, Surat and Naroda which have been operational for less than 5 years are currently ramping up 19% 45.0% Min. Occupancy SG Group, 35.0% 40.0% Naroda, 36.2% 35.0%
Slide 22: Annual Performance Trends
ANNUAL PERFORMANCE TRENDS Strong EBITDA to Cash Flow conversion rate of 88.4%. Unlevered balance sheet results in lower Return on Equity ROE ROCE 7.3% 6.9% 6.5% 5.2% 4.1% 3.5% FY 19 FY 20 FY 21 FY 19 FY 20 FY 21 CFO to EBITDA Capital Structure 88.4% Figures in Rs Million FY 19 FY 20 FY 21 55.9% Gros
Slide 23: FY2021 Year in Review
FY2021 YEAR IN REVIEW Strong rebound in second half of the year despite Covid-19 challenges Improved margins and profitability driven by an increase in occupancy levels coupled with cost rationalization initiatives Net Profit increase of 53.6% to Rs. 424 Mn in FY21 Improving Operational Performance
Slide 24: Strategic Direction
SHALBY MULTI-SPECIALTY ——HOSPITALS— STRATEGIC DIRECTION
Slide 25: Knee Replacement
KNEE REPLACEMENT Knee Replacement - The big opportunity ~ 1,75,000 ~ 54,000 Year 2017 Last year, In United States ~ 6,000 Surgeries ~0.8 mn knee replacements in a population of ~300 mn Year 2010 ~ 300 India has a similar affording Year 2000 Surgeries population. Hence, direct Surgeries potential to
Slide 26: Cardiac Growth
CARDIAC GROWTH The Cardiac growth story in India ~ 2,00,000 ~ 50,000 Year 2017 CAGR – 29% in 30 years. ~ 5,000 Surgeries Currently growing @ 2-3% Year 2004 ~ 500 Year 1994 Surgeries Surgeries Wide procedure penetration to Tier 2 and 3 cities Year 1984 Surgeries 25
Slide 27: Franchise Model Asset Light
FRANCHISE MODEL ASSET LIGHT Franchisee Footprint • All franchisees to be branded as Shalby • Hopsitals located in key catchment areas & should have upto 50 beds • Focus on Orthropaedics as a specialty SHALBY Operating Model • Provide Shalby systems (HIS, procurement, manpower planning etc) • All hos
Slide 28: Homecare Service Offerings
HOMECARE SERVICE OFFERINGS Present offerings Future offerings • Home COVID-19 care • ICU Setup @home package • Nursing (incl. critical care) • Chronic disease • Attendant management • Physiotherapy • Pathology • Rehabiliation • Medical Equipment • Pharmacy @home • Personalised & tech • Home visits b
Slide 29: Care Card Primary Features
CARE CARD PRIMARY FEATURES Membership Fee : Rs 2500/- Membership Fee : Rs 5000/- • Complimentary Health check-up: Worth Rs 2500/- • Complimentary Health check-up: Worth Rs 5000/- • OPD Services: Consultations(20%), Lab & Diagnostics (15%) • OPD Services: Consultations(20%), Lab & Diagnostics (15%) •
Slide 30: Strategic Growth Drivers
STRATEGIC GROWTH DRIVERS Franchise Model Home Care Care Card Strategy: Strategy: Strategy: • The need for localization of hospital • The healthcare dynamics in India all • Constructive mechanism to promote treatment. Faster penetration in pan point towards a high need for affordable health awareness
Slide 31: Shalby Implant Business
SHALBY MULTI-SPECIALTY ——HOSPITALS— Shalby Implant Business
Slide 32: Transaction Overview
TRANSACTION OVERVIEW Shalby acquires selected implant assets from Consensus Orthopedics for a cash consideration of USD 11.45 million Transaction Overview Transaction Highlights ✓ Shalby has entered into a definitive agreement to ✓ Mr. Sushobhan Dasgupta appointed as Vice acquire certain assets from
Slide 33: Transaction Structure
TRANSACTION STRUCTURE The assets have been acquired by Shalby Advanced Technologies Inc, a wholly owned subsidiary of Mars Medical Devices which in turn is a wholly owned subsidiary of Shalby Shalby Limited USD 11.45 million Deal Consideration 100% Equity USD 3.35 million USD 12.65 million Mars Medi
Slide 34: Business Leadership
BUSINESS LEADERSHIP Shalby appointed Sushobhan Dasgupta as Vice Chairman and Global President of Shalby Limited and Daniel Hayes as the Chief Executive Officer of Shalby Advanced Technologies ✓ Sushobhan Dasgupta, former Vice President -Orthopedics, ✓ Daniel Hayes, former CEO and founder of Consensu
Slide 35: Strategic Rationale
STRATEGIC RATIONALE The strategic and financial rationale for this acquisition is compelling ✓ Internationally experienced management team appointed to lead Shalby’s implant International business Management Team ✓ Enables Shalby to procure quality implants at a competitive price for its own consump
Slide 36: Appendix
SHALBY MULTI-SPECIALTY ——HOSPITALS— APPENDIX
Slide 37: Hospital Business Update: SG Group
HOSPITAL BUSINESS UPDATE Commencement 2007 | 13 Years Catchment: Ahmedabad and surrounding areas of Gujarat, Rajasthan and Mumbai No. of beds / Occupancy 201 | 34% SG • The unit has been active participants in the COVID Type of Arrangement Leased – Fixed Rent vaccination drive vaccinating nearly 650
Slide 38: Hospital Business Update: Surat Group, Vapi, Indore
HOSPITAL BUSINESS UPDATE Catchment: South Gujarat, North Maharashtra (including Commencement 2017 | 3 Years Mumbai) No. of beds / Occupancy 243 | 49% Surat • Treated More than 200 Covid patients in a month(March) Type of Arrangement Freehold • Empanelment of 10 new private insurance companies Surat
Slide 39: Hospital Business Update: Mohali, Jaipur, Zynova
HOSPITAL BUSINESS UPDATE Commencement 2017 | 2+ Years Catchment: Punjab, Uttrakhand Mohali No. of beds / Occupancy 145 | 31% • Collaboration done with elite orthopedics surgeon (Dr. Manuj Type of Arrangement Freehold Wadhwa) to enhance our Arthroplasty Business. • Promoting Critical Care and Pulmono
Slide 40: Annual Performance Trends
ANNUAL PERFORMANCE TRENDS Particulars (in Rs. Million) FY 19 FY 20 FY 21 Y-o-Y Growth Revenue from Operations 4,623 4,869 4,309 (11.5)% Other Income 93 174 91 (47.8)% Total Income 4,715 5,042 4,400 (12.7)% Expenses COGS 2,833 2,953 2,496 (15.5)% % of Revenue from Operations 61% 61% 58% Employee Bene
Slide 41: Annual Performance Trends: Operational Metrics
ANNUAL PERFORMANCE TRENDS Operational Metrics FY 19 FY 20 FY 21 Y-o-Y Growth In Patient Count 36,311 39,030 28,847 (26.1)% (Nos.) Day Care Patient Count 19,674 23,728 19,668 (17.1)% (Nos.) Out Patient Count 2,96,197 3,25,596 2,61,562 (19.7)% (Nos.) Surgeries Count 19,908 19,835 11,933 (39.9)% ARPOB
Slide 42: Disclaimer and Contact Details
DISCLAIMER and CONTACT DETAILS No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as