Integrated Diagnostics Holdings Plc · LSE:IDHC
Integrated Diagnostics — FY2022 Earnings Presentation
56 slides from Integrated Diagnostics's earnings presentation, April 2023
Slide 1: IDH Results Presentation April 2023
IDH Results Presentation April 2023
Slide 2: Contents
Contents: • IDH At a Glance • FY 2022 Results Overview • Key Investment Highlights • Our Market • Our Business Model • Financial Position and Performance • Growth Strategies • Governance 2 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 3: 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 Brands Accreditations Immunology Endocrinology Cytogenetics Clinical Microbiology Histopathology C
Slide 4: Our Geography
Our Geography IDH currently operates the largest branch network amongst private providers in Egypt and boasts an established presence in four key markets in the Middle East and Africa Egypt Nigeria 1979 500 #1 2018 12 2% Market Ranking1 Share of First began Branches (52% in Acquisition of (#1 in Cor
Slide 5: Our Patients
Our Patients IDH serves two principal types of patients: contract and walk-in Around 70% of total revenue generated across the two segments is paid in cash Contract Patients Walk-In Patients IDH’s contract clients include institutions who enter into one-year IDH’s walk-in clients, also referred to a
Slide 6: IDH Post Covid-19: A new chapter (I/II)
IDH Post Covid-19 : A new chapter (I/II) IDH has transformed its business, rethinking its service offering and delivery capabilities, and setting the foundations for a new chapter of sustainable growth Test Offering and Reach Agility Delivery and Visibility Conventional Business Ramped up Ramped Up
Slide 7: IDH Post Covid-19: A new chapter (II/II)
IDH Post Covid-19: A new chapter (II/II) IDH has transformed its business, rethinking its service offering and delivery capabilities, and setting the foundations for a new chapter of sustainable growth Improved Long-term Efficiency Relationships Decreased Turnaround Times and Improved Patient Satisf
Slide 8: FY 2022 Results Overview
FY 2022 Results Overview 8 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 9: Important Notice
Important Notice Treatment of Revenue Sharing Agreements and Use of Alternative Performance Measures As part of IDH’s efforts to support local authorities in Jordan in the fight against the pandemic, Biolab (IDH’s Jordanian subsidiary) secured several revenue-sharing agreements to operate testing st
Slide 10: Results Snapshot
Results Snapshot IDH reports sustained growth in traditional offering showcasing the fundamental strength and potential of the business EGP 3,542 mn EGP 527 mn Net Sales in FY 2022 EGP 1,462 mn EGP 1,172 mn Net Profit in FY 2022 Adj. EBITDA1 in FY 2022 ▼ 65% y-o-y / 15% margin* ▼ 30% y-o-y Gross Pro
Slide 11: Sustainable Growth in Conventional Business
Sustainable Growth in Conventional Business IDH’s conventional business stood 33% above pre-pandemic levels in FY 2022 demonstrating the strong underlying demand for the Group’s traditional offering Conventional net sales continue growing solidly supported by higher Conventional revenue per test inc
Slide 12: Sustainable Growth Despite Seasonality – Quarterly
Sustainable Growth Despite Seasonality – Quarterly IDH’s conventional business stood 35% above pre-pandemic levels in Q4 2022 showcasing the strength and potential of its underlying business Conventional net sales continue growing solidly supported by higher Conventional revenue per test currently s
Slide 13: Normalising Profitability
Normalising Profitability Lower profitability for the year primarily reflects a post-Covid-19 normalisation in IDH’s test mix. In the longer-term IDH expects margins to converge back to historical averages. Gross profitability in line with pre-pandemic averages EBITDA level profitability aligned wit
Slide 14: Adj. EBITDA/Net Profit Bridge
Adj. EBITDA/Net Profit Bridge Excluding losses related to transactions completed by IDH to source USD to fulfill its dividend obligations for FY2021, net profit would record EGP 692 million with a NPM on net sales of 20% FY 2022 EBITDA/Net Profit Bridge | EGP million 14 INTEGRATED DIAGNOSTICS HOLDIN
Slide 15: Solid Financial Position
Solid Financial Position The Group maintains a robust financial position, with a liquid balance sheet thanks to a strong cash generation profile allowing for consistent dividend payouts Consolidated Cash Balance | EGP mn Net Cash/(Debt) Balance* | EGP mn Gross Fixed Assets | M-EGP -65% +34% 1,483 2,
Slide 16: Segment Performance
Segment Performance IDH’s contract segments recorded strong conventional net sales growth in FY 2022. Meanwhile, at the walk-in segment net sales came in largely unchanged from last year. Walk-in Segment Contract Segment Total FY21 FY22 Change FY21 FY22 Change FY21 FY22 Change Revenue (EGP mn) 2,339
Slide 17: Segment Performance
Segment Performance The contract segment continued to contribute the lion share of both patient volumes and consolidated revenues in FY 2022 Revenue Split Patient Split FY 2021 FY 2022 FY 2021 FY 2022 30% 34% 43% 41% 57% 59% 66% 70% Walk-in Corporate Walk-in Corporate Walk-in Corporate Walk-in Corpo
Slide 18: Regional Performance
Regional Performance IDH witnessed strong results from its conventional business in Egypt and Jordan, with both its Nigerian and Sudanese operations recording solid results for the year ended 31 December 2022 Revenue | EGP mn EGYPT 4,108 ▼ 30% 16% 9% Patient Retention Direct-to-patient 81.7% 2,894 G
Slide 19: COVID-19-adapted Service Offering in Egypt and Jordan
COVID-19-adapted Service Offering in Egypt and Jordan Net sales in Egypt and Jordan were supported by both IDH’s Covid-19-related* test offering and its house call service despite both recorded year-on-year declines as infections and average test prices fell, and mandatory testing was lifted Covid-1
Slide 20: Continued Growth at Echo-Lab (Nigeria)
Continued Growth at Echo-Lab (Nigeria) IDH’s Nigerian operations reported year-on-year revenue growth of 24% in FY 2022. Top-line growth was supported by a 51% year-on-year increase in average revenue per test in part reflecting the rising demand for the generally higher-priced CT and MRI exams duri
Slide 21: Continued Ramp up at Al Borg Scan
Continued Ramp up at Al Borg Scan Al Borg Scan offers a full range of radiology services, including EGP 85 MN 116k 151k EGP 564 EGP 735 but not limited to Magnetic Resonance Imaging (MRI), Computed Tomography (CT), Ultrasound, X-ray and FY 2022 Revenue FY 2022 Patients FY 2022 Tests FY 2022 FY 2022
Slide 22: Outlook and Strategy
Outlook and Strategy IDH is well positioned to deliver solid growth in its conventional business supported by its flexible business model, robust mitigation measures, and effective growth and investment strategy Double-digit Normalising Margins Conventional Revenue Growth Target for FY 2023 Despite
Slide 23: Investment Highlights
Investment Highlights 23 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 24: Investment Highlights
Investment Highlights IDH is an attractive investment opportunity with compelling fundamentals, present in fast- growing, under-served markets Operating in highly fragmented markets characterised by 1 strong structural growth drivers and high barriers to entry Deploys an asset-light business model t
Slide 25: Fast-Growing, Underserved Markets
Fast-Growing, Underserved Markets 25 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 26: Favorable Industry Dynamics
Favorable Industry Dynamics IDH’s home market of Egypt is underpinned by robust structural growth drivers Lab tests per capita (2012) 23.2 High Disease Burden Operating in a still under-penetrated The Egyptian population is marked by a high incidence of market 10.1 lifestyle-related medical conditio
Slide 27: Favorable Industry Dynamics: High Barriers to Entry
Favorable Industry Dynamics IDH’s markets are characterised by high barriers to entry Economies of Scale Accreditation of Facilities Brand & Reputation Market Reach Key Stakeholder Relationships IT-enabled platform, Attracting patients Patients are loyal to Fragmented markets Building a scalable cri
Slide 28: IDH is a Consumer-Facing Service Provider
IDH is a Consumer-Facing Service Provider The mechanics of healthcare markets in developing economies are markedly different from those in many Western healthcare industries Private Healthcare Systems in Developing Economies IDH serves the private healthcare A hospital outpatient clinic or Perceived
Slide 29: Scalable Business Model
Scalable Business Model 29 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 30: Asset-light Business Model
Asset-light Business Model 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’s diagnostic “Hub,” eq
Slide 31: Our Mega Lab
Our Mega Lab IDH’s Mega Lab provides a robust platform to support rapid, cost-effective growth Capabilities Quality Control • Mega Lab machines are capable of conducting a wide range of tests including basic blood grouping to advanced gene sequencing. • New and esoteric test facilities at the Mega L
Slide 32: Key Supplier Relationships
Key Supplier Relationships IDH leverages its bargaining power with suppliers to maximize value in a business that is fundamentally about economies of scale. Combined with the long-tenure nature of its supplier contracts, this provides significant protection against short-term price fluctuations. Dyn
Slide 33: Strong Growth and Financial Position
Strong Growth and Financial Position 33 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 34: Key Financial Performance Indicators
Key Financial Performance Indicators Since the Company’s IPO on the LSE in 2015, IDH has delivered consistent top- and bottom-line growth supported by a steady increase in volumes and increasingly favourable pricing across the Group’s service offering Adj. EBITDA *** - Adj. EBITDA Margin** | Net Sal
Slide 35: Regional Performance
Regional Performance Across its footprint, the Company deploys tailored expansion strategies which enable it to continue driving growth irrespective of the prevailing macroeconomic environment Share of 2022 Net Sales Revenues* (EGP mn) ▲89% IDH is in a strong competitive position in the 4,108 ▼30% E
Slide 36: Growth Strategies
Growth Strategies 36 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 37: Future Growth Strategies
Future Growth Strategies IDH’s growth strategies rely on leveraging its competitive advantages to achieve four strategic goals Expand Customer Expand Reach Geographically Beyond opening laboratories in new In addition to organic expansion, the geographies, IDH is reaching out to new Company continue
Slide 38: Expanding Customer Reach – Growing In Egypt
Expanding Customer Reach – Growing In Egypt The Group enjoys ample growth room in Egypt thanks to its market leading position and extensive reach, attractive underlying fundamentals, and favourable regulatory environment Reach and penetration Solid Fundamentals Universal Healthcare Act Forecasted GD
Slide 39: Diversifying Service Offering – Al Borg Scan Expansion Updates
Diversifying Service Offering – Al Borg Scan Expansion Updates Al Borg Scan’s operates six branches, two of which were inaugurated in 2022. The Group also recently earned the prestigious ACR (American College of Radiology) accreditation for Al Borg Scan’s Nuclear Medicine and ultrasound units. Ratio
Slide 40: House Call Services (Egypt and Jordan)
House Call Services (Egypt and Jordan) IDH’s house call services, offered in both Egypt and Jordan, is becoming a primary contributor to top-line, averaging 15-20% compared to a pre-pandemic contribution of c.10% Expands IDH’s customer base Expands reaching new segments of the House call services wi
Slide 41: Expanding Customer Reach – State-sponsored Initiatives
Expanding Customer Reach – State-sponsored Initiatives 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 Revenue Generated “100 Million Healthy Lives” campaig
Slide 42: Expanding Customer Reach – IDH Awareness Campaigns
Expanding Customer Reach – IDH Awareness Campaigns 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’s PCR Offers and Campaigns Discounts on PCR testing for Covid-19 PCR te
Slide 43: Diversifying Service Offering – New Investment in Wayak
Diversifying Service Offering – 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 On
Slide 44: Growing Geographic Footprint – Investment Rationale
Growing Geographic Footprint– Investment Rationale IDH’s regional expansion strategy targets acquisitions in African, Middle Eastern and Asian markets where it can deploy its proven business model and generate accretive value Growing economies and strong demographics Similar healthcare market struct
Slide 45: Growing Geographic Footprint – Nigeria Expansion
Growing Geographic Footprint – 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 46: 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. In parallel, the Group is actively seeking to optimise its offering, pushing its radiology and pathology services. Branc
Slide 47: 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 47 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 48: Growing Geographic Footprint – KSA Expansion
Growing Geographic Footprint – KSA Expansion In October 2022, IDH and Biolab signed a joint venture agreement with Izhoor, a company owned by Fawaz Alhokair, to launch a full-fledged pathology diagnostic services provider in Saudi Arabia Deal Structure Deal Specifics The new joint venture will be ow
Slide 49: Strong Leadership & Governance
Strong Leadership & Governance 49 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 50: Governance
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 Independent Non-E
Slide 51: Governance
Governance 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 The Board
Slide 52: 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 53: Appendix
Appendix 53 INTEGRATED DIAGNOSTICS HOLDINGS
Slide 54: IDH Development Story
IDH Development Story Over 40 years of industry experience, complemented by strategic expansion to develop a strong market position across products and geographies. Today IDH has built a scalable platform that is positioned for further strong growth 1979 1990 2008 2011 2012 2013-14 Establishment of
Slide 55: Covid-19 Internal Protocols and Preventative Measures
Covid-19 Internal Protocols and Preventative Measures In light of the recent covid-19 global outbreak, IDH, in line with World Health Organization (WHO) guidelines, has implemented detailed internal protocols to guarantee the safety of its staff and patients and safeguard its operations. IDH’s respo
Slide 56: IDH
INTEGRATED DIAGNOSTICS HOLDINGS IDH
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