Metropolis Healthcare Ltd. · NSE:METROPOLIS
Metropolis Healthcare — Q2 FY2023 Earnings Presentation
70 slides from Metropolis Healthcare's earnings presentation, Nov 8, 2022
Slide 1: Intimation of Investor Presentation to stock exchanges
Ref: MHL/Sec&Legal/2022-23/69 Date: November 08, 2022 To, To, Head, Listing Compliance Department Head, Listing Compliance Department, BSE Limited, National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, Plot No. C/1. G Block, Dalal Street, Mumbai – 400 001. Bandra – Kurl
Slide 2: Reaching Out Responsibly – Investor Presentation November 2022
Reaching Out RESPONSIBLY Investor Presentation – November 2022
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Metropolis Healthcare Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any
Slide 4: Q2FY23 Performance
Q2FY23 Performance...
Slide 5: Q2FY23 Performance Snapshot
Q2FY23 Performance Snapshot Revenue Excl. Covid PCR & Total Revenue Covid Allied tests Rs. 300 Crores Rs. 288 Crores -1% YoY +16% YoY Highest Ever Quarterly Revenue Covid PCR Revenue Covid Allied Rs. 7 Crores Rs. 6 Crores -84% YoY -48% YoY EBITDA Margin Reported EBITDA Margin (Before CSR & ESOP) 27.
Slide 6: H1FY23 Performance Snapshot
H1FY23 Performance Snapshot Revenue Excl. Covid PCR & Total Revenue Covid Allied tests Rs. 580 Crores Rs. 549 Crores -8% YoY +21% YoY Covid PCR Revenue Covid Allied Rs. 19 Crores Rs. 12 Crores -82% YoY -83% YoY EBITDA Margin Reported EBITDA Margin (Before CSR & ESOP) 26.6% 26.0% H1FY23 Key Highlight
Slide 7: Non-Covid revenue on growth trajectory
Quarterly snapshot – Non-Covid revenue on growth trajectory Non-Covid Revenues +16% Key Highlights 287.5 248.3 254.7 261.7 231.9 207.0 ✓ Recorded Highest Ever Quarterly Revenue excl. revenue from Covid PCR & Covid Allied tests Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 ✓ Revenue excluding Covid PCR &
Slide 8: Financial Metrics – from Q2FY20 (pre-covid) to Q2FY23
Financial Metrics – from Q2FY20 (pre-covid) to Q2FY23 Total Revenue EBITDA (Before CSR & ESOP) +34% +32% 289.0 303.0 300.3 95.0 93.2 83.0 224.0 63.0 Q2FY20 Q2FY21 Q2FY22 Q2FY23 Q2FY20 Q2FY21 Q2FY22 Q2FY23 Reported EBITDA Profit after Tax (PAT) +29% -6% PAT has been impacted due to higher 92.5 90.6 6
Slide 9: Operational metrics – from Q2FY20 (pre-covid) to Q2FY23
Operational metrics – from Q2FY20 (pre-covid) to Q2FY23 No. of Patient Visits (In Mn.) Revenue Per Patient (In Rs.) +13% +16% 3.1 977 942 2.8 2.7 +17.3% 813 871 -3.6% 2.2 Q2FY20 Q2FY21 Q2FY22 Q2FY23 Q2FY20 Q2FY21 Q2FY22 Q2FY23 No. of Tests (In Mn.) Revenue Per Test (In Rs.) +27% +3.5% 6.6 427 432 46
Slide 10: Strong traction in B2C business
Strong traction in B2C business (Excl. Covid PCR and Covid Allied tests) Annual Trend Q2 & H1FY23 (Y-o-Y Growth) B2C Business Revenue B2C Business Revenue +49% +12% -18% +25% +18% +22% FY18 FY19 FY20 FY21 FY22 Q2FY22 Q2FY23 H1FY22 H1FY23 ✓ Our B2C business continue to witness growth on account of ou
Slide 11: Share of B2C Business in Focus Cities at 60% in H1FY23
Share of B2C Business in Focus Cities (Non-Covid) at 60% in H1FY23 ✓ Excluding Covid-19 revenues, our B2C contribution B2C Contribution in Focus Cities (Non-Covid Business) (Rs. in Crs.) continues to increase ✓ Our aspirations is to achieve 65% B2C contribution in focused cities in coming years rema
Slide 12: Well diversified test volume and value mix
Well diversified test volume and value mix… Q2FY22 Q2FY23 Q2FY22 Q2FY23 Total Revenue Revenue excl. Covid PCR & Covid Allied tests Volume Mix Volume Mix 1% 2% 1% 15% 16% 13% 24% 2% 41% 45% 46% 47% 37% 38% 38% 34% Value Mix Value Mix 8% 12% 16% 17% 7% 14% 11% 17% Routine 43% 28% 32% 40% 32% 40% 32% S
Slide 13: Diversified Revenue contribution across Geographies (1/2)
Diversified Revenue contribution across Geographies (1/2)… Revenue Mix between Focus, Seeding & Other Cities Q2FY22 Q2FY23 Q2FY22 Q2FY23 Total Revenue Revenue Excl. Covid PCR & Covid Allied tests 19% 21% 21% 21% 61% 20% 61% 18% 59% 20% 61% 18% Focus Seeding Others Continue to focus on strengthening
Slide 14: Diversified Revenue contribution across Geographies (2/2)
Diversified Revenue contribution across Geographies (2/2)… Revenue Mix between Geographies Q2FY22 Q2FY23 Q2FY22 Q2FY23 Total Revenue Revenue Excl. Covid PCR & Covid Allied tests 7% 6% 8% 6% 8% 6% 8% 5% 25% 30% 25% 30% 57% 51% 51% 5% 56% 5% 5% 5% North South East West International Increase in revenu
Slide 15: Network Strategy
Network Strategy Laboratory Network - MHL Service Network - MHL Hitech Network Total Network Rationalization ARC Period Lab network Service network +227 centers Third Party PSCs Total 172 Total 3379 + 9 labs Laboratory Network Owned PSCs 3,291 3,064 22 Labs 22 88 141 150 2,731 770 2,555 704 119 124
Slide 16: Home visits services now covered in 100+ locations
Home visits services now covered in 100+ locations… Total Home Visits Revenue Home Visits Revenue Excl. Covid PCR & Covid Allied tests Rs. Crs. Rs. Crs. +71% 43 +47% 34 24 25 29 22 +4.2% 17 17 Q2FY20 Q2FY21 Q2FY22 Q2FY23 Q2FY20 Q2FY21 Q2FY22 Q2FY23 Total home visit revenue has grown substantially as
Slide 17: Focus on Wellness Segment
Focus on Wellness Segment Population for Diagnostic Industry Total Wellness Revenue (excl. Covid & Allied) 81% 6% 33 94% 23 40% 18 13 Wellness Population Illness Population Q2FY20 Q2FY21 Q2FY22 Q2FY23 ✓ Revenue from wellness has grown by 81% as compared Our focus is to cater to the balance 94% of to
Slide 18: Creating a Digital Transformation for business to grow
Creating a Digital Transformation for business to grow Enhanced Plans Benefits Productivity • A Fully Scaled Application Programming • Digital Leadership Rapid Scalability Interface (API) - Centric Tech Core • Full-fledged Customer Relationship • Faster go-to-market Management (CRM) stack for Servic
Slide 19: Steady Focus on Balance Sheet continues
Steady Focus on Balance Sheet continues Debtor Days Working Capital Days 31 32 Key Highlights 14 11 ✓ Debtor days in Sep-22 at stable levels compared to Mar-22 ✓ Cash & Cash Equivalents dropped on Mar-22 Sep-22 account of prepayment of loan taken for Mar-22 Sep-22 acquisition of Hitech OCF to EBIDTA
Slide 20: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Key Highlights Profit & Loss Statement (Rs. Crs.) Q2FY23 Q2FY22 Y-o-Y Q1FY23 Q-o-Q ✓ Revenue for Q2FY23 was marginally Total Revenue from Operations 300.3 302.6 -1% 279.9 7% down by 1% as compared to Rs. 302.6 EBIDTA (before CSR & ESOP) 83.0 93.2 -11% 71.7 16% cr
Slide 21: Consolidated Balance Sheet
Consolidated Balance Sheet Assets (Rs. Crs.) Sep-22 Mar-22 Equity & Liabilities (Rs. Crs.) Sep-22 Mar-22 Non-current assets 1,181.5 1,137.2 Equity 958.9 888.2 Property, Plant and Equipment 143.0 139.2 Equity Share capital 10.2 10.2 ROU Assets 154.3 109.5 Other equity 946.4 876.0 Goodwill 454.7 454.7
Slide 22: Consolidated Cash Flow
Consolidated Cash Flow Cash Flow Statement (Rs. Crs) H1FY23 H1FY22 Profit Before Tax 97.6 180.8 Adjustments for Depreciation and other items 52.6 36.2 Operating profit before working capital changes 150.3 217.0 Changes in working capital 19.7 -14.6 Cash generated from operations 170.0 202.3 Direct t
Slide 23: Metropolis is well placed
Metropolis is well placed
Slide 24: Doctor recommendation & not price is the key determinant for acute patients
Doctor recommendation & not price is the key determinant for acute patients % of respondents (top 4 criteria) Doc recommendation and not price is Acute Patients are highly influenced by doctors the major determinant of acute uptake 100% 62% 55% 51% 57% 90% Metro Cities 43% 40% 36% 30% 27% 22% 20% 80
Slide 25: Metropolis is well placed
Metropolis is well placed Category Acute Patient Chronic Patient Preventive Customers Doctor Influence Highest Moderate Lowest Price Factor Lowest Moderate Highest Online aggregators Lowest Moderate Highest Impact ✓ Appx. 18% of the volumes at ✓ Appx. 2% of the volumes at ✓ Appx. 80% of the volumes
Slide 26: Mumbai continues to be a key market for us
Mumbai continues to be a key market for us Service Network in Mumbai Mumbai is a key market for Metropolis with strong doctor & customer connect +150 ✓ Centres in Mumbai continue to be highly 491 profitable even after increasing competition in the city in FY22 +59 +18 341 ✓ Expect strong profitabili
Slide 27: Strong Productivity from new centres in focus cities
Strong Productivity from new centres in focus cities Service Network in Focus Cities Strong expansion plan across focus cities ✓ Focus cities for Metropolis include Mumbai, +419 Pune, Chennai, Bengaluru & Surat 1,075 ✓ Productivity for new centers in its first 12 months continue to increase in most
Slide 28: Way forward
Way forward...
Slide 29: Way Forward
Way Forward… Added 16 labs & 509 network centers in FY22 of planned addition of 90 labs and 1,800 Network Expansion network centers by FY25 to strengthen our leadership position in existing geographies and build Metropolis brand in new geographies Added 100+ locations for home testing in FY22. Will
Slide 30: 1. Network Expansion Plan
1. Network Expansion Plan Metropolis Network Expansion Plan Laboratory Network Service Network +72% +70% 215 4,355 90 1,800 125 2,555 FY21 FY25E FY21 FY25E ✓ Expand to existing & newer locations – Aim to expand the service network to existing locations to strengthen our leadership position as Benefi
Slide 31: 2. Driving growth via digitally driven, asset-light home-visit segment
2. Driving growth via digitally driven, asset-light home-visit segment Digital demand generation Asset Light Rapid scale up via technology drive processes + 3rd party network Integrated CRM to Captured via provide omni- Metropolis website Capturing Changing Demand channel support and app 1 Covid has
Slide 32: 3. Deepening our digital touch points, capability throughout our value chain
3. Deepening our digital touch points, capability throughout our value chain Digitally engaging Scaling up Digitizing distribution & logistics: Digital Customer Engagement: customers and operational Launched Unified Patient Launching an end-to-end online partners capabilities Information System lead
Slide 33: 4. Levers for Margin Improvement & Cost Efficiencies
4. Levers for Margin Improvement & Cost Efficiencies Increased Utilization and Product Mix Higher utilization of Labs and increase in patient visits coupled with superior product mix 01 Increased Home Visits Cost Efficiency Initiatives Increase Home Visits revenue with focused Encouraging innovation
Slide 34: 5. Hitech Integration
5. Hitech Integration Hitech Diagnostic Centre Revenue strategy to aid double digit growth Revenue Rs. (In Crs.) ✓ Dual brand strategy in Chennai while single brand in rest of Covid Non-Covid TN & Karnataka. Plan to launch 100 centers in FY23 +15% 124 123 ✓ Increasing contribution of speciality test
Slide 35: Overview
Overview
Slide 36: We are Metropolis: The Pathology Specialist
We are Metropolis: The Pathology Specialist To be a respected healthcare brand trusted by clinicians, patients and stakeholders. Positively impact lives of patients Vision in their most anxious times and turn their anxiety in to assurance. Helping people stay healthy, by accurately revealing their 4
Slide 37: Journey to Leadership Position
Journey to Leadership Position ✓ First Referral Laboratory Set- ✓ Ameera Shah takes charge ✓ Secondary transaction by ✓ Exit of Warburg Pincus, ✓ Strong Thrust on Retail up by Founder & Chairman Dr. Foxcreek Investment Limited management control by frontend Expansion ✓ First major acquisition - Sush
Slide 38: Three decades of Delivering Value to Stakeholders
Three decades of Delivering Value to Stakeholders Leadership Position Across Industry METROPOLIS Focus Area ACCREDITATION CUSTOMER & QUALITY EXPERIENCE ROCE SPECIALITY SCORES SCORE BUSINESS INCREASED INFRASTRUCTURE PRODUCTIVITY REVENUE PER REALISATION PER TEST MENU OF YOUNG PATIENT PATIENT NETWORK 3
Slide 39: Key Drivers for Growth
Key Drivers for Growth 01 Industry Growth 05 Expansion Plan 02 Value Chain 06 Quality 03 Business Model 07 People 04 Service Network 08 Digital Transformation 38
Slide 40: 1a. Diagnostic Industry Poised to grow
1a. Diagnostic Industry Poised to grow… Indian Healthcare Industry Size of Indian Diagnostics Market Indian Diagnostics Industry Breakup Source – IIFL Diagnostics Report (in Billion Rs.) 6.0% +11.6% 924 9.0% 4.0% Healthcare Delivery - Hospitals 776 42% Pharma Pathology +16.4% 596 13.0% Medical Devic
Slide 41: 1b. Top players to continue to acquire market share of standalone centers
1b. Top players to continue to acquire market share of standalone centers Brand Awareness Increased brand awareness amongst patients and customers towards quality, reliability and test accuracy Service + Scale Large Test menu Large Test menu by organized diagnostics chains Factors leading Consolidat
Slide 42: 2. Presence in key pockets of Value Chain
2.Presence in key pockets of Value Chain Diagnostic Industry - Fragmented Routine Test Metropolis Focus Highly Fragmented Market Low Quality Standard Majority Diagnostic Players Technician + Run Lab Low on Technical Qualifications & Moderate Competition Presence across Accreditations (99.9% labs rem
Slide 43: 3. Hub & Spoke Model to scale efficiently
3. Hub & Spoke Model to scale efficiently Home Collection Global Reference Lab (GRL) Individual Patient (B2C) Wholesale (B2B) RRL / Satellite Lab Express Lab Third Party Lab / Hospitals / ARCs Collection Patient Centres Patient Leverage Widespread Delivery to our Enhances Collection of Greater netwo
Slide 44: 4. Patient Centric Network
4.Patient Centric Network Global and More than ~4,000 Present in 20 States 40+ Years National Over 10,000 Patient Test’s & Profiles & 220 cities Quality Touch Points of Credible Operations Accreditations Why Metropolis ? Collection ✓ Conclusive Diagnosis with Large Centres Pics test Menu backed by H
Slide 45: 5. Asset Lite Expansion Plan
5. Asset Lite Expansion Plan Asset Light Model Network Expansion Strategy Doctor APSC/ Lab on ✓ Focus on Asset Light Model to achieve Geographic Expansion with Bleeding DAPSC Lease High Scalability Point (DBP) ✓ The A-PSC and D-APSC Model allows us to grow our revenues by providing management and br
Slide 46: 6a. Quality in Core
6a. Quality in Core Quality Scores of 98.5% in 2018-19 by College Quality protocols following global standards of American Pathology 99.9% of industry labs remain un-accredited with lack of minimum standards in the industry Large Investments in Focus on Governance Information and rigorous audit Tech
Slide 47: 6b. Globally Compliant Quality Standards
6b. Globally Compliant Quality Standards “Global Lab Accreditations” No. of Audits Conducted by PAC Team FY 18-19 19-20 20-21 21-22 1312 1,057 583 988 ✓ PAC Team: Special Pre Analytical Care Team constituted as part of the Quality Assurance Team ✓ This team conducts thorough internal audits as per N
Slide 48: 6c. Scientific brand leadership
6c. Scientific brand leadership Segment Focus ◼ New tests on advanced technologies ddPCR, LCMS, New tests, R&D Strategy CGH Array and WSI Women & Child health • Gynecxpert ◼ NGS R&D Innovation Pipeline • Neoxpert • Pediamet ◼ Companion Diagnostics CDx Integrated Oncopathology • Oncomet ◼ Artificial
Slide 49: 7. People are our greatest asset
7. People are our greatest asset Leadership Team Investment in future leaders aligned to vision of the company. across levels and ahead of time. 2. Decision making Business models at par with changes 1. Leadership and Strengthening Structures to in the fields of Technology & structure support object
Slide 50: 8. Leveraging IT for Competitive Advantage
8. Leveraging IT for Competitive Advantage 1 2 3 4 Improving Business revenue Improved Operational Improve Customer Cost Saving & Optimization generation capabilities Efficiency Experience ✓ Zero Data Loss; 100% data ✓ IBM Watson Campaign Automation replication in remote location ✓ Mobility Applicat
Slide 51: 8a. Digital Transformation to improve efficiency
8a. Digital Transformation to improve efficiency 1 Standardization Achieve standardization across 2 Reduced Errors Reduce incidence of errors due to human intervention our operations Patients & Customers 3 Technical Operations Provide convenience to our 5 Monitor Technical Operations patients and cu
Slide 52: Future Strategy
Future Strategy 01 Increase Services 02 Increase Scale 51
Slide 53: Customer Centricity: In everything we do
Customer Centricity: In everything we do 01 02 03 04 Easy to Interpret Test Sample Collection from Conclusive Diagnosis Digital Access Report Doorstep We also have a policy of ensuring We have developed a Mobile Conclusive Diagnosis to our Application We offer our patients a Detailed We have increas
Slide 54: Sustainable Growth across Network
Sustainable Growth across Network Network of 210 Cities Criteria Strategy % of Revenue for FY22 (Total Business) ✓ Increasing productivity of Collection Centers ✓ Enhancing our Laboratory Capacity and Test Menu by adding Latest Machines and Technology ✓ High Potential Market Focus Cities ✓ Expanding
Slide 55: Increase B2C sales mix
Focus on Profitable B2C Business Increase B2C sales mix Deeper Network Strengthen Productivity of Wellness initiatives Penetration Metropolis Brand existing young network for consumers Deeper centre penetration Expand Branded third- Increase number of referring Creating an easy and engaging in Focus
Slide 56: Growing Inorganically – A Win-Win Strategy
Growing Inorganically– A Win-Win Strategy Build Industry Best practices Introducing Standardized Machines and SOPs in a phased manner resulting in efficiency and quality enhancement Access to Metropolis Network Providing acquired entities access to Metropolis Sales and Marketing Network to improve t
Slide 57: Successful Track Record of Inorganic Strategy: 24 Acquisitions in 18 years
Successful Track Record of Inorganic Strategy : 24 Acquisitions in 18 years Revenue at the time of Few of the Acquired Companies Year of Acquisition Location Revenue for FY22 acquisition Sudharma Metropolis Health Services 2003 Kerala Rs. 1.8 Crores Rs. 58.9 Crores Private Limited Golwilkar Metropol
Slide 58: Plenty of Opportunities for Growth
Plenty of Opportunities for Growth… Growing our offering of Test Packages to Increase Revenue Test Packages Metrics. Customized packages to Institutional Customers Expansion and Personalized Packages to Individual Patients are key Leverage our vast capabilities in Molecular Diagnostics, Aggressive N
Slide 59: CSR Activities
CSR Activities MEDENGAGE HEALTHCARE HEROES – 2nd Edition Metropolis awarded 122 Scholarships to Medical Students in FY21-22 worth 90+ Lakhs Healthcare Heroes – 2nd Edition: The Healthcare under its flagship initiative MEDENGAGE. Over 1500 students applied for MedEngage Heroes 2nd Edition was launche
Slide 60: Historical Financial & Operational Performance
Historical Financial & Operational Performance
Slide 61: Better than industry growth
Better than industry growth Revenue (In Rs. Crs.) Bolstering Growth in Wellness Segment Metropolis Wellness revenue contribution for 1,229 Metropolis is 7% in FY22 +18% 998 856 760 644 This market is expected to grow at a CAGR of 20% over next 3 financial years (Frost & Sullivan) FY18 FY19 FY20 FY21
Slide 62: Growing B2C Mix
Growing B2C Mix Retail contribution in Focus Cities (Non-Covid) to Total Revenue 58% 60% 56% 52% 48% Efforts to increase the Retail share in focus cities to 65% FY18 FY19 FY20 FY21 FY22 Chart shows B2C contribution over the years in focus cities; Mumbai, Chennai, Bangalore, Surat and Pune B2C contri
Slide 63: Financial Highlights
Financial Highlights Revenue (In Rs. Crs.) Normalized EBITDA (In Rs. Crs.) Normalized EBITDA (%) +17% 1,228 362 998 +20% 301 30.2% 856 29.4% 760 27.3% 27.3% 232 207 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 Reported PAT (In Rs. Crs.) ROCE (%)* ROE (%)* 43.1% 29.4% 38.5% 25.9% +20%
Slide 64: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Profit & Loss (Rs. Crs.) FY22 FY21 FY20 FY19 FY18 Revenue from Operations 1,228.3 997.8 855.5 760.1 643.6 Cost of Material Consumed 276.1 252.2 204.1 173.5 145.9 Laboratory testing charges 6.9 5.4 6.9 5.6 5.7 Gross Profit 945.3 740.1 644.5 581.0 492.0 Gross Profi
Slide 65: Consolidated Balance Sheet
Consolidated Balance Sheet Assets (Rs. Crs.) Mar-22 Mar-21 Mar-20 Mar-19 Mar-18 Equity & Liabilities (Rs. Crs.) Mar-22 Mar-21 Mar-20 Mar-19 Mar-18 Non-current assets 1,137.2 396.0 355.2 247.9 230.1 Equity 888.2 708.1 525.2 420.0 429.1 Property, Plant and Equipment 139.2 115.1 121.2 116.7 112.3 Equit
Slide 66: Board of Directors and Management Team
Board of Directors and Management Team
Slide 67: Board of Directors
Board of Directors Dr. Sushil Kanubhai Shah Ameera Sushil Shah Chairman & Executive Director Managing Director Holds a bachelor’s degree in Medicine and Surgery and Holds a bachelor’s degree in Business Administration a degree of Doctor of Medicine in Pathology and from the University of Texas and a
Slide 68: Management Team
Management Team Ameera Sushil Shah Dr. Nilesh Shah Managing Director President and Chief of Science & Innovation Holds a bachelor’s degree in Business Administration from Holds a master’s degree in Engineering from University of the University of Texas and also completed Owner-President Mumbai and a
Slide 69: Recent Awards and Accolades
Recent Awards and Accolades Period Particulars Dr. Kirti Chadha, Chief Scientific Officer and Group Head – CSR recognized with the Distinguished Doctor of the Year Award in Oct-22 Oncopathologist category by Assocham for her outstanding contribution in healthcare industry. Our CFO Mr. Rakesh Agarwal
Slide 70: For further information, please contact
For further information, please contact: Company : Investor Relations Advisors : Metropolis Healthcare Ltd. Strategic Growth Advisors Pvt. Ltd. CIN – L73100MH2000PLC192798 CIN - U74140MH2010PTC204285 Mr. Rakesh Agarwal - CFO Mr. Shogun Jain / Mr. Sagar Shroff Email Id – rakesh.agarwal@metropolisindi
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