Healthcare Global Enterprises Ltd. · NSE:HCG
Healthcare Global Enterprises — Q2 FY2023 Earnings Presentation
51 slides from Healthcare Global Enterprises's earnings presentation, Nov 10, 2022
Slide 1: Cover letter to stock exchanges: Investor Presentation
November 10, 2022 National Stock Exchange of India Limited, BSE Limited, Compliance Department, Compliance Department, Exchange Plaza, Bandra Kurla Complex, Phiroze Jeejeebhoy Towers, Bandra (East), Mumbai - 400051, Dalal Street, Mumbai - 400001, Maharashtra, India Maharashtra, India Dear Sir/Madam,
Slide 2: Healthcare Global Enterprises Limited Investor Presentation November 2022
HEALTHCARE GLOBAL ENTERPRISES LIMITED I NV ESTOR P R ESENTATI ON November 2022
Slide 3: Safe Harbor
SAFE HARBOR This presentation and its contents are confidential and are not for release, publication or distribution, in whole or in part, directly or indirectly, in or into or from the United States of America, Canada, Australia, Japan or any jurisdiction where such distribution is unlawful. This p
Slide 4: Overview
Overview One of the Largest 1 provider of Cancer care in India under “HCG” brand Comprehensive cancer diagnosis and treatment services (offering radiation therapy, medical oncology and surgery) 22 2 comprehensive cancer centers (including Kenya) FERTILITY TREATMENT MULTI SPECIALITY • Integrated repr
Slide 5: Our Journey
Our Journey Acquired the 1 st privately Bangalore Institute of Company’s name changed to owned comprehensive cancer 1 st Comprehensive HCG Ahmedabad, 1 st Oncology commences HealthCare Global center in Karnataka Cancer Care Center in privately owned operations Enterprises Pvt. Ltd. 1st private cance
Slide 6: Pioneered Scalable Model for Comprehensive Cancer Care
Pioneered Scalable Model for Comprehensive Cancer Care Largest oncology focused Marquee leadership team hospital chain with a pan 1 5 and experienced India network management Leveraging digital Comprehensive cancer care transformation to model with a focussed 2 6 strengthen patient and factory appro
Slide 7: Largest Pan-India Oncology Hospital Chain
Largest Pan-India Oncology Hospital Chain Best-in-class cancer care by adopting globally acclaimed practices and state-of-the-art technology Largest cancer care network in India 33+ years of Clinical Excellence Center of Excellence (CoE) Emerging Cancer Care Centers Established Cancer Care Centers (
Slide 8: One Stop Solution with Superior Clinical Expertise
One Stop Solution with Superior Clinical Expertise END-TO-END CANCER CARE SERVICES AT HCG Expertise in Handling DIAGNOSTICS Complex Cases (1) P hysical Lab o rato ry D igita l D igital P E T E xa min at io n Te st s Pat h o lo gy 4.5k+ Genomic based TREATMENT Chemo sessions Ro b o t ic Ta rgete d D
Slide 9: Unique Long-term Value Creation Opportunity in Single Specialty Healthcare
Unique Long-term Value Creation Opportunity in Single Specialty Healthcare 1 2 3 4 5 Market leadership in Integrated cancer care High entry barriers for Profitable scalable Poised for high growth high growth industry for patient retention differentiated care business model with limited capex • 33+ y
Slide 10: Focused Factory Approach is critical for Quality of Life
Focused Factory Approach is critical for Quality of Life Cancer requires specialized care available at focused players only, with emphasis on clinical expertise Cancer has Unique Solutions available only at HCG’s Focused Factory Challenges that Requires Comprehensive Cancer Approach for Most a Speci
Slide 11: Dominant Network in Cancer Care with Market Leadership across 13 out of 18 Cities
Dominant Network in Cancer Care with Market Leadership across 13 out of 18 Cities HCG is committed to provide last mile cancer care across India and is the largest player with >1.6x footprint of CCCs as compared to the next largest player MARKET LEADERSHIP ACROSS METROS & NON-METROS REGIONS(1) # of
Slide 12: Successfully Decoded Non-metro Business Model
Successfully Decoded Non -metro Business Model MARKET LEADER IN ALMOST 9 NON-METRO CENTERS WITH SUCCESSFUL SCALABLE ALL NON-METRO CENTERS HIGH-TEEN ROCE NON-METRO MODEL Jaipur 13 12 9 9 Baroda Ranchi Nagpur Key Parameters(1) Metro Non-Metro Cuttack Bhavnagar Nashik Vishakhapatnam Revenue CAGR(2) 18%
Slide 13: Leveraging Digital Transformation to Reshape Patient and Partner Engagement
Leveraging Digital Transformation to Reshape Patient and Partner Engagement KEY DIGITAL TRANSFORMATION IMPERATIVES FOR HCG 2.0 Increasing reach and Omnichannel patient Ecosystem of digital Integrated patient- Improving customer Digitalized post awareness engagement healthcare lifecycle management co
Slide 14: Successful Playbook of Smart Acquisitions and Driving Sustained Growth Post Integration
Successful Playbook of Smart Acquisitions and Driving Sustained Growth Post Integration Time tested and highly replicable model of consistent revenue growth and profitability across geographies HCG Ahmedabad (Metro City) HCG Cuttack (Non-metro City) Acquisition 2013(1) 2008 Year Revenue c. 22% c. 38
Slide 15: Well Poised to Outpace Industry Growth
Well Poised to Outpace Industry Growth Visible growth opportunities supported by proven brand-driven play, professional approach and ready capacity A ▪ Strong growth across regions aided by market leadership and high incidence growth Demand Driven ▪ Existing facilities have significant capacity to s
Slide 16: High Revenue Growth with Well-diversified Segments
High Revenue Growth with Well -diversified Segments Expansive Geographical Presence (1) Diversified Revenue from Various Modalities (1) 3% Others(2) Maharashtra Others 2% Metros Karnataka Out-patients 16% 34% 53% 18% Medical Revenue by Revenue by 37% Oncology 20% Cluster City Type AP + East 47% 18%
Slide 17: Platform for Attractive Returns with Efficient Capital Allocation and Asset Light Expansion
Platform for Attractive Returns with Efficient Capital Allocation and Asset Light Expansion Capital efficient growth driven by ROCE breakup from Cancer Centers expansion in clinical 18-20% Vintage trials and diagnostics Pre-Corp. Post-Corp. Established Ongoing value Centers 25% 20% creation projects
Slide 18: Strong Financial Profile with Low Leverage and Reduced Capex Needs
Strong Financial Profile with Low Leverage and Reduced Capex Needs Capex ▪ Low future capex (INR mn) 2,873 2,115 1,265 354 704 629 requirements 35% ▪ Focus on optimizing existing infra and Capex 22% brownfield projects (INR mn) 12% 5% 8% 3% ▪ Ongoing capex for two greenfield expansions - INR FY18 FY
Slide 19: Proven Track Record of Outperforming the Industry
Proven Track Record of Outperforming the Industry Expansion Phase Ramp Up Phase CAGR 15% ▪ Consistently upward 16,561 revenue trajectory CAGR 19% 13,978 10,956 ▪ Expansion mode by 9,787 10,134 setting up new cancer Revenue 8,307 7,001 (INR mn) 5,842 centres till FY19 to achieve large scale ▪ Demonst
Slide 20: Improved Performance Leading to Profitability
Improved Performance Leading to Profitability 2.2x 4,081 4,200 3,231 3,520 3,581 3,646 Revenue 2,479 2,740 2,981 (INR mn) 1,935 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 3.9x 300 722 747 EBITDA 194 617 619 633 512 (INR mn) 378 394 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'
Slide 21: Led by Board of Directors comprising of Industry Veterans
Led by Board of Directors comprising of Industry Veterans Dr. BS Ajai Kumar Siddharth Patel Executive Chairman Non-Executive Non-Independent Director Visionary and key driving force of HCG, with an Partner at CVC. 20+ years of leading successful aim to make advanced cancer care accessible investment
Slide 22: Marquee Management Team supported by Experienced Promoters
Marquee Management Team supported by Experienced Promoters SEASONED PROMOTERS – LEADING VALUE CREATION Dr. BS Ajai Kumar CVC Capital Partners Founder and Executive Chairman Promoters & Board Members • Served as the CEO from 2005 to 2021 • Large portfolio of marquee healthcare • Over 40+ years of exp
Slide 23: Q2 & H1FY23 Financial & Operational Highlights
Q2 & H1FY23 FINANCIAL & SUBASENI LENKA, CANCER WINNER OPERATIONAL HIGHLIGHTS I am eternally thankful to Dr. Panda and other specialists at HCG Panda Cancer Hospital, as the specialists were able to treat my condition the right way, the first time 22 www. h c g e l . c o m
Slide 24: Financial Highlights Q2 FY23
Financial Highlights Q2 FY23 REVENUE R E V E N U E - H C G C e n t e r s (1) REVENUE - Milann Centers^ +19% +21% +15% 4,200 4,035 166 3,520 3,346 144 Q2FY22 Q2FY23 Q2FY22 Q2FY23 Q2FY22 Q2FY23 ADJUSTED EBITDA PROFIT AFTER TAX2 PROFIT AFTER TAX2 ADJUSTED EBITDA MARGIN (Pre-IND AS) (Post-IND AS) +28% +
Slide 25: Financial Highlights H1 FY23
Financial Highlights H1 FY23 REVENUE R E V E N U E - H C G C e n t e r s (1) REVENUE - Milann Centers^ +23% +23% +32% 8,281 7,942 338 6,751 6,456 257 H1FY22 H1FY23 H1FY22 H1FY23 H1FY22 H1FY23 ADJUSTED EBITDA PROFIT AFTER TAX2 PROFIT AFTER TAX2 ADJUSTED EBITDA MARGIN (Pre-IND AS) (Post-IND AS) +40% +
Slide 26: Growth Across HCG Centers
Growth Across HCG Centers Matured Centers Emerging Centers^ ~1.6x g r o w t h i n l a s t 8 q u a r t e r s ~2.0x g r o w t h i n l a s t 8 q u a r t e r s +19% +26% REVENUE# 2,979 3,090 929 945 2,596 2,628 2,663 785 826 2,304 2,418 750 2,100 693 1,890 535 479 509 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22
Slide 27: HCG – Q2FY23 Operational Metrics
HCG – Q2FY23 Operational Metrics # MATURED CENTERS EMERGING CENTERS MATURED CENTERS TOTAL AOR (%) AOR (%) A O R ^* ( % ) ROCE (%) 66.4% 65.0% 69.9% 20.0% 56.1% in Q2FY22 57.6% in Q2FY22 51.8% in Q2FY22 15.4% in FY22 1,030 bps 740 bps 1,810 bps 460 bps ROCE pre-corporate a l l o ca t i o n s s ta n d
Slide 28: HCG – Cluster Wise Revenue Break Up
HCG – Cluster Wise Revenue Break Up # C LU ST E R Q2FY23 Q2FY22 Y-o-Y H1FY23 H1FY22 Y-o-Y K A R N ATA K A 1,425.8 1,128.9 26.3% 2798.8 2239.6 25.0% G U J A R AT 1,052.9 879.4 19.7% 2053.6 1748.2 17.5% MAHARASHTRA 564.7 642.2 -12.1% 1164.9 1188.8 -2.0% EAST INDIA 401.6 302.9 32.6% 789.0 555.1 42.1% A
Slide 29: Milann – Implementing Strategic Initiatives
Milann – Implementing Strategic Initiatives BENGALURU (5 Centers) Growth Growth Particulars Q2FY23 Q2FY22 H1FY23 H1FY22 Y-o-Y Y-o-Y New Registrations 1,152 1,014 13.6% 2,764 1,690 63.6% M S Ramaiah Nagar Shivananda IVF Cycles 473 431 9.7% 1,011 742 36.3% Indiranagar Revenues* Whitefield 165.5 144.3
Slide 30: Capital Expenditure & Net Debt
Capital Expenditure & Net Debt CAPITAL EXPENDITURE (Rs. Mn.) NET DEBT (Rs. Mn.) NET DEBT 30 th Sep 2022 31 st March 2022 HCG CENTERS H1FY23 FY22 Bank Debt (1) 3,485 3,543 Vendor Finance (2) 205 333 Matured Centers 581 458 Other Debt 20 34 Emerging Centers 49 246 Less: Cash & Cash Equivalents (3) (1,
Slide 31: Q2 & H1 FY23 Consolidated Profit & Loss Account
Q2 & H1 FY23 Consolidated Profit & Loss Account Profit and Loss (in Rs. Mn.) Q2 FY23 Q2 FY22 Y-o-Y Q1 FY23 Q-o-Q H1 FY23 H1 FY22 Y-o-Y Revenues from Operations 4,192.1 3,512.5 4,073.1 8,265.2 6,736.7 Income from Govt. Grant 7.9 7.1 7.4 15.3 14.3 Total Revenue from Operations 4,200.0 3,519.6 19.3% 4,
Slide 32: Consolidated Balance Sheet
Consolidated Balance Sheet B alan ce Sh eet - Eq u ity & Liab ili t ie s (in Rs. M n .) Sep -22 M ar -22 B alan ce Sh eet - Assets (Rs. M n .) Sep -22 M ar -22 E q u ity Sh are Cap ital 1,391 1,390 Non -Cu rren t Assets Oth er E q u ity 7,420 7,313 Prop erty, Plan t An d E q u ip men t 9,166 9,315 E
Slide 33: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement Cash Flow Statement (in Rs. Mn) Sep-22 Sep-21 Net Profit Before Tax 204 1,330 Adjustments For: Non - Cash Items / Other Investment Or Financial Items 1,380 -163 Operating Profit Before Working Capital Changes 1,585 1,167 Changes In Working Capital -379 -288 Cash Gene
Slide 34: Historical Financial Highlights
HISTORICAL FINANCIAL SHANKAR, CANCER WINNER HIGHLIGHTS The days I was at HCG, I felt like I was sleeping at home. They never stop caring for you. The doctors and nurses are always finding ways to make this difficult journey as comfortable as possible 33 www. h c g e l . c o m
Slide 35: Historical Profit & Loss Account
Historical Profit & Loss Account Profit and Loss (in Rs. Mn.) FY22 FY21 FY20 FY19 CAGR Revenues from Operations 13,948 10,092 10,923 9,760 Income from Govt. Grant 30 43 33 27 Total Revenue from Operations 13,978 10,134 10,956 9,787 13% Costs of Goods Sold 3,549 3,632 3,645 3,581 Employee Cost 2,337
Slide 36: Historical Balance Sheet
Historical Balance Sheet Balance Sheet - Equity & Liabilities (in Rs. Mn.) Mar-22 Mar-21 Mar-20 Mar-19 Equity Share Capital 1,390 1,254 887 879 Other Equity 7,313 5,718 2,926 3,933 Equity Attributable To Equity Holders Of The Company 8,703 6,972 3,813 4,811 Non-Controlling Interests 134 168 385 619
Slide 37: Historical Balance Sheet
Historical Balance Sheet Balance Sheet - Assets (in Rs. Mn.) Mar-22 Mar-21 Mar-20 Mar-19 Non-Current Assets Property, Plant And Equipment 9,315 8,531 9,271 8,026 Capital Work in Progress 217 300 461 1,440 Rights-of-use Assets 4,045 4,114 5,776 0 Goodwill 1,813 963 1,093 1,093 Other Intangible Assets
Slide 38: Historical Cash Flow Statement
Historical Cash Flow Statement Cash Flow Statement (in Rs. Mn) Mar-22 Mar-21 Mar-20 Mar-19 Net Profit Before Tax 878 -2,287 -1,193 -334 Adjustments For: Non - Cash Items / Other Investment Or Financial Items 1,666 3,619 2,988 2,463 Operating Profit Before Working Capital Changes 2,543 1,333 1,795 2,
Slide 39: Appendix
APPENDIX 38 www. h c g e l . c o m
Slide 40: Vision, Mission and Values
Vision, Mission and Values VISION MISSION Adding life to years by redefining To be an acclaimed healthcare institution healthcare through global in pursuit of medical excellence through innovation value-based medicine VALUES Quality Collaboration Innovation Integrity Leadership Enabling Limitless In
Slide 41: Select Awards and Accreditations
Select Awards and Accreditations Leading Oncology Brand with Industry Wide Recognition in 2020 -21 Accreditations Leader in Oncology Best Cancer Care Hospital Chain All India Critical Care Hospital Ranking Navbharat Healthcare Award - HCG Survey 2020 – HCG Bangalore Mumbai & Nagpur Top Specialized –
Slide 42: Setting Standards in ESG for conserving Natural Capital
Setting Standards in ESG for conserving Natural Capital Pioneer among hospitals to adopt Integrated Reporting (IR) Framework in FY19, with disclosures covering performance against Financial, Manufactured, Social, Intellectual, Natural & Human Capital Key Practices for Environment Conservation Enhanc
Slide 43: Enduring Patient Trust for 33+ Years
Enduring Patient Trust for 33+ Years “ We ’re gett ing t re ate d in t his hos pital for last 4 mont hs . Radiat ion, s urge r y & now c he mo INTEGRATED CARE t re at me nt is going on. We ’re sat is f ie d wit h all t he s e r v ice s and t re at me nt s ” - K ri sh n a Mu rt hy “Almost ev e r y in
Slide 44: Oncology Market in India
Oncology Market in India SARITA DEVI, CANCER WINNER I chose the hospital that said my cancer could be treated over the hospital that said I only had six months 43 www. h c g e l . c o m
Slide 45: High Patient Volume driving Oncology Growth in India
High Patient Volume driving Oncology Growth in India Under-coverage of Population Indian Cancer Care Industry (INR bn) – Projected Growth 89% 91% CAGR 12% 38% 3% 263 10% 1% India China UK USA 3% Realization Affordability Population coverage by national cancer registries 3% Relapse Driven Increasing
Slide 46: High Growth Headroom due to Low Population Coverage
High Growth Headroom due to Low Population Coverage Low Early-stage Diagnosis in India … …leading to High Mortality to Incidence Ratio 81% 88% 91% 71% 73% 70% 61% 51% 52% 56% 29% 31% 30% 31% 26% 25% 28% 33% 19% 15% 17% 22% 23% 8% Breast Cancer Head and Neck Lung Cancer Breast Cancer Head and Neck Lu
Slide 47: Quality Focused
QUALITY FOCUSED SHANKAR, CANCER WINNER The days I was at HCG, I felt like I was sleeping at home. They never stop caring for you. The doctors and nurses are always finding ways to make this difficult journey as comfortable as possible 46 www. h c g e l . c o m
Slide 48: Many Firsts of Cutting-edge Technology Introduction for Integrated Cancer Care
Many Firsts of Cutting -edge Technology Introduction for Integrated Cancer Care TRACK RECORD OF BEING 1 st TO State-of-the-art Equipment in each modality LAUNCH ADVANCED TECHNOLOGY IN DIAGNOSTICS Total P E T CTs : 1 7 INDIA A I- b ase d 2022 Automated RIS PACS Skyra Et h o s / Digital PET Digital Br
Slide 49: Tumor Board based Treatment Approach for Patients
Tumor Board based Treatment Approach for Patients PIONEER OF TUMOR BOARD IN INDIA Tumor Board Approach ▪ 17+ years of nation wide, Tumor Boards held weekly Case-specific panel curated involving multiple specialists for ▪ Supplemented by multiple local tumor boards planning and implementing efficient
Slide 50: Quality, Research & Academics Ecosystem
Quality, Research & Academics Ecosystem QUALITY & RESEARCH INITIATIVES I n n o vat i o n @ H C G HCG ACADEMICS • Grant s b y M in ist ry o f AY USH an d D ST Life of a Laryngectomy person Is marked ONCOLOGY by many problems including no voice • Ora l p re se ntatio ns at : Har vard Un ive rsit y, AS
Slide 51: Thank You
THANK YOU Company: HealthCare Global Enterprises Limited Investor Relation Advisors: Strategic Growth Advisors CIN: L15200KA1998PLC023489 CIN: U74140MH2010PTC204285 For updates and specific queries, please visit Mr. Sagar Shroff / Mr. Deven Dhruva www.hcgel.com sagar.shroff@sgapl.net / deven.dhruva@
HealthCare Global Enterprises — Q2 FY2023 Earnings Presentation on 6ix