Cleopatra Hospital Company · EGX:CLHO
Cleopatra Hospital — Cleopatra Hospitals Group — 9M 2021 Earnings Presentation
63 slides from Cleopatra Hospital's earnings presentation, 2021
Slide 1: Cleopatra Hospitals Group Investor Presentation 9M21
Cleopatra Hospitals Group Investor Presentation 9M21
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements, including, but not limited to, statements concerning expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating
Slide 3: Contents
CONTENTS 1 Unique Investment Story 2 Performance Review 3 Business Updates 4 Governance & Shareholder Information 5 Appendix
Slide 4: Our Mission & Values
Our Mission & Values — We put our patients first by providing high quality healthcare services with a focus on patient safety and quality of outcomes while enhancing the quality of life of our patients — We focus on creating sustainable growth with positive measurable impact on our stakeholders and
Slide 5: A Unique Investment Story
A Unique Investment Story • Leading integrated healthcare • Group-wide tenders in provider in Egypt with track pharmaceuticals and medical record of acquiring and consumables that drive scale cost integrating leading operating efficiencies and improve margins hospital assets • Scale volume benefits
Slide 6: A Diversified Healthcare Services Group
A Diversified Healthcare Services Group • Cleopatra Hospitals Group is Egypt’s first and largest private hospital group by number of hospital beds and operating hospitals and consists of six operational Other hospitals and two polyclinics in addition to a leading IVF Centre all in Cairo. The Outpati
Slide 7: CHG's Journey History & Timeline
CHG’s Journey History & Timeline The Evolution of CHG from a Single Asset into one of the Largest Hospital Platform in the Region CHG signed a Letter of Intent in June 2019 to acquire a 19- bed The first asset and the CHG acquired Nile Badrawi CHG signed a definitive specialized IVF center located C
Slide 8: Broad Network Coverage in Greater Cairo
Broad Network Coverage in Greater Cairo Leveraging a growing footprint, CHG continues to penetrate new segments of the population and provide high quality care to currently underserved areas of Greater Cairo Cleopatra Hospitals Group, is the largest private 9 hospital group in Egypt by number of bed
Slide 9: Diversified Service Offering and Revenue Stream
Diversified Service Offering and Revenue Stream CHG reports strong revenue growth in 9M2021 supported by growing New Revenue Stream volumes and improving utilization rates across all its facilities as of Q4 2020 73% 3% 18% 4% 2% OUTPATIENT IVF HOSPITALS* POLYCLINICS DIAGNOSTICS PHARMACY CHG operates
Slide 10: Clearly Defined Core Growth Strategy
Clearly Defined Core Growth Strategy Integrating the platform to Leveraging payor and achieve higher efficiencies supplier relationships Geographic expansion in Egypt Enhancing utilization and linked to following optimizing existing capacity Establish centers of while expanding capacities and the ma
Slide 11: Healthcare Provider of Choice
Healthcare Provider of Choice Creating a one-stop-shop that is seamlessly integrated across all our assets comes as a result of the Group’s persistence in keeping our patients at the center of everything we do, while at the same time ensuring to drive value to all CHG’s key stakeholders. With these
Slide 12: Sources of Differentiation
Sources of Differentiation Having been the amongst the first private healthcare providers to recognize the attractiveness of the Egyptian healthcare industry, the Group has played a central role in institutionalizing the sector and promoting its growth and development over the years Capital Resource
Slide 13: CHG 9M2021 Financial Highlights
CHG 9M2021 Financial Highlights Cleopatra Hospitals Group continued to build on a strong first half of the year to deliver remarkable top- and bottom-line growth in line with recent trends. EGP 1,900.6 mn EGP 690.4 mn Revenue year-on-year growth of 38% in Consolidated revenues in 9M21 Gross profit m
Slide 14: 9M2021 in Review
9M2021 in Review Cleopatra Investor Presentation 9M21 14
Slide 15: Financial Performance in 9M2021
Financial Performance in 9M2021 The robust top-line growth was supported by a 20% increase in cases versus the comparable period of last year, couple with improving utilization rates, an increasingly optimised service mix, and favourable pricing. Solid growth and margin improvements at all levels of
Slide 16: Key Revenue Drivers (i)
Key Revenue Drivers (i) In line with CHG’s diversification strategy, all the Group’s verticals and segments continued to deliver strong results in 3Q2021. The Group’s polyclinics vertical saw revenues of EGP 19.0 million in 3Q2021, up 58% versus 3Q2020 and 6% compared to 2Q2021, while revenues gener
Slide 17: Key Revenue Drivers (ii)
Key Revenue Drivers (ii) Volumes expanded 20% year-on-year in 9M2021, with the Group recording its highest ever third quarter number of cases served. In fact, total cases served were up a solid 16% versus the comparable quarter of 2020. Moreover, despite the quarter including an extended bank holida
Slide 18: Patient Volumes Recovery
Patient Volumes Recovery The Group’s polyclinics continue to record strong growth as their unique service offering delivered in an outpatient setting and in currently underserved geographical areas continue to attract a growing number of patients. During the third quarter, volumes and revenues incre
Slide 19: Group Revenue Contribution in 9M2021
Group Revenue Contribution in 9M2021 Top-line growth came on the back of strong performances recorded by all the Group’s more established facilities. The year-to-date performance was supported by a robust 3Q2021 performance which saw the Group record revenue of EGP 623.8 million, up 16% from 3Q2020.
Slide 20: Financial Performance by Hospital (i)
Financial Performance by Hospital (i) Cleopatra Hospital (CHC) Cairo Specialized Hospital (CSH) EGP 3,721 EGP 4,197 EGP 4,112 EGP 1,989 EGP 1,939 EGP 2,708 EGP 1,299 EGP 1,529 764 748 374 365 677 695 340 560 522 287 261 493 244 265 34% 31% 28% 30% 35% 31% 31% 281 318 323 302 231 69 87 129 112 92 81
Slide 21: Financial Performance by Hospital (ii)
Financial Performance by Hospital (ii) Al- Katib Hospital (KHC) Queens Hospital (QHC) EGP 1,398 +390% EGP 1,200 EGP 190 +9% 124 126 91 53% 84 37% 67 33% 32% 60 38% 17 46 31% 28 29 23 5 26 6% 2019 2020 9M20 9M21 2020 9M20 9M21 ARP / Bed in 000’ Revenue Gross Profit ARP / Bed in 000’ Revenue Gross Pro
Slide 22: Group Revenue Analysis
Group Revenue Analysis Group Revenue Trend The Group closed 2020 with 19% growth Y-o-Y on a quarterly basis and 11% Y-o-Y The Group closed 2018 with on a full year basis. Growth trajectory solid growth in revenue on a was maintained in Q1 2021 as patient full year basis of 29% Y-o-Y, as volumes cont
Slide 23: Quarter-year Performance Review (3Q2021 vs 3Q2020 vs 3Q2019)
Quarter-year Performance Review (3Q2021 vs 3Q2020 vs 3Q2019) The Group build on an already strong start to the year and in 3Q2021 reported a record-high top- and bottom-line performance. This was supported by strong demand across the Group’s entire service offering, with robust performances recorded
Slide 24: Capex Profile
Capex Profile Capex Investments Organic Capex Expansion Capex Acquistions Acquisition Investments: • El Katib (143mn Propco & 135mn Opco) Acquisitions • Queens (25mn Opco) • IVF (2020) EGP 115mn 115 160 Medical & Renovation Capex: • Investments need to refurbish/enhance Expansion recently added faci
Slide 25: 2021 in Review
2021 in Review Cleopatra Investor Presentation 9M21 25
Slide 26: Renovations, Inaugurations, and Capacities Optimization Across the Group
Renovations, Inaugurations, and Capacities Optimization Across the Group Hospital Renovations Inpatient wards Electromechanical ICU/CCU Operating rooms renovations Upgraded all upgrades across all renovation and renovations and ongoing across all medical equipment hospitals system upgrades technical
Slide 27: Nile Badrawi – Upgrading Quality of Service Offerings
Nile Badrawi – Upgrading Quality of Service Offerings Inpatient Services The Group has completed the renovations of Nile Badrawi Hospital’s tenth and eleventh floors which now feature 24 modern and fully equipped patient suites. 10th & 11th floor expansion (24 beds) Cleopatra Investor Presentation 9
Slide 28: Al – Sherouk Outpatient Clinics Inauguration & Capacity Optimization
Al – Sherouk Outpatient Clinics Inauguration & Capacity Optimization Outpatient Services The Group has successfully launched Al Shorouk Hospital’s new outpatient clinics, that are located adjacently to the hospital’s premises. Housing the hospital’s outpatient clinics services, we have opened up mor
Slide 29: Cleopatra Hospital – Outpatient Clinics Renovations & Capacity Optimization
Cleopatra Hospital – Outpatient Clinics Renovations & Capacity Optimization Outpatient Services The Group has completed the renovations of Cleopatra Hospital’s outpatient clinics, meeting the Group’s premium standards. We are currently studying further optimization strategies within the hospital, in
Slide 30: Cairo Specialized Hospital – Emergency Room & Diagnostics Renovations
Cairo Specialized Hospital – Emergency Room & Diagnostics Renovations & Capacity Optimization Emergency Room & Radiology Departments Upgrades In line with the Group’s strategy to position the hospital as a state-of-the-art Trauma Center of Excellence, setting a new standard of excellence, we began o
Slide 31: Governance & Shareholder Information
Governance & Shareholder Information Cleopatra Investor Presentation 9M21 31
Slide 32: Governance (I)
Governance (I) The Group’s Board of Directors provides the necessary oversight and combination of expertise to thoroughly oversee the Group’s corporate governance framework, a cornerstone of the Group’s long-term success and value creation. Executive Board Non-Executive Board Members Independent Boa
Slide 33: Governance (II)
Governance (II) OPERATIONS ABC No Referral Fees Medical Council • CHG has a zero-tolerance approach to bribery and • CHG does not pay any referral fees or kickbacks to • CHG recently launched a group-wide medical council corruption with a clear anti-bribery and anti-corruption physicians and instead
Slide 34: CLHO Trading Analysis
CLHO Trading Analysis CHG’s Trading Analysis CHG’s Price Performance Since IPO (Rebased to 100) Valuation Multiples 225% % Change in Performance 38% 14.1x 10.8x (IPO - Date) 9.0x EV/EBITDA CHG EGX30 Valuation CLHO Volume CHG EGX30 Multiples (x) 600 FY 2019 FY 2020 Q3 2021 500 400 33.9x 29.8x 300 200
Slide 35: Brownfield Strategy
Brownfield Strategy Cleopatra Investor Presentation 9M21 35
Slide 36: Adding +400 new bed capacity to Greater Cairo
Adding +400 new bed capacity to Greater Cairo +400 bed New Build Project CHG signed documentation to acquire a majority stake in a hospital project in New Cairo at a Core & Shell state with estimated bed capacity in excess of 400 new beds • CHG has no presence in New Cairo, an underserved area with
Slide 37: Expanding CHG's Presence to New Cairo
Expanding CHG’s Presence to New Cairo 6th October location 2021 New Hospital Project Under Construction Location New Cairo # of Beds +400 Project Completion 2025 Cleopatra Investor Presentation 9M21 37
Slide 38: New Build Project to Offer Centers of Excellence
New Build Project to Offer 5 Centers of Excellence Centers of Excellence 1 2 3 4 5 Oncology Orthopedic Newborns & Neurology Cardiovascular Maternity Inpatient Services Outpatient Services 85 Beds 1 The flagship hospital will house more than 40 outpatient ICUs: NICU, ICU, and SCBU (Special Care Baby
Slide 39: Appendix
Appendix Cleopatra Investor Presentation 9M21 39
Slide 40: COVID-19 Response Protocols (I/IV)
COVID-19 Response Protocols (I/IV) CHG response protocol was developed to ensure the health and safety of its patients and staff while guaranteeing the quality and effectiveness of its medical care despite the ongoing difficulties. Health and Safety Business Continuity From the very beginning, the G
Slide 41: COVID-19 Response Protocols (II/IV)
COVID-19 Response Protocols (II/IV) Back office & Operations Medical Council Responsibilities Training Patient Pathway BCP Key Pillars “To Adopt and Agile Ensuring the safety of our staff and patients Decision-Making Mentality” Disinfection & PPE Space Optimization Potential COVID-19-Positive Patien
Slide 42: COVID-19 Response Protocols (III/IV)
COVID-19 Response Protocols (III/IV) As demand for private COVID- Medical Council 19 treatment centres increased so did the number STEP 1 STEP 2 STEP 3 STEP 4 of suspected cases Patients flowing into the ER’s Patients are triaged and If results are positive and Once the MOHP is informed approaching
Slide 43: COVID-19 Response Protocols (IV/IV)
COVID-19 Response Protocols (IV/IV) In light of the COVID-19 pandemic and in an effort to better serve its patients and aid the Ministry of Health and Population in its fight against the virus, Cleopatra Hospital Group has transformed both Queens Hospital (which was currently undergoing a full renov
Slide 44: Additional Information and Financial Disclosures
Additional Information and Financial Disclosures Cleopatra Investor Presentation 9M21 44
Slide 45: A Unique Investment Story (I/III)
A Unique Investment Story (I/III) Market Leader in a Growing Market with Strong Long-term Prospects • Highly fragmented market with a small number of institutionalized and strong Number of Beds per 1,000 Citizens Egypt’s Number of Beds Breakdown brand players 2.90 127,600 • Significant under supply
Slide 46: A Unique Investment Story (II/III)
A Unique Investment Story (II/III) Strong Management with Structured Organizational Chart to Oversee All Aspects of the Business • CHG has created a central management Audit Committee Board of Directors team that focuses on setting the overall strategy of the Group • Centralized back-office function
Slide 47: A Unique Investment Story (III/III)
A Unique Investment Story (III/III) Scale and Cost Synergies • Group-wide tenders in pharmaceuticals and medical consumables that drive scale cost efficiencies and improve margins • Scale volume benefits from providing payors with a network of healthcare services solutions • The size of the Group’s
Slide 48: Balance Sheet and Leverage
Balance Sheet and Leverage Balance Sheet Summary Cashflow Movement Balance Sheet Summary (EGP 000') Dec-20 Sep-21 Cash & Cash Equivalent 551 813 Inventory 66 55 Debtors and other debit balances 514 501 Current Assets 1,131 1,370 Fixed Assets 1,205 1,313 Intangible Assets 428 426 Non-Current Assets 2
Slide 49: Cash Conversion Cycle
Cash Conversion Cycle DIO DSO 113 49 47 98 83 35 Sep - 20 Dec - 20 Sep - 21 Sep - 20 Dec - 20 Sep - 21 DPO Cash Conversion Cycle 41 46 121 123 102 22 16 Sep - 20 Dec - 20 Sep - 21 Sep - 20 Dec - 20 Sep -21 Cleopatra Investor Presentation 9M21 49
Slide 50: Consolidated Income Statement
Consolidated Income Statement All figures in EGP mn 3Q2021 3Q2020 % change 9M2021 9M2020 % change Revenues 623.8 535.9 16% 1,900.6 1,379.0 38% Cost of sales (414.2) (349.4) 19% (1,210.2) (925.1) 31% Gross profit 209.7 186.4 12% 690.4 453.8 52% Gross Profit Margin 34% 35% 36% 33% General & administra
Slide 51: Consolidated Balance Sheet
Consolidated Balance Sheet All figures in EGP mn 31 December 2020 30 September 2021 Non-current assets Fixed assets 1,205.2 1,313.2 Intangible assets 427.6 426.0 Right of use 18.8 180.5 Payment under investment - 5.7 Investment in associates 1.1 2.0 Total non-current assets 1,652.7 1,927.4 Current a
Slide 52: Consolidated Cashflow Statement
Consolidated Cashflow Statement All figures in EGP mn 30 September 2020 30 September 2021 Cash flow from operating activities: Profit before tax 251.9 389.4 Adjustments for: Depreciation 61.4 83.5 Amortization of intangible assets - 11.9 Allowance for impairment of current assets 45.3 33.3 Provision
Slide 53: Market Overview
Market Overview Cleopatra Investor Presentation 9M21 53
Slide 54: Underserved and Under-Penetrated Market with Steady Demand Growth
Underserved and Under-Penetrated Market with Steady Demand Growth Supply Gap in Egyptian Healthcare Industry Healthcare Expenditure in Egypt Public vs. Private Healthcare Expenditure | EGP bn Population (millions) 102 104 104 106 108 113 118 124 130 CAGR: 2.24 % 65.6 68.1 70.9 73.8 98.9 100.9 102.9
Slide 55: Egypt Healthcare Market Payor Profile
Egypt Healthcare Market Payor Profile The Macro Picture Public-Private Partnership Between 2016-2019, the country has been able to successfully execute economic People’s willingness and ability to pay for higher quality healthcare in Egypt are reforms supported by the International Monetary Fund’s E
Slide 56: The Private Healthcare Market
The Private Healthcare Market Market Leader in a Growing Market with Strong Long-term Prospects • Highly fragmented market with a small number of institutionalized and strong Total Healthcare Spending per Capita | USD Egypt’s Number of Beds Breakdown brand players $300 102% $298 Prepaid Private Spen
Slide 57: Egypt Total Hospital Beds (I/III)
Egypt Total Hospital Beds (I/III) No. of Hospital Beds in Egypt (K) Total = 133 Beds 35 98 100% Armed Forces Facilities Specialized Medical Centers Teaching Institutes Highly Fragmented Space 80% Includes Hospitals Owned & Operated by Public Insurance 60% Others General Hospitals 40% C. 50 – 100+ Be
Slide 58: Egypt Total Hospital Beds (II/III)
Egypt Total Hospital Beds (II/III) Basic Healthcare General Hospitals Specialized Medical Teaching Institutes Armed Forces Private Hospitals Centers (Public Insurance) Centers / Medical Colleges Facilities (Non-Government) • Support basic • First level of public • One of the highest • Provide diagno
Slide 59: Egypt Total Hospital Beds (III/III)
Egypt Total Hospital Beds (III/III) Large Hospitals Medium Hospitals Small Hospitals (100+ Beds) (50 – 100 Beds) (<50 Beds) • Large multi super-specialty care centers • Basic centers with beds (average size of with ability to do high-complexity cases 15 – 20 beds) with focus on triage & • Multi-spec
Slide 60: Greater Cairo Hospital Groups by Commercial Bed Count
Greater Cairo Hospital Groups by Commercial Bed Count Hospital Groups in Cairo (Operational) – Bed Count Market Share in Cairo by # of Commercial Beds 7821 6712 481 9% 3003 2604 4% 8% 4% 1% 74% Hospital Groups in Cairo - # of Operational Hospitals 6 3 3 3 CHG Elaj Alameda German Saudi Andaluseya Oth
Slide 61: Greater Cairo Distribution of Hospitals by Commercial Beds
Greater Cairo Distribution of Hospitals by Commercial Beds Distribution of Hospitals in Greater Cairo by # of Commercial Beds Cleopatra Investor Presentation 9M21 61
Slide 62: Egypt Healthcare Market Payor Profile
Egypt Healthcare Market Payor Profile Egypt Healthcare Market Payor Profile 16.5 72 28.2 5 4.8 0.5 1.4 Out of Pocket MOH HIO Public Agencies Private / Syndicate Insurance Corporates/NGOs Cleopatra Investor Presentation 9M21 Source: MOHP 2010, World Bank Report “A roadmap to achieve social justice in
Slide 63: Thank you
Thank you INVESTOR RELATIONS CONTACTS SHAREHOLDER INFORMATION Telephone: +2 02 23103771 EGX: CLHO.CA E-mail: ir@cleopatrahospitals..com Listed: June 2016 investors.cleopatrahospitals.com Shares Outstanding: 1.6 billion Cleopatra Investor Presentation 9M21 63
Cleopatra Hospitals Group — 9M 2021 Earnings Presentation on 6ix