Cleopatra Hospital Company · EGX:CLHO
Cleopatra Hospital — FY2019 Earnings Presentation
56 slides from Cleopatra Hospital's earnings presentation, 2020
Slide 1: Cleopatra Hospital Company Investor Presentation FY19
Cleopatra Hospital Company Investor Presentation FY19
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: Table of Contents
Table of Contents 1. Unique Investment Story 2. Recent Business Updates 3. Expansion Strategy 4. Governance & Shareholder Information Cleopatra Investor Presentation FY19 3
Slide 4: 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 integrating hospital assets cost efficiencies and improve • Institutionalizing the healthcare margins indust
Slide 5: CHG financial highlights
CHG financial highlights In 2019, CHG reported strong top-line growth and solid profitability, with fourth quarter EGP 501.1 mn EGP 1,798.1 mn margins in line with CHG’s all- EBITDA1 in FY19 with a Consolidated revenues in FY19 with time highs. 28% Margin 23% growth y-o-y The Group enters 2020 ideal
Slide 6: CHG facilities and staff
CHG facilities and staff Cleopatra Hospital Company, is the largest private hospital group in Egypt and consists of four operational hospitals all 6 2 Polyclinics in Cairo (2018), namely: Operational hospitals East Cairo Polyclinic is across our platform operational as of February 2019. With two add
Slide 7: Clearly Defined Core Growth Strategy
Clearly Defined Core Growth Strategy Integrating the platform Integrating Cleopatra to achieve higher branding, sales and efficiencies marketing approach Geographic expansion in Egypt Enhancing utilization and linked to following the main payor Leveraging payor and optimizing existing relationships
Slide 8: A Scalable Platform with a Track Record of Integrating Acquisitions
A ScalableHospitals, Cleopatra Platform with a Track Record of Integrating Acquisitions CHG signs a partnership agreement to manage The first asset, Cleopatra CHG acquired Nile Badrawi and operate a 198 CHG acquired and started CHG signed a definitive Hospital, was acquired in the Hospital in Octobe
Slide 9: A Network of Six Hospitals across Greater Cairo
A Network of Six Hospitals across Greater Cairo 4 2 5 Queens Location Mohandesin, Giza Location Heliopolis, Cairo Location Heliopolis # of Beds 121 # of Beds 188 # of Beds 50 6 Al Katib (2) Location Dokki # of Beds 89 3 Location Maadi, Cairo # of Beds 152 1 ⚫ Operating hospitals ⚫ Polyclinics Feeder
Slide 10: Well Defined Integration model
Well Defined Integration model Integration, Optimization of Operations Effect on CHG Umbrella Brand Unified Pricing & Unified Financial Optimize operations and Institutionalizing Corporate Centralized Unified Expansion Value Creation Name for Each Positioning Sops & management the Group Governance C
Slide 11: Solid Financial Performance
Solid Financial Performance While the group continues its focus on enhancing and maintaining margins organically , performance in 2019 reflected strong margins despite the addition of four newly inaugurated facilities which are currently in the ramp-up or pre- integration phases. The Group’s hospita
Slide 12: Key Revenue Drivers (i)
Key Revenue Drivers (i) Volumes from both inpatient admissions and outpatient visits continued to report solid year-on-year growth, at 22% and 13% respectively, reflecting CHG’s volume enhancement strategy across its revenue streams Group Revenue Contribution by No. Outpatients | ‘000s No. Inpatient
Slide 13: Key Revenue Drivers (ii)
Key Revenue Drivers (ii) Surgeries and ER visits have also witnessed increasing revenue per visit, which expanded 13% and 15% year-on-year respectively. Overall revenues from both segments have witnessed notable growth over the year. ER Visits | 000s No. of Surgeries | 000s 261 247 257 253 37 36 35
Slide 14: Key Revenue Drivers (iii)
Key Revenue Drivers (iii) Revenue per bed at group organic hospitals have continued to post solid year-on-year growth on the back of management’s utilization enhancement and case mix optimization strategy. Revenue Progression Cleopatra Hospital | EGP mn Nile Badrawi | EGP mn by Hospital 13% 25%
Slide 15: COVID-19 Update
COVID-19 Update CHG is closely monitoring, and proactively responding to the developments in Egypt associated with coronavirus (COVID-19) under the guidance of the Egyptian Ministry of Health and Population (MOHP). As the number of reported COVID-19-positive patients in Egypt slowly rises, the Egypt
Slide 16: Recent Business Updates
Recent Business Updates Cleopatra Investor Presentation FY19 16
Slide 17: Recent Business Updates: Renovations & Upgrades
Recent Business Updates Renovations & Upgrades Hospital Renovations & Capacity Additions 10th & 11th floor expansion • Façade facelifts: completed at NBH and Al (20 beds) Shorouk. 2020 planned: Cleopatra. • Inpatient wards renovations ongoing across all hospitals • Started electromechanical upgrades
Slide 18: Recent Business Updates: Revenue Cycle Management
Recent Business Updates Revenue Cycle Management Service Conducted - Price, Description & Classification standardized - (Pre-)Approval of all services for credit and insurance clients Revenue Cycle Management • Since the beginning of 2019, the group has taken strong steps to Monitoring & Reporting M
Slide 19: CHG Medical Council
CHG Medical Council During the third quarter of the year, the Group officially launched its new Medical Council. The new body will be under the direct supervision and guidance of the Board’s quality committee and will be composed of renowned specialized consultants from across the Group’s hospitals.
Slide 20: 2019 Acquisitions
2019 Acquisitions 2019 2020 Jan March Sept Dec H1 H1 H2 H2 JV with Signing of Nahda CHG Bani Suef East Cairo Queens Exclusivity West Cairo University to Capacity assumes Hospital Bani Suef 1st Polyclinic Hospital Agreement Polyclinic establish Additions 3rd & 4th Katib Civil Work IVF Closing Phase i
Slide 21: Expansion Strategy
Expansion Strategy Cleopatra Investor Presentation FY19 21
Slide 22: Expansion strategy
Expansion strategy 1 2 3 4 5 6 Building Additional Strategic Acquisitions Brownfield/Greenfield Expanding Reach Creating Strategic Capacities in Existing of Operating Facilities Expansions Beyond Greater Cairo Entities to Serve Facilities Group’s Scale of Operations Creating Feeder Networks Cleopatr
Slide 23: Core Theme – Focus on Patient Pathway Capture
Core Theme – Focus on Patient Pathway Capture to Maximize Share of Wallet from Existing Payors Increase number of registered patients through increasing the outpatient network, while a focus on patient pathway capture results in increased network revenue from the core payors. 10 Polyclinics in 5 yea
Slide 24: Feeder Network Expansion: Polyclinics
Feeder Network Expansion Began with the Launch of CHG’s First Two Polyclinics Located in East and West Cairo – The Group Has Recorded Growing Demand at both Facilities From a strategic point of view, Polyclinics act as feeder networks for patient referral for the group hospitals. Comprehensive outpa
Slide 25: Expansion strategy
Expansion strategy 1 2 3 4 5 6 Creating Feeder Strategic Acquisitions Brownfield/Greenfield Expanding Reach Creating Strategic Networks of Operating Hospitals Expansions Beyond Greater Cairo Entities to Serve Group’s Scale of Operations Building Additional Capacities in Existing Facilities Cleopatra
Slide 26: Building Additional Capacities in Existing Hospitals
Building Additional Capacities in Existing Hospitals Al Shorouk hospital Extension Building In Q2 2018, the group signed Vital Konzept, a leading Engineering & Consultancy Firm to start the process of Drawings for the extension in preparation for releasing the project for tendering with expected tim
Slide 27: Expansion strategy
Expansion strategy 1 3 3 4 5 6 Creating Feeder Building Additional Brownfield/Greenfield Expanding Reach Creating Strategic Networks Capacities in Existing Expansions Beyond Greater Cairo Entities to Serve Facilities Group’s Scale of Operations Strategic Acquisitions of Operating Facilities Cleopatr
Slide 28: Strategic Entry into IVF Segment
Strategic Entry into IVF Segment • CHG signed a Letter of Intent “LOI” to acquire majority control of an IVF center located in the heart of Cairo – CHG is now finalizing the DD process • A highly scalable specialized center that can generate substantial referrals to CHG’s network of hospitals and ca
Slide 29: Expansion strategy
Expansion strategy 1 2 3 4 5 6 Creating Feeder Building Additional Strategic Acquisitions Creating Strategic Networks Capacities in Existing of Operating Hospitals Entities to Serve Facilities Group’s Scale of Operations Brownfield/ Expanding Greenfield Reach Beyond Expansions Greater Cairo Cleopatr
Slide 30: Expansions in Brownfield Hospitals in and around Greater Cairo
CHG Is Working on Expansions in Brownfield Hospitals in and around Greater Cairo Expanding reach beyond greater Cairo Brownfield Pipeline In Bani Suef CHG entered into a Footprint expansion The group is currently assessing governorate (Upper JV with Taaleem (Al to Upper Egypt and and shortlisting po
Slide 31: Expansion strategy
Expansion strategy 1 2 3 4 5 6 Creating Feeder Building Additional Strategic Acquisitions Brownfield/Greenfield Expanding Networks Capacities in Existing of Operating Hospitals Expansions Reach Beyond Greater Facilities Cairo Creating Strategic Entities to Serve Group’s Scale of Operations Cleopatra
Slide 32: Strategic Initiatives and Entities Created by CHG
Strategic Initiatives and Entities Created by CHG to Enhance Efficiencies in Operation As part of the group’s strategy to leverage synergies and expand its service offerings, CHG is now in the process of creating business operation entities: Cleopatra entity for importing Pharmaceutical Cleopatra Ac
Slide 33: Governance & Shareholder Information
Governance & Shareholder Information Cleopatra Investor Presentation FY19 33
Slide 34: Governance (I)
Governance (I) The Board is composed of majority independent directors. Non-Executive Board Members Independent Board Members Dr. Mohamed Awad Tarek Kabil Ahmed Badreldin Dr. Tarek Zahed Tag El Din Image Former Minister of Chairman Vice Chairman Former Minister of Trade and Industry Health Nabil Kam
Slide 35: Governance (II)
Governance (II) ABC No Referral Fees Medical Council • CHG has a zero-tolerance approach to • CHG does not pay any referral fees or • CHG recently launched a group-wide bribery and corruption with a clear anti- kickbacks to physicians and instead has medical council with multiple bribery and anti-co
Slide 36: Key Investor Information
Key Investor Information Cleopatra Hospitals Company’s Care Healthcare Limited’s DFI Shareholders Shareholder Structure Care Healthcare DEG, the German Investment A Development Financial An international financial 38% Limited (Malta) and Development Corporation, Institution partly owned by instituti
Slide 37: Appendix: Q4 2019 Additional Disclosure
Appendix : Q4 2019 Additional Disclosure Cleopatra Investor Presentation FY19 37
Slide 38: Financial Performance by Hospital
Financial Performance by Hospital Cleopatra Hospital Cairo Specialised Hospital (CSH) CAGR: 21% CAGR: 16% 374 764 677 287 42% 244 493 41% 34% 34% 42% 43% 30% 38% 28% 34% 281 318 129 187 184 77 203 87 69 87 79 27 109 37 2017 2018 2019 4Q 2018 4Q 2019 2017 2018 2019 4Q 2018 4Q 2019 Revenue Gross P
Slide 39: Balance Sheet and Leverage
Balance Sheet and Leverage Balance Sheet Summary Bank Debts Trend (EGP m) EGP 000 Dec-18 Dec-19 Cash 953 841 Inventory 41 49 Debtors & other Debt balance 358 444 Current Assets 1,353 1,335 Intangible Assets 241 414 Non-Current Assets 704 919 Total Assets 2,298 2,668 Overdraft & Short Term Loan 27 0
Slide 40: Cash Conversion Cycle
Cash Conversion Cycle DIO DSO DPO Cash Conversion Cycle Cleopatra Investor Presentation FY19 40
Slide 41: Cash Flow Walkthrough in 2019
Cash Flow Walkthrough in 2019 Ending consolidated cash balance amounts to EGP 841m as of Dec 2019, out of which EGP 50m in Treasury Bills and EGP 177m time deposits 41 Cleopatra Investor Presentation FY19 41
Slide 42: Capex Profile
Capex Profile CAPEX INVESTMENTS Organic Capex Expansion Capex Acquistions Acquisition Investments ; • Katib (143mn Propco & 135mn Acquisitions Opco) • Queens (25mn Opco) • IVF (2020) EGP 250mn 160 Medical & Renovation Capex Investments need to refurbish/enhance Expansion recently added facilities (Q
Slide 43: Appendix: Financial Statements
Appendix : Financial Statements Cleopatra Investor Presentation FY19 43
Slide 44: Consolidated Income Statement
Consolidated Income Statement All figures in EGP mn FY2019 FY2018 % change 4Q2019 4Q2018 % change Revenues 1798.1 1456.1 23% 511.1 394.0 30% Cost of sales (1172.7) (942.5) 24% (337.5) (245.5) 37% Gross profit 625.5 513.6 22% 173.6 148.6 17% Gross Profit Margin 35% 35% 34% 38% General & administrativ
Slide 45: Consolidated Balance Sheet
Consolidated Balance Sheet All figures in EGP mn 31 December 2019 31 December 2018 Non-current Assets Fixed assets 560.5 908.5 Intangible assets 241.0 413.6 Right Of Use - 10.2 Payment under investment 143.9 - Total non-current assets 945.4 1,332.4 Current assets Paid Under Subsidiaries Capital Incr
Slide 46: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement All figures in EGP mn 31 December 2019 31 December 2018 Cash flows from operating activities Net (Loss) / Profit before tax for the period / year 367.5 408.0 Adjusted for : Depreciation 65.0 46.8 Allowance for impairment of current assets 57.5 (4.4) Provision (9.3) 3
Slide 47: Appendix: Market Overview
Appendix : Market Overview Cleopatra Investor Presentation FY19 47
Slide 48: 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 Population (millions) Public vs. Private Healthcare Expenditure | EGP bn CAGR: 2.2 % 102 104 104 106 108 113 118 124 130 100.0 110.0 88.0 90.0 92.0 96.0 98.0 8
Slide 49: Egypt Total Hospital Beds
Egypt Total Hospital Beds Number of Beds per 1,000 Citizens Egypt’s Number of Beds Breakdown 2.90 127,600 2.80 2.50 2.30 32,353 2.10 1.49 93,600 Egypt KSA Brazil Turkey Britain USA Public Sector Private Sector Total Beds Market Share in Egypt by # of Commercial Beds CHG, 2% Elaj, 1% Alameda, 2% Germ
Slide 50: Egypt Total Hospital Beds (cont'd)
Egypt Total Hospital Beds (cont’d) No. of Hospital Beds in Egypt (K) Total = 133 Beds 35 98 100% Armed Forces Facilities Specialized Medical Centers Teaching Institutes 80% Highly Fragmented Space Includes Hospitals Owned & Operated by Public Insurance 60% Others General Hospitals 40% C. 50 – 100+ B
Slide 51: Egypt Total Hospital Beds (cont'd)
Egypt Total Hospital Beds (cont’d) 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 52: Egypt Total Hospital Beds (cont'd)
Egypt Total Hospital Beds (cont’d) Large Hospitals Medium Hospitals Small Hospitals (100+ Beds) (50 – 100 Beds) (<50 Beds) • Large multi super-specialty care centers with • Basic centers with beds (average size of 15 – ability to do high-complexity cases • Multi-specialty centers focused on mid to 2
Slide 53: Greater Cairo Hospital Groups by Commercial Bed Count
Greater Cairo Hospital Groups by Commercial Bed Count Hospital Groups in Cairo (Operational) – Bed Count Hospital Groups in Cairo - # of Operational Hospitals 6431 782 6012 671 6 481 3 4 300 3 3 3 260 1 Market Share in Cairo by # of Commercial Beds CHG, 8% Elaj, 4% Alameda, 7% German Saudi, 4% Andal
Slide 54: 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 FY19 54
Slide 55: Egypt Healthcare Market Payor Profile
Egypt Healthcare Market Payor Profile Egypt Healthcare Market Payor Profile MOH 16.5% Out of Pocket 71.9% Other 28.1% HIO 5.0% Public Agencies 4.8% Private / Syndicate Insurance 0.5% Corporates/NGOs 1.4% Cleopatra Investor Presentation FY19 Source: MOHP 2010, World Bank Report “A roadmap to achieve
Slide 56: Thank you
Thank you INVESTOR RELATIONS C ONTAC TS 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 C leopatra Inves tor P res entation F Y 19 56
Cleopatra Hospital Company — FY2019 Earnings Presentation on 6ix