Babylon Holdings Limited · OTC:BBLNF
Babylon — Q3 2022 Earnings Presentation
20 slides from Babylon's earnings presentation, Nov 10, 2022
Slide 1: Q3 2022 Earnings
1 Q3 2022 Earnings November 2022 Putting an accessible and affordable quality health service in the hands of every person on Earth
Slide 2: Disclaimer: Use of Non-IFRS Financial Measures
Disclaimer Use of Non-IFRS Financial Measures This presentation includes certain financial measures to evaluate Babylon’s historical and projected financial and operating performance, and measures calculated based on these measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Medical Loss Rat
Slide 3: Summary Progress for Q3 2022
Summary Progress for Q3 2022 3 288% Revenue growth year-over-year +45ppt Adjusted EBITDA Margin improvement year-over-year 4.8x Growth in VBC Revenue year-over-year Key Highlights Total revenue of $289m, representing a 288% increase from Q3 2021 revenue of $74m Improving revenue guidance for 2022 to
Slide 4: U.S. Value-Based Care Membership Growth
59K 59K 56K 73K 140K 225K 222K 211K 8K 8K 12K 12K 11K 31K 31K 45K 16K 16K 15K 15K 15K 15K 66K 66K 84K 100K 167K 271K 269K 271K Q4-2020 Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Medicaid Medicare Commercial 4 U.S. Value-Based Care Membership Growth U.S. Value-Based Care Membership(1) •
Slide 5: Value-Based Care Revenue Mix
69% 68% 44% 58% 71% 60% 59% 55% 31% 32% 33% 28% 19% 36% 37% 41% 0% 0% 22% 13% 8% 3% 3% 3% � � 1% 1% 2% 1% 1% 1% $27m $27m $39m $56m $99m $247m $244m $268m Q4-2020 Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Medicaid Medicare Commercial Other 5 Value-Based Care Revenue Mix Value-Based Car
Slide 6: Our Performance Continues to Accelerate as We Learn from Each Contract
6 • Compared to New York and Missouri contracts, our weekly high-risk members’ sign up rates for Georgia and Mississippi have been 3-4x faster • Continuous optimization and tailored outreach approach driving improvement in penetration rates over time • Onboarding high-risk members early allows Babyl
Slide 7: Strong Medical Margin Improvements in Our Digital-First Cohorts
-4.1% -3.7% -2.8% 2.7% 7.6% Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 We Are Seeing Strong Medical Margin Improvements in Our Digital-First Cohorts Notes: (1) Includes digital-first VBC deals that went live in 2021 across New York, Georgia, and Mississippi. (2) Medical Margin is defined as 1 minus Medical Loss
Slide 8: Key Clinical Initiatives Driving Margin Improvement
Key Clinical Initiatives Driving Margin Improvement 8 Integrated behavioral health service • Our behavioral health service is highly accessible and integrated with physical healthcare • We have reduced depression and anxiety burdens by >50%, which is a leading indicator for reduced physical and beha
Slide 9: Revenue and Revenue Growth (unaudited)
9 Revenue and Revenue Growth (unaudited) $43m $28m $16m $41m $71m $57m $74m $120m $266m $265m $289m Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 +159% +5% +34% +30% +61% +123% Revenue Growth Notes: (1) $28.4m of one-off upfront revenue recognition in connection with a soft
Slide 10: Revenue & Adjusted EBITDA Margin (unaudited)
10 $43m $28m $16m $41m $71m $57m $74m $120m $266m $265m $289m Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Revenue (1) Notes: (1) $28.4m of one-off upfront revenue recognition in connection with a software licensing arrangement in Q1 2021. Adjusted EBITDA Margin for Q1 202
Slide 11: Operational Leverage: Technology & SG&A costs as % of revenue
11 135% 92% 39% 38% 36% 21% 10% 12% 8% 150% 44% 73% 79% 57% 65% 22% 26% 20% 285% 137% 112% 116% 92% 86% 32% 38% 28% Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Technology costs SG&A costs 256ppt 130ppt SG&A margin and 126ppt technology margin improvement since Q3 2020 Not
Slide 12: Guidance Update
Guidance Update Revenue Guidance • Updating full year guidance to $1.05bn to $1.1bn Adjusted EBITDA Guidance • Reiterating guidance of $(270)m or less for the full year, with a December exit rate of $(18)m or less Profitability Guidance • Reiterating guidance of targeting profitability no later than
Slide 13: Financial Statements and Reconciliations
13 21 Financial Statements and Reconciliations
Slide 14: Statement of Profit and Other Comprehensive Loss
Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 $’000 $’000 $’000 $’000 $’000 Software licensing revenue 7,983 7,824 7,756 7,375 7,168 Clincial services revenue 10,764 13,119 12,115 13,889 14,044 Value-based care revenue 55,715 98,745 246,575 244,098 267,686 Revenue 74,462 119,688 266,446 265,362 288,898 Cl
Slide 15: Consolidated Statement of Financial Position (unaudited)
Consolidated Statement of Financial Position (unaudited) 15 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 $’000 $’000 $’000 $’000 $’000 ASSETS Non-current assets Right-of-use assets 7,297 7,844 20,014 17,972 15,379 Property, plant and equipment 5,964 24,990 25,694 26,698 25,280 Investments in associates 1
Slide 16: Consolidated Statement of Cash Flows
15 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 $’000 $’000 $’000 $’000 $’000 Cash flows from operating activities Loss for the period (65,974) (232,815) (91,357) (157,079) (89,891) Adjustments to reconcile Loss for the period to net cash used in operating activities: Recapitalization transaction expense
Slide 17: Reconciliation of Adjusted EBITDA and Other Non-IFRS Measures
Reconciliation of Adjusted EBITDA and Other Non-IFRS Measures 17 Note: We are not able to reconcile projected 2022 Adjusted EBITDA or 2022 Adjusted EBITDA Margin to their respective most directly comparable IFRS measures as we are not able to forecast IFRS loss for the period on a forward-looking ba
Slide 18: Thank you!
18 30 Thank you!
Slide 19: Forward-looking statements risk factors
• We have a history of incurring losses, may not be able to achieve or maintain profitability, and may require additional financing to support our business. Additional financing may not be available on favorable terms or at all; • Our historical operating results and dependency on further capital ra
Slide 20: Forward-looking statements risk factors (continued)
• Our quarterly results may fluctuate significantly, adversely impacting the value of our Class A ordinary shares; • Risks associated with our international operations, economic uncertainty, or downturns; • Failure to adequately expand our direct sales force will impede our growth; • We may invest i