Metropolis Healthcare Ltd. · NSE:METROPOLIS
Metropolis Healthcare — Q3 FY2023 Earnings Presentation
71 slides from Metropolis Healthcare's earnings presentation, Feb 10, 2023
Slide 1: Intimation of Investor Presentation to stock exchanges
Ref: MHL/Sec&Legal/2022-23/91 Date: February 10, 2023 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 February 2023
Reaching Out RESPONSIBLY Investor Presentation – February 2023
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: Q3FY23 Performance
Q3FY23 Performance...
Slide 5: Q3FY23 Performance Snapshot
Q3FY23 Performance Snapshot Revenue Excl. Covid PCR & Total Revenue Covid Allied tests Rs. 286 Crores Rs. 278 Crores -3% YoY 20% YoY Covid PCR & Allied Volume (Excl. Covid PCR Tests Revenue & Allied Tests) Rs. 8 Crores 6.2 Mn -88% YoY 14% YoY EBITDA Margin Reported EBITDA Margin (Before CSR & ESOP)
Slide 6: 9MFY23 Performance Snapshot
9MFY23 Performance Snapshot Revenue Excl. Covid PCR & Total Revenue Covid Allied tests Rs. 866 Crores Rs. 828 Crores -6% YoY 21% YoY Covid PCR & Allied Volume (Excl. Covid PCR Tests Revenue & Allied Tests) Rs. 37 Crores 18.4 Mn -84% YoY 21% YoY EBITDA Margin Reported EBITDA Margin (Before CSR & ESOP
Slide 7: Key Operational & Financial Highlights
Key Operational & Financial Highlights Operating EBIDTA for labs started Operating EBIDTA for Q3FY23 stood at 28.3%, dilution of ~120 bps on 01 before April 2022 stood @ 28.3% account of Lab addition & Network expansion. New Network has contributed ~3% of Revenues for Q3FY23 Non-Covid growth @ 13% f
Slide 8: Revenue by category Q3FY23 and 9MFY23
Non-Covid MHP (excl. PPP Contracts) Revenues up by 13% for Q3FY23 Non-Covid MHL PPP Contracts Covid PCR & Covid Allied Hi-Tech Diagnostics Total Revenues (excl. PPP Contracts) +13% +200% +20% -3% -88% 235 23 61 20 293 286 Q3FY23 208 17 8 8 Q3FY22 Q3FY23 Q3FY22 Q3FY23 Q3FY22 Q3FY23 Q3FY22 Q3FY23 Q3FY
Slide 9: Non-Covid revenue on growth trajectory
Non-Covid revenue on growth trajectory (excl. PPP Contracts & Hi-Tech) Non-Covid Revenues Non-Covid Revenues Q4FY21 v/s Q4FY22 Q1FY22 v/s Q1FY23 +8% +21% Key Highlights 213 222 197 183 ✓ Non-Covid revenues (excl. Hi-tech) for Q3FY23 stood at Rs. 235 crs as compared to Rs. 208 crs in Q3FY22, a growth
Slide 10: EBITDA stood at ~27.1% for Q3FY23
Financial Metrics –EBIDTA stood at ~27.1% for Q3FY23 (before CSR & ESOP) Operating EBIDTA for labs started before April 2022 stood @ 28.3%, dilution of ~120 bps was on account of our Lab addition & Network expansion strategy. New Network has contributed ~3% of Revenues for Q3FY23 Total Revenue EBITD
Slide 11: Strong Operational metrics
Strong Operational metrics No. of Patient Visits (In Mn.) Revenue Per Patient (In Rs.) +15.7% +3.6% 2.9 924 957 2.5 Q3FY22 Q3FY23 Q3FY22 Q3FY23 No. of Tests (In Mn.) Revenue Per Test (In Rs.) +13.5% +5.6% 6.2 426 450 5.4 Q3FY22 Q3FY23 Q3FY22 Q3FY23 ✓ Company recorded strong growth in No. of patients
Slide 12: B2C revenue grew by 15% for Q3FY23
B2C revenue grew by 15% for Q3FY23 (Excl. Covid PCR and Covid Allied tests) Total B2C Revenue +21% Key Highlights ✓ Our B2C business continue to +15% witness growth on account of our customer first approach, digital & marketing initiatives Q3FY22 Q3FY23 9MFY22 9MFY23 ✓ Our Total B2C revenues grew by
Slide 13: Share of B2C Business in Focus Cities at 60%
Share of B2C Business in Focus Cities (Non-Covid) at 60% in 9MFY23 ✓ 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 14: Specialised & Premium Wellness are the fastest growing segments
Specialised & Premium Wellness are the fastest growing segments Our Brand Equity across markets & Doctors Trust and Reliance on Metropolis helps us grow our Specialized & Premium Wellness segment faster than the Industry growth Q3FY22 Q3FY23 Q3FY22 Q3FY23 Revenue excl. Covid PCR & Covid Allied tests
Slide 15: Diversified Revenue contribution across Geographies (1/2)
Diversified Revenue contribution across Geographies (1/2)… Continue to focus on strengthening the Brand in Focus cities through increase in B2C share while improving the share of Seeding and Other cities through a healthy mix of B2B and B2C driven by our large Test menu Q3FY22 Q3FY23 Q3FY22 Q3FY23 R
Slide 16: Diversified Revenue contribution across Geographies (2/2)
Diversified Revenue contribution across Geographies (2/2)… Revenue Mix between Geographies Q3FY22 Q3FY23 Q3FY22 Q3FY23 Total Revenue Revenue Excl. Covid PCR & Covid Allied tests 7% 7% 7% 8% 6% 7% 6% 8% 25% 30% 31% 30% 51% 51% 51% 56% 5% 4% 4% 4% North South East West International ✓ Revenues in Nort
Slide 17: Network Strategy
Network Strategy Laboratory Network - MHL Service Network - MHL Hitech Network Total Network Rationalization ARC Period Lab network Service network +396 centers Third Party PSCs Total 175 Total 3,548 + 12 labs Laboratory Network Owned PSCs 3,460 22 Labs 22 88 153 3,064 141 2,731 744 124 125 2,555 70
Slide 18: Our Strategies: Focus on Premium Wellness
Focus on Premium Wellness Segment Population for Diagnostic Industry Total Premium Wellness Revenue (excl. Covid & Allied) 30% 6% 26 94% 20 16 Wellness Population Illness Population Q3FY21 Q3FY22 Q3FY23 ✓ Revenue from Premium Wellness has grown by 30% on Y-o-Y Our focus is to cater to the balance 94
Slide 19: 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 20: Our ESG Initiatives
Our ESG Initiatives Well identified ESG focus Areas and assessments are SOCIAL created as per the materiality matrix based on the GRI, Diversity: Calculate and strategize the future hiring process SASB, and SDG frameworks. Full BRSR report to be in line with the business growth plan. Define a plan f
Slide 21: CSR at Metropolis
CSR at Metropolis Too Shy to Ask (TSTA) MedEngage Preventive health Care Project DSEU*( Delhi Skills Outreach and Digital Program Programme Entrepreneurial University) • Metropolis Foundation, the CSR • The annual MedEngage Scholarship • Under the CSR intiiatives, • DSEU has collaborated with arm of
Slide 22: Steady Focus on Balance Sheet continues
Steady Focus on Balance Sheet continues Debtor Days Working Capital Days 31 31 Key Highlights 19 14 ✓ Debtor days in Dec-22 at stable levels compared to Mar-22 ✓ Cash & Cash Equivalents dropped on Mar-22 Dec-22 account of prepayment of loan taken for Mar-22 Dec-22 acquisition of Hitech OCF to EBIDTA
Slide 23: Q3 & 9M FY23 Consolidated Profit & Loss Statement
Q3 & 9M FY23 Consolidated Profit & Loss Statement Profit & Loss Statement (Rs. Crs.) Q3FY23 Q3FY22 Y-o-Y 9MFY23 9MFY22 Y-o-Y Total Revenue from Operations 285.5 293.1 -2.6% 865.7 922.4 -6.2% EBIDTA (before CSR & ESOP) 77.2 80.5 -4.1% 231.9 279.3 -17.0% EBIDTA (before CSR & ESOP) Margin 27.1% 27.5% 2
Slide 24: 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 25: Metropolis is well placed
Metropolis is well placed
Slide 26: 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 27: 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 28: 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 29: 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 30: Way forward
Way forward...
Slide 31: 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 32: 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 33: 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 34: 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 35: 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 36: 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 37: Overview
Overview
Slide 38: 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 39: 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 40: 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 41: 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 40
Slide 42: 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 43: 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 44: 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 45: 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 46: 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 47: 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 48: 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 49: 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 50: 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 51: 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 52: 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 53: 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 54: Future Strategy
Future Strategy 01 Increase Services 02 Increase Scale 53
Slide 55: 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 56: 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 57: 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 58: 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 59: Successful Track Record of Inorganic Strategy
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 60: 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 61: Historical Financial & Operational Performance
Historical Financial & Operational Performance
Slide 62: 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 63: 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 64: 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 65: 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 66: 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 67: Board of Directors and Management Team
Board of Directors and Management Team
Slide 68: 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 69: Management Team
Management Team Ameera Sushil Shah Mr. Surendran Chemmenkotil Managing Director Chief Executive Officer Holds a bachelor’s degree in Business Administration from Over 34 years of rich and diverse experience across the University of Texas and also completed Owner-President consumer facing companies s
Slide 70: Recent Awards and Accolades
Recent Awards and Accolades Period Particulars Our Chairman Dr. Sushil Shah recognized with the Hurun Industry Achievement Award 2022 at the 10th edition of Most Respected Feb-23 Entrepreneurs Awards, organized by Hurun India. Jan-23 Metropolis Healthcare won the Gold Award for Excellence in High-en
Slide 71: 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
Metropolis Healthcare — Q3 FY2023 Earnings Presentation on 6ix