Mlp Saglik Hizmetleri As Class B · BIST:MPARK
Mlp Saglik Hizmetleri As Class B — MLP Care — Raiffeisen Centrobank Turkish Day 2020
44 slides from Mlp Saglik Hizmetleri As Class B's conference presentation, Jan 16, 2020
Slide 1: Raiffeisen Centrobank Turkish Day
Raiffeisen Centrobank Turkish Day New York January 16th,2020
Slide 2: MLP Care: The #1 Private Hospital Group in Turkey
MLP Care: The #1 Private Hospital Group in Turkey 16 17 Cities 29 31 Hospitals; 5,900+ 5.900+ Beds; More than the #2 2x the size of 2nd Largest 20,000+ 17.500+ Staff and #3 Competitors Combined Competitor 2,200+ 2.100+ Doctors Addresses All Price Segments 3 JCI Accredited Hospitals 2.6 Revenues: TL3
Slide 3: Content
Content 1. Recent Developments & Outlook Strategy & Outlook Operational and Financial Updates 2. Why Invest in MLP Care? Operates in the Attractive Turkish Healthcare Market Clear Leader in Private Hospital Provision Strong Brand Recognition and Unique Business Model Addressing Multiple Pr
Slide 4: Strategy & Outlook
Strategy & Outlook MLP Care continues its asset light growth strategy Expanding in metropolitans through mid-large scale hospitals (min. 100 bed capacity) Quick EBITDA ramp-up through leveraging MLP Care’s resources (brand strength, operational know how, licensing, experienced physicians, and manage
Slide 5: Expansion strategy of 2020
Strategy & Outlook Expansion strategy of 2020 VM Medical Park Maltepe Gaziantep Hospital Potential Hospital Location İstanbul Maltepe Gaziantep İstanbul Opening Date December 2019 ~ Q2 2020 ~ Q4 2020 Key Statistics 20k sqm 40k sqm ~ 50k sqm 125 bed capacity ~ 230 bed capacity
Slide 6: Revenue Up 21% in 9M 2019
Operational & Financial Updates Revenue Up 21% in 9M 2019 Revenue (TLm) 22.3% 20.6% 3000 3,018 15.0% 2500 2,468 2,716 2000 14.3% 2,251 1500 1000 991 862 500 782 893 0 Q3 2018 Q3 2019 9M 2018 9M 2019 Revenue Including Managed Hospitals: Revenues of Florya, ISU Gaziosmanpaşa and ISU Bahçeşehir were in
Slide 7: Double digit growth in majority of payor types
Operational & Financial Updates Double digit growth in majority of payor types 24% 47% Other 9% Revenue from PMI, Top-up & Contracted 4% Institutions grew by 40% in Q3 2019 Medical Tourism SSI 26% 12% Medical Tourism grew by 18% in Q3 2019 SSI Insurance allows for a wide addressable PMI, Top-u
Slide 8: All revenue segments posted strong growth in 9M 2019
Operational & Financial Updates All revenue segments posted strong growth in 9M 2019 Domestic Patient Medical Tourism Ancillary Business Revenues Revenues 18.9% 51.8% 23.6% 17.9% 17.1% 21.5% 47.0% (18.7%) 18.0% 239 17.7% 2,147 330 716 117 60 Q3 2019 9M 2019 Q3 2019 9M 2019 Q3 2019 9M 2019 Growth Con
Slide 9: Domestic Patient Revenues: Strong improvement in ARPV and ARPP
Operational & Financial Updates Domestic Patient Revenues: Strong improvement in both ARPV and ARPP in 9M 2019 Outpatient Revenues (TLm) Inpatient Revenues (TLm) 18.6% 16.1% 17.5% 12.8% 1.0% 3.3% 129 141 8 36 875 1,273 738 1,096 9M 2018 Volume & Mix Price 9M 2019 3.5009M 2018 Volume & Mix Price 9M 2
Slide 10: Medical Tourism Revenue grew by 47% in 9M 2019
Operational & Financial Updates Medical Tourism Revenue grew by 47% in 9M 2019 Medical Tourism Revenue Volume & Price (TLm) 28.7% Diversified and Balanced Geography. Patients comes 350 from: 300 18.3% 35% 32% Europe 64 Middle East and Africa 250 41 34% Former CIS and the Rest 200 330 Strong mark
Slide 11: # of People with Top-up Insurance Exceeds 1.1 million
Operational & Financial Updates # of People with Top-up Insurance Exceeds 1.1 million # of People With Insurance (PMI and Top-up) in Turkey – 000s Top-up insurance Growth (since 2014) CAGR (2014-2018) (9M 2018-9M 2019) Cheaper form of PMI to 3,144 3,368 cover SSI patients’ co- 2,214 9.2% 2,974 13.
Slide 12: EBITDA Up 29% in 9M 2019
Operational & Financial Updates EBITDA Up 29% in 9M 2019 EBITDA (TLm) 1 25.4% 600 28.6% 17.5% 601 500 592 16.7% 511 400 29.4% 411 472 300 7.3% 353 403 313 200 122 100 102 110 95 0 Q3 2018 Q3 2019 9M 2018 9M 2019 9M 2018 9M 2019 (IFRS 16) (IFRS 16) 1 Adj. EBITDA: EBITDA TFRS adjustments that have no
Slide 13: Smart Cost Management results in profitability growth
Operational & Financial Updates Smart Cost Management results in profitability growth Cost of Service and G&A Expenses as a % of Revenues Material costs as a % of revenue increased in 9M Adj. EBITDA Margin 15.7% 15.2% 2019 due to the inflation adjustment for drugs in February 2019, which accounts
Slide 14: Continued focus on deleveraging the balance sheet
Operational & Financial Updates Continued focus on deleveraging the balance sheet FX BASED NET DEBT (in EUR m) NET DEBT 20181 9M 20191 204 EUR72m EUR82m (TL437m) (TL504m) 35% 34% 65% 66% 82 Percentage 72 TL806m TL1,000m Local Currency Local Currency Hard Currency Hard Currency 2017 2018 9M 2019 Nomi
Slide 15: Natural FX hedging on the EBITDA driven by Medical Tourism Revenue
Operational & Financial Updates – Excluding IFRS 16 Natural FX hedging on the EBITDA driven by Medical Tourism Revenue Hard Currency as % TLm 9M 2019 (TLm) of total revenues Share of Medical Domestic Hospital Revenue 2,147 - Tourism Revenue Foreign Medical Tourism 330 12% in Total Revenue Ancillary
Slide 16: No expansion CAPEX in 2019
Operational & Financial Updates No expansion CAPEX in 2019 Maintenance Capex (TLm) Total Capex (TLm) 2.9% 10.2% 250 70 1.6% 60 200 230 4.5% 65 50 150 40 44 30 100 123 20 50 10 - - 9M 2018 9M 2019 9M 2018 9M 2019 % of Revenue % of Revenue 16
Slide 17: Cash Conversion Cycle is expected to improve
Operational & Financial Updates Cash Conversion Cycle is expected to improve due to seasonally strong Q4 150 20 18 18 133 120 16 14 14 108 101 90 12 91 10 60 8 6 45 30 35 4 2 0 0 9M 2018 9M 2019 DPO DSO Inventories Cash Conversion Days 17
Slide 18: Free Cash Flow improved in 9M 2019
Operational & Financial Updates Free Cash Flow improved in 9M 2019 Operating Cash Flow / Adj. EBITDA Free Cash Flow 66% 61% 49% 78 332 50 215 202 9M 2018 2018 9M 2019 (15) % of EBITDA 9M 2018 2018 9M 2019 Trade payables decreased by TL73m and trade receivables increased by TL52m impacting operatin
Slide 19: 2. Why Invest in MLP Care?
2. Why Invest in MLP Care? 1 Operates in the Attractive Turkish Healthcare Market 2 Clear Leader in Private Hospital Provision 3 Strong Brand Recognition and Unique Business Model 4 Clinical Excellence and World Class Service Offering 5 Superior Historical Financial Performance 6 Outstanding Platfor
Slide 20: Operates In The Attractive Turkish Healthcare Market
1 Operates In The Attractive Turkish Healthcare Market Turkey is an attractive healthcare market with a growing elderly population and level of affluence, with significant scope for expansion compared to OECD players Turkish Healthcare Spending to Providers1 (TLbn) Growth in Aging Turkish Population
Slide 21: Operates In The Attractive Turkish Healthcare Market
1 Operates In The Attractive Turkish Healthcare Market Private operators have increased their market share, by increasing capacity and by focusing on procedures with higher complexity. Private players now account for 22% of beds, but provide 53% of complex surgeries. Number of Hospital Beds (’000) N
Slide 22: Operates In The Attractive Turkish Healthcare Market
1 Operates In The Attractive Turkish Healthcare Market Supportive government policies have underpinned the expansion of private hospital groups Healthcare system and key participants Universal Healthcare Coverage with Patient Choice Regulation Funding Service Patients Universal healthcare coverage •
Slide 23: Clear Leader in Private Hospital Provision
2 Clear Leader in Private Hospital Provision MLP Care is the largest multi-specialty hospital group in Turkey and the only private player with a truly nationwide network MLP Care network (# of hospitals and locations) National and local leader with a network covering the greatest number of cities
Slide 24: MoH is investing in the PPP program
2 Clear Leader in Private Hospital Provision MoH is investing in the PPP program, but large private players do not expect to see an impact in the near / mid term Highly illustrative schematic of the Turkish Healthcare Sector PPP success factors Top end of the Private Hospital market City hospitals
Slide 25: Strong Brand Recognition And Unique Business Model Addressing Multiple Price Points
3 Strong Brand Recognition And Unique Business Model Addressing Multiple Price Points Two brands and one concept targeting three different price points with consistently outstanding medical service quality Overview and Positioning 29 Total Hospitals in Portfolio Relative Average Price per Payor Type
Slide 26: Clinical Excellence And World Class Service Offering
4 Clinical Excellence And World Class Service Offering MLP Care benefits from a “Virtuous Circle” of best-in-class service, infrastructure and academic affiliations JCI accreditation SRC1 University affiliations The Gold Standard in Healthcare Globally The Global standard for quality surgical care M
Slide 27: Clinical Excellence And World Class Service Offering
4 Clinical Excellence And World Class Service Offering Top tier talent and patients are attracted to MLP Care’s unrivalled reputation, resulting in a steadily growing market share Ability to attract and retain top-tier physicians… CAGR Key points of attraction Proven track record of physicians recru
Slide 28: Superior Historical Financial Performance
5 Superior Historical Financial Performance EBITDA Growth > Net Sales Growth > CPI (Consumer Price Index) Net Sales (TLm) Adj. EBITDA (TLm) 20% 25% CAGR 2014-2018 CAGR 2014-2018 31% 31% 22% 23% 21% 19% 17% 13% 20% 12% 9% 9% 2015 2016 2017 2018 Net Sales Growth EBITDA Growth CPI (Consumer Price Index
Slide 29: Outstanding Platform for Further Growth
6 Outstanding Platform for Further Growth Quick and successful ramp up in greenfields as well as acquisitions with typical range of 12-18 months to EBITDA-neutral hospitals Example of Greenfield Example of Acquisition Batıkent (Oct-2014) Yıldızlı (Sep-2014) Total Investment TL50m Total Investment Co
Slide 30: Proven track record of greenfield expansions and M&A
6 Outstanding Platform for Further Growth Proven track record of greenfield expansions and M&A Total Hospitals 25 26 27 29 31 29 At Year End MLP Care has added on average c.400 beds p.a.1 Acquired 6 1 hospital acquired in Opened one managed 2 New Hospitals Greenfield through greenfield projects si
Slide 31: MLP Care has several avenues to continue its growth trajectory
6 Outstanding Platform for Further Growth MLP Care has several avenues to continue its growth trajectory 1 2 Top line growth via the Growth through favourable insurance scheme revenue diversification MLP Care has increased its market share in PMI (private medical insurance) Self-Pay share of tot
Slide 32: 3. Appendix
3. Appendix Revenue Breakdown by Payor Type – 2018 Revenue and EBITDA Figures - 2018 Revenue Segments - 2018 Costs Breakdown - 2018 Total Capex, Maintenance Capex and Operating Cash Flow - 2018 Historical Financial Statements Organizational Chart Capital, Shareholder Structure & Subs
Slide 33: Revenue Breakdown by Payor Type – 2018
Revenue Breakdown by Payor Type – 2018 Double digit growth in majority of payor types 56% 76% Other 9% Revenue from PMI, Top-up & Contracted 1% Institutions grew by 34% in 2018 Medical Tourism 11% SSI 29% Medical Tourism grew by 76% in 2018 and 86% in 4Q 2018 y-o-y PMI, Top-up & SSI Insurance
Slide 34: Revenue and EBITDA Figures - 2018
Revenue and EBITDA Figures - 2018 Revenue and EBITDA grew above expectations Revenue (TLm) Adj. EBITDA1 (TLm) 4.000 21.6% 700 23.5% 3.500 600 3.000 3,132 500 2.500 505 2,576 400 2.000 409 300 1.500 1.000 200 500 100 0 0 2017 2018 2017 2018 Comparable Adj. EBITDA is at TL530m without the negative i
Slide 35: Revenue Segments - 2018
Revenue Segments - 2018 All revenue segments posted strong growth in 2018 Domestic Patient Medical Tourism Ancillary Business Revenues Revenues 14.0% 75.9% 56.1% 2,512 330 289 2018 2018 2018 Growth Continued in 2018 Continued to Attract Foreign Strong Growth in Managed Inpatient revenues grew 11.9
Slide 36: Costs Breakdown - 2018
Costs Breakdown - 2018 Adj. EBITDA improves on the back of smart cost management and savings Cost of Service and G&A Expenses as a % of Revenues Material costs as a % of revenue increased, Adj. EBITDA Margin 15.9% 16.1% due to the patient mix impact and increase in share of laboratory services bus
Slide 37: Total Capex, Maintenance Capex and Operating Cash Flow - 2018
Total Capex, Maintenance Capex and Operating Cash Flow - 2018 Trade receivables increased in line with the strong revenue growth leading to lower operating cash flow Maintenance Capex (TLm) Total Capex (TLm) Operating Cash Flow / EBITDA 131.1% 2.7% 65.7% 2.5% 600,0 100,0 300,0 500,0 80,0 250,0 282 4
Slide 38: Historical Balance Sheet
Historical Balance Sheet Unaudited Unaudited Audited TLm September 30, 20191 September 30, 2019 December 31, 2018 Cash and cash equivalents 231 231 223 Trade receivables 966 966 899 Inventory 83 83 80 Short term other assets 312 312 276 Current assets 1,592 1,592 1,479 Tangible and intangible fixed
Slide 39: Historical P&L Statements
Historical P&L Statements TLm Unaudited Unaudited Unaudited 9M 20191 9M 2019 9M 2018 Q3 20191 Q3 2019 Q3 2018 Revenue 2,716 2,716 2,251 893 893 782 Cost of service (-) (2,098) (2,248) (1,902) (698) (748) (671) Gross profit 617 467 349 196 146 110 General administration expenses (-) (218) (218) (189)
Slide 40: Reconciliation from Reported EBITDA to Adjusted EBITDA
Reconciliation from Reported EBITDA to Adjusted EBITDA TLm 9M 20191 9M 2019 9M 2018 Q3 20191 Q3 2019 Q3 2018 Net profit / (loss) (20) (47) (143) 5 (8) (135) Tax income from operations (5) (12) (66) (3) (6) (20) Depreciation and amortization of tangible and intangible fixed assets 198 161 141 69 59 5
Slide 41: Organizational Chart
Organizational Chart Visionary founder & CEO supported by an outstanding management team, leading the company’s exemplary growth; Significant breadth and depth of experience across the senior management and executive level teams Team Structure Field Organization per Hospital Hospital GM Head Head Nu
Slide 42: Capital, Shareholder Structure & Subsidiaries
Capital, Shareholder Structure* & Subsidiaries *Shareholding structure after public offering (excluding the 6,827k shares purchased by shareholders from publicly traded portion) Usta Group – Elbaşı Group Lightyear Hujori Sancak İnşaat (Founders) Healthcare B.V. Financieringen B.V. Turizm Nakliyat •
Slide 43: Key Historic Milestones
Key Historic Milestones • Carlyle • TURKVEN • 1 hospital • MPARK • Founders Dr. • Dr. Usta, Adem acquired • 2 • 3 • 1 hospital acquired Muharrem Usta Elbaşı and opened in Stocks 40% stake hospitals hospitals 53.35% and Adem Sancak Group opened in Samsun starting to in MLP opened opened stake in Elba
Slide 44: Disclaimer / IR Contact
Disclaimer This presentation may contain certain forward-looking statements concerning MLP Care’s future performance and should be considered as good faith estimates made by the Company. These forward-looking statements reflect management expectations and are based upon currently available data. Act