Slide 1: Investor Presentation
Investor Presentation SHALBY LIMITED (BSE CODE: 540797 I SHALBY, NSE CODE: SHALBY) A leader in Joint Replacement surgeries in India with an established chain of multi-specialty tertiary care hospitals.
Slide 2: Agenda
AGENDA 01 BUSINESS OVERVIEW 02 FINANCIAL PERFORMANCE 03 STRATEGIC DIRECTION 04 APPENDIX 2
Slide 3: Business Overview
SHALBY MULTI-SPECIALTY ——HOSPITALS— BUSINESS OVERVIEW
Slide 4: Our Regional Presence
OUR REGIONAL PRESENCE Shalby has developed strong brand recognition in its core markets and is well positioned for further expansion National Presence International Presence (in Africa) PUNJAB Mohali – 145 beds RAJASTHAN Jaipur – 237 beds GUJARAT Ahmedabad o SG – 201 beds o Krishna – 220 b
Slide 5: Business Model
BUSINESS MODEL Greenfield 907 Beds Brownfield 977 Beds Acquisition 366 Beds Franchise Franchise Lower capital requirement New Growth Area 2017 Year 2015 Year Naroda 267 Beds Jabalpur 233 Beds Leased 2007 Year 2017 Year SG 201 Beds Mohali 145 Beds Santa Cruz 2024 Year 2023 Year 175 Beds Nashik 113 Be
Slide 6: Our Business Model – Optimising Capex and Opex
BUSINESS MODEL Our Business Model – Optimising Capex and Opex Optimize capex Operational Lowest Capex and Opex per planning with Efficiency due bed due to optimal use of real- Inhouse to projects better capex estate team planning Equipment planning and utilities planning In-house planning team
Slide 7: Cardiac Growth
CARDIAC GROWTH The Cardiac growth story in India ~ 2,00,000 ~ 50,000 Year 2017 CAGR – 29% in 30 years. ~ 5,000 Surgeries Currently growing @ 2-3% Year 2004 ~ 500 Year 1994 Surgeries Surgeries Wide procedure penetration to Tier 2 and 3 cities Year 1984 Surgeries 7
Slide 8: Knee Replacement
KNEE REPLACEMENT Knee Replacement - The big opportunity ~ 1,75,000 ~ 54,000 Year 2017 Last year, In United States ~ 6,000 Surgeries ~0.8 mn knee replacements in a population of ~300 mn Year 2010 ~ 300 India has a similar affording Year 2000 Surgeries population. Hence, direct Surgeries potential to
Slide 9: Hospital Maturity Profile
HOSPITAL MATURITY PROFILE Shalby Hospitals generates positive EBITDAR Margin within 3 years of its operations 33% 13% 15% Avg. EBITDAR Margin Avg. EBITDAR Margin Avg. EBITDAR Margin Naroda SG Group Indore Jaipur Nashik Krishna Jabalpur Surat Group Mohali Santa Cruz 8+ Years 5+ Years 3+ Years 2+ Year
Slide 10: Hospital Business Update
HOSPITAL BUSINESS UPDATE Santa Cruz Development Update Nashik Development Update Business Model: Revenue Sharing Business Model: Revenue Sharing Bed Capacity: 175 Bed Capacity: 113 Operating and Management Term: 30 + 30 years Operating and Management Term: 30 years Operationalization Year: FY 2024 O
Slide 11: Board of Directors
BOARD OF DIRECTORS Experienced Board of Directors Dr. Vikram Shah Chairman and Managing Director Mr. Shyamal Joshi Non-Executive Director Over two and a half decades of professional healthcare experience across UK, USA and India, Dr. Shah has been serving as Director of the Department of Knee Associ
Slide 12: Senior Management
SENIOR MANAGEMENT Senior Management Mr. Shanay Shah Mr. Muraarie Rajan Principal Advisor President 25 years experience in corporate strategy, mergers and acquisitions and fund raising. With over six years of experience in the healthcare industry, Mr. Shah is involved in Worked at Wolfensohn & Compan
Slide 13: Organisation Structure
ORGANISATION STRUCTURE CORPORATE STRUCTURE UNIT LEVEL STRUCTURE Unit CAO Chairman & Managing Director Clinical Applications Corporate development Accounts Advisor to Group VP President CFO CHRO CIO HR CMD COO Projects Hospitality Cluster COO CORPORATE SUB-FUNCTIONS IT/Systems Billing Unit CAO Ph
Slide 14: Financial Performance
SHALBY MULTI-SPECIALTY ——HOSPITALS— FINANCIAL PERFORMANCE
Slide 15: Annual Performance Trends
ANNUAL PERFORMANCE TRENDS Increasing number of patients across all care formats reflects Shalby’s strong brand recognition In Patients Day Care Out Patients 23,728 325,596 39,030 7.5% 19,674 20.6% 296,197 9.9% 36,311 Y-o-Y Y-o-Y 222,970 Y-o-Y 27,771 5,196 FY 18 FY 19 FY 20 FY 18 FY 19 FY 20 FY 18 FY
Slide 16: Annual Performance Trends
ANNUAL PERFORMANCE TRENDS Number of beds occupied increased by 8.9% y-o-y and occupancy rate of 38% Hospital Revenue Mix by Care % of Revenue from Arthroplasty 11% 55% 12% 13% 45% 45% 2% 4% 5% 88% 84% 83% FY 18 FY 19 FY 20 FY 18 FY 19 FY 20 In Patient Day Care Out Patient No. of Beds Occupied Occupa
Slide 17: Hospital Specialties
HOSPITALS SPECIALTIES Revenue by Hospital Specialty 50% 45% 45% 40% 30% 20% 11% 10% 11% 9% 9% 10% 11% 7% 6% 8% 5% 10% 4% 4% 4% 0% Arthroplasty Cardiac Science Cardia Care & Nephrology Neurology Oncology Other Ortho Others General Medicine FY 19 FY 20 Number of Surgeries by Specialty Revenues by End
Slide 18: Financial Performance
FINANCIAL PERFORMANCE Total Revenue (Rs. Mn) 21.5% 6.9% 14.0% Y-o-Y Y-o-Y CAGR 5,042 4,715 3,880 FY 18 FY 19 FY 20 Significant impact on FY20 surgeries due to Covid-19 during March-20 18
Slide 19: Financial Performance
FINANCIAL PERFORMANCE Total EBITDA (Rs. Mn) Total PBT (Rs. Mn) 22.7% 13.8% 567 12.6% 19.4% 19.7% 8.1% Y-o-Y Y-o-Y 10.7% 11.3% 537 991 504 916 881 FY 18 FY 19 FY 20 FY 18 FY 19 FY 20 Despite subdued FY2020 revenue growth, Shalby continued to deliver higher margins 19
Slide 20: Financial Performance
FINANCIAL PERFORMANCE Ongoing optimization of doctor cost and centralized sourcing of medical instruments, devices and consumables Total Operating Expenses (Rs. Mn) Total Costs ex Finance Cost (Rs. Mn) 4,051 D&A Expenses 3,799 7% 8% 8% 2,999 10% 8% 10% Other Expenses 14% 16% 15% 12% 10% 12% Employee
Slide 21: Financial Performance
FINANCIAL PERFORMANCE Total Profit after Tax (Rs. Mn) (107) 460 10.4% 291 6.8% 5.7% 392 317 276 FY 18 FY 19 FY 20 Accounting Cash Tax Adjusted PAT FY20 Tax Adjusted PAT FY20 reflects Profit after deduction of Cash MAT Tax outflow from PBT Note: 1. Cash tax rate is calculated as Taxes outflow as per
Slide 22: Hospital Investment Journey
HOSPITAL INVESTMENT JOURNEY Return on Capital Employed currently reflects real estate investments and a relatively younger maturity portfolio Shalby Branding Phase Investment Phase 2 Hospitals with 228 beds Added 8 Hospitals with 1,734 new beds Current Occupancy of 38% reflects younger maturity Phas
Slide 23: Hospital Margin Profile
HOSPITAL MARGIN PROFILE Each hospital group makes a positive contribution at the Shalby level where corporate costs are 4.7% of total revenue ARPOB Rs. 51,231 27,843 21,382 22,635 31,517 24,427 16,801 40% 35.6% 35% 30% 25.9% EBITDA % 25% 24.5% 23.2% Hospital and Other EBITDA Margins 20% 14.7% 15% 19
Slide 24: Hospital Margin Profile
HOSPITAL MARGIN PROFILE Shalby is able to operate hospitals profitability at EBITDA and EBITDAR levels even at a bed occupancy of 30% Jaipur, Surat and Naroda which have been operational for less than 5 years are currently ramping up 30.5% Min. Occupancy 45.0% 40.0% SG Group, 36.0% 35.0% EBITDAR Mar
Slide 25: Financial Performance
FINANCIAL PERFORMANCE Cash Flow Statement (Rs. Mn) – FY2020 4 • Mat tax outflow of Rs. 107 mn, Tax (176) receivables created of Rs. 95 mn 360 (202) • Maintenance capex of 3.9% of (198) Total Income 567 553 (109) • Net other investment activity of (215) Rs. (161) mn 31 • Interest received of Rs. 52 m
Slide 26: Financial Performance
FINANCIAL PERFORMANCE Strong EBITDA to Cash Flow conversion rate of 55.9%. Unlevered balance sheet results in lower Return on Equity ROE ROCE 7.7% 7.3% 6.9% 5.8% 5.2% 4.1% 3.5% FY 18 FY 19 FY 20 FY20 Adjusted FY 18 FY 19 FY 20 CFO to EBITDA Capital Structure 55.9% 47.4% Figures in Rs Million FY 18 F
Slide 27: Financial Performance
FINANCIAL PERFORMANCE Over last two years, Total Revenue increased by 14.0% and EBITDA by 6.1% CAGR with EBITDA margins at 19.7% Increasing number of patients across all care formats reflects Shalby’s strong brand recognition: In Patients 7.5%, Day Care 20.6% and Out Patients 9.9% Number of beds occ
Slide 28: Strategic Direction
SHALBY MULTI-SPECIALTY ——HOSPITALS— STRATEGIC DIRECTION
Slide 29: Franchise Model Asset Light
FRANCHISE MODEL ASSET LIGHT Franchisee Footprint • All franchisees to be branded as Shalby • Hopsitals located in key catchment areas & should have upto 50 beds • Focus on Orthropaedics as a specialty SHALBY Operating Model • Provide Shalby systems (HIS, procurement, manpower planning etc) • All hos
Slide 30: Homecare Service Offerings
HOMECARE SERVICE OFFERINGS Present offerings Future offerings • Home COVID-19 care • ICU Setup @home package • Nursing (incl. critical care) • Chronic disease • Attendant management • Physiotherapy • Pathology • Rehabiliation • Medical Equipment • Pharmacy @home • Personalised & tech • Home visits b
Slide 31: Care Card Primary Features
CARE CARD PRIMARY FEATURES Membership Fee : Rs 2500/- Membership Fee : Rs 5000/- • Complimentary Health check-up: Worth Rs 2500/- • Complimentary Health check-up: Worth Rs 5000/- • OPD Services: Consultations(20%), Lab & Diagnostics (15%) • OPD Services: Consultations(20%), Lab & Diagnostics (15%) •
Slide 32: Strategic Growth Drivers
STRATEGIC GROWTH DRIVERS Franchise Model Home Care Care Card Strategy: Strategy: Strategy: • The need for localization of hospital • The healthcare dynamics in India all • Constructive mechanism to promote treatment. Faster penetration in pan point towards a high need for affordable health awareness
Slide 33: Appendix
SHALBY MULTI-SPECIALTY ——HOSPITALS— APPENDIX
Slide 34: Hospital Business Update
HOSPITAL BUSINESS UPDATE Catchment: Ahmedabad and surrounding areas of Gujarat, Commencement 2007 | 13 Years Rajasthan and Mumbai No. of beds / Occupancy 201 | 50.3% • Transfer of Covid-19 positive patients to other Shalby units SG • Optimum utilization of manpower Type of Arrangement Leased – Fixed
Slide 35: Hospital Business Update
HOSPITAL BUSINESS UPDATE Commencement 2017 | 3 Years Catchment: South Gujarat, North Maharashtra (including Mumbai) No. of beds / Occupancy 243 | 39.1% Surat • Conducted multiple awareness sessions for corporates like Type of Arrangement Freehold Reliance, L&T and Shell about Covid-19 dos and don’ts
Slide 36: Hospital Business Update
HOSPITAL BUSINESS UPDATE Commencement 2017 | 2+ Years Catchment: Punjab, Uttrakhand Mohali No. of beds / Occupancy 145 | 24.7% • Top 2 floors of the hospital dedicated for Covid-19 patients Type of Arrangement Freehold • Major specialties like arthroplasty, urology and medicine showing recovery in Q
Slide 37: Annual Performance Trends
ANNUAL PERFORMANCE TRENDS Particulars (in Rs. Million) FY 18 FY 19 FY 20 CAGR Revenue from Operations 3,780 4,623 4,869 13.5% Other Income 100 93 174 31.7% Total Income 3,880 4,715 5,042 14.0% Expenses COGS 2,219 2,833 2,953 15.4% % of Revenue from Operations 59% 61% 61% Employee Benefit Expenses 45
Slide 38: Annual Performance Trends
ANNUAL PERFORMANCE TRENDS Operational Metrics FY 18 FY 19 FY 20 CAGR In Patient Count 27,771 36,311 39,030 18.6% (Nos.) Day Care Patient Count 5,196 19,674 23,728 113.7% (Nos.) Out Patient Count 2,22,970 2,96,197 3,25,596 20.8% (Nos.) Surgeries Count 17,554 19,908 19,835 6.3% ARPOB 31,564 31,296 30,
Slide 39: Disclaimer and Contact Details
DISCLAIMER and CONTACT DETAILS No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as