Bumrungrad Hospital. Public Company Limited. Investor Presentation May 2011

Transcription

1 Bumrungrad Hospital Public Company Limited Investor Presentation May 2011

2 Disclaimer The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for shares in Bumrungrad Hospital Public Company Limited (the "Company") in any jurisdiction nor should it or any part of it form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. This presentation is being communicated only to persons who have professional experience in matters relating to investments and/or to persons to whom it is lawful to communicate it under the laws of applicable jurisdictions. Other persons should not rely or act upon this presentation or any of its contents. Certain information and statements made in this presentation contain the Company's forward-looking statements. All forward-looking statements are the Company's current expectation of future events and are subject to a number of factors that could cause actual results to differ materially from those described in the forward-looking statements. Prospective investors should take care with respect to such statements and should not place undue reliance on any such forward-looking statements. This presentation has been prepared by the Company solely for the use at this presentation. The information in this presentation has not been independently verified. No representation, warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions in this presentation. None of the Company, any of its affiliates or any of their respective agents, advisors or representatives, shall have any liability (in negligence or otherwise) for any loss or damage howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. The information presented or contained in this presentation is current as of the date hereof and is subject to change without notice and its accuracy is not guaranteed. None of the Company, any of its affiliates or any of their respective agents, advisors or representatives, makes any undertaking to update any such information subsequent to the date hereof. This presentation should not be construed as legal, tax, investment or other advice. No part of this presentation shall be relied upon directly or indirectly for any investment decision-making or for any other purposes. Prospective investors should undertake their own assessment with regard to any investment and should obtain independent advice on any such investment s suitability, inherent risks and merits and any tax, legal and accounting implications which it may have for them. Certain data in this presentation were obtained from various external data sources, and none of the Company, any of its affiliates or any of their respective agents, advisors or representatives have verified such data with independent sources. Accordingly, the Company makes no representation as to the accuracy or completeness of those data, and such data involve risks and uncertainties and are subject to change based on various factors. 2

3 Agenda Overview Bumrungrad International Hospital, Bangkok Bumrungrad International Limited 3

4 Fact Sheet With a 30-year track record, BH is now the leading healthcare service provider in South-East Asian region Established in 1980; listed on SET in 1989 Major operations divided into Bangkok facility and international business Bangkok Facility Facilities One of the largest and most sophisticated private hospitals in South-East Asia 538 licensed inpatient beds and over 4,000 outpatient capacity per day Thailand s leading tertiary medical center Accreditation 1 st hospital in Asia to receive US JCI Accreditation 1 st private hospital in Thailand with Thai Hospital Accreditation Patients Over one million patients treated annually International following with over 400,000 international patients from 190 countries Services 34 specialist centers International Presence Asian Hospital Inc. in the Philippines with 217-bed capacity Mafraq Hospital, a public hospital in Abu Dhabi with 463 beds (management contract) Shareholding Structure Others, 44.82% As of March 2011 Bangkok Bank Pcl., 1.08% Sinsuptawee AM, 8.66% UOB Kay Hian (HK) - Client Account, 8.28% Bangkok Insurance Pcl., 14.42% Bangkok Dusit Medical Services Pcl., 11.11% Thai NVDR, 11.63% 4

5 Group Structure Core business of BH is the renowned Bumrungrad International Hospital, Bangkok Bumrungrad Hospital Public Company Limited ( BH ) Operates Bumrungrad International Hospital, Bangkok 100.0% 31.5% 24.99% 100.0% Vitallife Corporation Ltd. ( Vitallife ) Bumrungrad International Ltd.* Bangkok Chain Hospital PCL doing business as Kasemrad Hospital Group Asia Global Research Co., Ltd. ( AGR ) Comprehensive wellness center specializing in preventive care International business Private Hospitals Clinical research 56.5% Management Contract Asian Hospital Inc. ( AHI ) Mafraq Hospital * Strategic partners of Bumrungrad International Limited are: - Istithmar 19.5% - Temasek 19.5% - Asia Financial Holding 19.5% - Bangkok Bank 10.0% Note: As of March

6 Management Team BH s management team comprises individuals with extensive experience in healthcare management Dr. Sinn Anuras Group Medical Director K. Linda Lisahapanya Managing Director Mr. Dennis Brown Corporate CEO Mr. Mack Banner CEO Bumrungrad International, Bangkok Mr. Dennis Brown CEO Bumrungrad International Ltd. Dr. Suthipong Treeratana CEO Asia Global Research Co., Ltd. Mr. Anthony Tan CEO Vitallife Corporation Ltd. Mrs. Lee Chan Yow CFO Bumrungrad International, Bangkok Ms. Karen Carter COO Bumrungrad International, Bangkok Mr. John Nickens CEO Mafraq Hospital Abu Dhabi, U.A.E. Mr. Theo Seiler CEO Asian Hospital Inc. Philippines 6

7 Bumrungrad International Hospital, Bangkok 7

8 BH s Core Attributes Bangkok Flagship Facility Over past two years, completed renovation of inpatient facilities and increased capacity with new outpatient facilities Emphasis on physician recruitment & program development Ongoing marketing initiatives directed towards Thai and International patients Medical Tourism More experience treating international patients with over 400,000 international patients from 200 countries Diverse international patient base, with 40% international volume Established specialized international services to accommodate international patients Quality 1 st hospital in Asia to receive US JCI Accreditation (since 2002) JCI Disease-Specific certifications: heart and stroke programs (2006), diabetes and kidney programs (2010) 1 st private hospital in Thailand with Thai Hospital Accreditation (since 1999) 1 st private hospital to receive Thailand Quality Class standard (2008) - based on US Baldrige Award Financial Strength Proven long-term revenue & profit growth Stable margins and strong cash flow Strong financial metrics (as at March 2011); Net debt to EBITDA 1.20x Net debt to equity 0.60x ROA 14.8% ROE 27.1% Operational Competitiveness Efficient workflow with comprehensive hospital management system 1 st hospital in Asia to implement: robotic pharmacy dispensing system automated laboratory system Recognized as leading desired employer and innovative provider Selective Growth Opportunities for growth: Operationalize recently expanded capacity International investments - Bumrungrad International Limited Complementary businesses, wellness & anti-aging through Vitallife & VitechPro 8

9 Certifications and Awards Certifications and Awards 2010: Thailand Tourism Award: Award of Outstanding Performance in Medically-Oriented Establishment by The Tourism Authority of Thailand Best Practice Workplace Award on Labor Relations and Labor Welfare Award 2010 by the Ministry of Labor Thailand s Top 10 Most Innovative Companies 2010 By Chulalongkorn University s school of business Prime Minister s Export Award 2010 for Best Service Provider (Hospital Service) JCI Disease-Specific Certifications: Diabetes Mellitus and Chronic Kidney Disease 2009: Wall Street Journal Award Recognition: top 10 most admired companies overall, quality and corporate reputation Best Practice Workplace Award on Labor Relations and Labor Welfare Award 2009 by the Ministry of Labor Growth Excellence Awards by Frost & Sullivan Growth Excellence Awards by Frost & Sullivan 2009 Thailand s Top 10 Most Innovative Companies award By Chulalongkorn University s school of business 2008: 1 st private hospital to receive Thailand Quality Class standard - based on US Malcolm Baldrige Award 1 st hospital to win Award of Excellence, healthcare tourism category, 2008 Thailand Tourism Award Wall Street Journal Award Recognition Rank No.1 Most Admired Thai Companies Award of Excellence, Outstanding Achievement and Special Recognition in Applied Medical Informatics 2008 Best Website for International Medical Travel awarded at 2008 Consumer Health World Awards, USA Thailand Most Innovative Company By Chulalongkorn University s school of business Thailand s Best Small Cap Company 2008 awarded by Hong Kong-based Asiamoney magazine Most Desirable Companies to Work for in Thailand, Rank 7 for overall and Rank 1 in healthcare, by Business.com Magazine Company with very good corporate governance scoring by Thai Institute of Directors Association 2007: Received ISO (Medical laboratory certification ) 2006: JCI Disease-Specific certifications: Heart and Stoke programs 2002: 1 st hospital in Asia to receive US JCI Accreditation 2001: Received ISO for environmental management and was 1 st hospital in Asia to receive ISO 9001: : 1 st private hospital awarded Thailand Hospital Accreditation (HA) and received ISO 9002:1994 9

10 World Class Inpatient Facilities Renovation of all rooms completed in May 2010 Inpatient experience offers hotel-like ambience and room design Priority on patient safety Less clinical feeling Warm and restful environment 10

11 Expanded Outpatient Facilities New OPD Tower with similar high quality ambience opened in June 2008 Clinic area design enhances privacy, in a pleasant and calming environment, with efficient workflows Sky Lobby Ground Floor Lobby Welcome Center New Clinics 11

12 Strategy Focus on physician recruitment and targeted specialties Domestic marketing efforts include Healthy Living Club membership program, advertisements, fairs, and packages International marketing through multiple channels Proven growth with increasing penetration in referral markets Selectively pursuing overseas expansion Bumrungrad International Limited Extend success in wellness, anti-aging and other complementary business lines 12

13 Operating Performance Total Revenue EBITDA Revenues (THB mn) 12,000 10,000 8,000 6,000 4,000 2,000 7,896 9, ,559 6% CAGR 8,882 9,338 10,069 EBITDA (THB mn) 3,000 2,500 2,000 1,500 1, ,946 2,070 6% CAGR 2,155 2,259 2, BH reported a one-time gain on share of profit in investment in CDE Trading (previously GCS Thailand) in 2007 of THB 829 million, mainly from sale of GCS Thailand s assets Source: Audited FS Net Income Net Income (THB mn) 2,000 4% CAGR 1,603 1, ,246 1,321 1, ,096 1,258 1,000 1, Source: Audited FS DILUTED EPS Diluted EPS (THB) % CAGR * ** *One-time profit of THB 458 million in 2007 was share of profit in investment in GCS Thailand, netted off with impairment of hospital software system ** One-time loss of THB 63 million in 2010 was loss on the translation adjustment from the sale of Asia Renal Care (ARC) Group Source: Audited FS 0.0 Source: Audited FS

14 Margins & Trend EBITDA Margin Trend Net Profit Margin Trend 30% 30% 24.7% 24.2% 24.3% 24.2% 24.4% 20% 20% 17.1% 13.9% 13.3% 13.3% 12.5% 10% 10% 0% % * * Net margin in 2007 includes the benefit of one-time non-operating items Margins have been strong and relatively stable over time 14

15 1Q11 Update Total Revenue EBITDA THB million 4,000 3,000 2,628 7% 2,803 THB million 1, EBITDA EBITDA Margin 13% % 30% 2, % 27.4% 20% 1, % 0 0 0% Source: Audited FS 1Q10 1Q11 Source: Audited FS 1Q10 1Q11 Net Income Higher growth of net profit compared to growth of total THB million % Net Profit 13% Net Profit Margin % 25% 20% 15% revenues was driven by a lower rate of increase in cost of hospital operations and administrative expenses % 0 5% Source: Audited FS 1Q10 1Q11 15

16 Dividend Payment Dividend Payment Bt per share Final Interim The board of directors announced the 2010 dividend payment with details as follows: Dividend payment for the year 2010 of Bt 0.90 per share Payout Ratio 80% 60% 50.0% 49.0% 49.0% 49.8% 52.0% 40% 20% 0% * * Net profit used to calculate the dividend payout ratio in 2007 is: 2007 net profit Baht 1,605 million - share gain from GCS - Baht 829 million + dividend received from GCS + Baht 418 million = Net profit for dividend payment Baht 1,195 million 16

17 Leverage Net Debt to EBITDA Interest Coverage x x Q Q11* Net Debt to Equity x Q11 Net debt to EBITDA and Net debt to Equity ratios were higher due to an increase in Bt 3,570 million short-term loans from the purchase of common shares of Bangkok Chain Hospital PCL doing business as Kasemrad Hospital Group on 18 March Interest expenses related to the purchase of common shares of Kasemrad Hospital Group to calculate interest coverage ratio was Bt 3.5 million based on remaining days in the quarter after the transaction settled. *If we assumed impact for the full quarter, interest expenses from this transaction will be Bt 51 million and interest coverage ratio will be 15.1x. 17

18 Overall Volume Trend Total Visits per Day Visits 1.6% 12.6% 8.8% 2.4% 3,000 2,715 2,759 2,889 2,645 2,654 2,694 2,759 2,313 2,000 2, % 2,837 1Q11 total visits increased by 2.8% compared to 1Q10. 1Q11 total admission increased by 2.4% compared to 1Q10. ADC decreased in 1Q11 due to lower length of stays compared to 1Q10. Focus on campus expansion and physician recruitment. 1, Q 2Q 3Q 4Q 1Q The additional clinic space will allow Bumrungrad International Hospital to recruit doctors in sub-specialties to enhance capacities in providing advanced medical care to patients. Total Admission per Day Admissions 2.0% 12.1% 11.1% 2.0% 2.4% Average Daily Census ADC % 5.3% 13.4% 1.1% % Q 2Q 3Q 4Q 1Q Q 2Q 3Q 4Q 1Q

19 Revenue Intensity Revenue per Visit Bt 5.5% 5.5% 4.6% 5.0% 5.2% 6,000 5,509 5,544 5,509 5,796 5,221 5,403 5,119 5,306 5,072 5,282 4,000 2,000 Revenue per visit growth resulted from increased consumption in outpatient ancillary services and annual price adjustment. Revenue per admission continued to grow compared to the prior year. 0 1Q 2Q 3Q 4Q 1Q Revenue per Admission Bt 240, , % 22.0% 213, , , , % 3.3% 3.4% 199, , , , , , ,000 60, Q 2Q 3Q 4Q 1Q

20 Revenue Breakdown Inpatient vs. Outpatient - (% of revenue) Method of Payment (% of revenue) 100% Outpatient Inpatient Insurance 13% Corporate Contracts - Domestic 9% Corporate Contracts - Intl 7% 75% 49% 49% 51% 51% 50% 50% 50% 25% 51% 51% 49% 49% 50% 50% 0% Q11 3M10 Self-pay 71% Revenue contribution from outpatient service was flat at 50% in 1Q11 Revenue breakdown in 1Q11: Outpatient revenue growth of 8% y-o-y Inpatient revenue growth of 6% y-o-y Revenue by method of payment: Self-pay remains the primary method of payment Increasing trend on international corporate contracts 20

21 International Contribution Revenue Contribution by Nationality % of Revenue 100% 80% 46% 45% 46% 45.30% 60% 40% 54% 55% 54% 54.70% 20% 43% 40% 57% 60% International revenue in 1Q11: Up 6% y-o-y, primarily from volume growth Top 5 countries revenue contribution (3M11) -UAE 11% -US 6% - Myanmar 4% 0% Q11 International Thais -Oman 3% - Bangladesh 3% Volume Contribution by Nationality 100% % of Volume 80% 60% 40% 20% 59% 59% 59% 60% 58% 55% 41% 41% 41% 40% 42% 45% 0% Q11 International Thais 21

22 Bangkok Facility Expansion Plan Outpatient Service Plan to open 5 clinic floors at Bumrungrad International Clinic in 2012 Inpatient Services Plan to add about 28 ICU beds in Bumrungrad Hospital Building to serve more high acuity patients CAPEX Baht 1.1bn through mid

23 Strategic investment in Kasemrad Transaction Overview BH has purchased 415,624,000 shares, equivalent to a 24.99% ownership stake, in Bangkok Chain Hospital PCL doing business as Kasemrad Hospital Group ( Kasemrad ). The purchase consideration is Bt 3,532,804,000 at a price of Bt 8.5 per share. This investment will be financed with Bt 3.57 billion loan facility. The increased debt balances of the Company remain within prudent levels mn shares mn shares mn shares Major Shareholders BH 44.99% 24.99% 30.02% KH Minority Shareholders Benefits expected to be generated This investment expands the interests of the Company in the Thai healthcare sector, supported by the broader market coverage of Kasemrad's successful, multi-facility network and established presence serving a broad variety of Thai patient needs. The shares purchased are eligible to participate in any future dividends paid to the common shareholders of Kasemrad, and will allow the Company to reflect its share of any earnings generated by Kasemrad in its future financial performance. Both companies share growth oriented strategies, and have agreed to a joint effort to pursue mutually beneficial opportunities for collaboration, as and when appropriate, that prioritize patient care, integrity, and providing a suitable financial return to shareholders. 23

24 Investment Rationales Potential for new investment Medical education and recruitment cooperation Technology transfer and sharing Centralization- back office and laboratory services Potential for tertiary referral to Bumrungrad 24

25 Summary of Financial Information Related to the Purchase of Kasemrad Shares Loan Facility Transaction Date Draw down and share trade settlement on 23 March 2011 Amount & Tenor Interest rate Bt 3,570 mn with a one year term The rate is a 6 month floating rate with multiple alternatives for the reference rate at the choice of the borrower The rate for the initial 6 month term is 3.7% BH plans to refinance this facility during the next year with a longer term loan, and has already received serious expressions of interest from the banking community to provide financing for this amount with a term of up to 8 years, if desired. 25

26 Bumrungrad International Limited 26

27 Asian Hospital, the Philippines (AHI) Facts & Figures: 2002: Opened as a private hospital, one of the largest in the southern Luzon corridor of metropolitan Manila, the Philippines Feb 2005: Acquired by Bumrungrad International Limited 2010: A 217-bed private hospital Since the acquisition, the hospital has turned around and became profitable in 2007 With the hospital operating at near full utilization, AHI is undergoing expansion of both inpatient and outpatient capacity, including an increase to a total of beds over time Ownership (by Bumrungrad International Limited): from conversion of management fees into equity & and new capital acquisition present 56.5% - Amount and year invested: (by Bumrungrad International Limited) 2005 USD 10 million 2008 USD 7 million Other shareholders: Dr. Garcia 8.2% Insular Life 11.8% Filinvest 8.3% Others 15.3% 27

28 Mafraq Hospital, Abu Dhabi, U.A.E. Management contract signed with the Health Authority of Abu Dhabi for 4 years, December Inpatient capacity of 463 acute care beds, 33 critical care beds and 14 Neonatal intensive care beds Patient volume of over 280,000 patients, including more than 17,000 inpatients annually Simultaneously, a new modern hospital building is being constructed on an adjacent site that will replace the current facility 28

29 Bumrungrad International Limited - In Summary Bumrungrad International Limited is making a positive contribution to the operating profits of BH - AHI is profitable and generating good internal cash flow - Management fees from Mafraq Hospital are accretive Capacity expansion plans for AHI are progressing well Bumrungrad International Limited is focusing on expansion opportunities - In the hospital sector - In Asian markets which are supportive of private sector healthcare - Where valuations are reasonable - Project timing is difficult to predict given decision points of asset sponsors or governments 29