MLP Care Analyst Meeting Liv Hospital Ulus, March 7 th 2018

Transcription

1 MLP Care Analyst Meeting Liv Hospital Ulus, March 7 th 2018

2 MLP Overview Dr. Muharrem Usta Chairman and CEO 2

3 Summary Results above our expectations Growth across all segments Double digit growth in Net Sales and EBITDA Declining leverage ratio and expected reduction in FX loss and interest expenses* Proforma for TL600m capital increase at the IPO 3

4 MLP: The #1 Private Hospital Group in Turkey 29 Hospitals; More than the #2 and #3 Competitors Combined Beds; 2x the size of 2 nd Largest Competitor 17 Cities Staff Doctors Addresses All Price Segments in the Turkish Market 3 JCI Accredited Hospitals 3 Centers of Excellence Revenues: 2.6 billion TL EBITDA: 409 million TL 1 1 Adjusted EBITDA figures * Figures on this page have been updated for Year End 2017 results. 4

5 Strong Growth and Successful Financial Performance Net Sales (TLm) EBITDA¹ (TLm) EBITDAR¹ (TLm) %19 CAGR %25 CAGR %26 CAGR Acquisition of 6 hospitals (2 of which are in Istanbul) 2 greenfield hospitals in Ankara 2 brand new hospitals in Istanbul and Kocaeli Opening of a University Hospital in Istanbul Opening of a University Hospital in Istanbul and a greenfield hospital in Samsun Adjusted figures 5

6 Strong Financial Performance in 2017 Net Sales (TLm) EBITDAR¹ (TLm) EBITDA¹ (TLm) Growth %19 %29 %31 Margin Healthy balance sheet post IPO Net profit proforma for TL600m capital increase; TL47m (vs. reported net loss of TL 133m) Proforma Net debt / EBITDA: 1.9x (vs. reported ratio of 3.4x) ¹ EBITDA and EBITDAR figures have been adjusted for TFRS adjustments that have no cash impact on relevant period and one-off income/expense figures 6

7 Share of Private Hospitals is Increasing in Total Healthcare Market Healthcare Expenditure by Provider Total Number of Beds ( 000) 43% 25% 12% Private University Public Healthcare Services Revenue Breakdown (2015) 82% 18% 69% 66% 31% 34% Doctors' Consultations Inpatient Stays All Surgeries Complex Surgeries % 47% 53% % 13% 21% Private Public Total Healthcare Expenditure: TL 76 billion (2015) Capacity expansion in the private sector Increase in share of private sector in complex surgeries PPPs are expected to get market share from state and small private hospital PPPs can increase the speed of consolidation in the market Private Public Sources: IMS Health, Euromonitor International, OECD, Espicom Business Intelligence, MoH Statistics 2015 (Published in Dec-2016), TURKSTAT, TOBB report. Complex Surgeries: Organ transplants and other A1 surgeries. Analysis performed with 2014 figures. 1 Includes 7

8 Key players and the Healthcare System A System where all the Participants are Satisfied General Health Services Regime Providing Patients with Options Regulation Ministry of Health (MOH) Funding Treasury SSI Private Insurance Out of Pocket Service Providers MOH University Hospitals Private Healthcare Providers Patients GHS* Healthcare reforms started in 2004 %98 1 of the Population is covered by the GHS *General Health Services Insurance (Genel Sağlık Sigortası) Healthcare expenditure by funding type (billion TL) Private payors SSI and MOH CAGR % 7% 19% Patient s right to choose SSI pays according to SUT prices Private Hospitals are allowed to charge +%200 3 top-up on top of the SUT prices 2 Top-up Health Insurance is the fastest growing segment 4 of the Private Health Insurance market Sources: OECD healthcare systems review, Turkey 2008, TURKSTAT, TOBB Report 1 TOBB report; 2 SUT prices = SSI Price Tariffs; 3 Almost all services are eligible for %200+ (except for certain specific services); CAGR:%150 Number of policies sold 8

9 Revenue Breakdown by Payor Type 66% 40% Growth Continues in All Payor Types Balanced Revenue Portfolio SSI Insurance provides access to the majority of Turkey s population 6% Revenue from PMI grew by 6x in the last five years 31% Revenue from Top-up Insurance grew by more than 2x in 2017 Medical Tourism growing from a small and sustainable base Strong Growth in Top-up Insurance Total # of Policies Sold ( 000) 18% Denotes growth in

10 JCI accreditation Gold Standard in Global Health Services Market Clear Leader in Private Hospital Services SRC 1 Global standard in surgical excellence Bahçelievler Göztepe İzmir Colorectal Surgery Robotic Surgery Metabolic and #1 in the World #1 Outside of the US (#4 in the World) Bariatric Surgery 100% Success Rate MLPCARE Network (number of hospitals and locations) JCI standardized services; competitive advantage through surgical centers of excellence 40% of the bed capacity is in the attractive market of Istanbul MLP has the highest number of beds almost in all cities it operates Gamma Knife Da Vinci Robotic Surgery Sources: Company 1 TURKSTAT 2016 Census 2 TOBB report, Company websites 10

11 Premium Clear Leader in Private Hospital Provision Turkish Healthcare Sector 1 Growing Levels of Affluance in Turkey 2 Top end of the Private Hospital market CAGR PPP will likely attract patients from public hospitals and less competitive, smaller private hospital operators Private Hospital market Public and Private Hospital market Public Hospital market Income Bracket Distribution (%) High (>$50k) Upper Mid ($25-50k) Mid ($15-25k) Lower Mid ($10-15k) Low (<$10k) 9% 15% 24% 31% 27% 24% 17% 13% 24% 17% 9% 5% 0% (3)% (4)% Private hospital s target population is significantly different from what the PPP hospitals are expected to attract Emergence of large PPP hospitals can accelerate consolidation in the industry, resulting in smaller hospitals having just license value As such, MLP is expected to be minimally impacted by the MoH s PPP initiative ¹ Ministry of Health, Health statistics yearbook 2015, as of IMS Health, Euromonitor International, OECD, Espicom Business Intelligence, MoH Statistics 2015 (published in Dec-2016), Turkish Statistical Institute, TOBB Report 11

12 Bone Marrow Transplant Chemotherapy Radiotherapy Stent By-Pass Invasive Procedures Angio A-type surgeries Clinical Excellence and World Class Service Offering Top academic physicians choose MLP Care for: Strong and reliable brand Leading market share State-of-the-art infrastructure University affiliations Vast exposure to complex cases 603 of the 2,133 are academicians Growth continues with Academicians Eyl # Share of academicians # Other physicians CAGR % -1% 99% Growing market share with patient volumes MLP Share in beds 1 MLP Share in inpatients 1 MLP Share in complex surgeries 1 11% 15% 48% 36% 19% 17% Complex surgeries in private sector 16% 15% 14% 14% 2% 2 4% MLP share in private beds MLP share in total beds MLP share in inpatients in the private sector MLP share in total inpatients Source: Turkish Ministry of Health. 1 Data as of Assumes growth in beds based on 7.2% private beds CAGR and 1.9% total beds CAGR applied to 2015 MoH figures 12

13 Premium Unique Business Model Addressing Multiple Price Points General Overview of the Concept and Positioning Relative Average Price per Payor Type 29 Total Hospitals in Portfolio Number of hospitals including a particular concept Note: Three hospitals (Ereğli, Avcılar and Çanakkale) are operated under the brand of Anadolu Hastanesi, instead of Medical Park 13

14 Exceptional Operational and Financial Performance in 2017 Net Sales 2.6 billiontl 19% growth EBITDAR* 597 million TL 29% growth EBITDA* 409 million TL 31% growth Number of Beds 5, Capacity Utilization % basis points Avg. Length of Stay 1.7 days -0.2 days *EBITDA and EBITDAR figures have been adjusted for non-recurring FX gain/losses and non-cash GAAP provision expenses 14

15 Two New Hospitals Commenced Operations in 2017 MLP Florya University Hospital Samsun Liv Location İstanbul Samsun Opening Date March 2017 June 2017 Key Statistics 250 beds 50,714 m2 68 doctors 6 operating rooms 445 staff 75 beds 6,800 m2 45 doctors 2 operating rooms 190 staff 15

16 Financial Performance Burcu Öztürk CFO 16

17 Strong Growth in All Segment Revenues Domestic Patient Revenues TL m 15% growth Medical Tourism Revenues TL 188 m 66% growth Ancillary Business TL 185 m 40% growth Strong Growth In Line With Our Strategy Inpatient revenues grew 13% Outpatient revenues grew 18% Attactive for Foreign Patients Share of patients from Europe in total Medical Tourism: 40% Middle East & Africa: 29% Former CIS and the rest: 31% Growth Continues in Ancillary Businesses Higher laboratory revenues in line with higher # of hospitals Growth in contribution of revenues from managed hospitals 17

18 General Overview Exceptional Operational and Financial Performance Mature Hospitals Developing Hospitals Breakdown of Beds Revenue 2 (milliontl) / Growth (%) Revenue 2 (milliontl) / Growth (%) 14% 8% 17% 176% 78% 22% 18 Mature Hospitals 9 Developing Hospitals 2 Managed Hospital Revenue Breakdown Contribution 2 (million TL) / Margin (%) Contribution 2 (million TL) / Margin (%) 18.4% 17.5% 18.8% 19.7% 4.8% 0.2% 5.5% 6.6% Total: TL2.576 million Note: Revenue and Contribution from Managed Hospitals is not consolidated in Hospital Revenues and included as part of Other Ancillary Business. Mature refers to hospitals opened, or acquired as well as integrated in the MLP IT system, prior to 2015, and Developing refers to hospitals opened / acquired / integrated after Hospital counts by Estate as part of current MLP portfolio as at Dec Excludes headquarters costs and contribution from Other Ancillary Business. 18

19 Inpatient Outpatient Balanced Price and Volume Growth Mature Portfolio (TLm) Developing Portfolio (TLm) % Hospital Revenue Volume Price 2017 Hospital Revenue 2016 Hospital Revenue Volume Price 2017 Hospital Revenue % Hospital Revenue Volume Price 2017 Hospital Revenue 2016 Hospital Revenue Volume Price 2017 Hospital Revenue Note: Analysis based on domestic revenues excluding medical tourism and 2017 numbers of developing hospitals include managed university hospitals in order to make the comparison meaningful. 19

20 Hospital Cost Comparison as % of Sales Smart Cost Management Contribution Margin 16.6% 17.5% 11,7% 11,1% 7,6% 7,9% 19,7% 18,5% Material: Slight increase due to change in the revenue mix Doctor: Flat as doctor cost is ca. 95% variable Personnel: Decline on the back of operational leverage 24,5% 24,6% Rent: New hospital openings and FX impact 19,8% 20,4% Material Doctor Personnel Rent Other 20

21 Strong Cash Flow Maintenance Capex 1 (TLm) Capex of New Hospitals (TLm) Free Cash Flow (TLm) %2.6 %2.6 63% 73% % of Sales Remained flat as a percentage of revenues at 2.6% Continued new hospital investments Strong free cash flow generation maintained x% FCF / EBITDA 21

22 Deleveraging After Capital Injection Post IPO Net Debt Currency Breakdown 2017 Proforma Proforma Net Debt / EBITDA declines from 3.4x to 1.9x 1,381 mtl 793 mtl Capital Increase of TL600m (m TL) Net profit/(loss) (49) (133) FX gains/(losses) (85) (168) IPO related costs - (12) Net profit / (loss) w/o FX and IPO impact

23 Closing Dr. Muharrem Usta Chairman and CEO 23

24 Outstanding Platform for Further Growth Pendik (2018) Mersin (2018) Location İstanbul Mersin Plan Opened in Q ,000 sqm Building construction complete License already available To be opened in ,604 sqm Building construction complete License already available 24

25 M&A Greenfield Outstanding Platform for Further Growth Proven track record of greenfield expansions and M&A Total Hospitals At Year End MLP has added on average c.400 beds p.a. 1 through greenfield projects since 2014 Multiple opportunities identified for expanding bed capacity in the near term Acquired 6 hospitals (of which 2 in İstanbul) Opened one managed university hospital in İstanbul 2 New Hospitals being opened in Mersin and İstanbul Bed expansion in Goztepe Two potential hospital openings / acquisitions MLP actively seeks out new opportunities in acquiring existing private hospitals of 29 hospitals acquired Multiple targets identified and in consideration Remaining private hospitals 492 Vast amount of potential targets 88% 12% Top 5 private players 70 Total Beds Added to Portfolio Opened 2 greenfield hospitals in Ankara Opened 2 greenfield hospitals in İstanbul and Kocaeli Opened one managed university hospital in İstanbul and one greenfield hospital in Samsun Two greenfield hospital developments under construction Total private hospitals = 562 Cumulative Total Beds 3,380 4,054 4,622 5,330 5,830 6,330 6,830 Note: Bed counts based on licensed capacity average. Acquisitions Greenfields Expansions Pipeline 25

26 Thank You 26

27 Historical P&L Statements TLm FY FY Revenue 2,160 2,576 Cost of service (-) (1,854) (2,171) Gross Profit General administration expenses (-) (127) (215) Other income Other expenses from operations (-) (169) (358) Operating Income Finance expenses (-) (2741 (383) Net profile (loss) before tax (62) (171) Tax income / (expense) from operations Net profit / (loss) (49) (133) 27

28 Historical Balance Sheet TLm Dec 31 Dec 31 Cash and cash equivalents Trade receivables Inventory Short term other assets Short term assets 1,016 1,161 Fixed assets 1,173 1,220 Deferred tax assets Long term other assets Long term assets 1,420 1,560 Total Assets 2,435 2,721 Trade payables Short term other liabilities Short term financial liabilities (incl. leases) Short term liabilities 1,031 1,261 Long term other liabilities Deferred tax liabilities Long term financial liabilities (incl. leases) 962 1,176 Long term liabilities 1,139 1,355 Shareholders' equity Non-controlling interest Total liabilities & equity 2,435 2,721 28

29 Reconciliation from Reported EBITDA to Adjusted EBITDA TLm 2016A 2017A Net Profit / (Loss) Before Taxes (49) (133) Depreciation and Amortization of Tangible and Intangible Fixed Assets Total Interest Expenses, Net of Interest Income and Gain on Financial Derivatives Net (Gains) / Losses from the Disposal of Tangible and Intangible Assets and Income from Negative Goodwill 1 (0) Reported EBITDA Net One-off (Gains) / Losses (47) 19 o/w One-off Net Operational FX (Gains) / Losses (44) 0 o/w One-off Revenues (3) 19 Non-cash GAAP Provision Expenses 5 11 Adjusted EBITDA

30 Mature Hospitals Cost Comparison as a % of Sales Developing Hospitals 81% 80% 94% 94% 20% 21% 30% 30% 13% 13% 6% 7% 19% 18% 23% 21% 24% 24% 29% 28% 21% 21% 15% 17% Material Doctor Personnel Rent Other Material Doctor Personnel Rent Other 30

31 Reconciliation from Contribution to Adjusted EBITDA TLm 2016A 2017A Hospital Contribution Mature Developing A Total Hospital Contribution Other Ancillary Business Contribution¹ Other Ancillary Business Revenues Other Ancillary Business Costs (114) (149) B Total Other Ancillary Business Contribution C HQ Expenses (43) (46) Adjusted EBITDA A B C Note: Revenue and Contribution from Managed Hospitals is not consolidated in Hospital Revenues and included as part of Other Ancillary Business ¹ Other Ancillary business includes Laboratory, Imaging and Management service income from university hospital management operations 31

32 Outstanding Platform For Further Growth Quick and successful ramp up in greenfields as well as acquisitions with typical range of months to EBITDA-neutral hospitals Example of Greenfield Batıkent (Oct-2014) Total Investment TL50m Total Beds at Opening 110 Covered Area (sqm) 22,500 Example of Acquisition Yıldızlı (Sep-2014) Total Investment Cost TL23m Total Capex TL8m Total Costs TL31m Total Beds 107 Covered Area (sqm) 12,000 Sales TL 000s 3,252 44,408 61,863 8,332 35,024 42,987 Contribution Margin (%) (63)% (1)% 17% (10)% 5% 19% 10,780 8,348 Hospital Contribution per year in TL 000s 1,910 (2,057) 2014 (359) 2015 (807) Period open for: 3 Months 15 Months 27 Months 4 Months 16 Months 28 Months 32