Bumrungrad Hospital Public Company Limited

Transcription

1 Bumrungrad Hospital Public Company Limited The Presentation for Debenture Issuance 11 November 2011 Financial Advisor Joint Lead Underwriters

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 any securities of Bumrungrad Hospital Public Company Limited (the "Company or BH ) 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. 1

3 Table of Contents 1. Company Information / Q3 Update Financials 2. Key Investment Highlights / Debenture Issue / Potential Key Covenants 3. Key Timeline 2

4 Agenda Overview Bumrungrad International Hospital, Bangkok 3

5 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 outpatients 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 Shareholding Structure Others, 44.69% Bangkok Bank Pcl., 1.08% Sinsuptawee AM, 8.68% UOB Kay Hian (HK) - Client Account, 8.29% Bangkok Insurance Pcl., 14.65% Bangkok Dusit Medical Services Pcl., 14.25% Thai NVDR, 10.49% As of 26 August

6 Group Structure Core business of BH is the renowned Bumrungrad International Hospital, Bangkok Bumrungrad Hospital Plc. ( BH ) Operates Bumrungrad International Hospital, Bangkok Vitallife Corporation Ltd. ( Vitallife ) Comprehensive wellness center specializing in preventive care Note: As of August % 31.5% 56.5% Asian Hospital Inc. ( AHI ) Bumrungrad International Ltd.* International business Management Contract Mafraq Hospital * Strategic partners of Bumrungrad International Limited are: - Istithmar 19.5% - Temasek 19.5% - Asia Financial Holding 19.5% - Bangkok Bank 10.0% 24.99% Bangkok Chain Hospital PCL doing business as Kasemrad Hospital Group Private Hospitals 100.0% Asia Global Research Co., Ltd. ( AGR ) Clinical research On 4 Nov 2011, BIL entered into a SPA in relation to the sale of 3 subsidiaries in the Philippines (BIPI, NSH, and AHI) to Metro Pacific Investments Corporation. The sale transactions will be completed in Dec 2011 and Jan BIL has notified SEHA that it would not renew the Management Services Agreement. The contract will end December 31,

7 Management Team BH s management team comprises individuals with extensive experience in healthcare management K. Linda Lisahapanya Managing Director Dr. Sinn Anuras Group Medical 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. 6

8 Agenda Overview Bumrungrad International Hospital, Bangkok 7

9 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 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 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 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 Financial Strength Proven long-term revenue & profit growth Stable margins and strong cash flow Strong financial metrics (as at 30 September 2011); Net debt to EBITDA 1.08x Net debt to equity 0.51x ROA 14.4% ROE 26.1% Selective Growth Opportunities for growth: Operationalize recently expanded capacity Add additional capacity Complementary businesses, wellness & anti-aging through Vitallife & VitechPro 8

10 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 Wall Street Journal Award Recognition: top 10 most admired companies overall, quality and 2009: 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 1 st private hospital to receive Thailand Quality Class standard - based on US Malcolm Baldrige Award 2008: 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

11 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

12 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

13 Strategy Focus on physician recruitment and targeted specialties Domestic marketing efforts include 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

14 Net Income (THB mn) Diluted EPS (THB) Revenues (THB mn) EBITDA (THB mn) Operating Performance ,000 10,000 8,000 6,000 4,000 2, ,896 Total Revenue 6% CAGR 9, ,882 9,338 8,559 10, 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 3,000 2,500 2,000 1,500 1, EBITDA 6% CAGR 2,452 2,155 2,259 2,070 1, ,000 1,500 1, ,096 Net Income 1, ,145 4% CAGR 1,191 1,246 1, , * ** *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 DILUTED EPS % CAGR

15 Margins & Trend EBITDA Margin Trend Net Profit Margin Trend 30% 24.7% 24.2% 24.3% 24.2% 24.4% 30% 20% 20% 13.9% 17.1% 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

16 9M11 Update Total Revenue EBITDA THB million 9,000 16% 8,730 THB million 4,000 EBITDA EBITDA Margin 40% 8,500 8,000 3,000 2, % 1, % 2, % 30% 20% 7,500 7,521 1,000 10% 7,000 YTD Sep'10 YTD Sep'11 0 YTD Sep'10 YTD Sep'11 0% THB million 1,400 1,200 1, % 12.2% Net Income Net Profit excl extra items Net Profit Net Profit Margin excl extra items Net Profit Margin 914 1, , % 13.8% 29% 33% 25% 20% 15% 10% Higher growth of net profit compared to growth of total revenues was driven by a lower rate of increase in cost of hospital operations and administrative expenses. 0 YTD Sep'10 YTD Sep'11 5% 15

17 Dividend Payment Bt per share Dividend Payment Final Interim The board of directors announced the dividend payment with details as follows: Dividend payment for the year 2010 of Bt 0.90 per share Interim Dividend payment for the year 2011 of Bt 0.45 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 THB 1,605 million -share gain from GCS - THB 829 million -+ dividend received from GCS + THB 418 million = Net profit for dividend payment THB 1,195 million 16

18 Leverage Net Debt to EBITDA 1.50 x Interest Coverage x x YTD Sep' YTD Sep'11* Net Debt to Equity x YTD Sep'11 * Interest expenses related to the investment in KH was Bt 69.5 million based on remaining days after the transaction settled. If we assumed impact for the full period, interest expenses from this transaction would be Bt 98.8 million and interest coverage ratio will be 14.5x Net debt to EBITDA and Net debt to equity for YTD sep 11 was higher than YE2010 and Interest coverage ratio of YTD Sep 11 was lower than YE2010. This is a result of increase in Short-term loan of THB 3,570 million from the purchase of Kasemrad Hospital shares in March

19 Overall Volume Trend Total Visits per Day Visits 3,200 2,400 1, , % 2, % 2,889 2,654 2, % 2, % 2,759 2, % 2,313 2,877 2,889 3,030 2Q 3Q 4Q 1Q 2Q 3Q % Compared to Q3 10, total visits per day increased by 4.9% (mainly from International market), total admissions per day stayed flat. ADC increased by 4.9% which is higher than the growth rate of admission due to the higher length of stay. 100 Total Admission per Day Admissions % % 2.4% 25.7% % Average Daily Census ADC % 5.3% % % 14.4% % Q 3Q 4Q 1Q 2Q 3Q Q 3Q 4Q 1Q 2Q 3Q

20 Revenue Intensity Revenue per Visit Bt 7, % 8.2% 2.8% 5.4% 10.0% 4.8% 5,976 6,012 5,538 5,993 6,000 5,209 5,217 5,465 5,444 5,596 5,671 5,538 5,465 4,500 3,000 1, Q 3Q 4Q 1Q 2Q 3Q Revenue per Admission Bt 3.3% 3.4% 3.4% 22.0% 1.3% 18.6% 240, , , , , , , , , , , , , , ,000 60,000 Revenue per visit growth resulted from increased consumption in outpatient ancillary services and annual price adjustment. For Q3 11, revenue per admission growth resulted from higher service intensity and an increase in length of stay. Basis of calculating Revenue per Visit has been refined to include consolidated results, rather than hospital operations only, and historical data is adjusted accordingly 0 2Q 3Q 4Q 1Q 2Q 3Q

21 Revenue Breakdown Inpatient vs. Outpatient (% of revenue) Method of Payment (% of revenue) Outpatient 100% 75% Inpatient 49% 50% 51% 52% 51% 51% Insurance 13% Corporate Contracts - Domestic 9% Corporate Contracts - Intl 8% 50% 25% 51% 50% 49% 48% 49% 49% 0% M11 Self-pay 70% YTD Sep11 Revenue contribution from outpatient service remained stable at 51% in 9M11 Basis of calculating revenue contribution has been refined to include consolidated results, rather than hospital operations only, and historical data is adjusted accordingly Revenue breakdown in 9M11: Outpatient revenue growth of 18.5% y-o-y Revenue by method of payment: Inpatient revenue growth of 15.1% y-o-y Self-pay remains the primary method of payment Increasing trend on international corporate contracts 20

22 % of Volume % of Revenue International Breakdown Revenue Contribution by Nationality 100% 80% 46% 45% 46% 45% 60% 43% 40% For 9M11, International revenue was up 23% from 9M10, primarily from volume growth. Top 5 revenue contribution countries 40% 54% 55% 54% 55% 57% 60% 20% 0% M11 International Thais Volume Contribution by Nationality 100% UAE 12% USA 5% Myanmar 5% Oman 4% Bangladesh 3% 80% 59% 59% 59% 60% 58% 55% 60% 40% 20% 41% 41% 41% 40% 42% 45% 0% M11 International Thais 21

23 Strategy BI Bangkok Master Plan Physician Recruitment Thailand Invest into Mid-Tier Market Expand BI Brand International Seller s market in countries with established private sector Reviewing small investments in emerging markets Outpatient Service Inpatient Service Plan to open 5 clinic floors at Bumrungrad International Clinic in 2012 Plan to add about 46 ICU beds and 60 ward beds in Bumrungrad Hospital Building CAPEX THB 3.9bn through

24 Master Plan CAPEX Million THB Y11* Y12* Y13 Y14 Y15 Total Est. Capital Investment , ,928 Note: * CAPEX for years 2011 and 2012 have been approved by the Board. The remaining year will require approval in each subsequent years budget submission. Capital Type Est. Capital Costs (THB mm) Land 625 New Building Construction 1,186 Construction 1,306 Special Medical Equipment 248 General Medical Equipment 396 General Equipment 57 IT Equipment 90 Vitallife Expansion 20 Total Costs 3,928 23

25 Kasemrad Hospital Group (KH) KH s Q3 11 reported net profit was THB 195 million, a 6% increase from THB 184 million of Q3 10. For 9M11, Net profit was THB 512 million, a 5% increase from THB 486 million in 9M10. BH recognized KH s share of income in Q3 11 and 9M11 as the table below. ( 000 THB) Q3 11 9M11 (Apr-Sep 11) KH s net profit in , ,099 BH % 24.99% 24.99% Share of income from KH 48,697 92,238 The Company did not recognize the share of income of THB 3.6 million from Kasemrad Hospital Group in Q

26 Table of Contents 1. Company Information / Q3 Update Financials 2. Key Investment Highlights / Debenture Issue / Potential Key Covenants 3. Key Timeline 25

27 Key Investment Highlights Leading position and strong brand recognition among both domestic and international hospitals Experienced management team Solid medical profile in attracting competent medical team Strong financial profile 26

28 Debenture Issue Issuer Type Company Rating Coupon Type / Payment Distribution Method Issue Size Tenors Listing Underwriters Registrar Bumrungrad Hospital Public Company Limited ( BH ) Unsubordinated and Unsecured Thai THB Debentures A with Stable Outlook by TRIS Fixed Rate / Semi-Annually Private Placement to institutional and high net-worth investors [ ] [ ] Thai Bond Market Association The Siam Commercial Bank PCL and Bangkok Bank PCL The Siam Commercial Bank PCL 27

29 Potential Key Covenants Financial Covenant Net Debts to Equity of not more than 1.75 times Net Debts to EBITDA of not more than 3.25 times Negative pledge No sale of key assets Other Key Terms & Conditions No change of main business Insurance on key assets Maintain listing status No dividend in an Event of Default 28

30 Table of Contents 1. Company Information / Q3 Update Financials 2. Key Investment Highlights / Debenture Issue / Potential Key Covenants 3. Key Timeline 29

31 Key Timeline November 2011 SUN MON TUE WED THU FRI SAT December 2011 SUN MON TUE WED THU FRI SAT November Nov : Submit filling document to SEC 11 Nov : Public Roadshow at BH ( hrs.) [18] Nov : Issue Credit Rating Announcement (tentative) December Dec : Book building Dec & 19 Dec : Subscription Period 20 Dec : Issue Date MPC meeting Note : The above timeline is subjected to SEC approval and prevailing market conditions 30