HSBC Non-deal Roadshow, Paris - London April 2018

Transcription

1 HSBC Non-deal Roadshow, Paris - London 6-9 April 208

2 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. Actual results are subject to future events and uncertainties, which could materially impact the MLP Care s actual performance. 2

3 Overview of MLP Care 3

4 MLP Care: The # Private Hospital Group in Turkey 30 Hospitals; More than the #2 and #3 Competitors Combined Beds; 2x the size of 2 nd Largest Competitor 7 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 Adjusted EBITDA figures * Figures on this page have been updated for Year End 207 results. 4

5 Net Sales (TLm) EBITDAR¹ (TLm) EBITDA¹ (TLm) Growth %9 %29 %3 Margin Healthy balance sheet post IPO Net profit proforma for TL600m capital increase; TL47m (vs. reported net loss of TL 33m) Proforma Net debt / EBITDA:.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 5

6 MLP Care is the Leading Private Hospital Group in Turkey Operates in the Attractive Turkish Healthcare Market 2 Clear Leader in Private Hospital Provision 3 Strong Brand Recognition and Unique Business Model Addressing All Price Points 4 Clinical Excellence and World Class Service Offering 5 Superior Operational and Financial Performance 6 Outstanding Platform for Further Growth 7 Visionary Leadership Supported by Outstanding Management Team 6

7 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 Providers (TLbn) Growth in Aging Turkish Population (millions) Growing Levels of Affluence in Turkey CAGR % 4% 2% 0% 0% 0% Income Bracket Distribution (%) High (>$50k) Upper Mid ($25-50k) Mid ($5-25k) Lower Mid ($0-5k) Low (<$0k) 9% 5% 24% 3% 27% 24% 7% 3% 24% 7% CAGR 9% 5% 0% (3)% (4)% Significant Scope For Expansion Compared to OECD 2 Peers Healthcare Spending Per Capita ($ 000) Healthcare Spending % of GDP Hospital Beds Per Capita ( 000) % 9.2% 2.7 MoH Goal: Turkey OECD Median² Turkey OECD Median² Turkey OECD Median² Source: IMS Health, Euromonitor International, OECD, Espicom Business Intelligence, MoH Statistics 205 (published in Dec-206), Turkish Statistical Institute, TOBB Report Denotes hospitals only excluding pharmaceutical, medical equipment, dental and other. 2 Denotes the Organization for Economic Cooperation and Development including 35 member countries: USA, Sweden, Switzerland, France, Germany, Austria, New Zealand, Netherlands, Denmark, Belgium, Canada, Japan, Norway, Finland, Portugal, Australia, Italy, Slovenia, UK, Spain, Iceland, Greece, Slovakia, Israel, Chile, Ireland, Czech Republic, Hungary, Luxembourg, Lithuania, Estonia, Poland, Mexico, Latvia and Turkey ,648 beds in Turkey. 7

8 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 2% of beds, but provide 53% of complex surgeries. Number of Inpatient Visits (m) Number of Hospital Beds ( 000) CAGR 5% CAGR 2% 0 75% 69% 4% % % 0% 25% 3% 9% 3% 2% Private Public¹ Private Public¹ 0% Provision of Healthcare Services (205) 82% 69% 66% 47% 8% 3% 34% 53% Doctors' Consultations Inpatient Stays All Surgeries Complex Surgeries² Private Source: Ministry of Health, Health Statistics Yearbook 203, 205, TOBB report; Public includes Ministry of Health and University hospitals; 2 A type surgeries e.g., organ transplants, 204 numbers due to data availability Public¹ 8

9 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 Government MoH Treasury SSI Private Insurance Self-Pay MoH University Hospitals Private Healthcare Institutions Universal healthcare coverage (UHI) Healthcare reforms initiated in 2004 Primary care free of charge for all citizens 98% population coverage by UHI Regulator Monitors quality at all public and private hospitals System favours patient choice Ministry of Health (MoH) Payor Social Security Institute (SSI) Owns and operates public hospitals Controls the number of licences in the sector Main provider of financing to the healthcare sector Monitors usage statistics across private and public hospitals Services provided by both public and contracted private hospitals with SSI being the key payor Private hospitals are able to charge higher rates than public hospitals, with some payment required from SSI patients SSI reimburses private hospitals using SUT prices 2 (stable since 2008) Private hospitals have the right to charge +200% 3 over and above SUT prices 2 Patients choice Partial SSI reimbursements Co-pay up to 200% above SUT prices 2 Healthcare expenditure in private providers by payor type (TLbn) Private Public (SSI + MoH) 0 57% 43% 2009A 58% Source: OECD reviews of health systems, Turkey 2008, Turkstat, TOBB report 9 42% 205A CAGR TOBB report; 2 SUT prices = SSI tariffs; 3 200%+ on all services (except a few specified services); 4 Based on number of policies sold 3% 7% 9% Top-up insurance (since 204) Cheaper form of PMI to cover SSI patients copay costs Can only be used at hospitals that signed a contract with SSI Top-up PMI is the fastest growing segment of the health insurance market with CAGR of >9% 4 Attractive funding structures increasing accessibility 9

10 <mm mm- 2mm 2mm 5mm >5mm Pop.¹ 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 National and local leader with a network covering the greatest number of cities 40% of beds located in the attractive Istanbul market MLP Care has the highest number of beds in nearly every city in which they are present MLP Care network (# of hospitals and locations) 2 Kocaeli Bursa Çanakkale İstanbul 0 İzmir Uşak Antalya Ereğli 2 Ankara 2 Samsun Tarsus Tokat Ordu Trabzon 2 Elazığ Gaziantep Batman Bed concentration in İstanbul: MLP: 40% Acibadem: 67% Memorial: 34% Medicana: 42% Location (in order of population) 2 İstanbul 0 2,532 9, Ankara İzmir Bursa Mersin (Tarsus) Antalya Adana Konya Gaziantep Kocaeli Diyarbakır Kayseri Samsun Bodrum (Muğla) Eskişehir Trabzon Ordu Sivas Tokat Ereğli (Zonguldak) Elazığ Batman Çanakkale Uşak Total 30 5, ,27 0,476 0,380 Source: Source: Latest information from company websites, Company Analysis, Turkstat (population estimates 206) Turkstat, 206 population; 2 Latest information from company websites 0

11 Premium 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 are mega health complexes requiring operational excellence to ensure financial sustainability and top quality 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 Operational excellence Healthcare personnel Right governance system needs to be in place MoH needs to staff city hospitals with the right quantity and quality of medical staff Some public hospitals may need to be closed and staff re-located Re-location of medical staff may pose some risk due to remote location of city hospitals 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 Care is expected to be minimally impacted by the MoH s PPP initiative High service quality MoH needs to ensure patient demand through high quality service Significant increase in travel time, especially for outpatient or unplanned visits may hinder demand ¹ Ministry of Health, Health statistics yearbook 205, as of 205

12 Premium 3 Strong Brand Recognition and Unique Business Model Addressing Multiple Price Points Three concepts targeting three different price points with consistently outstanding medical service quality Concept Overview and Positioning Relative Average Price per Payor Type 30 Total Hospitals in Portfolio 3 Premium segment 4 Premium mass segment 22 Upper mass segment Number of hospitals including a particular concept Note: Three acquired hospitals (Ereğli, Avcılar and Çanakkale) are operated under the name of Anadolu Hastanesi, instead of Medical Park 2

13 3 Strong Brand Recognition and Unique Business Model Addressing Multiple Price Points Business model results in a balanced portfolio covering multiple payor types 207 Revenue Breakup by Payor Type 40% 66% 6% SSI Insurance provides access to the majority of Turkey s population 3% Revenue from PMI grew by 6x in the last five years Revenue from Top-up Insurance grew by more than 2x in 207 Medical Tourism growing from a small and sustainable base 8% Source: Turkish Reinsurers and Insurers Association. Calculated as MLP Care s revenue from private medical insurance (excluding contracted institutions revenue) divided by the total payment made by insurers to healthcare providers. Denotes growth in

14 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 The Gold Standard in Healthcare Globally SRC The Global standard for quality surgical care University affiliations Bahçelievler Göztepe İzmir Colorectal Surgery Robotic Surgery World s st st outside the US Metabolic and Bariatric Surgery 00% success rate Enable us to maintain flexibility in our doctor portfolio Attract Turkey s most skilled and experienced doctors 603 academicians working as physicians at MLP Care hospitals 3,000 scientific activities and publications in the last two years Highly diversified full service offering (No medical department comprises >9% of total sales) Da Vinci Robotic Surgery Gamma Knife Denotes Surgical Review Corporation. 4

15 Bone Marrow Transplant Chemotherapy Radiotherapy Stent By-Pass Invasive Procedures Angio A-type surgeries 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 Key points of attraction Top tier physicians choose MLP Care for: Strong and reliable brand Leading market share State-of-the-art infrastructure Universities affiliations Vast exposure to complex cases Ability to attract and retain top-tier physicians Proven track record of physicians recruitment Eyl # Share of academicians CAGR % 99% and drive patient in-flows to grow market share in Turkey MLP Care share in beds MLP Care share in inpatients MLP Care share in complex surgeries % 2 5% 48% 36% 9% 7% Complex surgeries in private sector 6% 5% 4% 4% 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. Data as of Assumes growth in beds based on 7.2% private beds CAGR and.9% total beds CAGR applied to 205 MoH figures. 5

16 Financial Performance 6

17 5 Superior Operational and Financial Performance Attractive double-digit historical growth Net Sales (TLm) %9 CAGR EBITDA¹ (TLm) %25 CAGR EBITDAR¹ (TLm) %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 7

18 5 Superior Operational and Financial Performance Strong Growth in All Segment Revenues in 207 Domestic Patient Revenues TL m 5% growth Medical Tourism Revenues TL 88 m 66% growth Ancillary Business TL 85 m 40% growth Strong Growth In Line With Our Strategy Inpatient revenues grew 3% Outpatient revenues grew 8% Attractive for Foreign Patients Share of patients from Europe in total Medical Tourism: 40% Middle East & Africa: 29% Former CIS and the rest: 3% Growth Continues in Ancillary Businesses Higher laboratory revenues in line with higher # of hospitals Growth in contribution of revenues from managed hospitals 8

19 5 Superior Operational and Financial Performance Robust growth and financial performance seen across Mature and Developing hospitals General Overview Breakdown of Beds Mature Hospitals Revenue 2 (milliontl) / Growth (%) Developing Hospitals Revenue 2 (milliontl) / Growth (%) 4% 8% 7% 76% 78% 22% 8 Mature Hospitals 9 Developing Hospitals 2 Managed Hospital Revenue Breakdown Contribution 2 (million TL) / Margin (%) Contribution 2 (million TL) / Margin (%) 8.4% 7.5% 8.8% 9.7% 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 205, and Developing refers to hospitals opened / acquired / integrated after 205. Hospital counts by Estate as part of current MLP portfolio as at Dec Excludes headquarters costs and contribution from Other Ancillary Business. 9

20 Inpatient Outpatient 5 Superior Operational and Financial Performance driven by balanced increases in volume and price Mature Portfolio (TLm) Developing Portfolio (TLm) % Hospital Revenue Volume Price 207 Hospital Revenue 206 Hospital Revenue Volume Price 207 Hospital Revenue % Hospital Revenue Volume Price 207 Hospital Revenue 206 Hospital Revenue Volume Price 207 Hospital Revenue Note: Analysis based on domestic revenues excluding medical tourism. 206 and 207 numbers of developing hospitals include managed university hospitals in order to make the comparison meaningful. 20

21 5 Superior Operational and Financial Performance Contribution Margin Hospital Cost Comparison as % of Sales 6.6% 7.5%,7%,% 7,6% 7,9% 9,7% 8,5% 24,5% 24,6% Smart Cost Management 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 Rent: New hospital openings and FX impact 9,8% 20,4% Material Doctor Personnel Rent Other 2

22 5 Superior Operational and Financial Performance Strong cash flow generation Maintenance Capex (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 Includes expenditure on assets acquired through finance lease. 22

23 5 Superior Operational and Financial Performance Deleveraging After Capital Injection Post IPO Net Debt Currency Breakdown 207 Proforma Proforma Net Debt / EBITDA declines from 3.4x to.9x,38 mtl 793 mtl Capital Increase of TL600m (m TL) Net profit/(loss) (49) (33) FX gains/(losses) (85) (68) IPO related costs - (2) Net profit / (loss) w/o FX and IPO impact

24 Outstanding Platform for Growth 24

25 6 Outstanding Platform for Further Growth Quick and successful ramp up in greenfields as well as acquisitions with typical range of 2-8 months to EBITDA-neutral hospitals Example of Greenfield Batıkent (Oct-204) Total Investment TL50m Total Beds at Opening 0 Covered Area (sqm) 22,500 Example of Acquisition Yıldızlı (Sep-204) Total Investment Cost TL23m Total Capex TL8m Total Costs TL3m Total Beds 07 Covered Area (sqm) 2,000 Sales TL 000s 3,252 44,408 6,863 8,332 35,024 42,987 Contribution Margin (%) (63)% ()% 7% (0)% 5% 9% 0,780 8,348 Hospital Contribution per year in TL 000s,90 (2,057) 204 (359) 205 (807) Period open for: 3 Months 5 Months 27 Months 4 Months 6 Months 28 Months 25

26 M&A Greenfield 6 Outstanding Platform for Further Growth Proven track record of greenfield expansions and M&A Total Hospitals At Year End MLP Care has added on average c.400 beds p.a. through greenfield projects since 204 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 Care actively seeks out new opportunities in acquiring existing private hospitals E 209E 2020E 0 of 30 hospitals acquired Multiple targets identified and in consideration Remaining private hospitals 492 Vast amount of potential targets 88% 2% 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 E 209E 2020E 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 26

27 Medical tourism Self-Pay 6 Outstanding Platform for Further Growth MLP Care has several avenues to continue its growth trajectory Top line growth via the favourable insurance scheme 2 Growth through revenue diversification MLP Care has increased its market share in PMI over the years, growing its revenue from private medical insurance by c.52% p.a. from 202 to 207 Top-up insurance is the fastest growing portion of the PMI market MLP Care has been a pioneer in Top-up insurance High Growth of MLP Care in the PMI market MLP Care market share in the PMI market 2% 3% 4% 5% 7% High Growth in Top-up Insurance Segment Total # of policies sold ( 000s) 2,678 2,24 2, ,703 0% X Expand premium service offering (e.g. Liv,VM) Increase elective procedure offering (e.g. Aesthetics) Self-Pay share of total pay in MLP Care revenues has risen from c. 25% in 202 to c. 33% in 207 Outstanding medical quality in line with OECD countries Comparatively affordable with c % in estimated savings compared to US treatment costs Visitors to Turkey with health / medical related purpose ( 000s) MLP Care Medical Tourism Revenue (TLm) PMI Top-up Insurance Source: TOBB Report; Insurance Association of Turkey; Medical tourism association; TURKSTAT, Departing Visitors by Purpose of Visit, Calculated as: MLP revenue from private medical insurance (excluding contracted institutions revenue) divided by the total payment made by insurers to healthcare providers 27

28 Appendix 28

29 Historical P&L Statements TLm FY FY Revenue 2,60 2,576 Cost of service (-) (,854) (2,7) Gross Profit General administration expenses (-) (27) (25) Other income Other expenses from operations (-) (69) (358) Operating Income Finance expenses (-) (27) (383) Net profile (loss) before tax (62) (7) Tax income / (expense) from operations 4 38 Net profit / (loss) (49) (33) 29

30 Historical Balance Sheet TLm Dec 3 Dec 3 Cash and cash equivalents 28 Trade receivables Inventory 45 5 Short term other assets Short term assets,06,6 Fixed assets,73,220 Deferred tax assets Long term other assets 0 43 Long term assets,420,560 Total Assets 2,435 2,72 Trade payables Short term other liabilities Short term financial liabilities (incl. leases) Short term liabilities,03,26 Long term other liabilities Deferred tax liabilities Long term financial liabilities (incl. leases) 962,76 Long term liabilities,39,355 Shareholders' equity 75 6 Non-controlling interest Total liabilities & equity 2,435 2,72 30

31 Reconciliation from Reported EBITDA to Adjusted EBITDA TLm 206A 207A Net Profit / (Loss) Before Taxes (49) (33) 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 (0) Reported EBITDA Net One-off (Gains) / Losses (47) 9 o/w One-off Net Operational FX (Gains) / Losses (44) 0 o/w One-off Revenues / Costs (3) 9 Non-cash GAAP Provision Expenses 5 Adjusted EBITDA

32 Cost Comparison as a % of Sales Mature Hospitals 8% 80% Developing Hospitals 94% 94% 30% 30% 6% 7% 9% 8% 20% 2% 3% 3% 23% 2% 24% 24% 29% 28% 2% 2% Material Doctor Personnel Rent Other 5% 7% Material Doctor Personnel Rent Other 32

33 Reconciliation from Contribution to Adjusted EBITDA TLm 206A 207A Hospital Contribution Mature Developing 8 27 A Total Hospital Contribution Other Ancillary Business Contribution¹ Other Ancillary Business Revenues Other Ancillary Business Costs (4) (49) B Total Other Ancillary Business Contribution 8 36 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 33

34 IR Contact Dr. Deniz Can Yücel Head of Investor Relations T (Ext: 48) E deniz.yucel@mlpcare.com 34