Shalby Ltd. · NSE:SHALBY
Shalby — Investor Presentation (February 2018)
37 slides from Shalby's investor presentation, February 2018
Slide 1: Growth is Passion
OF EXPERT HEALTHCARE SHALBY MULTI-SPECIALTY —— HOSPITALS — Growth is Passion
Slide 2: Healthcare Industry Scenario
Healthcare Industry Scenario Low Double-digit EBITDA Highly Capital Intensive levels H Result - Investor Disinterest Single digit ROCE Long Payback Period Shalby is Different 2
Slide 3: Promoter
Promoter • Over two and a half decades of professional work experience across UK, USA and India. Serving as Director, Department of Knee Replacement at Shalby Hospitals since 1993 • Dr. Shah innovated zero ‘0’ Technique in 2011. This has resulted in reduction of surgery time from 2.5 hours to 8 minu
Slide 4: Our Journey so far…
Our Journey so far… 2007 1994 Operationalized Started professional First Multispecialty practice with a 6- Hospital of the bed facility group 2004 • Revenue growth - 2017 100 times in first 10 Bed capacity grown years. 10 times in 10 years • Incorporation of – to 2012 beds Company 4
Slide 5: Introduction to Shalby Limited (1 of 2)
Introduction to Shalby Limited (1 of 2) Company Overview Network of Hospitals in India with bed capacity2 Background: Established in 20041, Shalby Limited (“Shalby” or the “Company”) is one of the leading multi-specialty chain of hospitals in India (Source: F&S Report) Jaipur – 237 beds Mohali – 145
Slide 6: Introduction to Shalby Limited (2 of 2)
Introduction to Shalby Limited (2 of 2) Network of Outpatient Clinics in India1 International Footprint1 Presence in Africa Ethiopia Kenya Addis Ababa (1) Eldoret Tanzania Kampala Kisu (1) Nairobi (1) mu Nairobi (1) Uganda Dar es Salaam (2) SACE Outpatient clinics Presence in UAE UAE (2) SACE SACE O
Slide 7: Shalby’s unique business outcomes
Shalby’s unique business outcomes Growth until Current turnover recently, financed and EBITDA only through largely Strong record of Profits reinvested internal accruals. contributed by consistently being for growth - No In recent times older units. EBITDA positive dividend payouts debt used for Grow
Slide 8: Financials - Best in class
Financials - Best in class Revenue [Rs mn] E B I T DA [ R s m n ] 3328.3 797.0 2776.1 2925.0 696.8 2616.0 654.2 2298.0 1820.0 576.3 451.9 Dip due to new units 1332.2 462.1 1029.6 261.6 745.4 142.2 482.2 106.7 76.7 193.6 22.1 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007 2008 2009 2010
Slide 9: Robust Return Ratios
Robust Return Ratios RoCE % RoE % 31% 32% 88% 28% 28% 66% 20.0% 51% 17% 36% 18% 17.0% 26% 22% 9% 15% 14% 13% 20% 2% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Double Digit return ratios against industry trend of single digit 9
Slide 10: How are we able to do this?
How are we able to do this? Optimize Operational capex Efficiency due planning with to better In-house capex projects team planning Capex Opex Cycle Cycle Better Leveraging Utilities utilization of Low economies of planning to • Cost per bed ~ Rs. 4.5 space [and consumable EBITDA upwards of 20% scal
Slide 11: Operating Models
Operating Models No fixed rental Operate and Manage Fully owned [Revenue Sharing] Unique revenue No Business sharing model security deposit Model Operate SACE Acquisition and Outpatient No Clinics minimum guarantee 11
Slide 12: Shalby’s disruptive model
Shalby’s disruptive model Only player in the industry to grow 2000+ beds without any non-promoter equity funding. Growth funded entirely through internal accruals and debt recently Payback Period best in class Double digit PAT and best in class EBITDA levels. Consistent EBITDA upwards of 20% against
Slide 13: Expansion strategy across the country
Expansion strategy across the country Plans to Started from West strengthen and spread presence in West towards Central and expand India and North of further to Central, Delhi Eastern and Northern India 13
Slide 14: Typical concept of 200 bed capacity set-up
Typical concept of 200 (±20%) bed capacity set-up Facilities 10-15 kms away Local and Natural Footfalls from 4-5 kms radius helps to fill up ~70-80 beds Balance ~70-80 beds – patients come in the name of doctors reducing thereby dependency on star doctors thus controlling doctor payout % 14
Slide 15: Expansion Strategy - We go where we are relevant
Expansion Strategy - We go where we are relevant Set-up outpatient clinics where we have a strong brand recall Operating such Outpatient clinics for 15 years now Simultaneously We analyze hire local doctors So we can start Patients visit our patient trends and train them at the facility with clinics
Slide 16: Why to Expand
SHALBY ULTI-SPECIALTY Why to Expand
Slide 17: Cardiac Sciences Growth Story in India
Cardiac Sciences Growth Story in India 2014 ~ 2,00,000 surgeries and ~ 8,00,000 angioplasties 2004 ~ 50,000 surgeries CAGR – 29% in 30 years. Currently 1994 growing @ 2-3% ~5000 surgeries Wide procedure penetration– to 1984 Tier 2 and 3 cities ~500 surgeries 17 Source: Industry reports
Slide 18: Knee Replacements Growth Story in India
Knee Replacements Growth Story in India 1994 ~300 surgeries 2000 ~6000 surgeries Last year, In United States ~0.8 mn knee replacements in a population of ~300 mn 2010 ~54,000 surgeries India has a similar affording population. Hence direct potential to grow to 8 lacs knee 2017 replacements ~1,75,000
Slide 19: India is a multi class society
India is a multi class society
Slide 20: Advantage Shalby
Orthopedics specialties such as Spine, Ortho-trauma, Arthroscopy and Pediatric Orthopedics Best positioned to growing fast Experienced good capitalize on the growth in other growth opportunity specialties in Joint Replacements Shalby is pioneer in Joint Replacements in Advantage Way forward to move
Slide 21: Key Highlights FM Speech, Union Budget 2018
Key Highlights FM Speech, Union Budget 2018 Swastha Bharat, Smriddha Bharat. Demographic dividend realization impossible without proper healthcare Rashtriya Samaj Beema Yojana: 10 crore families will get 5 lakh per year for their families to cover secondary and tertiary hospital expenses National He
Slide 22: Central Government Benefits for Healthcare Sector
Central Government Benefits for Healthcare Sector • 100% depreciation on capex incurred • MAT credit can be availed for 15 years Tax • All healthcare education and training services exempted from GST • Section 80 JJAA. Applicable for wages less than Rs 25,000 per month. For additional staff, rebate
Slide 23: State Government Benefits for Healthcare Sector
State Government Benefits for Healthcare Sector • 25 percent Capital Investment subsidy on establishing multi or super specialty hospital, medical college subject to maximum Madhya limit of Rs. 50 mn in cities with population more than 1 mn and Rs. 30 mn in cities/rural areas. Pradesh • Interest sub
Slide 24: Leverage
Leverage Investment Plans for Upcoming facilities • Bed Capacity 113 Nashik • Capex – Rs. 250 mn ~Rs 1.5 bn surplus from IPO proceeds • Bed Capacity 150 Vadodara • Capex – Rs. 350 mn Enough room for leverage. Can raise ~ Rs 6.5 bn Thus a financial leverage available to • Bed Capacity 175 double the
Slide 25: Financial Results Review Q3 FY2018 and YTD ended 31.12.17
Financial Results Review Q3 FY2018 and YTD ended 31.12.17 25
Slide 26: Operational Performance Synopsis
Operational Performance Synopsis (INR in million) Quarter Ended Quarter Ended Particulars 31-12-17 % of Revenue 31-12-16 % of Revenue Growth Total Revenue 1019.99 100% 769.81 100% 32.50% Total EBITDA 257.55 25.25% 203.00 26.37% 26.87% Bed Capacity (Nos.) 2,012 1,215 65.60% Operational Beds (Nos.) 95
Slide 27: Financial Highlights Q3FY18
Financial Highlights Q3FY18 (INR in million) Particular Quarter Ended % of Quarter Ended 31-12-17 Revenue 31-12-16 % of Revenue Growth Variation Revenue from Operations 1,005.95 100.0% 752.51 100.0% 33.7% Expenses Materials & Consumables 276.71 27.5% 177.45 23.6% 55.9% 3.9% Fees to Doctors and Consu
Slide 28: Financial Performance Comparison
Financial Performance Comparison Normalized PAT (in millions) Operational EBITDA (in millions) EBITDA Margin Normalized PAT Margin 243.50 25.64% 107.84 24.21% 192.98 10.60% 8.80% 67.15 Q3FY17 Q3FY18 Q3FY17 Q3FY18 • Operational EBITDA grew by 26.2% due to increase in • Normalized PAT grew by 60.6% re
Slide 29: Revenue Composition Q3 FY18
Revenue Composition Q3 FY18 Specialty Mix Payee Profile 2.0% 14.9% 14.4% 4.2% 5.9% 9.0% 55.9% 24.6% 58.5% 10.6% Arthroplasty General Medicine & Critical Care Cardiac Sciences Other Ortho Selfpay TPA Corp-Govt Corp-Private Onco Sciences Others 29
Slide 30: Operational Performance Synopsis
Operational Performance Synopsis (INR in million) Particulars YTD Dec’17 % of Revenue YTD Dec’16 % of Revenue Growth Total Revenue 2831.99 100% 2416.15 100% 17.21% Total EBITDA 758.58 26.79% 579.76 24.00% 30.84% Bed Capacity (Nos.) 2,012 1,215 65.60% Operational Beds (Nos.) 951 762 24.80% Average Le
Slide 31: Financial Highlights YTD Dec’17
Financial Highlights YTD Dec’17 (INR in million) % of Particular YTD Dec’17 Revenue YTD Dec’16 % of Revenue Growth Variation Revenue from Operations 2,809.84 100.00% 2,388.65 100.00% 17.63% Expenses Materials & Consumables 728.72 25.93% 633.98 26.54% 14.94% (0.61)% Fees to Doctors and Consultants 59
Slide 32: Revenue Composition & Cost Structure
Revenue Composition & Cost Structure Revenue Mix Cost Structure Orthopaedic Others Administrative and Other Expenses Employee Benefit Expenses Other Operative Costs Fees to Doctors and Consultants 26.89% 28.81% 32.23% Materials & Consumables 38.24% 80.89% 75.50% 77.76% 7.98% 73.78% 6.02% 8.01% 9.96%
Slide 33: Performance Analysis
Performance Analysis Revenue from Operations (in millions) Operational EBITDA (in millions) EBITDA Margin Revenue Growth YoY 735 736 3,240 695 17.63% 2,868 26.44% 26.21% 2,810 576 2,627 22.68% 20.09% 12.95% 8.94% 9.17% FY15 FY16 FY17 9mFY18 FY15 FY16 FY17 9mFY18 33
Slide 34: Operational Matrix
Operational Matrix Bed Capacity Operational Beds FY15 FY16 FY17 9mFY18 FY15 FY16 FY17 9mFY18 951 2,012 2,012 823 781 1,295 593 907 FY15 FY16 FY17 9mFY18 FY15 FY16 FY17 9mFY18 34
Slide 35: Operational Matrix
Operational Matrix Occupied Beds ALOS (Days) ARPOB Occupancy % 4.14 324 39,904 271 34,173 33,032 4.03 40.95% 32,495 252 36.47% 3.99 34.48% 196 31.75% 3.76 FY15 FY16 FY17 9mFY18 FY15 FY16 FY17 9mFY18 35
Slide 36: Key Developments
Key Developments Historically highest revenue during the quarter Successful conclusion of the IPO of INR 5,048 million and listing on the stock exchanges Surat and Naroda units operationalized in Q2FY18 36
Slide 37: Thanks
SHALBY meee Thanks