Med Life SA · BVB:M
Med Life SA — Investor Presentation (2019)
37 slides from Med Life SA's investor presentation, 2019
Slide 1: Investors and Analysts Presentation
The Largest Ecosystem on the private healthcare market in Romania One of the largest private healthcare companies in Central and Eastern Europe Investors and Analysts Presentation
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER This presentation is not, and nothing in it should be construed as an offer, invitation or recommendation in respect of Med Life SA’s securities, or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy Med Life SA’s securities. Neither this presentati
Slide 3: Contents
CONTENTS PAGE I. INTRODUCTION TO MEDLIFE ………… 4 A. KEY INVESTMENT HIGHLIGHTS ………… 5 B. HOW WE GREW ………… 7 C. MEDLIFE NETWORK ………… 10 D. BUSINESS OVERVIEW ………… 11 E. 2018 and 2019 KEY EVENTS ………… 14 II. MARKET OVERVIEW ………… 17 III. GROUP FINANCIAL SNAPSHOT A. 2018 FINANCIAL RESULTS ………… 22 B. Q1 2019
Slide 4: I. Introduction to MedLife
I. INTRODUCTION TO MEDLIFE Founded in 1996, MedLife is the leading private healthcare provider in Romania*. The Company operates the widest network of clinics, one of the large networks of medical laboratories, general and specialised hospitals and it has the largest client database for Healthcare P
Slide 5: A. Key Investment Highlights
A. KEY INVESTMENT HIGHLIGHTS ▪ Expected - highest growth of healthcare market in CEE with a 1 Romania – attractive & growing healthcare market CAGR for private healthcare of 9.6% over 2018 – 2023 ▪ Pro-Forma Sales 2018: RON 804 mln MedLife - the leading private healthcare operator in 2 Romania and o
Slide 6: Unique Revenue Capture Model - Flow of Referrals
THE LARGEST ECOSYSTEM ON THE PRIVATE HEALTHCARE MARKET Unique Revenue Capture Model - Flow of Referrals Among Business Lines CLIENT BASE SOURCES OF MED LIFE BUSINESS PAYMENT LINES % of Total Sales Q1 2019 Clinics 19% NHIH Clients paying out of pocket or covered by NHIH Laboratories Referrals Trust b
Slide 7: B. How We Grew
B. HOW WE GREW 2010 2016 1999 2004 MedLife crossed the country`s boarders and announced the first international transaction in Hungary Our own pharmacy chain is launched, PharmaLife MedLife develops a new business division, Stomatology, as well as the second brand, “Sfânta 1996 The first own The fir
Slide 8: Successful Track Record in Organic Growth and Acquisitions
SUCCESSFUL TRACK RECORD IN MANAGEMENT OF ORGANIC GROWTH AND ACQUISITIONS ORGANIC 2019 ACQUISTIONS LEGEND Hyperclinics Clinics Hospitals Pharmacies Laboratories Dental Clinics * data as at May 2019 M E D L I F E G R O U P I n v e s t o r s a n d A n a l y s t s P r e s e n t a t i o n | Page 8
Slide 9: National Footprint Captures Growth in All Regions
NATIONAL FOOTPRINT CAPTURES GROWTH IN ALL REGIONS HYPERCLINICS/CLINICS H O S P I TA L S L A B O R AT O R I E S & S P S 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 2 1 2 3 1 1 1 1 1 1 2 1 2 2 1 6 1 1 1 1 1 4 1 2 18 7 1 2 11 1 1 3 1 1 1 1 1 Legend: Day inpatient Inpatient Legend: Laboratories Sampling Point
Slide 10: C. MedLife Network
C. MEDLIFE NETWORK The two brands of MedLife Group - the only private medical Romanian service company that can use its synergies at national level to capture competitive advantages MEDLIFE BRAND NETWORK SFANTA MARIA BRAND NETWORK 20 Hyperclinics 39 Clinics 10 Clinics 10 Hospitals 25 Laboratories 8
Slide 11: D. Business Overview
D. BUSINESS OVERVIEW HEALTHCARE PREVENTION CLINICS HOSPITALS LABORATORIES PHARMACIES STOMATOLOGY PACKAGES (HPP) Mandatory Outpatient services Maternity, specialist Full range of tests Prescription, OTC Wide range of dental ALL KEY occupational health including Imagistics. and generalist facilities p
Slide 12: Business Segments: Hyperclinics and Clinics
BUSINESS SEGMENTS MEDLIFE: A PIONEER IN LARGE SCALE CLINICS AND LARGE SCALE HIGH-END LAB OPERATION • One stop shop concept - MedLife hyperclinics includes medical ambulatory specialties, providing in one single place: clinical examinations and imaging • Hyperclinics have over 20 medical offices and
Slide 13: Business Segments: Hospitals
BUSINESS SEGMENTS MEDLIFE: LARGEST OPERATOR OF PRIVATE HOSPITALS* • MedLife hospitals cover a wide range of medical and surgical specializations, reuniting the best medical staff, with significant national and international expertise • 10 hospitals – 7 inpatient hospitals and 3 day inpatient. Life M
Slide 14: E. 2018 Key Events
E. 2018 KEY EVENTS ACQUISITIONS • 100% of the shares in Polisano (approved by the Competition Council in April 2018) • 90% of the shares in Ghencea Medical Center (finalized in May 2018) • 80% of the shares in Solomed Group (finalized in May 2018) • 100% of the shares in the medical platform SfatulM
Slide 15: 2018 Key Events (Cont.)
2018 KEY EVENTS (Cont.) CREDIT FACILITIES CONTRACTED BY THE GROUP • MedLife signed a new syndicated credit facility with Banca Comercială Română, Raiffeisen Bank, BRD Groupe Société Générale and Banca Transilvania for refinancing its existing facilities, extending the maturity of the loans, rearrang
Slide 16: E. 2019 Key Events
E. 2019 KEY EVENTS ACQUISITIONS • 51% of the shares in RMC Group in Hungary (finalized in March 2019) • 65% of the shares in Badea Medica Center of Excellence in Cluj, Romania (finalized in May 2019) • Increase from 55% to 90% shares in Sama Group, Craiova under the share buy-back and exchange of sh
Slide 17: Favourable Macroeconomic Environment
II. MARKET OVERVIEW FAVOURABLE MACROECONOMIC ENVIRONMENT • The Romanian economy expanded by 5% in Q1 2019 as compared to Q1 2018 and 4.1% YoY in 2018 (2017: 6.9%; 2016: 4.8%) as compared to EU which expanded by 1.9% YoY in 2018. According to European Commission forecasts, Romanian GDP is expected to
Slide 18: Favourable Macroeconomic Environment: Living Standards
MARKET OVERVIEW FAVOURABLE MACROECONOMIC ENVIRONMENT Living standards improve on the back of economic welfare with total unemployment declining and net income and monthly expenditure increasing •The average net salary follows an increasing trend with an increase of 13% in 2018 (12% in 2017). Romaina
Slide 19: Favourable Macroeconomic Environment: GDP per Inhabitant
MARKET OVERVIEW FAVOURABLE MACROECONOMIC ENVIRONMENT CHANGE OF GDP PER INHABITANT IN PURCHASING POWER STANDARDS (PPS) IN RELATION TO THE EU-28 AVERAGE, 2007-2015 (percentage points difference between 2007 and 2015) Macroeconomic • Romania has increased with 5-15 Environment percentage points & even
Slide 20: Healthcare Market Assessment
MARKET OVERVIEW HEALTHCARE MARKET ASSESSMENT Value (EUR bn) and change (%) of the private healthcare market in Central Europe, 2015-2023 Private healthcare Because the development of private investment was market boosted by the recently introduced tax deductibility, Outpacing the rest of CE private
Slide 21: Healthcare Market Growth Fundamentals
MARKET OVERVIEW HEALTHCARE MARKET GROWTH FUNDAMENTALS The Romanian private healthcare industry has developed considerably over the Current health expenditure last few years. as percentage of GDP, 2015 Opportunities include: • A reduction in the levels of satisfaction of patients with public services
Slide 22: A. 2018 Financial Results
III. GROUP FINANCIAL SNAPSHOT A. 2018 FINANCIAL RESULTS Sales increased by : + 29% Pro-forma 2018 vs. IFRS 2017 SALES + 27.5% IFRS 2018 vs. IFRS 2017 vs. market increase by approx. 10%* + 12.9% like2like Absolute value of EBITDA increased by 32.7% Pro-forma 2018 vs. IFRS 2017 improved EBITDA margin
Slide 23: A. 2018 Financial Results (Cont.)
A. 2018 FINANCIAL RESULTS (Cont.) IFRS EBITDA is consistent with CF before WC and other monetary changes, as IFRS EBITDA was 95.4m RON, 9.3% while CF before WC and other monetary changes was 92m RON. Split of Pro-forma EBITDA between Owners of the Group / NCI for 2018: EBITDA - 90.7% to Group Owners
Slide 24: Consolidated Statements of Financial Position and Profit and Loss
A. 2018 FINANCIAL RESULTS (Cont.) Consolidated Statement of Financial Position Consolidated Statement of Profit and Loss M E D L I F E G R O U P I n v e s t o r s a n d A n a l y s t s P r e s e n t a t i o n | Page 24
Slide 25: Consolidated Statement of Cash Flow
A. 2018 FINANCIAL RESULTS (Cont.) Consolidated Statement of Cash Flow IFRS EBITDA is consistent with operating CF before WC and other monetary changes M E D L I F E G R O U P I n v e s t o r s a n d A n a l y s t s P r e s e n t a t i o n | Page 25
Slide 26: Opex Evolution
A. 2018 FINANCIAL RESULTS (Cont.) OPEX EVOLUTION Note: The Group recorded a 0.8 p.p. increase of operating expenses as % of sales in 2018 as compared to 2017. A. 0.9 p.p. decrease of “Rent" as % of Sales; and B. 1.2 p.p. increase of “Third parties and salaries expenses” as % of Sales as an effect of
Slide 27: Key Operational Metrics for 2018
A. 2018 FINANCIAL RESULTS (Cont.) KEY OPERATIONAL METRICS FOR 2018 M E D L I F E G R O U P I n v e s t o r s a n d A n a l y s t s P r e s e n t a t i o n | Page 27
Slide 28: B. Q1 2019 Financial Results
B. Q1 2019 FINANCIAL RESULTS Sales increased by : + 27.6% Pro-forma Q1 2019 vs. IFRS Q1 2018 SALES + 31.1% IFRS Q1 2019 vs. IFRS Q1 2018 + 15% like2like Improved margin: Before applying IFRS 16: 13.8% Pro-forma Q1 2019 vs. 12.2% IFRS Q1 2018 (fig_1 below) After applying IFRS 16: 17.8% Pro-forma Q1 2
Slide 29: B. Q1 2019 Financial Results (Cont.)
B. Q1 2019 FINANCIAL RESULTS (Cont.) Split of Pro-forma EBITDA between Owners of the Group / NCI for Q1 2019: 9.9% - 90.1% to Group Owners 90.1% - 9.9% to NCI EBITDA Vs. - 87.1% to Group Owners for IFRS Q1 2018 Pro-forma EBITDA to Group Owners - 12.9% to NCI for IFRS Q1 2018 Pro-forma EBITDA to NCI
Slide 30: Q1 2019 Net Result
B. Q1 2019 FINANCIAL RESULTS (Cont.) IFRS & Pro-forma: Decrease in Net Result was exclusively due to increased Financial Loss coming from: 1. Other financial expenses (i.e. loss from FX rate differences) in amount of 6.3m RON in Q1 2019 as compared to 300k RON in Q1 2018; and NET RESULT 2. IFRS 16 I
Slide 31: Consolidated Statement of Financial Position
B. Q1 2019 FINANCIAL RESULTS (Cont.) Consolidated Statement of Financial Position IFRS 16 adjustments: 1. Right-of-use asset : 105,951,764 RON; 2. Deferred tax liability: 161,837 RON; 3. Lease liability (current and long term): 106,471,190 RON; and 4. Impact in net result: (681,263) RON. M E D L I F
Slide 32: Consolidated Statement of Profit and Loss
B. Q1 2019 FINANCIAL RESULTS (Cont.) Consolidated Statement of Profit and Loss IFRS 16 adjustments: 1. Rent: release of 9,033,920 RON from Rent expense; 2. Depreciation: additional 8,541,867 RON in Depreciation expense; 3. EBITDA: increase of 9,003,920 RON; 4. Financial result: additional 1,011,480
Slide 33: Opex Evolution
B. Q1 2019 FINANCIAL RESULTS (Cont.) OPEX EVOLUTION Note: The Group recorded a 0.3 p.p. decrease of Operating Expenses as % of Sales in Q1 2019 as compared to Q1 2018, despite the increase in salaries that took place subsequent to March 2018: A. 5.2 p.p. decrease of “Rent” as % of Sales, generated b
Slide 34: Key Operational Metrics for Q1 2019
B. Q1 2019 FINANCIAL RESULTS (Cont.) KEY OPERATIONAL METRIX FOR Q1 2019 M E D L I F E G R O U P I n v e s t o r s a n d A n a l y s t s P r e s e n t a t i o n | Page 34
Slide 35: C. Mission Statement & Evolution
C. MISSION STATEMENT & EVOLUTION 2016 IFRS 2017 IFRS 2018 Pro-forma IFRS Consistent track record of strong 502.9 mRON 623.2 mRON, increased by 24% 804 mRON, increased by 29% growth of Sales MedLife units as at 31 December MedLife units as at 31 December MedLife units as at 31 December through acquis
Slide 36: C. Mission Statement & Evolution (Cont.)
C. MISSION STATEMENT & EVOLUTION (Cont.) 2016 IFRS 2017 IFRS 2018 Pro-forma IFRS EBITDA evolution in 54.6 mRON 77.9 mRON, increased by 43% 103.4 mRON, increased by 32.7% absolute figures Sustainable and improved EBITDA 10.9% EBITDA margin 12.5% EBITDA margin 12.9% EBITDA margin margin M E D L I F E
Slide 37: Thank you!
Thank you! © Med Life