AfroCentric Investment Corporation Limited · JSE:ACT
AfroCentric Investment — FY2019 Earnings Presentation
37 slides from AfroCentric Investment's earnings presentation, Jun 30, 2019
Slide 1: AfroCentric Investor Day 2019 Annual Results
vN AfroCentric Investor Day 2019 ANNUAL RESULTS Audited Final Results and Dividend Declaration. FOR THE YEAR ENDED 30 JUNE 2019
Slide 2: Dr Anna Mokgokong, Group Chairperson
Dr Anna Mokgokong GROUP CHAIRPERSON
Slide 3: Agenda
AGENDA Achievements Who we are and what we do Focus areas Building blocks NHI and where we want to be Ahmed Banderker GROUP CEO
Slide 4: Achievements: Acquisitions
ACHIEVEMENTS ACQUISITIONS Activo – 100% owned, PHA – 82.8% (acquired 82.8%) (acquired 74%) Sanlam Health – 100% owned Associated Fund (acquired 100%) Administrators (Botswana) – 49% owned (acquired additional 25%)
Slide 5: Achievements: Rebranding in Progress
ACHIEVEMENTS REBRANDING IN PROGRESS
Slide 6: Achievements: Medscheme
ACHIEVEMENTS: MEDSCHEME ▪ 38.8% 39.55% ▪ ▪ 19.2%
Slide 7: Achievements: Medscheme
ACHIEVEMENTS: MEDSCHEME AfroCentric GROUP Savings achieved Contracts won Healthcare savings @ Medshield hospital, disease and fraud management R2.3 billion* saved for the year, including Hospital costs and tariffs - R1.4 billion «&s) Pharmacy costs (incl. dispensing fees) - R449.8 million @ Hosmed m
Slide 8: Achievements: Pharma, Activo Pharmacy Direct
ACHIEVEMENTS: PHARMA ACTIVO PHARMACY DIRECT • Wholly owned - 1 March 2019 • Number of Prescriptions Dispensed Strong organic growth 8.7m • 6.4m • 4.1m • 2m
Slide 9: Achievements: Other
ACHIEVEMENTS: OTHER Developed p Medicine capitation solutions • Benefits for corporates • Back and neck rehabilitation • • • • • • 4 New Clients Software, transaction switching • Surgical and medical • product distribution • • •
Slide 10: Achievements: Other
ACHIEVEMENTS: OTHER Primary Health Care Care and Preventative Disease Management Occupational Health Curative Care Services Employee Wellness Organisational Emergency Medical Services Health and Wellness
Slide 11: Our Vision and Purpose
OUR VISION Transforming healthcare OUR PURPOSE Enhancing the quality of life
Slide 12: Focus Areas
FOCUS AREAS CULTURE & LEADERSHIP BE THE BEST Transformative Thinking Operational excellence Compete differently in market Bringing down the cost of healthcare
Slide 13: Focus Areas: Digital & IT
FOCUS AREAS DIGITAL & IT Medscheme with Helios Drivers ensuring value • • • • Digital priorities • • • •
Slide 14: We Are Growing
WE ARE GROWING Phase 1 Phase 2 TRANSFORMING HEALTHCARE
Slide 15: Scriptpharm: Example
SCRIPTPHARM: EXAMPLE NETWORK OF RETAIL PHARMACIES Savings Region Pharmacies R49m Acute medication Eastern Cape 150 Free State 103 Generic focused formulary R15m Chronic medication Gauteng 609 (Incl. Activo products) Pharmacy Compliance R64m TOTAL KwaZulu-Natal 299 Limpopo 61 Supply Chain Management
Slide 16: NHI
NHI AFROCENTRIC SUPPORTS Affordable, accessible and sustainable healthcare for all A health system that achieves universal coverage Parliamentary public consultation process for input Transformation of the health sector AFROCENTRIC RECOMMENDS A calm, cogent, phased introduction of NHI Clarification
Slide 17: Hannes Boonzaaier, Group CFO
Hannes Boonzaaier GROUP CFO Annual Results Presentation
Slide 18: Summarised Statement of Comprehensive Income
Summarised Statement of Comprehensive Income 2018 2019 R’million R’million Change % Healthcare Services Revenue 2 910 3 528 12% Operating Costs (2 355) (2 710) 15% Operating Profit 555 548 (1.2%) Healthcare Retail Revenue 1 302 2 038 57% Total Costs (1 234) (1 908) 55% Operating Profit 68 130 91% Gr
Slide 19: How do the numbers support the strategy?
How do the numbers support the strategy?
Slide 20: Revenue Diversification
Revenue Diversification AFROCENTRIC AFROCENTRIC AFROCENTRIC REVENUE 2017 REVENUE 2018 REVENUE 2019 MARKETING 2% MARKETING 2% MARKETING 3% OTHER IT 4% IT IT 6% 7% 6% OTHER OTHER 5% 5% ADMIN ADMIN ADMIN HEALTH HEALTH HEALTH 28% 34% MANAGED 32% MANAGED CARE MANAGED CARE 25% CARE 20% 24% RETAIL RETAIL R
Slide 21: Client Concentration
Client Concentration 3% 7% 47% 4% 39% 12% 5% 9% 9% 12% 2018 2019
Slide 22: New Startup Turnaround Cycles
New Startup Turnaround Cycles NET OPERATING PROFIT - 2019 (R'000) 5,808 5,141 2,572 1,854 971 137 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN (303) (476) (561) (209) (694) (1,132)
Slide 23: New Startup Turnaround Cycles
New Startup Turnaround Cycles NET OPERATING PROFIT - 2019 (R'000) 2,081 407 416 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN (409) (260) (361) (223) (679) (1,055) (1,660) (1,981) (2,826)
Slide 24: New Startup Turnaround Cycles
New Startup Turnaround Cycles NET OPERATING PROFIT - 2019 (R'000) 3,923 1,065 603 489 369 370 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN (64) (535) (521) (535) (624) (705)
Slide 25: Pharma Cluster
Pharma Cluster 2017 2018 2019 R’million R’million R’million A B A B B 2017 2018 2019 SCRIPTS DISPENSED ’000 ‘000 ‘000
Slide 26: What's happening in the core business?
What’s happening in the core business? 2018 2019 Membership Membership Movement SCHEMES Bonitas 331 663 336 063 4 400 Fedhealth 72 040 69 193 (2 847) Polmed 178 552 178 423 (129) Corporate Schemes 102 939 102 255 (684) Hosmed 23 092 21 446 (1 646) GEMS 693 467 710 211 16 744 Medshield 81 339 79 529
Slide 27: Healthcare Revenue South Africa
Healthcare Revenue South Africa 2018 2019 R’million R’million Change % Medscheme SA 2 262.6 2 384.0 5% - Current Business 2 262.6 2 363.0 4% - New Business - 21.0 Aid for Aids Management 81.6 87.9 8% AfroCentric Distribution Services 83.0 87.4 5% Private Health Administrators - 59.0 Wellness Odyssey
Slide 28: What is the impact of diversification?
What is the impact of diversification? 2017 2018 2019 Change 2017→ 2019 R’million R’million R’million R’million WORKING CAPITAL Cash 769.3 430.2 265.3 (504.0) Receivables 269.8 314.7 400.3 130.5 Prepayments 63.9 39.5 131.1 67.2 Current Tax 25.2 7.0 5.1 (20.1) Inventory 73.4 83.5 283.7 210.3 Payables
Slide 29: Inventory
Inventory Inventory Pharmacy Direct / Activo R’million MMed R’million Other R’million Total R’million Curasana R’million 2018 74.3 - 6.3 3.0 83.5 2019 98.4 139.1 46.2 - 283.7 Movement 24.1 139.1 40.0 (3.0) 200.2 % Change 32% n/a 639% -100% 240% Inventory Days 28.8 110.0 48.2
Slide 30: Receivables
Medscheme AfroCentric Pharmacy Activo MMed Total Receivables SA R’million Technologies R’million Direct / Curasana R’million R’million R’million R’million 132 89 98 - 8 315 2018 158 77 105 72 39 400 2019 Movement 26 (11) 7 72 30 86 % Change 20% -13% 7% n/a 362% 27% Receivable 17.1 28.7 16.2 42.2 32.
Slide 31: Payables
Payables Medscheme SA Pharmacy Direct / Activo R’million Scriptpharm R’million MMed R’million Total R’million R’million Curasana R’million
Slide 32: Cash
AHL Treasury Medscheme AfroCentric Pharmacy Activo Scriptpharm MMed Total R’million South Africa Technologies Direct / R’million R’million R’million R’million CASH R’million R’million Curasana R’million
Slide 33: Interest Earned & Paid
INTEREST EARNED & PAID 2018 2019 R’million R’million Difference Credit Facilities Interest Income 55.1 37.5 (17.6) Drawings R550m Interest Expense (1.9) (20.6) (18.7) Repaid R59m Net Interest 53.2 16.9 (36.3) Balance at 30 Jun 19 R491m Cash on Hand R265m
Slide 34: Intangible Assets
Intangible Assets Carrying Carrying Amortisation Amortisation Value Value Value Value 2018 2019 2018 2019 Goodwill 883 1 354 - - Goodwill – AfroCentric Health 410 470 - - Goodwill – Retail Cluster 474 884 - - Intangible Assets 856 1 202 90 111 TOTAL 1 739 2 556 90 111
Slide 35: Group Performance - Investor Dashboard
Group Performance - Investor Dashboard 5 Year 2015 2016 2017 2018 2019 CAGR#
Slide 36: Conclusion: Transitioning to the next phase...
Conclusion: Transitioning to the next phase... →
Slide 37: Thank You
THANK YOU WN AfroCentric Investor Day 2019 ANNUAL RESULTS
AfroCentric Investment — FY2019 Earnings Presentation on 6ix