AfroCentric Investment Corporation Limited · JSE:ACT
AfroCentric Investment — FY2017 Earnings Presentation
28 slides from AfroCentric Investment's earnings presentation, 2017
Slide 1: Investor Day - 2017 Annual Results
AfroCentric GROUP CaN Investor Day - 2017 ANNUAL RESULTS
Slide 2: Dr. Anna Mokgokong, Chairperson
Dr. Anna Mokgokong Chairperson
Slide 3: Vision and mission
To relentlessly innovate a new integrated model of sustainable Empowering greater access to healthcare that measurably sustainable quality healthcare improves access to quality care
Slide 4: Antoine van Buuren, Group CEO
Antoine van Buuren Group CEO
Slide 5: CPI vs Medical inflation
0 2 4 6 8 10 12 14 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 CPI (country) Jan-13 Health Market Inflation Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Medical Insurance CPI vs Medical inflation Apr-15 Jul-15 Oct-15 Jan-
Slide 6: Health market spend
Health market spend GDP Health expenditure* USD 570.21 per capita * Latest % from the World Health Organisation (2014) 8.8%* WHO 4.5% Private Sector 5% Recommends 4.3% Public Sector
Slide 7: Growth in hospital beds
Growth in hospital beds Hospital Beds Comparison 11,000 10,500 10,000 9,500 9,000 MediClinic 8,500 Life Healthcare Netcare 8,000 NHN 7,500 7,000 6,500 6,000 2012 2013 2014 2015 2016 2017
Slide 8: Increase in hospital beds vs. medical scheme beneficiaries
Growth in hospital beds Increase in hospital beds vs. Medical Scheme Beneficiaries Medical scheme beneficiaries (millions) 2010-2013: • 6% increase in beneficiaries Private Hospital Beds • 9% increase in private beds 2013-2016: • No beneficiary growth • 9% increase in private beds
Slide 9: Medscheme initiatives to decrease healthcare costs: Co-ordination of care
Medscheme initiatives to decrease healthcare costs Co-ordination of care
Slide 10: Medscheme initiatives to decrease healthcare costs: Fraud waste and abuse
Medscheme initiatives to decrease healthcare costs Fraud waste and abuse
Slide 11: In-hospital Case Management
Medscheme initiatives to decrease healthcare In-hospital Case Management costs 15% % Change in Admission Rate 10% 5% Other Non Big 2 IHCM IHCM 0% Big 4 Big 14 -5% -10% 2015/2014 2016/2015 -15% 2017/2016 -20%
Slide 12: Medscheme initiatives to decrease healthcare costs
Medscheme initiatives to decrease healthcare costs
Slide 13: Supply Chain Optimisation
Supply Chain Optimisation Activo, Curasana and Pharmacy Direct Reducing pharma costs Increasing access to care Klinikka Reducing pain, increasing mobility Reducing back and neck surgery Wellness Odyssey Lifestyle interventions for non-communicable diseases Opticlear Addressing high margins in optome
Slide 14: Fee comparison
Fee 363 357 344 comparison 320 314 268 266 263 2015 Average 257 254 242 236 Total Fees 224 213 205 204 Ranked 200 180
Slide 15: Hannes Boonzaaier, Group CFO
Hannes Boonzaaier Group CFO
Slide 16: Results in a Nutshell: Total Revenue
Results in a Nutshell 3,785 4000 3500 Total Revenue 3,148 3000 R’million 2500 2,098 1,958 2000 1,770 1500 2013 2014 2015 1000 2016 2017 500 0 2013 2014 2015 2016 2017 Column1
Slide 17: Results in a Nutshell: Operating Profit
Results in a Nutshell 564 600 Operating 500 Profit 400 372 376 356 R’million 334 300 200 2013 2014 2015 2016 2017 100 0 2013 2014 2015 2016 2017 Column1
Slide 18: Results in a Nutshell: Profit after tax
Results in a Nutshell Profit after tax 2015 2016 2017 R’m R’m R’m Profit after tax 179 194 220 Acquisition-related Expenditure - 25 121 Sanlam Contingent Put Obligation Interest (IAS 32) 25 46 WAD Tranche 2 (market to market) 60 Sanlam Indemnity 15 Normalised Comprehensive Income 179 219 341 38% Ave
Slide 19: Results in a Nutshell: Other highlights
Other highlights Results in a Nutshell Conditional Put Option Liability of R728m removed after Sanlam profit targets were Subsequent to year end, the WAD tranche 2 achieved acquisition payment was settled in cash of R140m (R195m less Sanlam’s contribution to Cash balances stable at R770m after the a
Slide 20: Revenue Drill-Down
Revenue Drill-Down Forensic Marketing, 2% Recoveries, 1% IT, 6% Admin Health, Managed Care, 38% 25% Retail, 28%
Slide 21: Client Revenue Drill-Down
Client Revenue Drill-Down Private Dept of Dispensing, Health, 6% 6% 30% Inventory Sales, 88% RETAIL 28% 11% 8% OTHER (RAF, MARKETING) 7% 8% 2% AFRICA & INTERNATIONAL 6%
Slide 22: Expenditure Drill-Down
Expenditure Drill-Down General Expenses Depreciation Communication Consulting Fees Indirect IT Costs 4% 3% 2% 5% Premises, Furniture 4% Equipment 5% Retail Cost of Sales Personnel Costs 25% 52%
Slide 23: IT Spend
IT Spend IT Desktop Support Digital Innovation Information Security Services 5% 4% Infrastructure Support - Software Licences and 3% Maintenance support 17% Enhancements to Admin & Managed care platform Connectivity Services 30% 6% Communication Services Maintenance & Support 15% Quality for Admin a
Slide 24: Cash Flow Management
Cash Flow Management Cash Efficiency week1 week2 week3 week4 week5 50% 40% 40% 30% 20% 10% 17% 15% 14% 14% 0% -11% -7% -10% -15% -20% -29% -30% -38% -40% -50% Inflows Outflows
Slide 25: Capital Expenditure Spend
Capital Expenditure Spend R234m R244m R243m R301m 100% 10% 13% 6% 22% 20% 90% 80% 15% 17% 16% 70% 28% 60% 26% 50% 31% 55% 27% 40% 27% 30% 20% 13% 20% 10% 13% 16% 10% 11% 0% 2015 2016 2017 2018 Hardware Software Development Facilities/Land & Buildings Fusion Development
Slide 26: In a year…
In a year… 65.6 million Member/Provider 7.4 million emails sent 43.5 million Phone Calls 719 000 SMS’s sent Customer Surveys 5 million Mobi Statements R30.8 billion R56.9 billion sent out 61.9 million Value of claims Contributions Claims Processed processed Collected 590 000 Member Cards 925 000 6 m
Slide 27: Why Invest?
Why Invest? Numerous Biggest Healthcare Diversifying service government and Administrator in offerings to reduce public health South Africa (volume healthcare spend contracts already based) Track Record of EBITDA secured Consolidation-ready: growth since 2010 Large and healthy Schemes & Significant
Slide 28: Thank you for your time
sa AfroCentric Investor Day 2017 ANNUAL RESULTS united v we 2 walk — Thank you for your | time ‘
AfroCentric Investment — FY2017 Earnings Presentation on 6ix