AfroCentric Investment Corporation Limited · JSE:ACT
AfroCentric Investment — H1 2020 Earnings Presentation
20 slides from AfroCentric Investment's earnings presentation, 2020
Slide 1: AfroCentric Investment Corporation Interim Results
AfroCentric Investment Corporation Interim Results for the period ending 31 December 2019
Slide 2: 2020 Interim Review
2020 Interim Review Group CEO: Ahmed Banderker
Slide 3: State of the Medical Schemes Industry
STATE OF THE MEDICAL SCHEMES INDUSTRY Premium increases > CPI Buy-down trend to continue Low Cost Benefit Options Limited overall membership growth 14m taxpayers vs. 8.9m medical aid lives NHI uncertainty remains COVID-19
Slide 4: Our Vision and Purpose
OUR VISION AND PURPOSE OUR VISION Transforming healthcare OUR PURPOSE Enhancing the quality of life
Slide 5: Group Structure
GROUP STRUCTURE Most focused and diversified Healthcare company in Southern Africa Medical Aid Administration, Risk Pharma Cluster Corporate Solutions Management and Technology 3.7m lives Largest SA courier pharmacy Primary Care & Occupational 39% market share Full value chain acquired Health Clinic
Slide 6: Our Strategy and Approach
OUR STRATEGY AND APPROACH Transitioning to Phase 2 Phase 1 Phase 2 • Operational Excellence • Unlocking Synergies for growth • Disruptive Models • Creating value and delivering the returns Acquisition of • Investing in our People building blocks TRANSFORMING HEALTHCARE
Slide 7: 3 Year Strategic Plan
3 YEAR STRATEGIC PLAN Be the BEST at what we do… Administration Platform (Cost and performance) People skills and culture – Leadership Excellence & Culture Transformation Aggressively target Schemes with new models Explore new structures for small Schemes Exploring disruptive models Digital Initiati
Slide 8: Strategic Initiatives
STRATEGIC INITIATIVES ROBOTICS HOSPITAL OPERATIONAL STAFF TO IT OPERATING PHARMACY Process automation BENEFIT EFFICIENCIES MEMBER RATIO MODEL AUTOMATION MANAGEMENT Reduced call time Improvements Enhancement focus Proof of Concepts areas PROJECT 1st phase – July 2020 BUSINESS TEAM SPLIT RISK CX CULTU
Slide 9: Recent Achievements
RECENT ACHIEVEMENTS Approach already yielding positive results… NEW BUSINESS Acquisition of DENIS Winning MEDiPOS contracts Scriptpharm Primary Care and Occupational Health CLIENTS RETAINED PHA retained 2 Hosmed contracts Pharmacy Direct retained Medshield AWARDS FICO Decisions Award ceremony PMR Aw
Slide 10: A Track Record of Growth
A TRACK RECORD OF GROWTH OPERATING PROFIT R’m - LIVES 1 000 1000 4 500 000 900 900 4 000 000 800 800 3 500 000 21.1% Compound 700 700 3 000 000 Annual 600 600 Growth over 2 500 000 10 years 500 500 2 000 000 400 400 1 500 000 300 300 1 000 000 200 200 100 500 000 100 00 0 2010 2011 2012 2013 2014 20
Slide 11: COVID-19 - Offer of Assistance
COVID 19 - OFFER OF ASSISTANCE AfroCentric has offered its services to the National Minister of Health BASIS FOR ASSISTANCE ACT’s Pharmacy Direct has been a holder of contracts for the Centralised Chronic Medicine Dispensing and Distribution (CCMDD) programme of the National Department of Health sin
Slide 12: COVID-19 - Offer of Assistance
COVID 19 - OFFER OF ASSISTANCE AfroCentric has offered its services to the National Minister of Health Containing this airborne virus requires: ACT offered distribution to all CCMDD patients or bulk delivery to facilities of: • Awareness Information flyers / booklets • Use of hand sanitisers Hand sa
Slide 13: Interim Financial Review
Interim Financial Review Group CFO: Hannes Boonzaaier
Slide 14: Segment Revenue, Costs and Operating Profit
Medical Aid Administration, Risk Pharma Cluster Corporate Solutions Management and Technology Medscheme SA Pharmacy Direct AfroCentric Integrated Corporate AfroCentric Technologies Activo Solutions Marketing Scriptpharm Wellness Odyssey Group head office MMed EssentialMed Revenue - R’m Revenue - R’m
Slide 15: Operating Profit to Profit Before Tax
2019 2018 2017 R’m R’m R’m 398.0 294.8 283.6 Operating Profit* 35.0% 3.9% (9.4) 20.1 20.8 Net Finance Income / (Cost) n/a 3.3% (106.4) (82.0) (67.3) Depreciation / Amortisation 29.7% 21.8% IFRS 16 (Leases) Net effect (10.0) (4.5) - (3.5) 11.2 11.5 Other (n/a) 2.6% 268.7 239.6 248.6 Profit before tax
Slide 16: Operating Profit by Other Operations
Operating Profit 2019 2018 2017 R’m R’m R’m EssentialMed (Health Insurance) 2.0 (2.5) - Mmed (Surgicals / Consumables) (2.7) (2.9) - Eswatini (Administration) (4.4) (3.4) (6.7) Scriptpharm (Pharma Managed Care) 9.5 3.5 - TOTAL 4.4 (11.8) (6.7)
Slide 17: Most Notable Changes
Most notable changes 31 Dec 2019 31 Dec 2018 Notes R’m R’m Land and Buildings 263.3 119.0 Medscheme purchase of office block - R77m Activo acquisition - R278m Intangible Assets 1 265.2 937.3 Cash 205.9 275.5 Cash utilised to reduce borrowings R98 million capital reduction in less than 9 months Net B
Slide 18: Base Earnings and Headline Earnings
2019 2018 2017 574 241 554 377 554 377 Weighted average number of shares (‘000) 3.6% 0% 134.8 120.9 119.9 Base Earnings (R’000) 11.4% 0.8% 134.8 123.9 120.1 Headline Earnings (R’000) 8.7% 3.2% 23.48 21.83 21.62 Earnings per share (cents) 7.6% 1.0% 23.47 22.35 21.67 Headline Earnings per share (cents
Slide 19: Corporate Solutions and Pharma Cluster
CORPORATE SOLUTIONS PHARMA CLUSTER EssentialMed Health Insurance CMS Circular 80 Pharmacy Direct 2018 R 40.5m Wellness R 65.1m 2019 • 2018 R 4.0m *New NDoH contract stabilization • 2019 R 5.2 m MEDICAL AID ADMINISTRATION, during 2019 Other RISK MANAGEMENT AND Scriptpharm contracts • Home Based Nursi
Slide 20: Thank You
Thank You Interim Results for the period ending 31 December 2019
AfroCentric Investment — H1 2020 Earnings Presentation on 6ix