Cleopatra Hospital Company
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Cleopatra Hospital Company Investor Presentation 1Q17 At a Glance 4 Operational hospitals +20 Years of subsidiary track record across our platform • Cleopatra Hospital Company (the “Group” or “CHC”), is the largest private hospital group in Egypt and consists of four operational hospitals all in Cairo, namely: 635 +2,000 Patient beds including 400 Total medical staff including c. 650 I. Cleopatra Hospital (“Cleopatra”) rooms resident doctors and c. 1400 (100% ownership) /wards and 120 ICU beds nursing staff II. Cairo Specialized Hospital (“CSH”) (53% ownership) III.Nile Badrawi Hospital (“NBH” or EGX Publicly listed on the EGX since +240,000 “Nile Badrawi”) (99.9% ownership) Cases served in 1Q17 June 2016 IV.Al Shorouk Hospital (“Al Shorouk”) (99.9% ownership) . EGP 262 mn EGP 62 mn Consolidated revenues in 1Q17 EBITDA in 1Q17 with a 24% margin Cleopatra Investor Presentation 1Q17 2 Presence in Attractive Catchment Areas Across Greater Cairo Location Mohandesin, Giza Location Heliopolis, Cairo Built-up Area 5,270 sqm Built-up Area 7,380 sqm Date Established 1996 Date Established 1984 # of Beds 120 # of Beds(2) 167 Location Maadi, Cairo Location Heliopolis, Cairo Built-up Area 10,980 sqm Built-up Area 14,600 sqm Date Established 1985 Date Established 1976 # of Beds 143 # of Beds 204 Cleopatra Investor Presentation 1Q17 3 Our Value Proposition Key Investment Highlights 1 2 3 4 5 6 Resilient and Leading position Capitalizing on Leverage on Solid financial Seasoned underpenetrated in a market with established integrated performance management market with high barriers to brand equity & platform and with potential team with structural entry subsidiary track scale to extract for enhanced strong track demand growth record synergies profitability record backed by strong corporate governance and experienced board of directors Cleopatra Investor Presentation 1Q17 5 Healthcare Expenditure (EGP bn) 194 Public Private 178 163 Resilient & Underpenetrated 149 137 131 113 117 96 107 Market with Demand Growth 83 90 98 81 83 70 53 60 55 59 65 71 77 30 36 43 50 Operating in an underpenetrated and growing market 2012 2013 2014 2015 2016f 2017f 2018f 2019f 2020f Hospital Beds / (1,000 people) (2013) Source: Business Monitor International (BMI) 1Q17 8.2 Historical Growth in Number of Beds in Egypt (‘000s) Public Private 3.5 129 128 128 128 131 2.9 2.5 2.1 2.1 1.8 1.1 27 0.9 0.5 29 29 32 33 103 99 99 97 98 Source: World Bank 2009 2010 2011 2012 2013 Source: LOGIC, WHO, CAPMAS Healthcare Expenditure per Capita (USD)(2013) Population Growth (million) % of Population Aged 65+ 9,146 5.5% New constitution that was passed in January 5.1% 5.2% 5.2% 5,006 5.0% 2014 stipulates that the government must spend a minimum of 3% of GDP on healthcare 1,569 101 808 632 88 90 92 608 336 309 189 151 86 Source: World Bank 2012 2013 2014 2015E 2020F Source: Business Monitor International (BMI) Cleopatra Investor Presentation 1Q17 6 Prevalence of Diseases in Egypt Lifestyle Diseases Cancer Prevalence (2012) (‘000 cases) 931 Estimated Incidence Prevalence (1-year) Prevalence (3-years) Hepatitis C Prevalence (2012) (‘000 cases) 6,023 492 358 208 146 3,403 145 105 83 59 54 34 26 21 17 17 14 12 10 9 9 7 6 6 6 4 3 2 1,473 1,215 254 43 25 16 7 6 Egypt USA Germany Turkey Saudi Arabia Morocco Jordan Tunisia Lebanon UAE % of Population Overweight and Obesity (2013) % Diabetes Prevalence in 20-79 years age group (2013) Overweight (BMI=25) Obesity (BMI=30) 23.9 74 19.0 70 69 67 66 66 63 62 16.6 14.9 14.8 57 55 11.5 37 9.4 9.4 35 32 34 7.9 7.9 30 31 27 29 22 20 Saudi Arabia UAE Egypt Leabnon Turkey Jordan Tunisia USA Germany Morocco Source: LOGIC, WHO, International Agency for Research on Cancer, National Center for Biotechnology Information Cleopatra Investor Presentation 1Q17 7 Leading Position in a Market with High Barriers to Entry Largest institutional hospital group in Egypt by number of …Capturing the largest share of the top 10 large private …And by number of hospitals(1) … beds(1)… hospitals in Cairo 4 635 3(4) 41% (3) (2) 300 (4) 4 out of top 10 200 (2) 241 (2) (2) (3) 145 1 1 1 private hospitals in Cairo 59% 200 200 177 165 152 145 139 120 120 110 CSH AS Salam Dar el Sheffaa Cleopatra El Do'aat Dar el Fouad Nile Badrawy Shorouk Dar el Hekma Nozha hospital Top Private Hospitals in Cairo - Existing number of beds (2015) …With significant barriers to entry Brand Equity and Track Record Economies of Scale Wide Geographic Coverage Employer of Choice Track record and reputation are key to Large investments on medical infrastructure, Wide geographic presence through multiple Ability to attract renowned doctors given patients’ selection equipment and real estate are required to facilities spread across different areas allows operational competency, quality of build scale through network expansion and for better access to a larger target market and infrastructure and reliability of patient flows achieve economies of scale. more customer reach Source: Logic, company public information Note (1): As of December 31, 2015, except for Saudi German; Note (2): Dar El Fouad and As Salam are managed as one group; Note (3): Saudi German started operations in 2016 (not fully operational yet); Note (4): Andalusia group has 3 hospitals that are all less than 100 beds each, two of which are in Alexandria and 1 in Cairo Cleopatra Investor Presentation 1Q17 8 Capitalizing on Established Brand Equity & Subsidiary Track Record Individual Subsidiary Track Record Est. 1976 Est. 1984 Est. 1996 Est. 1985 • Reputable brand in East Cairo area • Reputable brand in East Cairo area • Reputable brand in West Cairo area • Reputable brand in West Cairo area • 40 years of track record • Over 30 years of track record • 20 years of track record • More than 30 years of track record • Centrally located in East Cairo with easy • Centrally located in East Cairo with easy • Founded as a multi specialty, fully equipped • In addition to offering all specialties, NBH is accessibility accessibility therapeutic hospital recognized for complex treatments as IVF, • Largest footprint with potential for • Offers all major medical specialties • 138 resident doctors and 319 nursing staff neonatal care, organ transplant and open enhanced utilization • One of the best staffed ERs • 221 practicing physicians / consultants(2) heart surgery • 173 resident doctors and 336 nursing staff • 209 resident doctors and 473 nursing staff • Majority of consultants are university • One of the first private hospitals to • 206 practicing physicians / consultants(2) • 283 practicing physicians / consultants(2) professors introduce radiotherapy in Cairo, positioning • Majority of consultants are university • Majority of consultants are university • Acquisition of adjacent building in 2005, it as an oncology center professors professors increasing capacity from 96 to 120(1) beds • Oncology department with state of the art • In 1999, Cleopatra acquired a new adjacent • Serving GAMCA patients linear accelerator (Varian) building, expanding the hospital’s land area • Quality accreditations: • 117 highly qualified resident doctors and to a total of 1,727 m2 255 nursing staff • Quality accreditations: • 269 practicing physicians / consultants(2) • Serves GAMCA patients ISO 10002 ISO 22000 ISO 9001 ISO 9001 As of March 31, 2017 Customer Note (1): Includes OR beds Food Safety Quality Quality Note (2): Approximate figures Satisfaction All hospitals are located in catchment areas benefiting from high demand from these locations’ affluent target markets Cleopatra Investor Presentation 1Q17 9 Leverage on Integrated Platform and Scale to Extract Synergies • Centralized functions including quality control, IT, Institutionalized HR, finance, legal, business development and Group Management supply chain • Shared cost benefits • Bottom-up business planning • Standardized and improved quality • Improve collection / billing Centralized • Centralized procurement strategy and function • Enhanced operations Procurement / management • Stronger bargaining power • Leverage Group position to forge win-win • Significantly Unified Business agreements with leading corporate, and insurance enhanced margins Development clients • Function Centralized relationship with contract clients • One-stop-shop approach Cleopatra Investor Presentation 1Q17 10 Group Revenue Contribution by Hospital (1Q2017 ) Solid Financial 17% Performance* 18% Group Revenues (EGP mn) 43% 16% 17% 16% 747 864 638 263 543 139 103 211 114 44 118 128 22% 99 107 186 34 47 87 123 149 45 59 114 39 380 Cleopatra CSH NBH Al Shorouk 243 290 332 92 114 2013 2014 2015 2016 1Q16 1Q17 EGP mn, GPM) 29% Group Gross Profit ( 84 32% 35 71 29% 11 39 41 10 12 27% 40 32 46 13 17 23 31 38 18 13 32 33 140 Group Revenue Contribution by Segment 118 35 43 72 86 (1Q2017 ) 14% 2013 2014 2015 2016 1Q16 1Q17 20% 5% Group EBITDA (EGP mn, GPM) 22% 23% 4% 24% 21 21 26 60 14% 21% 21 25 8% 36 52 14 29 30 8 13 30 6 8 30 10 16 9% 98 109 10 27% 73 59 26 28 Surgeries Outpatient Clinics Inpatients Laboratories Cardiac Catheterization Emergency Room 2013 2014Cleopatra 2015 CSH 2016NBH Al Shorouk1Q16 1Q7 Radiology All Others * All historical figures are based on pro-forma financials Cleopatra Investor Presentation 1Q17 11 Key Revenue Drivers Number of Inpatients Outpatient Visits 554,764 607,215 472,319 46,886 45,794 48,825 171,913 11,985 2014 2015 2016 1Q17 2014 2015 2016 1Q17 Number of ER Patients Number of Surgeries 33,925 35,082 36,495 253,523 254,107 254,288 8,666 59,546 2014 2015 2016 1Q17 2014 2015 2016 1Q17 Cleopatra Investor Presentation 1Q17 12 Led by a Seasoned Management Team with Clear Organizational Structure Board of Directors Audit Committee Dr.