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Investor Relations (IR)YTD Sep 2019 CARE Performance Update
Disclaimer
The material in this presentation has been prepared by CARE and is general background information about CARE activities current as at the date of this
presentation. This information is given in summary form and does not purport to be complete. Information in this presentation, including forecast financial
information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling
securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs.
This presentation may contain forward looking statements including statements regarding our intent, belief or current expectations with respect to CARE
businesses and operations, market conditions, results of operation and financial condition, capital adequacy, specific provisions and risk management
practices. Readers are cautioned not to place undue reliance on these forward looking statements. CARE does not undertake any obligation to publicly
release the result of any revisions to these forward looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of
unanticipated events. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative
manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside CARE control. Past performance is not a reliable
indication of future performance.
Unless otherwise specified all information is for the quarter ended September 2019.
Table of Contents
I. Background
II. Market Update
III. YTD Sep 2019 CARE Performance Update
IV.Q & A
3
Table of Contents
I. Background
II. Market Update
III.YTD Sep 2019 CARE Performance Update
IV.Q & A
4
National Medical Care Co.
CARE has achieved significant milestones since inception which now includes 2 flagship hospitals and a state-of-the-art healthcare center
764m*Net Revenue
62.2m*Net Profit
655Total Beds
2Hospitals
1Polyclinic
2013Year listed
327mDividends**
~2.8KTotal Staff
5
‘* Data for FY 2018** Cumulative dividends since 2013
1967 1991 2017
2013
CARE’s core assets constitute a strong platform that will enable significant growth
Accreditations
6
Operational Statistics (YTD Sep
2018 & 2019)
Description
Established in 1967 as the first private hospital in Riyadh with 47 clinics as of June 2019
330 beds, 129 beds being licensed
OPD + ER visits – 2018: 111,800 2019: 98,317
Inpatient – 2018: 4,856 2019: 4,110
ALOS – 2018: 15.9 Overall 5 acute 2019: 17.7 overall 4.7 acute
Established in 1991 with 85 clinics as of June 2019
325 beds
OPD + ER visits – 2018: 212,005 2019: 181,195
Inpatient – 2018: 6,939 2019: 5,965
ALOS – 2018: 10.3 overall 3.5 acute & 2019: 10.5 overall 3.7 acute
Operations at the clinic began in 2017 with a focus on elective treatments and dental services
8 clinics and Dermatology unit
9 physicians
CNH1
RCH2
FHCC3
Saudi Central Board For Accreditation of Health Care Institutions (CBAHI)
Joint Commission International (JCI) Accreditation
Occupancy Occupancy rate in YTD Sep 2019 was ~79% on average across both hospitals
CARE has embarked on a focused expansion strategy since 2013
7
Underwent an expansion project prior to 2012 to increase bed capacity to 330 from the original 100 beds
Licensing is underway to reach expected capacity of 459 beds by 2020
Focusing on moving long-term patients from the National Guard contract to CNH’s new wing along with a focus on GOSI patients
KPIsDescription
100
330
459
2013A 2019A 2020E
Beds
+230
+129
CNH
Be
d e
xp
an
sio
n
RCH
Be
d e
xp
an
sio
n No plans to expand bed capacity. RCH can accommodate up to 400 beds with facility modifications
Ongoing efforts to improve patient experience and patient journey.
Become a preferred service provider.
Focus on growing pediatrics, obstetrics, neonatology and general surgery
320 325 325
2013A 2019A 2020E
Beds
+5
CARE management has identified following key focus areas for future growth supported by long-standing relationships with our key customers
8
Key focus
Deepening and diversifying
existing client base
Execution of actionable cost
saving initiatives
Identification of
complementary revenue growth
initiatives
Exploring synergies with
NMC Healthcare
Key customers
CARE’s strengths come from longstanding market and brand positioning, qualified leadership, service offering and top talent
9
27 Saudi National consultants –qualified from reputable medical institutes
CARE Academy plays a crucial role in creating a pool of future talent with a cumulative 2,609 students & interns trained since the Academy was established in 2016
Recently appointed C-Suite with vast experience in the Saudi healthcare sector
Management has a proven track record in enhancing & optimizing operations
Brand awareness since 1967
Recognised brand name and the first private healthcare facility in Riyadh
Strong association with top-notch quality, reliability and consistency as attested by JCI and CBAHI accreditation for both CNH and RCH
Expertise across various specialties including:
Orthopaedic Surgery, Obstetrics, Paediatrics, General Surgery, Plastic Surgery, Neonatology, Neuro Surgery, Internal Medicine, Urology, Cardiology and E.N.T.
Prominent Obstetrics & Gynecology, Cardiovascular and Bariatric surgery units
CARE exists to humanize the healthcare industry
Table of Contents
I. Background
II. Market Update
III.YTD Sep 2019 CARE Performance Update
IV.Q & A
10
Size of the bubble –Represents Rev/Bed
11
Net
Pro
fit
Ma
rgin
Gross Profit MarginSource: Tadawul, September, 2019
Mouwasat
Dallah
Hammadi
Saudi German Hospitals
CARENPM –11.6%
0%
5%
10%
15%
20%
25%
30%
0% 10% 20% 30% 40% 50% 60%
NPM ~ 23%
NPM= 8.5 %
NPM ~ 9.3 %
NPM= 5.5 %
Average sector NPM is 11.6%
In YTD Sep 2019, the average healthcare sector net profit margin declined to ~12% down ~3 ppt from ~15% in YTD Sep. 2018. CARE’s 11.6% NPM was only surpassed by Mouwasat. Our revenue per bed remained ~30% lower than average. This is mainly due to the large number of LTC patients and the drop in operations. We remain focused on improving utilization of existing bed capacity by attracting patients with shorter average length of stay
12
-10%
5%5.7%
-9%
5%
-29%
1%
-58%
10% 8%
-85%
-75%
-65%
-55%
-45%
-35%
-25%
-15%
-5%
5%
15%
YTD 19 vs YTD 18 YTD 19 vs YTD 18
CARE Hammadi Dallah SGH Mouwasat
Revenue Growth YoY Net Income Growth YoY
Our revenue declined ~10% YoY in YTD Sep. 2019 compared to an average growth of ~5% for our peer group. Despite revenue drop, we experienced ~5% net income growth compared to an average decline of ~22% for our peer group. This reflects the continuing impact of management initiatives aimed at right sizing and right costing initiated in 2017
13
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
H1 2016 H1 2017 H1 2018 H1 2019
Tho
usa
nd
s
# of Riyadh GOSI Injuries
10.00
10.50
11.00
11.50
12.00
12.50
13.00
H1 2016 H1 2017 H1 2018 H1 2019
# of Insured Lives
3.0
3.5
4.0
4.5
5.0
5.5
2016 2017 2018 2019
Tho
usa
nd
s
Riyadh Private Bed Capacity
-
100
200
300
400
500
600
H1 2016 H1 2017 H1 2018 H1 2019
CARE Revenue
mil
lio
ns
mil
lio
ns
Healthcare providers in Saudi Arabia witnessed declines in visits as the number of insured lives experienced ~4% annual declines since H1 2016. CARE additionally experienced declines due to the drop in injuries reported by GOSI as the number of mega infrastructure projects in Riyadh declined. Furthermore, the additional private bed capacity increased competition
14
CARE was the only company in the sector to grow net profit margins over the period YTD Sep 2017-2019; up from ~ 10% in YTD Sep 2017 to 11.6% in YTD Sep 2019
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
CARE Hammadi SGH Dallah Mouwasat
Table of Contents
I. Background
II. Market Update
III. YTD Sep 2019 CARE Performance Update
IV.Q & A
15
Page | 16Finance Financial Performance Report 2019
Ave. Collection Period
vs Last Year
21618.3%
EPS
vs Last Year
1.355.5%
GP margin
vs Last Year
24.2%1.1 ppt
Net profit Margin
vs Last Year
11.6%1.7 ppt
EBITDA Margin
vs Last Year
25.1%3.6 ppt
Cash
vs Last Year
SR 305 M
109.1%
Ave. Revenue/bedvs Last Year
1,0145.8%
Ave. Cost/bed
vs Last Year
769 7.1%
Rejection Exp SR 28.6 M
vsLast Year 13.5%
YTD Net Income SR 60.4 M
vsLast Year 5.5%
YTD OPEX SR 457.4 M
vsLast Year 11.6%
YTD EBTDA SR 131.3 M
vsLast Year 4.8%
YTD Revenue SR 522.9 M
vsLast Year 10.2%
Gross Receivables
EBIT
vs Last Year
SR 79.3 M
8.1%
Operating cash flow vs Last Year
SR 28.9 M
71.2%
Key Customers 65,851(13%)
88,248(17%)
186,716(36%)
Aramco
Insurance
GOSI
100,012(19%)
49,548(9%)
MOH
NG
31,536(6%)
CASH
968(0%)
Others
523 m
GOSI
Insurance
274,448(43%)
117,556(18%)
Aramco
MOH
92,881(15%)
76,021(12%)
NG49,324(8%)
CASH
11,753(2%)
13,860(2%)
Others
636 m
Care YTD Sep Performance Summary
Table of Contents
I. Background
II. Market Update
III. YTD Sept 2019 CARE Performance Update
IV.Q & A
17
Q&A session
18
