max india limited · max secondary hospital, noida – 45% (post expansion) • max medcentre,...
TRANSCRIPT
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Max India Limited
Investor Presentation
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Max – the journey from 1985 to 1998
Pharmaceuticals Gist Brocades, The Netherlands 1983
ElectronicComponentDistribution
Motorola, USA
Avnet Inc, USA
1989
1998
Mobile Telephony Hutchison Telecommunication Ltd, Hong KongHutchison 1992
Plating Chemicals Schering AG, GermanyAtotech Deutschland GmbH, Germany
1998
Communication Services Lockheed Martin Global
Telecommunications, USA1993
COMSAT Comsat Investment Inc 1993
ATOTECH
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Life Insurance
Healthcare
Clinical Research
From B-B to B-C
From Intermediates to Consumer Service & BRANDS
New business navigators : Knowledge, Service & Focus
Re-inventing : Strategic Choice
www.maxnewyorklife.com
www.maxhealthcare.com
www.neeman-medical.com
1999 – Birth of a new Max
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Protecting Life through Life Insurance
Caring for Life through Healthcare
Improving Life through Clinical Research
Max India – Life ….. Our Focus
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Max India Limited (www.maxindia.com) is a multi-business corporate, driven by thespirit of Enterprise, focused on Knowledge, People and Service oriented businesses ofLife Insurance, Healthcare and Clinical Research. Max also maintains interests in SpecialtyPlastic Products for the packaging industry and Healthcare Staffing
Core Others
VISION
“To be one of India’s Most Admired Corporates for Service Excellence”
MISSIONEstablish niche service businesses in Life Insurance, Healthcare & Clinical ResearchLife Insurance and Healthcare……..convergence!Rank amongst top 3 players in each nichePartner with best-in-class world leadersCreate service excellence in all businesses
Max India – 2005
BSE Scrip Code: 500271, NSE Ticker: Max, Bloomberg: Max IN
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US $ Mn
Investment in Core Businesses
* Life Insurance – Max India’s stake is 74%$ Healthcare – Max India’s stake is 70%
BusinessPlanned outlay for
the business
Current Equity Investment
by Max India
Peak Equity Investment
by Max India
Life Insurance * 222 86 164
Healthcare $ 133 32 37
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Healthcare
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PRIMARYDr MaxTM Consult
GP/ FP ConsultSpecialist doctor consultationDiagnostics: X-Ray, ECGPathology CollectionTreatment Room
High-end Diagnostics:MRI, CTDoctor ConsultationSurgery & inpatientfacilities
Max Hospital-Saket
Dr Max™ Implant
Pathology CollectionFull time nurse/first aidFull/Part time doctor
PRIMARY
SECONDARY TERTIARYMax
TertiaryHospital
Max Medcentre™
& Hospital
Dr Max™
Dr Max™Dr Max™
Dr Max™
Dr Max™
Max Medcentre™
& Hospital
Dr Max™
Dr Max™Dr Max™
Dr Max™
Dr Max™
Max Medcentre™
& Hospital
Dr Max™
Dr Max™Dr Max™
Dr Max™
Dr Max™
Max Medcentre™
& Hospital
Dr Max™
Dr Max™Dr Max™
Dr Max™
Dr Max™
Max Medcentre™
& Hospital
Dr Max™
Dr Max™Dr Max™
Dr Max™
Dr Max™
Max Hospital &Max Medcentre™
• Enable retention of patient traffic• Enable ‘start-to-finish’ comprehensive, seamless care: Consult & Diagnostics, Diagnostic
tests, pre-operative work up, operations, post-operative care.
Max Healthcare Model
Heart & VascularNeurosciencesJoint Replacement & orthopaedicsObstetrics, Paediatrics & GynaecologyMinimally Invasive Surgery
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Existing Max HospitalsDr Max Clinics & ImplantsProposed Max HospitalsTertiary care Hospital
Max Healthcare – Currently Geographically Focused on the National Capital Region
(Delhi and surrounding areas)
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Indian Healthcare• Over 1 billion people,spread into many different economic classes.
• More than 200 million upper & middle class, growing at over 4% per annum, with
combined annual income of over Rs. 820,000
Crores (> $182 billion).
Health expenditure in India by funding sources:
• This explodes the myth that a majority of
healthcare spending is by the Government
• Indian healthcare industry, currently estimated at about Rs. 150,000 Crores
( $ 33 Bn), is growing at 12% to 15% per annum – to be over Rs. 300,000 Crores
( $ 65 – 70 Bn), by 2012 driven by private sector investments
Self-pay59%
Government25%
Municipal Bodies
8%
Employers6%
Foreign Aid2%
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Advantage IndiaCore Competencies
“International Class Treatment at Domestic Costs”
Quality
Huge resource of highly trained doctors, nurses & paramedics
Comfort Level
Doctors of Indian origin recognized as amongst best in USA & UK
English Language
Value Proposition
Lower drug costs
Quality medical services at substantially lower costs
24x7 Physician, Nursing & Paramedic Availability
HIS
Unique Holistic basket: Ayurveda, Naturopathy, Allopathy
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Current Facilities
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Secondary Care Max Hospitals operational at:
Current Facilities
PANCHSHEEL PARK (February 2001)
•25 inpatient beds•1+1 OT•Full range diagnostics•PHP & OPD
PITAMPURA(February 2002)
•100 inpatient beds•2+1 OT•Full range diagnostics•PHP & OPD
NOIDA(August 2002)
•40 inpatient beds•2+1 OT•Full range diagnostics•PHP & OPD
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HEART & VASCULAR INSTITUTE – SAKET
• 250 patient beds
• 3 Operation Theatres, 2 Cardiac Catheterization Labs
• Total covered area of approx.150000 sq. ft.
• Post Surgery Critical Care Unit
• High Dependency Unit
• Apex Coronary Care
• Advanced Coronary Care Unit
• Exclusive well equipped ‘Observation Bay’and ‘Post Cath. Recovery’
• Centralized Emergency Command withAdvanced Cardiac Life Support Ambulancesand Air Evacuation Service.
Operational since January 2005
Current Facilities
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MAX HOSPITAL – PATPARGANJ
125 Bed Hospital; only one of its kind in EastDelhi comprehensive with full range ofservices include
• Cardiac Catheterization Lab• Non-invasive Cardiology• Mother & Child• PHP• Dialysis• Blood Bank• Traumatology• All other Specialties
Operational since May 2005
Current Facilities
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OPTHALMOLOGY & DENTAL CENTER – PANCHSHEEL
• Lasik, OPD and Diagnostics• Dental – 3 chambers, OPG and Lab• Support Services and Offices (N & S)• Training / Conference room
Current Facilities
Operational Since November 2005
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Occupancy* improving at each of the healthcare facility• Max Tertiary Hospital, Saket – 51% (Facility launched in Jan’05)• Max Secondary Hospital, Patparganj – 68% (Facility launched in May’05)• Max Secondary Hospital, Pitampura – 53% (Post expansion)• Max Secondary Hospital, Noida – 45% (Post expansion)• Max Medcentre, Panchsheel – 85% (Post expansion)
Max hospital at Patparganj launched in May’05 achieves EBITDAbreakeven
All Secondary care hospitals expected to achieve EBITDA breakeven by Mar’06.Facilities at Panchsheel & Noida already EBITDA breakeven.
Over 700 leading Doctors• Number of Physicians on rolls – 218• Number of visiting consultants – 493
Over 280 leading Corporate Clients
Registered Patient base of over 300,000• Patient transactions per month crosses 50,000 mark
Current Status
Total Targeted Bed Volume – 1500 by 2008*Occupancy has been calculated on operational beds
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Max Healthcare – Project Cost & Funding (Phase 1)
Project Cost
US$ 133 million
Equity
US$ 72 million
Debt
US$ 61 million
Max India – Promoters- Current – $32 Mn- Future – $5 MnWarburg Pincus – $31 Mn
Other Foreign Investors – $4 Mn
HDFC – $23 Mn
Other Indian Banks and Financial Institutions – $38 Mn
Debt – Equity Ratio: 0.84
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Upcoming Facilities
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Launch in March 2006
• 225 beds (including 70 critical care beds)
• To include:
• 7 OTs, 20 Consult Chambers
• Tower Specialties – Ortho, Neuro, Woman& Child and MIS
• Brain Lab (first in Asia) & intra operativeMRI
• DSA Lab (for Neuro Sciences)
• Emergency Services
• Estimated Project Cost – US $28 Mn
MAX HOSPITAL – SAKET
Upcoming Facilities
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MAX HOSPITAL – GURGAON• 100 bed Hospital with 4 OTs• Tower Specialties to include:
• Obstetrics, Paediatrics & Gynaecology (incl. Infertility)
• Nephrology & Urology• Plastic & Reconstructive Surgeries• General & Minimally Invasive surgeries• Launch by December 2006
Upcoming Facilities
• Tertiary care hospitals at Saket to be scaled up to 500 beds
• Patparganj hospital to add another 300 beds in adjoining landin the second phase.
• Dr Max Clinics at key locations for patient flow into the Maxhospitals
8 Hospitals by 2007 in and around NCR
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Phase 1 – National Capital Region Roll-out Refinement of Current NCR Portfolio and
Selected Expansion
Expansion Opportunities
Strategic choices based on:− Learnings from
NCR roll-out− Leveraging the
collective intellectual capital in the senior management team
− Discipline of rigour and validation
− Innovation and risk taking ability
− Faster decision making
National
Beyond NCR
International
Initial focus – Middle East, Central Asia, Indian Sub-continent
Max Healthcare – Thinking Ahead
PSH
PPA
NDA
SKT (E)
PPG
SKT (W)
Secondary Care Tertiary Care
GGN
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PAT (12.4) (17.5) (6.9) 5.7 12.5 16.2
US$million
Max Healthcare – Projected Financials
Cash Profit (9.4) (14.5) (1.3) 10.7 17.3 20.6
EBITDA (6.0) (9.2) 5.7 18.3 25.1 28.2
FY 05 FY 06 FY 07 FY 08 FY 09 FY 11
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Medical/Clinical Collaboration
• Medical
• Nursing
• Paramedical
Advanced Heart Physicians and Surgeons Network, New York
Team Comprising of • Dr V Subramaniun – Chairman, Cardio Thoracic Surgery,
Lennox Hill Hospital, New York• Surgeons
- Dr Didier Loulmet- Dr George Tolis- Dr James Fonger- Dr Nilesh Patel- Dr Dr Nirav Patel
Areas of Collaboration • Implementation of Advanced Minimally Invasive Cardiac
Surgery Program• Training of Max Healthcare Surgeons• Promotion of Programs & Brands• Education & Joint Research
• Scope- Training- Research- Education
• Exchange Programs – Exchange visits of appropriate personnel
• Exchange clinical and medical expertise between their medical staff and facilities
• Knowledge sharing of medical procedures, equipment and protocols
• Referral of MHC patients seeking medical care in the US
University of Nebraska Medical Center (UNMC)
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Life Insurance
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Joint Venture between Max India & New York Life International
NYL, ranked 68th in Fortune 500 companies provides insurance domain expertise
NYL is one of the oldest mutual life insurance company in the US with over $200billion in assets under management
Max India contributes local market understanding and managing regulatoryenvironmentRobust business performance – Peak equity investment to be increased from$135 Mn to $222 Mn
MAX NEW YORK LIFE INSURANCE
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1) Full Suite of products with a focus on protection
Long Tenor products , Young customer base
Unit Link in place: contributes 45% of total sales for the Company for the period Jan – Dec 2005
2) Build best in class agency
Productivity order of magnitude higher than competition
Most reputed in-house training (over 100 trainers)
Over 400 hours of training
3) Wide geographic coverage
48 Own agency offices
Deep penetration in to Punjab – 8 offices and 32 rural branches
Corporate agent coverage extends to an additional 100 towns
Emerging bancassurance channel getting established – Partnership with 11 banks, current access covers 193 branches across 13 locations
MNYL’S Strategy to build a Strong Life Insurance Business
36 agency offices planned in 2006
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7) High embedded value / appraisal value creation
First life insurer to be awarded the ISO 9000 : 2001 certification6 sigma program underwayBalanced scorecard approach
Good Audit & Compliance orientation
6) Strong customer trust and credibility
Balanced investment approach with a very long term view
– 73% of portfolio consists of long tenor government paper
– 23 % in AA+ and better corporate bonds
No asterisks in advertising
Honest illustration
– Controlled centrally
– Sent along with policy
MNYL’S Strategy to build a Strong Life Insurance Business
5) Strong quality orientations to business
4) Current paid up capital base of $117 Mn
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Protection Oriented, Longer Tenor Life Insurance
Actuarial Persistency of 79.9 % by Premium85% of portfolio is participating (excluding rural)
As on Dec 31st, 2005
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1DEFERRED ANNUITY
24MONEY BACK
10
8
UNIT LINKED
EASY TERM
4TERM
22ENDOWMENT
31WHOLE LIFE
PROPORTION OF POLICIES (%, by
number)PRODUCT TYPE
Tenure (Years)
Age of Insured(Years)
24 34
MNYL Average MNYL Average
17
22
26
34
37
3522
12
42
23 37
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Established Ourselves amongst the Leading Agency Sales Force
Source: IRDA Journal, media reports, Life Insurance report from Kotak Securities and team inputs
Adjusted Single Premium
New Business Apr -Dec 2005 (Agency)
(US$ Mn)Agents
Premium per Agent * ($) Cases per Agent *
193 60000 268 0.6
94 60000 130 0.4
63 28000 187 0.5
53 10753 415 1.8
31 20000 128 0.2
27 35000 64 0.3
21 11000 160 0.4
23 11000 174 0.5
16 6000 223 0.4
6 6500 79 0.5
7 4000 152 0.6
4 4000 92 0.8
* In terms of highest new business premium (Agency)
Rank4 Rank1Rank1
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Our Footprint
Actual customer base spread
over 100 cities
Cities Offices
Own 29 48
Franchisees 09 10
Total 38 58
Delhi
PuneHyderabad
Bangalore
Ahmedabad
Mumbai
Chennai
Kolkata
Jaipur
Surat
Ludhiana
Jalandhar
Amritsar
NoidaGurgaon
Rajkot
Jodhpur
Patiala
Bhatinda
Sangrur
Coimbatore
NasikUdaipur
Aurangabad
Phagwara
Navashahar
Moga
Baroda
Cochin
Trivandrum
Thane
Indore Nagpur
ChandigarhPunjab
VizagVijaywada
Faridabad
Lucknow
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Market Position–2005 Insurance Sales (US $ Mn)
Individual New Business Premium (Apr-Dec 2005)
Policies (‘000)(Apr-Dec 2005)
ICICI Prudential 276 492Bajaj Allianz 144 379HDFC Standard Life 105 222Birla Sun Life 73 150Max New York Life 62 298Tata AIG 59 211Aviva 46 88All Others 103 378Total Private Life Insurers 868 2218MS of Private Players(%) 35 12
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Source: Insurance Regulatory & Development Authority, Adjusted to include only 10% of Single PremiumAll Others include: Kotak Old Mutual, ING Vysya,SBI Life, Metlife, Reliance, Sahara, 1 US$ = Rupees 45
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MAX NEW YORK LIFE INSURANCE
Dec-05 Dec-04 Dec-05 Dec-04
a) Sales Value (Annualized first year premium) $ Mn 26.9 16.9 95.1 47.6 100%
b) Average case size per agent $ 369 301 349 272 28%
c) Case rate per agent per month No. 2.29 2.14 1.84 1.76 5%
d) Number of agents No. 12,575 6,908 12,575 6,908 82%
e) Net agents added No. 1,908 353 5,667 1,838
f) MDRT agents No. 202 126 60%
g) Overall persistency rate % 75.20 82.90
h) Gross written premium income $ MnFirst year premium 26.0 16.0 68.6 42.5 61%Renewal premium 19.0 12.1 59.0 30.0 97%Single premium 4.6 1.1 13.5 3.7 261%Total 49.6 29.2 141.1 76.3 85%
i) Paid up Capital $ Mn 117.2 95.8 22%
j) Sum insured in force $ Mn 5,227.6 3,387.6 54%
YoY GrowthKey Business Drivers Unit Quarter Ended Year Ended
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Other Businesses
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NEEMAN MEDICAL INTERNATIONAL
Neeman Medical International is a value added ClinicalResearch Service Organization. Neeman’s goal is toprovide highly competent GCP/ICH compliant Investigators inseveral geographies, who have access to patients anddedicated Clinical Research Coordinators. This allowsNeeman to accelerate patient enrollment and generate highquality data.
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North America
AlabamaNorth CarolinaNew JerseyTexasWisconsinArizonaPhiladelphia
San Jose, Costa Rica
Established brand and service quality
India
32 sites in 9 Major CitiesLarge diverse populationTie ups with 9 hospitals
Latin America
NicaraguaBrazilArgentinaChileGuatemala
NEEMAN MEDICAL INTERNATIONAL
EXPANDING GEOGRAPHIES
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NEEMAN MEDICAL INTERNATIONAL
Working towards Preferred Service Provider status
• Through sustained positioning efforts, getting sponsor Pharma companies to direct CROs towork only with Neeman.
• Re-working business mix: Towards direct sponsor company centric from CRO centric as oftoday.
Commissioning of Database Management Centre in New Delhi in process.
• To commence operations in April-June’06 quarter.
Neeman Asia
• Profitable with margins exceeding 30%.
• Aggressively expanding capacities – Alliances with 9 hospitals across 9 cities for researchsites, the most recent is with Bangalore Medical College (3000 Beds; 2,000,000 OPDs p.a.)
• Favorable Patent Regulations to catalyze exponential growth.
• Impressive operating standards – 2 Successful FDA audits, first ever Indian sites to beinspected by the US FDA.
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Neeman Latin America
• Currently operating in Costa Rica and Nicaragua
• Expands to Brazil, Argentina and Chile
• Working on potential alliance in Guatemala
• Having 13 years of Clinical Research operations
• 140 trials conducted. Audited by US FDA 5 times
Neeman USA
• Located in 7 states across North America
• Working with all pharma majors as well as leading CROs
• Aggressively expanding capacities and operational capabilities
NEEMAN MEDICAL INTERNATIONAL
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Substantial expansion plans approved in December 2005Addition of a new BOPP film manufacturing line with a capacity of 20,000 TPA.Addition of a new thermal lamination film line with a capacity of 120,000 KSM.Estimated project cost of $27 Mn – Debt-Equity mix of 1:1.Maintain leadership position in speciality plastic films segment.
Generates revenue of $22 Mn, and PBT of $2Mn for first nine monthsended Dec’05.
MaxFoil achieves revenue growth of 49% year-on-year.
100% capacity utilization – installed capacity 8,800 tons per annum.
High production yield.
Highest return on capital employed of $15 Mn – 21%, better thancompetitors.
MAX SPECIALITY PRODUCTS
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Thank You