Bumrungrad Hospital. Public Company Limited. Investor Presentation. November 2009

Transcription

1 Bumrungrad Hospital Public Company Limited Investor Presentation November 2009

2 Recent Updates Bangkok Facility 7 additional floors (of which 4 are outpatient clinics) of the new BI Clinic Building opened on 30 May 08, resulting in increase in outpatient capacity to 4,500 visits per day Renovation of the inpatient beds in the existing hospital building started in Feb 08; 298 rooms are completed as of Oct 09 Launched Healthy Living Club in mid-june 08 to attract domestic patients; 19,000 members as at Nov 09 International Expansion Asia Renal Care: Successfully acquired 60% (cumulative group holding) of a chain of 14-clinic dialysis operator in Thailand in Feb 09 Number of clinics increased to 105, in 7 Asian countries as at Oct 09 AHI in the Philippines: The expansion plans, including renovation of existing building and construction of a new 14-storey building with additional outpatient & inpatient capacity, are on schedule Bumrungrad International Limited s shareholding in AHI increased to 56.4% from conversion of management fee into equity Bumrungrad International Limited s shares in Bumrungrad Hospital Dubai have been sold back to Istithmar 2

3 Agendas Introduction to BH BH Financial Performance Bumrungrad International, Bangkok Bumrungrad International Limited Business Strategy 3

4 Fact Sheet With a 29 year track record, BH is now the leading healthcare service provider in South-East Asian region Established in 1980; listed on SET in 1989 Major operations divided into Bangkok facility and international business Bangkok Facility Facilities One of the largest and most sophisticated private hospitals in South-East Asia 538 inpatient beds and 4,500 outpatient capacity per day Thailand s leading tertiary medical center Accreditation 1 st hospital in Asia to receive US JCI Accreditation 1 st private hospital in Thailand with Thai Hospital Accreditation Patient Volume & Revenue Over one million patients treated annually International following with 420,000 international patients from 190 countries Services 19 specialist departments; 102 sub-specialist departments International Presence Asian Hospital Inc. in the Philippines with 253-bed capacity Bumrungrad Al Mafraq Hospital, a public hospital in Abu Dhabi with 488 beds (management contract) Asia Renal Care with a chain of 105 dialysis clinics in 7 Asian countries Shareholding Structure Others, 51.17% As of Mar 2009 Bangkok Bank Pcl. 1.08% Net Profit Contribution For the year 2008 Bumrungrad International Limited 5.45% Sinsuptawee AM 8.67% Bangkok Insurance Pcl % Istithmar 5.94% Temasek 5.94% UOB Kay Hian (HK) Littledown - Client Account Nominees Limited % 6.00% Total Net Profit = THB 1,191 million Bumrungrad International Hospital, Bangkok 94.55% 4

5 Regional Presence Presence in 8 countries, with 108 clinic and hospital locations Bangkok, Thailand Thailand South Korea 17 Locations 10 Locations 6 Japan 8 2 Locations Taiwan 3 33 Locations United Arab Emirates Malaysia 7 Philippines 8 Locations 4 Singapore Philippines 22 Locations 13 Locations 5

6 Group Structure Core business of BH is the renowned Bumrungrad Hospital Bumrungrad Hospital Public Company Limited ( BH ) 100.0% 100.0% 31.5% 100.0% 100.0% 30.0% Bumrungrad Medical Center Ltd. ( BMC ) Vitallife Corporation Ltd. ( Vitallife ) Bumrungrad International Ltd.* Asia Global Health Ltd. ( AGH ) Asia Global Research Co., Ltd. ( AGR ) CDE Trading Co., Ltd. ( CDE ) Owns main hospital building Comprehensive wellness center specializing in preventive care International business Regional healthcare opportunities Clinical research Dormant 56.4% 100.0% Management Contract Asian Hospital Inc. ( AHI ) Asia Renal Care Ltd. ( ARC ) Bumrungrad Al Mafraq Hospital Note: As of Nov 2009 * The strategic partners of Bumrungrad International Limited are: - Istithmar 19.5% - Temasek 19.5% - Asia Financial Holding 19.5% - Bangkok Bank 10.0% 49.0% 51.0% Asia Renal Care (Thailand) Co., Ltd. ( ARC Thailand ) 6

7 Management Team BH s management team comprises individuals with extensive experience in healthcare management K. Linda Lisahapanya Managing Director Mr. Curtis Schroeder Group CEO Dr. Sinn Anuras Group Medical Director Mr. James Mash CEO Asia Global Research Mr. Dennis Brown CEO Bumrungrad International Ltd. Mr. Mack Banner CEO Bumrungrad International, Bangkok Mr. Anthony Tan CEO Vitallife Corporation Ltd. Mrs. Lee Chan Khor CFO Bumrungrad International, Bangkok Ms. Karen Carter COO Bumrungrad International, Bangkok Ms. Janice Chan CEO Bumrungrad International Holdings (Hong Kong) Limited Mr. John Nickens CEO Bumrungrad Al Mafraq Hospital Abu Dhabi, U.A.E. Mr. Theo Seiler CEO Asian Hospital Inc. Philippines Mr. C.B. Lim CEO Asia Renal Care Limited Singapore Note: As of May

8 Third Party Recognitions: A Year of Awards 1. Thailand s Best Small Cap Company 2008 Awarded by Hong Kong-based Asiamoney magazine in January 09, based on survey of investment managers 2. Wall Street Journal Award Recognition Rank No.1 Most Admired Thai Companies Rank no. 4 overall among Thailand s top 10 companies 4. Thailand Tourism Award 2008 Award of Excellence (top prize) 5. Best International Medical Travel Website Washington D.C., 9 December Thailand Most Innovative Company By Chulalongkorn University s school of business 3. Award of Excellence, Outstanding Achievement and Special Recognition in 7. Most Desirable Companies to Work for in Thailand Bumrungrad ranks #7 overall and #1 in healthcare By Business.com Magazine APPLIED MEDICAL INFORMATICS Company with Very Good Corporate Governance Scoring By Thai Institute of Directors Association 9. Thailand Quality Class (TQC) 2008 By Office of Thailand Quality Award 8

9 Operating Performance Total Revenue EBITDA Sales (THB mm) 12,000 10,000 8,000 6,000 4,000 2,000 5,809 11% CAGR 6,807 7,896 9, ,584 8,925 EBITDA (THB mm) 3,000 2,500 2,000 1,500 1, ,351 12% CAGR 1,664 1,928 2,070 2, BH reported a one-time gain on share of profit in investment in CDE Trading (Previously GCS Thailand) in 2007 of THB 829 million, mainly from sale of GCS Thailand s assets Source: Audited FS Net Income Source: Audited FS DILUTED EPS Net Income (THB mm) 1,800 1,500 1, % CAGR 1,053 1,096 1, ,147 1,191 Diluted EPS (THB) % CAGR One-time items of THB458 million in 2007 due share of profit in investment in GCS Thailand, netted off with impairment of software system H2000 Source: Audited FS 0.0 Source: Audited FS

10 9M09 Update Revenue from Hospital Operations EBITDA THB million 8,000 6,000 6,523 3% 6,711 THB million 2,000 1,500 1,648 3% 1,701 4,000 1,000 2, Source: Audited FS 9M08 9M09 0 Source: Audited FS 9M08 9M09 Net Income THB million 1, % 946 Revenue from hospital operations was up 3% as a result of: Inpatient revenue growth of 3% Outpatient revenue growth of 5% 600 EBITDA increased by 3%, in line with the increase in revenue from hospital operations Net income increased by 5% because of lower interest expense and effective tax rate 0 Source: Audited FS 9M08 9M09 10

11 Margins & Trend Gross Margin Trend EBITDA Margin Trend 45% 30% 40% 35% 35.6% 37.6% 37.6% 38.5% 38.3% 38.7% 25% 23.4% 24.5% 24.5% 24.2% 24.3% 24.6% 30% 20% 25% 20% M09 15% M09 Net Profit Margin Trend vs. Effective Tax Rate 25% 20% 15% 16.1% 15.5% 13.9% Net Margin (LHS) Effective Tax Rate (RHS) 17.1% 13.3% 13.6% 100% 80% 60% Gross margin and EBITDA margin are on a rising trend over the past 5 years, signifying the efficiency of the operations Net profit margin, however, was more dependent on the effective tax rate 10% 28.5% 27.7% 27.4% 28.6% 5% 17.2% 12.8% 0% * M09 * Net margin in 2007 includes one-time non-operating items 40% 20% 0% BH used up all of its tax-loss-carried-forward in 2005 and paid full tax rate in 2006 onwards 11

12 Leverage Debt to Equity x Interest Coverage x M M09 Net Debt to Equity x Improvement of the balance sheet over the years, both in terms of D/E and interest coverage as the long-term debt is gradually paid-off Loan was refinanced on 1 Oct 09, with additional 0.20 credit line of THB 1.4 billion, extended repayment 0.10 schedule and lower interest rate M09 12

13 The Current Economic Environment Healthcare during recessions Our action plans Accelerate refurbishment of existing BI Hospital Building Focus on domestic market Open new international markets Tight cost control: no service effect Conserve & manage cash Continue Bumrungrad International Limited s investments as planned Hold on Dubai Source: McKinsey on Finance, Winter

14 Bumrungrad International Hospital, Bangkok 14

15 Revenue Breakdown Inpatient vs. Outpatient (% of revenue) Method of Payment (% of revenue) 100% Inpatient Outpatient Insurance 12% Corporate contracts 16% 75% 46% 47% 49% 49% 51% 51% 50% 25% 54% 53% 51% 51% 49% 49% 0% Self-pay 72% M09 As of Sept 2009 Revenue contribution from outpatient continues as majority share following worldwide trends towards ambulatory care; BI Clinic well positioned for future growth. Corporate contracts increasing especially from foreign accounts; self-pay remains the primary method of payment. 15

16 International Patients Growth International in International Revenues Patients THB mn 2,500 THB mn 2,500 International patients remain a solid customer base; BH served approximately 420,000 international patients in 2008 OPD Revenues 2,000 1,500 1, ,862 1,557 1,620 1,659 1,654 1,314 1,253 2,055 1,915 1,871 2,000 1,500 1, IPD Revenues Two main sources of international patients: - Domestic expatriate community - Foreign medical tourists Due to the generally high revenue intensity for international patients, foreign patients revenue expanded at a rate of 11% CAGR (5 years) % CAGR IPD OPD 13% CAGR Note: Revenues net of doctors fees Top growing countries are the Middle East and Mongolia, while the US is the most affected by the global economic meltdown & Thailand s political situation. Volume Contribution by Nationality 100% Revenue Contribution by Nationality 100% % of Volume 80% 60% 40% 20% 64% 62% 59% 59% 59% 36% 38% 41% 41% 41% 60% 40% % of Revenue 80% 60% 40% 20% 51% 47% 46% 45% 46% 49% 53% 54% 55% 54% 46% 55% 0% M09 0% M09 International Thais International Thais 16

17 Bangkok Facility Expansion Plan Inpatient Capacity - Open Beds Bumrungrad International Bangkok plans to expand and upgrade its facilities over the next 5 years The facilities will give a better overall hospital experience for the patients BH Tower BI Hospital Building Renovation + Expansion E 2011E 2012E 2013E 2014E M ax Capacity Outpatient Visit Capacity per day BI Hospital Building BI Clinic Building BH Tower 6,000 5,000 4,000 4,500 4,800 5,100 5,700 6,000 6,000 3,000 2,000 1,000 Outpatient: 4,500 6,000 visits per day Inpatient: beds E 2011E 2012E 2013E 2014E Opening of BI Clinic: 21 st Fl Opening of BI Clinic: 19 th & 20 th Fl Opening of BI Clinic: 18 th Fl Opening of BI Clinic: 17 th Fl * BI Clinic Building was opened in mid-2008, resulting in increase in outpatient capacity from 3,500 visits per day to 4,500 visits per day Renovation of BI Hospital Building Women s Center Digestive Disease Center 17

18 CAPEX Program CAPEX allocated by project Bt million 1,500 1, , ,161 BH Tower BI Hospital Building BI Clinic Building Maintenance 1, Total CAPEX for the capacity expansion and renovation over the next 5 years ( ): (Excluding Maintenance CAPEX) New BI Clinic Building Bt 335 million A/E 2010E* 2011E 2012E 2013E 2014E - Existing BI Hospital Building Bt 604 million - BH Tower Bt 660 million CAPEX allocated by asset type Bt million 1,500 Construction in Progress Equipment & software Building and Construction Total Bt 1,599 million 1, , , , A/E 2010E 2011E 2012E 2013E 2014E 18

19 An All New Concept BI Clinic Ground Floor Lobby, Parking and 5 floors of clinic space of the new outpatient building are now open Sky Lobby Ground Floor Lobby Welcome Center New Clinics 19

20 Complete Renovation Existing Inpatient Wards The hospital room of the future today! The rolling renovation of the inpatient wards of existing hospital building started in Feb 2008; and scheduled to be finished by Aug 2010 As of Oct 09, 298 rooms have been renovated 20

21 Bumrungrad International Limited 21

22 Bumrungrad International Limited Capital Info Total: THB 3,898 million BBL THB 422 million Asia Financial Holdings THB 823 million Total: THB 3,898 million Working Capital THB 548 million Bumrungrad Hospital Dubai, THB 94 million (USD 2.7 million) Asian Hospital THB 666 million (USD 20 million) Temasek THB 823 million Istithmar THB 823 million Asia Renal Care THB 2,590 million (USD 75 million) BH THB 1,008 million Note: As of December 2008 Capital Injected Investments Remaining commitment by Bumrungrad International Limited s shareholders is THB 450 million, Pro-rated by shareholding percentage (THB 142 million for BH) 22

23 Bumrungrad International Limited To update Current Portfolio Investments Asian Hospital, Inc. ( AHI ) Asia Renal Care Ltd. ( ARC ) Bumrungrad Al Mafraq Hospital, Abu Dhabi Ownership 56.4%* * Total percentage of ownership 100% Management Contract Partners Other shareholders: Dr. Garcia 8.2% Insular Life 11.8% Filinvest 8.3% Others 15.3% - Contractor: Health Authority of Abu Dhabi Amount & Year invested (by Bumrungrad International Limited) USD 10 million 2005 USD 10 million 2008 USD 75 million 2007 NA 2007 Business 346-bed private hospital Chain of dialysis clinics (105 clinics) 460-bed public hospital 23

24 Asian Hospital, the Philippines (AHI) 2002: Opened as a 253-bed private hospital, one of the largest in the southern Luzon corridor of metropolitan Manila, the Philippines Feb 2005: Acquired by Bumrungrad International Limited Sept 2009: Bumrungrad International Limited s shareholding in AHI increased from 43% to 56.4% from the conversion of management fees into equity and new capital injection Since the acquisition, the hospital has turned around and started to make profit in 2007 With the hospital operating at almost its full capacity, AHI is undergoing an expansion plan over the next two years to increase the number beds to 346 beds 24

25 Asia Renal Care Limited (ARC) 1997: Established by reputable financial investors June 2007: Acquired 100% by Bumrungrad International Limited Sept 2009: Headquartered in Singapore and is the leading private provider of dialysis and related services in Asia Operates inpatient and free-standing outpatient dialysis clinics in 7 countries (Singapore, Malaysia, Philippines, Taiwan, South Korea, Japan and Thailand), providing regular treatment to approximately 5,600 patients Holds leading positions in most of the high growth markets it operates, with established platform to further expand into other suitable Asian and Middle Eastern markets Expanded into Thailand in Feb 09 by acquiring Nephromed Group, a chain of 14 dialysis clinics The management plans to aggressively expand the number of clinics over the next three years No of Clinics 'Sept 09 25

26 Bumrungrad Al Mafraq Hospital, Abu Dhabi, U.A.E. Management contract signed with the Health Authority of Abu Dhabi for 4 years, December In-patient capacity of 460 acute care beds, 28 intensive care and 14 special care baby unit beds Patient volume of ~310,000 patients, including more than 25,000 inpatients annually Simultaneously, a new modern hospital building will be constructed on an adjacent site starting this year that will replace the current facility by mid

27 Bumrungrad International Limited In Summary Bumrungrad International Limited is profitable, with significant improvement in net profit from USD 1.5 million in 2007 to USD 5.5 million in 2008, as the three operating projects in the portfolio are profitable - AHI has become profitable and is generating good internal cash flow - ARC continues to be a stable source of profits - Management fees from Bumrungrad Al Mafraq Hospital is also accretive Expansion plans of the existing projects are now set - Capacity expansion of AHI - Acquisition of clinics by for ARC Bumrungrad International Limited s management continues to pursue additional investment opportunities in the region 27

28 Strategy: Growth from Insight, Intelligence and Innovation 1. New Patient Experience The renovation and expansion of the Bangkok campus not only adds capacity, but also totally re-invents the way healthcare services are delivered New outpatient clinics are designed to be more patientcentric, serving the often different needs of Thai and international patients New inpatient rooms of the future incorporate the latest of the following: + Bedside medication administration technology + Total communication and entertainment + Environmental control + Patient safety & evidence based design The Result: Bumrungrad is back on top as Asia s premier healthcare facility 28

29 Strategy: Growth from Insight, Intelligence and Innovation 2. IT Innovation Bumrungrad s 10 year investment in advanced IT has resulted in a clearly differentiated product, improved patient safety and efficiency resulting in some of the industry s highest margins and ROA. As part of its commitment to best practices, Bumrungrad Hospital in Bangkok is the first in Asia to implement a robotic pharmacy dispensing system and automated laboratory system, which will be fully integrated with its IT system. With Microsoft as a strategic alliance partner, Bumrungrad will remain at the world-wide forefront of IT healthcare technology to the benefit of the patients and shareholders. 29

30 Strategy: Growth from Insight, Intelligence and Innovation 3. Anticipating Long-Term Trends Bumrungrad s vision of the next generation of healthcare IT resulted in the 2007 sale to Microsoft of its software development company and the continued advantages of the strategic alliance. Long before others, Bumrungrad anticipated and exploited the medical tourism opportunity in1997 and is now at the vanguard of the next wave in medical travel: The Global Care Option Bumrungrad International Limited is leveraging Bumrungrad s brand equity to attract world-class investment partners to invest in healthcare opportunities throughout Asia and the Middle East. All of Bumrungrad International Limited s operating investments are profitable and growing. 30