Fortis Healthcare Limited

Transcription

1 Fortis Healthcare Limited Saving and Enriching Lives B&K Annual Investor Conference Mumbai June 1, 2016

2 Disclaimer These presentation materials have been prepared by Fortis Healthcare Limited (the Company or Fortis Healthcare ) solely for the use at this presentation and have not been independently verified. You agree to keep the contents of this presentation strictly confidential. This presentation material is highly confidential, is being presented solely for your information and may not be copied, reproduced or redistributed to any other person in any manner. This presentation may not be taken, transmitted or distributed, directly or indirectly, into the United States or to any U.S. persons (as defined in Regulation S of the Securities Act) outside the United States. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented or contained in this presentation. Neither the Company nor any of its affiliates, advisers or representatives accepts any responsibility whatsoever for any loss or damage arising from any information presented or contained in this presentation. The information presented or contained in this presentation is current as of the date hereof and is subject to change without notice and its accuracy is not guaranteed. Neither the Company nor any of its affiliates, advisers or representatives make any undertaking to update any such information subsequent to the date hereof. This presentation should not be construed as legal, tax, investment or other advice. In addition, certain information and statements made in this presentation contain forward-looking statements. Such forward-looking statements can be identified by the use of forward-looking terminology such as anticipate, believe, considering, depends, estimate, expect, intend, plan, planning, planned, project, trend, and similar expressions. All forward-looking statements are the Company s current expectation of future events and are subject to a number of factors that could cause actual results to differ materially from those described in the forward-looking statements. Caution should be taken with respect to such statements and you should not place undue reliance on any such forward-looking statements. Certain data in this presentation was obtained from various external data sources, and the Company has not verified such data with independent sources. Accordingly, the Company does not make representations as to, and assumes no responsibility or liability for, the accuracy or completeness of that data, and such data involves risks and uncertainties and is subject to change based on various factors This presentation does not constitute an offer or invitation to purchase or subscribe for any securities of the Company and neither any part of this presentation nor any information or statement contained therein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. By participating in this presentation, you agree to be bound by the foregoing limitations. 1

3 Presentation Structure Fortis An Overview Operational Highlights - FY16 Hospital Business Operations Diagnostic Business Operations Financial Highlights P&L and Balance Sheet 2

4 The Founding Vision Late Dr. Parvinder Singh Founder Chairman, Fortis Healthcare Ltd. TO CREATE A WORLD-CLASS INTEGRATED HEALTHCARE DELIVERY SYSTEM IN INDIA, ENTAILING THE FINEST MEDICAL SKILLS COMBINED WITH COMPASSIONATE PATIENT CARE 3

5 Vision Saving and Enriching Lives Mission GLOBALLY RESPECTED HEALTHCARE ORGANISATION KNOWN FOR CLINICAL EXCELLENCE & DISTINCTIVE PATIENT CARE 4

6 Our Journey Acquired & divested stake in Parkway Holdings & commissioned 2 new hospitals 2011 Acquired stake in SRL (Diagnostics laboratory network) Acquired Fortis International Pte. ; Business Trust listing on SGX Commissioned FMRI, LDH & Bengaluru; Divested International Assets Acquired 10 hospitals from Wockhardt group Fortis IPO - Listing on BSE & NSE Acquired Malar hospitals, Chennai 2005 Acquired Escorts chain of hospitals; Launched Fortis La Femme 2004 Commissioning of second greenfield hospital (NCR) 2001 Started first hospital at Mohali, Punjab 5

7 The Fortis Model INDIA FOCUS - PAN-INDIA PRESENCE - SIZE AND SCALE SERVICE OFFERINGS - TERTIARY / QUATERNARY CARE - DIAGNOSTICS DOCTOR MODEL - ON ROLL, FULL TIME DOCTORS - EMPANELED AND VISITING MULTIPLE FORMATS - MARQUEE HIGH END - MULTI-SPECIALTY - BOUTIQUE AND NICHE 6

8 Operational Expanse ONE OF THE LEADING HOSPITAL CHAINS IN INDIA FORMATS SCALE OF OPERATIONS 54 HEALTHCARE FACILITIES VERTICALS 314 DIAGNOSTIC CENTRES 4,000 CLINICIANS OVER 22,000 EMPLOYEES 4,600 OPERATIONAL BEDS WITH ~10,000 POTENTIAL BED CAPACITY 7

9 India Bed Infrastructure Potential 9,000 Beds Installed 5,100 Beds 2X BED ADDITION POTENTIAL ON A AS IS WHERE IS BASIS Operational 4,200 Beds 0 1,000 2,000 3,000 4,000 East North South West NCR *East includes Central India 8

10 Key Awards & Recognitions Fortis Hospital, Mohali, won two awards at the 6th MT India Healthcare Awards 2016 held in Mumbai. The two award categories were Best Doctor in Rheumatology, and Best Innovative Medical Product of the Year Fortis Hiranandani, Vashi, has won two Quality Excellence awards for Best Healthcare Services and Dedicated Service at the 5th CMO Asia World Quality Congress, held in Mumbai Nursing Teams of Fortis BG Road and Mulund won the prestigious Association of Healthcare Providers of India (AHPI) Award for Nursing Excellence at its Global Conclave held in Mumbai Fortis Hospital, Ludhiana, won the Asian Healthcare Leadership Award for Outstanding Achievement in Healthcare - Social Cause for Charity Show for Acid Attack Fighters. Two of the Fortis facilities Fortis Noida and Fortis Mohali won the first and second prizes respectively in the Hospitals Sector at the National Energy Conservation Awards Above pertains to Q4FY16 9

11 Key Medical Accomplishments - FY16 Fortis facilities performed over 8000 joint replacement surgeries during the year FMRI successfully undertook more than 100 bone marrow transplants and kidney transplants each in less than 3 years.i.e. from the date of its launch. More than 650 liver and kidney transplants were successfully performed across the Fortis network. 50% volume growth witnessed in Liver transplants. Fortis Mulund successfully completed 11 heart transplants in the year. The first hospital to have done a heart transplant in the city of Mumbai in over 4 decades in August FY 16. FMRI has done 38 robotic surgeries since the introduction of the Da Vinci Xi technology in Dec 2015 Fortis Malar has conducted a total of 92 Heart transplants with 51 heart transplants done in FY16 10

12 Successes in Clinical Excellence FEHI, performed a complex 7-hour long open heart surgery on a month-old baby, suffering from three major cardiac ailments Transposition of Great Arteries (TGA), Ventricular Septal Defect (VSD) and Patent Ductus Arteriosus (PDA) A team of Doctors at Fortis Noida successfully treated an 8- year old girl from Oman suffering from Cerebral Palsy and severe spasticity A team of Cardiac Surgeons at Fortis Mulund, conducted two heart transplants within a span of 24 hours saving the lives of a 7-year old girl and a 28-year old man suffering from dilated cardiomyopathy A 21-year old patient from Saudi Arabia was cured of a congenital abnormal curvature of spine (Kyphoscoliotic Deformity) at Fortis Shalimar Bagh Fortis Malar created a record for conducting two heart transplants within a span of 7 hours saving the lives of an 8- year old kid and a 37-year old man Doctors ate FEHI performed a Coronary Artery Bypass Graft (CABG) surgery using total arterial grafts on a 10-year-old boy suffering from a rare genetic disorder, Homozygous Familial Hypercholesterolemia (HoFH) Above pertains to Q4 FY

13 Highlights for the year FY2016 India consolidated business witnesses operating EBITDAC* Margins of 16.4% vs 15.4% reported in corr. previous period. Revenues at Rs 4,213 Cr vs Rs 3,928 Cr in corr previous period. India consolidated operating EBITDA grows 46% to Rs 235 Crs Hospital business : Revenue at Rs 3,449 Cr vs Rs 3,207 Cr, +7.6% Operating EBITDAC* at Rs 508 Cr (14.7% margin) vs Rs 459 Cr (14.3% margin ) in FY15. Diagnostic business : Net revenue at Rs 774 Cr vs Rs 722 Cr in corr period Operating EBITDA growth of 25% to Rs 184 Cr (24.1% margin) vs Rs 147 Cr (20.4% margin) in FY15 As of March 31 st 2016, net debt stood at Rs 753 Cr ( including in the money FCCBs of Rs 562 Cr), representing net debt to equity of 0.16x ( FY 15 : 0.24 x) * EBITDAC refers to EBITDA before net business trust costs 12

14 Highlights for the year FY2016 Successfully completed exits from all the major International assets; divests Fortis Surgical Hospital and RadLink, Singapore in April and May 2015, respectively Redeemed USD 100 Mn FCCBs issued in 2010 Announcement of Acquisition of 51% economic interest in Fortis Hospotel Limited ( FHTL), an RHT subsidiary comprising the Fortis Hospital Shalimar Bagh, New Delhi and the FMRI, Gurgaon Clinical Establishments Acquired Religare Health Trust Trustee Manager Pte Ltd (RHTTM), the Trustee Manager to Religare Health Trust (RHT), of which the Company is the Sponsor. Increased stake in SRL Limited to 56% from 53% previously - acquired 3.1% equity stake form Sabre Partners, Spring Healthcare (P) Limited and Spring Healthcare India Trust. Board of the Company in its meeting held on May 26, 2016 decides to assess and evaluate value unlocking options for SRL, including by way of a demerger. SRL, is the Company s diagnostic subsidiary in which Fortis owns a 56% effective equity stake. 13

15 India Consolidated Business REVENUE EBITDAC & Margin Rs Cr 5, Rs Cr CAGR - 11% CAGR - 27% 15.3% 16.4% 18.0% 4, % 14.0% 3, % 2,000 3,448 3,929 4, % 1, % - FY14 FY15 FY16 - FY14 FY15 FY16-2.0% *EBITDAC refers to EBITDA before net business trust costs., 14

16 India Hospital Business Rs Cr 4,000 REVENUE Rs Cr CAGR - 11% CAGR - 28% 600 EBITDAC 14.3% 14.7% 3,000 2,000 1,000 2,795 3,207 3, % FY14 FY15 FY16 - FY14 FY15 FY16 Steady increase in revenues and operating margins FY16 revenues at Rs 3,449 Cr; up 7.6%. EBITDAC at Rs 508 Cr up 11% ( 14.7% margin) Continuing improvement in key operational parameters (ARPOB*, ALOS* and Occupancy) FMRI, the company s flagship facility, becomes the highest ARPOB generating hospital in the network with an ARPOB of Rs 2.51 Cr during FY16 International patient revenue for FY16 at Rs 343 Cr, representing 10% of overall hospital business *EBITDAC refers to EBITDA before net business trust costs., * ARPOB Average Revenue per Occupied Bed, ALOS Average 15 Length of Stay

17 Key Operating Metrics Occupancy Average Revenue per Occupied Bed (Rs Cr) 73% 70% 72% FY14 FY15 FY16 FY14 FY15 FY16 16

18 Specialty Revenue Mix FY15 FY16 IPD Others, 17% OPD & Others, 16% Cardiac, 28% Ortho, 9% IPD Others, 18% OPD & Others, 17% Cardiac Sciences, 25% Ortho, 9% Renal, 7% Renal, 7% Gynae, 5% Pulmo, 2% Onco, 5% Gastro, 4% Neuro, 8% Gynae, 5% Pulmo, 2% Onco, 5% Gastro, 4% Neuro, 8% 17

19 FMRI 300 operational beds with a potential to go to approx. 1,000 beds Highest ARPOB generator in the Fortis Network Rs 2.51 Cr ; annual revenue of Rs 413 Cr ( FY16) Launched the liver transplant program during the year Holistic Patient Care Exceptional clinical talent World-class infrastructure Cutting edge technology Personalized service Rs Crore Revenue ARPOB (Rs Cr) Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY

20 Select Key Hospitals Fortis Escorts Heart Institute, Delhi Fortis Hospital, BG Road ARPOB of Rs 1.82 Cr; Occupancy at 67% FY16 revenue of Rs 344 Cr Introduced Gastro and Ortho specialties ARPOB of Rs 1.44 Cr; Occupancy at 75% FY16 revenue of Rs 273 Cr Expansion underway for 210 bed block Fortis Mulund Fortis Malar, Chennai ARPOB of Rs 1.34 Cr; Occupancy at 81% FY16 revenue of Rs 281 Cr First hospital in the city to conduct heart transplant in four decades. ARPOB of Rs 1.27 Cr; Occupancy at 62% FY16 revenue of Rs 130 Cr Known for its high end surgical work viz. heart transplants, awake craniotomy and others. Has performed over 75 heart transplants. 19

21 Future Value Drivers Clinical Talent Management Attracting and retaining top quality doctors Nurturing nursing talent through operational leadership training and retention policies Fortis Medical Council formed to enhance focus on medical operations Clinical Excellence Introduced state of the art medical technologies viz Robotic surgery, Neuro navigation and ECMO (Extracorporeal Membrane Oxygenation) Investment in medical programs across various facilities - Trans catheter Aortic Valve Implantation ( Cardiac Sciences) - LINAC (Oncology ) - MRI Brain Suite ( Neurosciences ) FEHI introduced publishing of clinical outcomes, a first in the country Leaner organization structure; consolidated 5 regions into 3 Cost Efficiencies Exit from non-core facilities; Mysore, Moradabad, Agra, etc Optimizing mid-line costs. eg - centralizing select services. 20

22 Growth Initiatives O&M Model Medical Tourism In line with the asset light growth strategy. No investment by Fortis. Entire capex and Opex by promoter. Facility built to Fortis specifications. Fortis to provide its brand, systems & processes and expertise in hospital operations and management. Fortis entitled to management fee and additionally fees for project consultancy for setting up the facility. Ideally positioned with world class infrastructure and top notch clinical talent. Focus to widen network of countries and deepen presence in existing markets. Garner Institutional Business Strengthen International patient referral programs Increase Online campaigns, OPD & Surgical camps, corporate tie ups Definitive agreements in place for O&M facilities in Rajasthan, Assam, Bangladesh and Africa 21

23 New Hospitals Fortis La Femme, Bengaluru 70 bed facility focusing on Gynecology, Obstetrics & Cosmetology Commissioned in September 2015 Fortis La Femme, Bengaluru Fortis Hospital, Bengaluru (Expansion) 210 bed facility with a comprehensive cancer care facility To be operationalized in phases over the next 4-6 quarters Fortis Hospital, Arcot Road, Chennai Fortis Hospital, Arcot Road, Chennai A 200+ bed tertiary care multi specialty hospital Expected to be commissioned shortly; awaiting regulatory approval 22

24 SRL : Our Diagnostics Business The largest private player in the organized diagnostic sector in India 4 Reference Laboratories 12 Reference Laboratories Presence across > 450 towns and cities across the country Offering a comprehensive range of investigations in 310 Network Laboratories Pathology and Imaging with over 3,700 types of diagnostic tests 1139 Collection Centers Managing the largest number of hospital implants by any diagnostics network in the country 6069 Direct Clients 23

25 Accreditations Logistic Capabilities SRL has the highest number of accredited labs in the country Accreditation by CAP, NABL and NGSP Compliance with Clinical Pathology Accreditation (CPA), U.K standards and US Clinical Laboratory Standards Institute Over 450 Cities connected nationally & internationally with on-line tracking hours transit for International shipments (per specimen stability norms) All shipments under temperature controlled conditions CAP: College of American Pathologists, NABL: National Accreditation Board for Testing & Calibration Laboratories, NGSP : National Glycohemoglobin Standardization Program Level1 Certification for HbA1c 24

26 Diagnostics Business Rs Cr CAGR - 8% 653 Revenue Rs Cr CAGR 25% 17.9% 117 EBITDA 20.1% % FY14 FY15 FY16 - FY14 FY15 FY16 Robust business performance FY16 net revenues at Rs 764 Cr, up 6%; EBITDA at Rs 184 Cr, up 25% ( 24.1% margin) Added over 50 labs, 800 collection points and 9 tests during FY16. Increased capacity utilisation from 52,000 tests/day in Q1FY12 to 90,000 tests / day in Q4FY16. 25

27 Diagnostics Business Lab medicine business also includes a small proportion ( ~ 4% ) from clinical trials, wellness and the international segment 26

28 Financial Highlights FY16 vs FY15 27

29 India Consolidated P&L Particulars ( Rs Cr) FY15 FY16 Operating Revenue 3, ,213.3 Operating EBITDAC* Operating EBITDAC margin 15.4% 16.4% Net BT Costs Other Income EBITDA Finance Costs Depreciation & Amortization PBT before Foreign Exchange (Loss) / Gain (116.6) (30.1) Foreign Exchange (Loss)/ Gain (12.7) 21.1 PBT before Exceptional Item (129.3) (9.0) Exceptional (Loss)/ Gain** 0.3 (66.6) Tax Expense PAT before minority interest and share in associates (133.6) (121.6) Share in Associates PAT after minority interest and share in associates (95.1) (86.4) *EBITDAC refers to EBITDA before net business trust (BT) costs ** Exceptional loss during FY16 is largely due to closure of certain labs, exit from select non core facilities and amendment of Provision of Bonus Act 28

30 Group Consolidated P&L Particulars ( Rs Cr) FY15 FY16 Operating Revenue 4, ,275.8 Operating EBITDAC* Operating EBITDAC margin 14.1% 15.8% Net BT Costs Other Income EBITDA Finance Costs Depreciation & Amortization PBT before Foreign Exchange (Loss) / Gain (186.3) (43.5) Foreign Exchange (Loss)/ Gain PBT before Exceptional Item (183.6) 10.9 Exceptional (Loss)/ Gain** 0.3 (33.2) Tax Expense PAT before minority interest and share in associates (189.5) (69.1) Share in Associates PAT after minority interest and share in associates (143.7) (24.9) * EBITDAC refers to EBITDA before net business trust (BT) costs **Exceptional loss during FY16 is the net gains arising due to divestment of RadLink and Fortis Surgical Hospital, Singapore (Rs 84 Cr) and adjusted with losses due to closure of certain labs & non core facilities, amendment of Provision of Bonus Act and impairment loss of one 29of the company s subsidiaries.

31 Group Consolidated Balance Sheet 31 st March 2016 Balance Sheet Rs Crore Shareholder s Equity* 4,810 Foreign Currency Convertible Bonds (FCCB s) 562 Debt 933 Total Capital Employed 6,306 Net Fixed Assets (including CWIP of Rs 197 Crore) 1,731 Goodwill 2,246 Investments 1,078 Cash and Cash Equivalents 743 Net Current Assets 508 Total Assets 6,306 As of March 31, 2016, Net Debt to equity ratio stood at 0.16 x (vs 0.24x as on March 31, 2015) Shareholder s Equity includes Minority Interest. 30

32 THANK YOU Fortis Healthcare Limited B&K Annual Investor Conference Mumbai June 1,