Roadshow Bumrungrad Hospital Public Company Limited Investor Presentation April 2008 1
Company Highlights Bangkok Facility Construction of 7 additional floors (of which 4 are outpatient clinics) of the new BI Clinic Building is underway; completion is expected to be 1 May 2008 Renovation of the inpatient beds in the existing hospital building started in Feb 08 Buy-back of BH Tower completed in Feb 08 International Expansion Asia Renal Care: Successfully obtained USD 20 million multi-currency credit facility for future expansions One acquisition of clinic in Taiwan in March 08 AHI in the Philippines: AHI successfully obtained a Peso 1.9 billion credit facility, which was partially used to refinance its existing loan and partially was additional loan for expansion AHI raised additional capital for the expansion, resulting in Bumrungrad International Limited s effective shareholding in AHI to increase to 53.2% The expansion plan includes renovation of existing building and construction of a new 14-storey building with additional outpatient & inpatient capacity 2
Agendas Introduction to BH BH Financial Performance Business Strategy The Bangkok Facility International Expansions 3
Introduction: Major Shareholders BH s major shareholders are mainly founders, strategic partners and institutional investors Bangkok Insurance Public Company Limited Sinsuptawee Asset Management Company Limited Bangkok Bank Public Company Limited 8.66% 13.12% 1.08% HSBC (Singapore) Nominees PTE Ltd. Fidelity Investments International Istithmar PJSC Temasek Holdings (Private) Ltd. Others 8.06% 8.36% 5.94% 5.94% 48.84% Bumrungrad Hospital Public Company Limited ( BH ) Note: As of January 2008 4
Introduction: Group Structure Core business of BH is the renowned Bumrungrad Hospital Bumrungrad Hospital Public Company Limited ( BH ) Bumrungrad Medical Center Ltd. ( BMC ) 100.0% 31.5%* 100.0% Bumrungrad International Ltd. Vitallife Corporation Ltd. ( Vitallife ) 30.0% CDE Trading Co., Ltd.** ( CDE ) Owns main hospital building International Business Comprehensive wellness center specializing in preventive care Dormant 53.2% 49.0% 100.0% Asian Hospital Inc. ( AHI ) Bumrungrad Hospital Dubai Asia Renal Care Ltd. ( ARC ) Note: As of March 2008 * BH s strategic partners in Bumrungrad International Limited are: - Istithmar 19.5% - Temasek 19.5% - Asia Financial Holding 19.5% - Bangkok Bank 10.0% ** Name change from Global Care Solutions (Thailand) Co., Ltd. in December 2007 after completion of the sale of its core assets, H2000 hospital software to Microsoft 5
Introduction: Fact Sheet With a 27 year track record, BH is now the leading healthcare service provider in South-East Asian region Bangkok Facility Facilities Accreditation Patient Volume & Revenue Services One of the largest and most sophisticated private hospitals in South-East Asia 554 inpatient beds and 3,500 outpatient capacity per day Thailand s leading tertiary medical center 1 st hospital in Asia to receive US JCI Accreditation 1 st hospital in Thailand with Thai Hospital Accreditation Over one million patients treated annually International following with 430,000 international patients from 190 countries 19 specialist departments 102 sub-specialist departments International Presence Hospital Group Asian Hospital Inc. in the Philippines with 253-bed capacity Bumrungrad Hospital Dubai with 250-bed capacity (to be operational in 2009) Bumrungrad Al Mafraq Hospital, a public hospital in Abu Dhabi with 488 beds (management contract) Dialysis Clinics Asian Renal Care with a chain of 80 dialysis clinics in 6 Asian countries 6
Introduction: 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. Dennis Brown CEO Bumrungrad International Ltd. Mr. Mack Banner CEO Bumrungrad International, Bangkok Medical Director 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. Clyde H. Eder CEO Bumrungrad Hospital Dubai Dubai, U.A.E. Mr. Ralph Beaty CEO Bumrungrad Al Mafraq Hospital Abu Dhabi, U.A.E. Mr. Eric Fox CEO Asian Hospital Inc. Philippines Mr. C.B. Lim CEO Asia Renal Care Limited Singapore Note: As of January 2008 7
Operating Performance Y2003-2007 2007 Total Revenue EBITDA Sales (THB mm) 10,000 8,000 6,000 4,000 2,000 4,620 20% CAGR 5,809 6,807 7,896 9,413 829 8,584 EBITDA (THB mm) 2,400 2,000 1,600 1,200 800 400 1,025 1,351 19% CAGR 1,664 1,928 2,070 0 2003 2004 2005 2006 2007 BH reported a one-time gain on share of profit in investment in GCS Thailand in 2007 of THB 829 million, mainly from sale of GCS Thailand s assets Source: Audited FS Net Income 0 2003 2004 2005 2006 2007 Source: Audited FS DILUTED EPS Net Income (THB mm) 1,800 1,500 1,200 900 600 300 666 25% CAGR 935 1,053 1,096 1,605 458 1,147 Diluted EPS (THB) 2.0 1.5 1.0 0.5 0.78 1.01 24% CAGR 1.21 1.26 1.85 0 2003 2004 2005 2006 2007 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 2003 2004 2005 2006 2007 8
Margins & Trend Gross Margin Trend EBITDA Margin Trend 40% 38.5% 30% 38% 36% 36.7% 35.6% 37.6% 37.6% 25% 20% 20.6% 22.3% 23.4% 24.5% 24.5% 24.2% 34% 34.6% 32% 15% 30% 2002 2003 2004 2005 2006 2007 10% 2002 2003 2004 2005 2006 2007 Net Profit Margin Trend vs. Effective Tax Rate 24% 20% 16% 12% 8% 4% 0% 14.4% 16.1% 15.5% 13.9% 17.1% 6.2% 28.6% 28.5% 12.8% Net Margin (LHS) Effective Tax Rate (RHS) 17.2% 2002 2003 2004 2005 2006 2007** * No tax payment in 2002 and 2003 because of tax-loss-carried-forward ** Net margin in 2007 includes one-time non-operating items 100% 80% 60% 40% 20% 0% Gross margin and EBITDA margin are on a rising trend over the past 5 years, signifying the efficiency of the operation Net profit margin, however, was more dependent on the effective tax rate BH has used up all of its tax-loss-carried-forward in 2005 and paid full tax rate in 2006 onwards 9
Leverage Debt to Equity Interest Coverage x 2.00 1.50 1.99 x 20.0 16.0 15.6 17.7 18.7 1.00 0.50 1.03 0.68 0.54 0.41 12.0 8.0 4.0 8.5 11.4 0.00 2003 2004 2005 2006 2007 0.0 2003 2004 2005 2006 2007 Net Debt to Equity x 1.00 0.97 0.80 0.60 Significant improvement of the balance sheet over the years as: Debt outstanding position decreases Shareholders equity improves as a result of better performance 0.40 0.37 0.39 0.27 0.28 0.20 0.00 2003 2004 2005 2006 2007 10
Business Strategy Bangkok Capacity Expansion Selective domestic acquisitions/affiliations Business Strategy Dominant healthcare provider in the region Ancillary businesses: Vitallife International expansion through Bumrungrad International Limited 11
The Bangkok Facility 12
Revenue Breakdown Inpatient vs. Outpatient - Quarterly (% of revenue) Method of Payment (% of revenue) 100% 75% Inpatient Outpatient 46% 46% 47% 49% 49% Insurance 13% Corporate contracts 17% 50% 25% 54% 54% 53% 51% 51% 0% 2003 2004 2005 2006 2007 Info. as of December 2007 Self-pay 70% Revenue contribution from outpatient gradually moves up as technology allows more inpatient procedures to be done in outpatient clinics Although self-pay remains the primary method of payment, the composition is slowly moving towards more insurance and corporate contracts 13
International Patients OPD Patients Growth International in International Patients Patients 400,000 300,000 200,000 100,000 0 294,643 9,233 353,660 11,726 378,613 12,946 Volume Contribution by Nationality 100% 417,906 413,203 14,048 2003 2004 2005 2006 2007 9% CAGR IPD OPD 9% CAGR 13,195 20,000 15,000 10,000 5,000 0 IPD Patients BH served approximately 430,000 international patients in 2007 Top growing countries are the Middle East and Ethiopia (opened rep office in 2006). Due to the generally high revenue intensity for international patients, foreign patients revenue expanded at a very fast rate of 19% CAGR (5 years) Two main sources of international patients - Domestic expatriate community - Foreign medical tourists Revenue Contribution by Nationality 100% % of Volume 80% 60% 40% 20% 67% 64% 62% 59% 59% 33% 36% 38% 41% 41% % of Revenue 80% 60% 40% 20% 59% 41% 51% 47% 46% 45% 49% 53% 54% 55% 0% 2003 2004 2005 2006 2007 International Thais 0% 2003 2004 2005 2006 2007 International Thais 14
Bangkok Facility Expansion Plan Bumrungrad International Bangkok plans to expand and upgrade its facilities over the next 5 years New BI Clinic + Expand Inpatient Capacity + Existing Hospital Building To double space for outpatient clinics and add new parking To re-acquire BH Tower building from Bangkok Bank To renovate the building for inpatient beds To renovate & upgrade building and invest in technology upgrade as the building is entering its 10 th year To convert some space into additional ICU beds The facilities will give a better overall hospital experience for the patients Increased capacity in the Bangkok facilities will double clinical revenue capability Outpatient: 3,500 6,000 patients per day Inpatient: 500 650 beds 15
Capacity Plan Inpatient - Open Beds Outpatient Visit Capacity per day 700 600 500 400 300 200 458 458 458 Reacquired Building Existing Hospital Building 458 468 499 531 32 468 499 499 649 109 540 6,000 5,000 4,000 3,000 2,000 3,500 4,500 5,000 5,500 6,000 6,000 100 1,000 0 2007 2008E 2009E 2010E 2011E Max Capacity 0 2007 2008E 2009E 2010E 2011E Max Capacity Maximum Capacity: Inpatient beds: - Existing hospital building 540 beds - Reacquired Building 109 beds Total 649 beds Outpatient Capacity per Day: - New BI Clinic + existing hospital building 6,000 patients Ground Fl Fl 11-Health Screening Center Fl 17 Fl 18 Fl 19 Fl 20 Opening of 7 Floors: Service Level: Robotic pharmacy & Lab Fl 10: Sky Lobby: Welcome Center & Napa Lounge Fl 11: The Mezz Fl 12: X-ray & Endocline Clinic Fl 14: Heart Center, Nephrology & Hematology Fl 15: General Medicine & Allergy Fl 16: Surgery & Neuro Med + Renovation of OPD clinic space in the existing hospital building 16
CAPEX Program Update CAPEX allocated by project THB million 2,000 1,600 1,200 800 988 1,968 1,140 1,227 Existing hospital building Reacquired building New BI Clinic Maintenance 841 966 Total CAPEX for the capacity expansion and renovation over the next 5 years (2008-2012): (Excluding Maintenance CAPEX) - New BI Clinic THB 1,069 million 400 0 2007 2008E 2009E 2010E 2011E 2012E - Reacquired Building THB 1,142 million (BH Tower) - Existing hospital building THB 831 million CAPEX allocated by asset type Total THB 3,042 million THB million 2,000 1,600 1,968 Construction in Progress Equipment & software Building and Construction 1,200 800 988 1,140 1,227 841 966 400 0 2007 2008E 2009E 2010E 2011E 2012E 17
An All New Concept New BI Clinic Ground Floor Lobby, Parking and Executive Health Screening Center of the new outpatient building are now open Ground Floor (0pened 5 Feb 07) Sky Lobby (To open May 08) 18
An All New Concept New BI Clinic The Mezz (To open May 08) Health Screening Center (Opened 2 Mar 07) 19
Complete Renovation Existing Inpatient Wards The rolling renovation of the inpatient wards of existing hospital building started in Feb 08 First floor to be renovated is 9 th floor New 11 th Floor Patient Lobby 20
Complete Renovation Inpatient Rooms The hospital room of the future today! New Inpatient Rooms 21
Bumrungrad International Limited Presence in 7 countries, with 83 hospital and clinic locations Network & Locations South Korea ARC: 10 Locations* Japan ARC: 2 Locations Taiwan ARC: 33 Locations** U.A.E. Bumrungrad Hospital Dubai Bumrungrad Al Mafraq Hospital, Abu Dhabi Malaysia ARC: 6 Locations* Singapore ARC: 19 Locations* Philippines Asian Hospital ARC: 10 Locations* * # 1 Market Position for ARC ** # 2 Market Position for ARC (Among private providers, excludes public sector and NGOs) 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) Asia Financial Holdings 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 February 2008 Capital Injected Investments Remaining Commitment by Bumrungrad International Limited s shareholders are THB 450 million, Pro-rated by shareholding percentage (THB 142 million for BH) 23
Bumrungrad International Limited Current Portfolio Investments Asian Hospital, Inc. ( AHI ) Bumrungrad Hospital Dubai Asia Renal Care Ltd. ( ARC ) Bumrungrad Al Mafraq Hospital, Abu Dhabi Ownership 53.2%* 49% * Total percentage of ownership 100% Management Contract Partners Other shareholders: Dr. Garcia 8.8% Insular Life 12.7% Filinvest 8.9% Others 16.3% Other shareholder: Istithmar 51% - Contractor: Health Authority of Abu Dhabi Amount & Year invested (by Bumrungrad International Limited) USD 10 million 2005 USD 10 million 2008 USD 0.7 million 2006 USD 2.0 million 2007 USD 75 million 2007 NA 2007 Business 346-bed private hospital 250-bed private hospital Chain of dialysis clinics (80 clinics) 460-bed public hospital 24
Asian Hospital, the Philippines (AHI) Company Profile March 2002 February 2005 2008 AHI was opened as a 253-bed private hospital, one of the largest in the southern Luzon corridor of metropolitan Manila, the Philippines Bumrungrad International Limited acquired 43% stake in AHI Bumrungrad International Limited increased its stake in AHI to 53.2% from the conversion of management fees into equity and new equity After two years since Bumrungrad International Limited assumed management control of AHI, the hospital has turned around and is starting to make some profits (Peso 40 million for YE07) With the hospital operating at almost its full capacity, AHI will be undergoing an expansion plan over the next two years 25
Asian Hospital Expansion Plan Phase I Existing Building Phase II New 17,500 sq.m. 14-storey Building A Remaining Purpose Conversion of multi-bedded rooms into single rooms and adding additional diagnostic and therapeutic services Construction of building and fit-out of 3 floors (1 clinic, 1 diagnostic/therapeutic, 1 ward) + 2 car park Fit-out of remaining floors as needed (1 clinic, 3 D&T, 2 office, 3 wards) Bed count Reduce from 253 to 218 beds +32 beds = 250 beds +96 beds = 346 beds in total Timing 2008 2008-2009 TBD Operational 2008/2009 2010 TBD CAPEX USD 21 million USD 21 million (estimated) Source of Funds Internal cash flow + equity injection + loan Internal cash flow 26
Asia Renal Care Limited (ARC) Company Profile 1997 June 2007 March 2008 ARC was established in Hong Kong by reputable financial investors Bumrungrad International Limited acquired 100% of ARC ARC increased number of clinics by 7, closing at 80 clinics by March 2008 Is headquartered in Singapore and is the leading private provider of dialysis and related services in Asia Operates 80 facilities (as of Mar 08) of inpatient and free-standing outpatient dialysis clinics in 6 countries (Singapore, Malaysia, Philippines, Taiwan, South Korea, and Japan), providing regular treatment to approximately 5,000 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 27
Asia Renal Care Facts & Figures, Expansion Plan Since Bumrungrad International Limited s acquisition of ARC in June 2007, ARC management has been actively pursuing expansion plans: ARC successfully obtained a USD 20 million loan facility to fund acquisitions In addition to 6 additional clinics since the acquisition in June 2007, a 30-bed nephrology hospital in Korea has been opened Management s strategy is to continue to aggressively expand the ARC network, especially in the next 2-3 years No of Clinics 90 77 80 60 40 49 60 67 30 0 2003 2004 2005 2006 2007 Mar 08 28
Bumrungrad Hospital Dubai, U.A.E. Hospital Site 29
Bumrungrad Hospital Dubai Investment Profile Shareholding Bumrungrad International Limited holds 49% in the operating company of Bumrungrad Hospital Dubai Partner Istithmar, prominent government-owned investment company Partner Contribution Istithmar provides land & building through a lease to operating company Bumrungrad International Limited will have management control and provide H2000 software systems Investment size The investment size of the hospital is being reassessed Hospital size 250 beds; first phase 153 beds Progress Hospital currently under construction Expected to be operational in 2009 30
Bumrungrad Al Mafraq Hospital, Abu Dhabi, U.A.E. Structure On 19 June 2007, Bumrungrad International Limited signed an agreement with the Health Authority of Abu Dhabi to manage Bumrungrad Al Mafraq Hospital in Abu Dhabi, the UAE Hospital size In-patient capacity of 460 acute care beds, 28 intensive care and 14 special care baby unit beds Patient Volume ~310,000 patients, including more than 25,000 inpatients annually Agreement Term 4 years Future Plans Simultaneously, a new modern hospital building will be constructed on an adjacent site starting this year that will replace the current facility by mid-2011 31
Bumrungrad International Limited In Summary Bumrungrad International Limited is starting to contribute profit of ~USD 1.5 million for YE07 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 - The management fees from Bumrungrad Al Mafraq Hospital is also accretive The expansion plans of the existing projects are now set - Capacity expansion of AHI - Acquisition of clinics by for ARC - Preparation for the opening of Bumrungrad Hospital Dubai Bumrungrad International Limited s management continues to pursue additional investment opportunities in the region 32
2008 Strategy Bangkok Facility Continued growth of the Bangkok facility through: Continued focus on yield management for the benefit of shareholders Gradual relocation of outpatient clinics to the new BI Clinic to boost 2008 capacity by 40% Renovation of the existing hospital building and hospital technology upgrade Renovation of the reacquired BH Tower Building into inpatient building International Expansion Capacity expansion of Asian Hospital Acquisition of additional dialysis clinics by Asia Renal Care Expansion of Bumrungrad International Limited s presence in the Middle East: Preparation for the opening of Bumrungrad Hospital Dubai & management contract of Bumrungrad Al Mafraq Hospital Pursue additional international investment opportunities in the region 33